TWN Info Service on WTO and Trade Issues (May16/04)
4 May 2016
Third World Network

Azevedo pressure on members to amend export subsidy schedules
Published in SUNS #8233 dated 2 May 2016

Geneva, 29 Apr (D. Ravi Kanth) -- The World Trade Organization Director-General Roberto Azevedo, in closed-door, one-on-one meetings with 16 countries, has been attempting to persuade and drive home his message that they must amend their schedules on agriculture export subsidy commitments as agreed at the tenth ministerial conference in Nairobi, Kenya, over four months ago, according to trade envoys.

These initiatives of the WTO chief, on just one of the Nairobi Ministerial Decisions (NMD), have raised "systemic" concerns, several trade envoys told the SUNS.

Although the Nairobi ministerial decision on export subsidies doesn't say that members have to amend their schedules, the Director-General is creating an unusual situation in which he is asking those countries that have scheduled commitments on export subsidies to amend their schedules in which export subsidy entitlements are brought to zero, according to a trade envoy, who asked not to be quoted.

[In a comment on the export subsidy schedules' modification issue, Chakravarthi Raghavan, Editor-Emeritus of the SUNS, notes that in 1994, when the Uruguay Round talks were concluded, and the WTO treaty was signed at Marrakesh, as a part of it, members were required to submit schedules of their export reduction commitments (volume and value) over the 6-year reform period beginning in 1995, and these were multilaterally scrutinised before incorporation to become an integral part of the WTO accords, and made a binding multilateral commitment of the member concerned.

[The modification of the export subsidy commitments in accord with the Nairobi Ministerial Decisions (NMD) has to be in respect of these commitments. Unlike specific provisions in the GATT for modifications of tariff schedule commitments, and procedures laid down for such modifications, there are no analogous provisions in the Agreement on Agriculture (AoA). And while in terms of the GATT, members can voluntarily reduce their tariffs and file reduced "commitments", there have been some questions as to whether these can be effected under the AoA, as a binding multilateral commitment by the member on its own, in the absence of a specific protocol incorporating the results of the NMD into the WTO framework.

[As in the case of "applied tariffs" on imports of goods, Members can no doubt voluntarily act on their own in reducing or ending their export subsidies to effectuate NMD decisions. However, it is difficult to see how they can be made to do so (in terms of the DG's efforts) or for that matter under what AoA provision? - SUNS]

The Nairobi ministerial decision on export subsidies says in paragraph six: "Developed Members shall immediately eliminate their remaining scheduled export subsidy entitlements as of the date of adoption of this Decision."

Further, the Nairobi decision on the elimination of export subsidies is clarified in footnotes three and four:

"Fn. 3 -- This paragraph shall not cover quantities counted against export subsidy reduction commitments found to exist by the Dispute Settlement Body in its recommendations and rulings adopted in disputes DS265, DS266, and DS283, with respect to the existing programme, which expires on 30 September 2017, for the product concerned by those disputes.

"Fn. 4 -- This paragraph shall not cover processed products, dairy products, and swine meat of a developed Member that agrees to eliminate as of 1 January 2016 all export subsidies on products destined for least developed countries, and that has notified export subsidies for such products or categories of products in one of its three latest export subsidy notifications examined by the Committee on Agriculture before the date of adoption of this Decision. For these products, scheduled export subsidies shall be eliminated by the end of 2020, and quantity commitment levels shall be applied as a standstill until the end of 2020 at the actual average of quantity levels of the 2003-05 base period. Furthermore, there shall be no export subsidies applied either to new markets or to new products."

As regards the developing countries, the NMD says in paragraph seven that, "Developing country Members shall eliminate their export subsidy entitlements by the end of 2018. And it is further clarified in footnote five that they can eliminate the export subsidies by 2022 due to Article 9.4 of the Agreement on Agriculture."

The moot issue is, "Why is the DG not adopting the same course on other issues that are there in the Nairobi or Bali ministerial decisions?" the envoy asked.

And "why is he hosting closed-door meetings instead of convening a Room W meeting for the sake of transparency?" the envoy added.

"What about the market access decision on cotton and why can't they be included in the scheduled commitments of members," asked another South American envoy.

The Nairobi ministerial decision on cotton market access says, "developed country members, and developing country members declaring themselves in a position to do so, shall grant, to the extent provided for in their respective preferential trade agreements in favour of LDCs, as from 1 January 2016, duty-free and quota-free market access for cotton produced and exported by LDCs."

It further says in paragraph four on cotton market access that, "developed country members, and developing country members declaring themselves in a position to do so, shall grant, to the extent provided for in their respective preferential trade arrangements in favour of LDCs, as from 1 January 2016, duty-free and quota-free market access for exports by LDCs of relevant cotton-related products included in the list annexed to this Decision and covered by Annex 1 of the Agreement on Agriculture."

Clearly, these two decisions on cotton market access can also be included in the scheduled commitments, but the Director-General has not raised this, the envoy said.

"Why did not the DG hold meetings with members to include the Bali decision as well as the modified decision on public stockholding programs for food security in the schedules," asked another African envoy.

India had already raised the issue at the last meeting of the Doha negotiating committee on agriculture saying that all ministerial decisions pertaining to Bali and Nairobi must be included in the schedule instead of only export subsidies, according to negotiators familiar with the meeting.

The Director-General must address these issues in an open forum instead of holding unusual closed-door room meetings, the envoy said. "Otherwise, they raise systemic issues," the envoy suggested.

Meanwhile, the chair for the Doha agriculture negotiations, Ambassador Vangelis Vitalis of New Zealand, told trade envoys of the informal group of developing countries on Thursday (April 28) that an overwhelming majority of countries want domestic support to be addressed on a strong footing, according to an envoy present at the meeting.

Ambassador Vitalis, who held some 50 bilateral meetings, said many major developed and developing countries have not notified their latest domestic support programs, the envoy said.

Around 24 members have to notify their latest domestic support payments, and the 24 include the US, China, India, and several other countries, the envoy suggested.

The least-developed and African groups have urged the chair to accelerate the negotiations on domestic support.

The chair is due to hold dedicated sessions on May 9th and 10th on the special safeguard mechanism and the permanent solution for public stockholding programs for food security. +