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TWN Info Service on WTO and Trade Issues (Mar16/07)
14 March 2016
Third World Network


SSM, public stockholding priority issues, say South
Published in SUNS # 8198 dated 10 March 2016


Geneva, 9 Mar (Kanaga Raja) - A number of developing countries, at an informal meeting of the Special Session of the Agriculture Committee on Tuesday (8 March), stressed that the Special Safeguard Mechanism (SSM) and public stockholding for food security purposes are stand-alone issues and a priority for them in the work going forward post-Nairobi.

In their various interventions at the informal meeting, the developing countries underlined that a permanent solution to the public stockholding issue must be found by the next WTO ministerial conference (MC11) scheduled to be held in 2017.

According to trade officials, the G-33 stressed on the need for work to start on the SSM for developing countries.

Expressing concern that members have not yet engaged in finding a permanent solution for public stockholding programmes for food security, the G-33 said that it is high time that members deliver on it by MC11.

According to trade officials, the G-33's view was also supported by the Least Developed Countries (LDCs) and the African, Caribbean and Pacific (ACP) group of states.

In its intervention, India made clear that success at MC11 is contingent on finding a permanent solution for public stockholding for food security.

Some developing countries also underscored that the 2008 Rev.4 draft agriculture modalities text should be the basis for the negotiations.

The interventions of various members at this first informal meeting of the Committee since MC10 last December was preceded by a report by the Chair of the Special Session, Ambassador Vangelis Vitalis of New Zealand, of the over 70 bilateral consultations that he held with members since mid-January this year.

CHAIR'S REPORT ON HIS CONSULTATIONS

On substance, the Chair said that he had asked all of those with whom he had met, including Group coordinators, what issues should in their view form the basis of the continuing negotiations.

According to the Chair, there were six areas identified through his consultations.

First, it is clear that the Special Safeguard Mechanism (SSM) and public stockholding (PSH) remain high priorities for some Members, said the Chair, noting however that it is also equally clear that other Members' positions on these two issues have not changed since Ministers met in Nairobi.

With regard to the SSM in particular, the guidance provided by Ministers is well understood.

The Chair said some Members reminded him that "developing country Members will have the right to have recourse" to this mechanism "as envisaged under paragraph 7 of the Hong Kong Ministerial Declaration."

These Members also drew his attention to the fact that negotiations on this will occur through "dedicated sessions" of the Special Session.

Other Members have also reminded the Chair that these negotiations will need to occur "in the context of addressing outstanding agricultural issues."

"These are all phrases contained in the Ministerial Decision on SSM and they will of course shape the way we look collectively to structure the negotiations," said the Chair.

With regard to public stockholding, some Members believe that an outcome can be delivered before MC11. Other Members do not necessarily share that view.

For his part, the Chair recalled for the record that Ministers confirmed that the negotiations on the PSH "shall be held in the CoASS in dedicated sessions"; in an "accelerated time frame"; and on a separate track "distinct from the agriculture negotiations under the Doha Development Agenda (DDA)".

"On both issues - the SSM and the PSH - and based on my consultations to date, there remains a lack of clarity from Members about what an eventual outcome might look like. This is clearly something you will need to work together on over the coming months," said Ambassador Vitalis.

The Chair strongly recommended that all Members read very carefully the texts of all of the Nairobi Decisions that relate to agriculture. The words used in those texts were deliberately chosen by Ministers to reflect their perspectives and, these will collectively shape and inform the way forward.

Second, he said, negotiations on domestic support have emerged as the clear priority for the overwhelming bulk of those he had consulted with.

"In fact, domestic support has been identified by many of you quite explicitly as a key potential outcome for MC11. In this regard, Members have reminded me of the WTO's comparative advantage in this area as compared with Preferential Trade Agreements."

The Chair also recorded that many Members expressed their very real disappointment about the absence of an outcome in domestic support at Nairobi in general and in cotton in particular.

On cotton, his attention was drawn on several occasions during his consultations to the language used by Ministers in their Decision on Cotton.

Specifically, paragraph 8 reminds members about "efforts that remain to be made" with regard to trade-distorting domestic subsidies for cotton production. Indeed, a considerable number of Members have made it clear to him that they want to take this issue up again.

"In sum, it is clear to me that domestic support, including for cotton is an issue on which there is general agreement that we need to explore what may be possible. That said, based on what I have heard it is clear that this will take some time and that we need to take due care in how we proceed on this matter."

The Chair noted that no Member had any specific ideas for how to proceed on domestic support at this early point.

Third, negotiations on market access remain a priority for a large group of Members and an issue worth discussing for the remainder of those with whom the Chair had consulted.

Some Members have advised him that progress on market access and domestic support will need to be contingent on movement elsewhere, including outside of the agriculture negotiation.

"Other Members have raised very specific issues of interest to them in the pillar of market access ranging from Tropical Products to Special Products - a wide range indeed. I have encouraged Members to continue consulting bilaterally to see where this can take us."

Fourth, with regard to export competition, the Chair reminded members that the implementation of the Nairobi Ministerial Decision on Export Competition is a matter for the regular Committee on Agriculture.

"Based on my consultations to date, further negotiations on export competition were a low priority for most Members. In fact, many Members made it clear to me that they have limited or no interest in re-engaging on export competition, given their assessment that the negotiations in Nairobi went as far as was possible."

Conversely, a small group of Members specifically identified export credits as an issue of "unfinished business."

The Chair noted that Paragraph 31 of the Nairobi Ministerial Declaration explicitly includes export competition as a subject for ongoing negotiation.

"It is up to Members therefore to map out what their Ministers had in mind for this process, but my role as Chair is clear - I will facilitate this for the Membership, as required."

Fifth, as part of the wider Article 20 (of the Agreement on Agriculture) agricultural reform process, several Members observed that it was important to continue negotiating across all pillars of agriculture. This is because there is value in the negotiating process in terms of domestic policy reform.

"Specifically, our negotiations have an important signalling effect that can help drive, shape and inform domestic agricultural reform. I strongly share that perspective and believe that this is what the Agreement on Agriculture is intended to do, i.e. to have a dynamic policy effect over time."

Finally, said the Chair, a minority of Members has raised with him what might be termed "other issues," some of which it is possible to argue could be undertaken through the mandate provided by the Article 20 reform process.

"Issues raised in this regard include: export restrictions; SPS; private standards for agricultural products; and disciplines on subsidies for bio-fuels and bio-energy."

In terms of the way ahead on the substance, Ambassador Vitalis has encouraged Members - and will continue to encourage them over the coming weeks and months - to reflect on these priorities.

"Where possible and when they are ready I have asked them to consider preparing information-focused submissions that can identify in a crisp and clear manner what the issue is. With improved and as up-to-date as possible information in front of us as negotiators, it is my expectation that we can carefully continue to frame and advance our process."

VIEWS OF MEMBERS

The Chair's summation was followed by several interventions from members.

Chile was happy with the outcome at Nairobi on export competition. What is important is the implementation of the Nairobi decisions. The unresolved areas of the agriculture negotiations should be taken up in the Negotiating Group, it added.

Colombia stressed rapid implementation of the Nairobi decisions. The reforms in agriculture however do not stop here.

The WTO is the appropriate forum to work on domestic support, in order to level the playing field. Members must be pragmatic but also be open-minded to new ideas, it said.

Benin, on behalf of the LDCs, said that in most of the LDCs, agriculture is a highly strategic sector, and 80% of the jobs created are in this sector.

Citing agriculture's potential for economic development, Benin said this potential cannot be recognised unless the rules are reformed. It referred to para 13 of the Doha Declaration which addresses agriculture reform.

Benin stressed the importance of DFQF (duty-free quota-free) market access for the LDCs, as well as the Nairobi decision on export competition.

It appreciated the fact that this decision took into account Special and Differential Treatment (SDT) for the LDCs.

It underlined that public stockholding for food security purposes and the Special Safeguard Mechanism (SSM) are also mandated in the Nairobi decisions.

On cotton, it said that the Nairobi decision has to be taken together with the DFQF exercise. It is also important to substantially reduce and eliminate domestic subsidies. It cited the Hong Kong mandate on cotton.

Brazil said that although the results in Nairobi fell short of its expectations, MC10 still delivered substantive results, the main point being a strong commitment to advance negotiations on the Doha issues. It is a clear mandate for members to continue working on agriculture.

Brazil was ready to examine any new issues. However, in no way should such discussion take place to the detriment of agriculture under the Doha Round, and stressed the importance of domestic support and market access.

There are clear instructions to continue working in both these areas. It also said that SPS and TBT as well as other areas should be dealt with multilaterally.

Indonesia, on behalf of the G-33, said that the discussion should be undertaken prudently in good faith and with a sense of urgency.

It appreciated the affirmation of Ministers in Nairobi that the SSM and a permanent solution for public stockholding will be undertaken in dedicated sessions in the Committee.

Noting that there is a commitment to take on public stockholding for food security, the G-33 is concerned that members are not engaged yet in finding a permanent solution. It is high time to deliver them by MC11 (in 2017). There should not be any pre-conditions for negotiations.

Australia said the Cairns Group has been fighting for 30 years to get rid of export subsidies. Major economies have spent more supporting farmers these days compared to the days when the WTO was created.

It said that there is need to reflect the reality, namely, that negotiations in market access have been taken outside of the WTO.

On SSM and public stockholding, there is need for fresh approaches on these issues. The discussion needs to be based on facts rather than stereotypes. It is ready to engage constructively.

Argentina said that what is important is to achieve certainty. The mandate to continue agriculture reform also comes from Article 20 (of the Agreement on Agriculture), which was before Doha.

It welcomed the elimination of export subsidies in Nairobi, but said that there is no clear result on the market access and domestic support pillars. There is need to make progress on these fronts as well. It expressed hope that the moment of reflection would be short.

Switzerland, on behalf of the G-10, said that implementation of the Nairobi decisions is very important. The G-10 has already started the internal process in this regard, and it is ready to engage constructively. It took note of para 31 of the Nairobi Ministerial Declaration (NMD).

The G-10 considers that the priority for future negotiations should be defined with an open mind.

Rwanda, on behalf of the ACP group, said that MC10 was successful in moving forward reforms in agriculture. If members want to capitalise on the Nairobi success, they need to continue with implementation.

On export competition, it expressed hope that the trading partners would do their homework. On the SSM and public stockholding, it said that there is need to ensure that members arrive at an outcome by MC11.

On the remaining DDA issues, it said delivering on the DDA mandate should be the priority. S&DT should remain integral to the discussion.

It is also looking for an outcome on domestic support because domestic subsidies have been damaging its agriculture. The discussions should start as soon as possible, focusing on delivering for the LDCs.

Mali, on behalf of the Cotton-4 countries, said that although the decision on cotton is modest, it can consider this result as an important step forward in the right direction. It reiterated the Hong Kong mandate on cotton, and said that this was an absolute priority for the group.

Chinese Taipei, on behalf of the Article XII countries (formerly the Recently Acceded Members), said that the first priority should be implementation of the Nairobi decisions. The most urgent task is to harness the positive momentum in Nairobi.

The Philippines, endorsing the G-33 statement, said that the Nairobi decision (on agriculture) is a modest but tangible gain.

Some aspects of the decision such as export credits, have escaped. There is need for work to continue on that specific area. Export subsidies are only the tip of the iceberg.

For the Philippines, reforms in domestic support and market access are priorities. It said that the SSM and public stockholding to ensure food security are important.

While it is willing to engage constructively on other issues, there should be no linkage between SSM or public stockholding and market access, it said.

Turkey, supporting the G-33 statement, pointed to a lot of uncertainties, not only in agriculture but also in NAMA and services. There is need for the negotiations to pick up expeditiously.

The outcome in export competition is far from perfect, and the Nairobi decision on cotton is much below expectation.

After 15 years of talks, the bulk of the reform agenda is still on the table, it said.

Export credits, state trading enterprises and food aid under the export competition pillar are still subject to further work. SSM and a permanent solution to public stockholding are of particular importance.

South Africa, endorsing the ACP group statement, welcomed the fact that the first ministerial conference in Africa delivered results. It supported developing countries' efforts on the SSM.

It was of the view that SSM is a stand-alone issue, and not linked to market access. SSM will offer some relief to developing countries for distortions that already exist in the market.

On public stockholding, it looked forward to working with members towards a permanent solution.

Paraguay said that we must seek tangible results for agriculture producers. Members must move forward on the domestic support pillar.

Members must also work on market access, which in its view, was the most tangible result. It is important to eliminate 'water' between the applied and bound tariffs. No one must be excluded from the multilateral discussion.

Mexico said that it is clear that history was created in Nairobi. It is fully committed. It is also ready to work in an open manner on the other issues.

The discussion must be holistic. We cannot unlink market access (in apparent reference to the SSM), it said. And it cannot unlink the public stockholding issue from the domestic support pillar. This discussion can only be carried out at the WTO and it must be given the highest priority.

Canada said that on the way forward, the Nairobi package is a positive and modest outcome. It is the first step in our continued discussion. It said that work needs to continue on food aid.

On domestic support, Canada said that Agriculture Committee could start to have an informal discussion. We see some value in taking time to review the domestic support landscape.

Peru said that all members must work on domestic support, market access and export competition. It is essential to look into these areas rapidly.

The Rev. 4 draft modalities text served its purpose in Nairobi, where it was the basis for discussion on export competition.

The Rev.4 can continue to serve as the basis in other areas. There is also need to guarantee a transparent and inclusive process, it said. It is open to consider new issues as long as the issues of interest to it are looked into.

Thailand said that agriculture is the centre of the negotiations. Article 20 of the Agreement on Agriculture mandates the members to continue the work.

It will continue to contribute constructively including on the SSM, public stockholding and export competition.

Uruguay stressed the importance of the domestic support pillar and hoped to achieve results on this issue.

Nicaragua said that the priority must be on achieving results. It favours the effective implementation of the Nairobi outcomes. Elimination of domestic support contributes to fair trade.

It also was in favour of market access for agricultural products. It further highlighted the issues of SSM, public stockholding and cotton which it said are essential.

Korea supported the G-10 and G-33 statements. The first priority is to implement the Nairobi decisions. Though they look humble, it is priceless to secure outcomes, particularly on SSM and public stockholding in dedicated sessions.

New Zealand said that MC10 demonstrates that the WTO can deliver. The most immediate job is to implement these decisions. There continues to be significant work left ahead of members on market access and domestic support.

The European Union said there is need to ensure that the decision on export competition is fully implemented. It is committed to implementing the Nairobi decisions. It expects to see all elements of the decisions implemented equally. It stressed on transparency and enforceability.

The EU said that we are entering a new phase in the agriculture negotiations. Two issues need to be addressed.

First, to advance the Doha issues, and the second is to look at new issues. It is ready to continue to move forward on the outstanding Doha issues.

The WTO framework is the most appropriate forum to discuss domestic support, it said, adding that if the past methods have not been successful, it is open to address new issues. It noted that the NMD also refers to the possibility of new issues.

On the SSM, the EU said that Ministers agreed to pursue negotiations, and it is ready to continue discussions as it has done before.

Pakistan, referring to International Women's Day, said that over 70% of employed women in Pakistan work in agriculture. Market access and domestic support are still outstanding, which are critical issues for Pakistan.

Cotton remains as work under progress. Distortions in agriculture affect the poorest producers and consumers in the world, it said.

Uganda voiced agreement with the LDC, ACP and the G-33 statements. It welcomed the outcome in Nairobi on export competition and cotton. It voiced regret that public stockholding and SSM were not delivered.

Agriculture is an important sector for Uganda, and it can play an important role in reducing the vulnerability of its poor people as well as its farmers, who continue to face highly subsidised inputs.

It also said that domestic support is a key issue. Without that, it is like pouring water in a basket, it added.

It further stressed on the need for DFQF market access for the LDCs, the SSM and a permanent solution for public stockholding.

Cuba, endorsing the G-33 and ACP statements, said that it is important to continue work in an inclusive and transparent manner. The work in agriculture must respect the Doha mandate. The Rev. 4 text should continue to be the benchmark in the negotiations.

On market access, it said it wished to preserve the treatment accorded to the Small and Vulnerable Economies.

The SSM, public stockholding for food security and Special Products are important to Cuba in the framework of the Doha negotiations.

Bolivia, endorsing the G-33 statement, said that the Nairobi decision on export competition is undoubtedly an achievement. But there is need to continue the reforms in order to achieve a level playing field. There is a high convergence that the Rev.4 text is important and is the best benchmark.

Special Products should be respected and priority must also be given to work on SSM and public stockholding, it said.

The United States, in reference to International Women's Day, said that agriculture is important for women and women are important for agriculture trade.

It noted that over two months have passed since the Nairobi Ministerial Conference. It welcomed the fact that WTO members finally delivered on export competition in agriculture, so that agriculture producers can look ahead.

In the US' view, it is apparent that this is a good opportunity to switch to a problem-solving mode. It is ready to engage with an open mind.

It said we might move ahead in the WTO and free of the Doha architecture. It is prepared to bring its best energy.

At home, the US has been asking what today's landscape reveals, and it is doing a lot of thinking internally.

It raised some questions to kick-start a discussion. What are the trade distortions in today's landscape? What are the impacts on producers, importers and exporters? Should we strengthen the role of the WTO's regular committees? What are the benefits of previous negotiations in multilateral and plurilateral fora?

The US recalled that in Davos, USTR Michael Froman had counselled that members have to engage in discussions. This will take time and members must avoid the impulse to force formal negotiations too soon.

It will engage in discussions and reflections. The existing structures at the WTO can allow members to engage in discussions. An example being the regular Agriculture Committee.

On the SSM, the US said that any meeting should be within the context of the agriculture negotiations.

Venezuela reiterated the mandate set out in para 13, 14 and 15 of the Doha Declaration. They continue to provide the framework for discussion.

The Nairobi decisions on SSM, public stockholding and cotton give these items a place on the negotiating agenda. The Rev. 4 text was a key to finding a solution in Nairobi, it noted.

Norway voiced agreement with the G-10 statement. This is a period of constructive interaction. Members may come forward with ideas. Having realistic ambition is also important. We should deliver more, and not only on agriculture.

The discussion should be among all members and not among 5,7 or 9 members. It recognised that some market access negotiations are outside the WTO. However, the WTO is the only place where tariff reduction is done on an MFN basis.

It is willing to continue discussion on domestic support, but it recognises that it will be very difficult if members maintain their old positions.

China, supporting the G-33 statement, welcomed the decisions at MC10. Ministerial decisions should be effectively implemented, it said.

Agriculture remains the key issue on the DDA. There is need to keep balanced progress across all the three pillars.

On the future of the DDA negotiations, it said the remaining issues should still be pursued. The remaining issues need to be resolved.

On new approaches and ideas, China said that if proposals are being put forward, it will study them. It cautioned that the DDA is not only about agriculture.

India supported the G-33 statement. On public stockholding, it reminded members of the General Council decision of November 2014. Similarly, Ministers decided to pursue SSM in dedicated sessions.

It reminded again that the cut-off to find a permanent solution for public stockholding is by MC11 in 2017. Any success of MC11 is contingent on a permanent solution for public stockholding.

Noting that a few members have today linked the SSM and market access, India warned that this is not going to lead to success. All the Ministerial decisions have to be respected. And this has to be a member-driven process.

Just floating off ideas without concrete proposals would not bring success, India added, urging members to bring forward concrete proposals.

Zimbabwe endorsed the G-33 and ACP statements. Welcoming the Nairobi outcomes, it called upon members to implement these outcomes. The Rev.4 text should continue to be the basis of the discussions.

Nigeria endorsed the G-33 and ACP group statements.

According to trade officials, the Chair concluded the meeting by informing members that he would hold another round of consultations to pin down the content as well as the format of the discussions.

He will then take a decision on the timing for the next meeting as well as the issues members will canvass. He encouraged members to talk with each other and to share more information.

 


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