TWN Info Service on WTO and Trade Issues (Mar16/06)
14 March 2016
Third World Network

South opposes extraneous linkages on SSM and PSH
Published in SUNS #8198 dated 10 March 2016

Geneva, 9 Mar (D. Ravi Kanth) - Many developing and least-developed countries on Tuesday (8 March) sharply opposed concerted attempts by the United States, Australia, Mexico, and Uruguay among others at the World Trade Organization at drawing extraneous linkages for negotiating the special safeguard mechanism (SSM) and the permanent solution for public stockholding programs for food security, several negotiators told the SUNS.

Close on the heels of the WTO's controversial tenth ministerial meeting in Nairobi in December 2015, several developed countries and their allies have already begun changing the goalposts for finalizing the much-delayed SSM and the permanent solution for public stockholding programs (PSH) by linking the two issues with other areas.

The US, for example, linked the SSM with overall agriculture negotiations. Australia called for new approaches to discuss SSM and PSH, implying that the existing architecture of special and differential treatment flexibilities and less-than-full-reciprocity commitments between developed and developing countries under the Doha Development Agenda (DDA) will not apply.

Mexico and Uruguay suggested that the SSM has to be linked with all other issues in the market access while the PSH must be negotiated along with trade-distorting domestic subsidies.

However, a large majority of developing countries such as Indonesia on behalf of the G-33 farm coalition, Benin on behalf of the least-developed countries, Rwanda for the ACP (Africa, Caribbean, and Pacific group), the Philippines, India, China, Cuba, Bolivia, Nigeria, and Uganda among others flatly opposed the linkages, maintaining that SSM and PSH are stand-alone issues, participants present at the meeting told the SUNS.

The developing countries insisted that the SSM is a stand-alone issue while PSH is outside the DDA and has little to do with the domestic support pillar.

The Hong Kong Ministerial Declaration of 2005 says, "Developing country Members will also have the right to have recourse to a Special Safeguard Mechanism based on import quantity and price triggers, with precise arrangements to be further defined".

Further, according to the HKMD, "Special Products and the Special Safeguard Mechanism shall be an integral part of the modalities and the outcome of negotiations in agriculture."

The permanent solution on PSH was conceived outside the domestic support negotiations.

The Nairobi Ministerial Declaration, which remains a source of grave controversy because of the manner in which it was negotiated, has set off a negotiating battle at the very first meeting of the Doha agriculture body on Tuesday.

While the decisions on agriculture are tilted in favour of the developed countries, particularly the United States, the developing countries are now forced to wage a major battle to preserve what they had negotiated on SSM since 2005 and PSH since 2011, said an Asian agriculture negotiator.

In his elaborate address to members on Tuesday, the chair, Ambassador Vangelis Vitalis of New Zealand, sought to know from members the possible outcomes in agriculture based on the Nairobi ministerial decisions and the mandate of Article 20 of the WTO's Agreement on Agriculture (AoA).

Prior to the meeting the chair had held bilateral consultations with 72 countries for eliciting their views on which issues need to be taken up on a priority basis.

Based on his consultations, Ambassador Vitalis listed six observations. They include:

1. The Special Safeguard Mechanism (SSM) and public stockholding (PSH) remain high priorities for many members. He suggested that there is still no clarity among members on the possible outcomes and the timeframe for negotiating the two issues.

2. Issues in the domestic support pillar remain a clear priority as well as potential outcome for the eleventh ministerial meeting next year.

3. Negotiations on market access are also a clear priority for a "large group of members." However, some members emphasized that progress on market access and domestic support remain contingent on movement elsewhere, including outside of the agriculture negotiations.

4. Many members ruled out any further work on the export competition. But "a small group of members" specifically identified export credits as an issue of "unfinished business" as well as export competition more broadly.

5. Several members want the negotiating work to continue across all pillars of agriculture based on Article 20 of the AoA.

6. "A minority of members," spoke about "other issues" such as export restrictions, sanitary and phytosanitary measures, private standards for agricultural products , disciplines on subsidies for bio-fuels and bio-energy.

[Article 20 mandates continuation of the Reform Process, and says: "Recognizing that the long-term objective of substantial progressive reduction in support and protection resulting in fundamental reform is an ongoing process, Members agree that negotiations for continuing the process will be initiated one year before the end of the implementation period, taking into account: (a) the experience to that date from implementing the reduction commitments; (b) the effect of reduction commitments on world trade in agriculture; (c) non-trade concerns, special and differential treatment to developing country Members, and the objective to establish a fair and market oriented agricultural trading system, and the other objectives and concerns mentioned in the pre-amble to this Agreement; and (d) what further commitments are necessary to achieve the abovementioned long-term objectives." - SUNS]

In response to the chair's assessment, members delivered differing messages about their priorities.

Chile, Colombia, Benin on behalf of the least-developed countries, Brazil, Argentina, Indonesia on behalf of the G-33 farm coalition, Australia, Switzerland on behalf of the G-10 countries, South Africa, the European Union, the United States, China, and Peru among others welcomed the Nairobi outcomes on export competition.

They called for rapid implementation of the Nairobi decisions.