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TWN Info Service on WTO and Trade Issues (Jun17/01)
2 June 2017
Third World Network
       
Permanent solution for PSH seems unlikely at MC11
Published in SUNS #8473 dated 1 June 2017


Geneva, 31 May (D. Ravi Kanth) - Major developed nations, and some of their allies in the South are refusing to engage in substantive discussions on the mandated permanent solution for public stockholding programmes for food security, and a successful outcome is unlikely at the WTO's eleventh ministerial meeting in Buenos Aires in December.

This comes out clearly in a "non-paper" reviewed by SUNS, which was circulated on Monday (29 May) by Indonesia, which is leading the G-33 coalition of more than 44 developing and least developed countries.

[The first operational paragraph of the Ministerial Decision on Public Stockholding for Food Security Purposes (WT/L/913), adopted at the ninth Ministerial Conference held in Bali, Indonesia, on 3-7 December 2013, states as follows: "Members agree to put in place an interim mechanism as set out below, and to negotiate on an agreement for a permanent solution, for the issue of public stockholding for food security purposes for adoption by the 11th Ministerial Conference."

[Subsequently, in November 2014, it was agreed at the General Council to have an accelerated phase of negotiations, and to finalise a solution by end-2015. But this did not materialise at the Nairobi Ministerial Conference. SUNS]

"It is a matter of concern that in the course of the dedicated sessions, some Members are still questioning the justifiable objectives behind the need for a permanent solution on Public Stockholding (PSH) for food security purposes and have not engaged in substantive discussions by tabling their [counter] proposals," Indonesia said.

"In our [the G-33 group's] understanding, this means that these Members are questioning the Ministerial Decision which have been the bedrock of WTO as an institution," Indonesia said.

Without naming the countries, Indonesia said "onerous" conditions such as burdensome transparency notification provisions are being placed to ensure that "developing members are unable to use the mechanism."

However, it is common knowledge that Australia, Canada, the European Union and the United States among others have been adopting stonewalling/diversionary tactics since the Nairobi meeting in December 2015 in frustrating the G-33 members by raising issues outside the proposals they had submitted, according to trade envoys familiar with the development.

Indonesia drew attention to the five proposals they had submitted in the run-up to the WTO's tenth ministerial conference in Nairobi, Kenya, in December 2015.

The G-33 group which includes Indonesia, China, India, the Philippines, Korea, Kenya, Bolivia, Cuba, Venezuela, and Zimbabwe among others, had tabled concrete proposals on how to arrive at the permanent solution.

In the Job document - Job/AG/54 - which was circulated a month before the Nairobi ministerial meeting, the G-33 group spelled out the proposed permanent solution.

It demanded an amendment to the Agreement on Agriculture (AoA) by inserting "a new Annex 6" to include the following programmes for food security purposes.

The group suggested that the following programmes for public stockholding for food security purposes must be included in the proposed Annex 6 to the WTO's Agreement on Agriculture.

The programmes include:

(a) programmes for the acquisition of foodstuffs at administered prices by the Government in developing country Members/Least Developed Country Members with the objective of supporting low income or resource poor producers;

(b) programmes for the acquisition of foodstuffs at administered prices by the Government in developing country Members/Least Developed Country Members and its subsequent distribution at subsidised prices with the objective of meeting food security requirements of urban and rural poor, and of maintaining adequate availability of foodstuff and/or ensuring food price stability.

The G-33 maintained that the "operation of programmes" for PSH "shall be transparent and constructed in accordance with officially published objective criteria and guidelines."

The group stated unambiguously that the PSH programmes "shall not be required to be accounted for in the Aggregate Measurement of Support [AMS or amber box reduction measures]."

It clarified that the annex will suggest that "governmental stockholding programmes for food security purposes in developing country Members whose operation is transparent and conducted in accordance with officially published objective criteria or guidelines shall be considered to be in conformity with the provisions of this paragraph, including programmes under which stocks of foodstuffs for food security purposes are acquired and released at administered prices."

"The expenditure incurred under such programmes shall be accounted for in accordance with Annex 6 of the AoA."

The latest Indonesian "non-paper" charged that time and again the developed countries - the US, the EU, Canada, and Australia among others - raised extraneous issues without discussing the G-33 proposals, according to trade envoys familiar with the development.

The US, for example, submitted a paper to counter the permanent solution by proposing elements "that go beyond the mandate."

The US paper had suggested the need to "review the efficacy and trade effects of the existing public stockholding [programmes] for food security purposes, to review the existing WTO rules and policies adopted by Members and how these policies are constrained by those rules, and finally to establish best practices and provide funding for capacity building to implement the agreed best practices."

The G-33 protested these attempts by the US, which will take the negotiations away from "finding" a permanent solution.

"General comments or utter rejections certainly will not help us to arrive at a permanent solution as mandated by our Ministers," Indonesia, on behalf of the G-33 members, said on 17 April 2015.

After two years of dedicated sessions for finding the permanent solution for PSH as per the Nairobi mandate, there is little change on the ground because of continued stonewalling/diversionary tactics adopted by "some countries", Indonesia has suggested in the non-paper.

The non-paper underlined the renewed, longstanding calls of the G-33 members for sustained "global trade reforms" to address "inequities and imbalances in the Uruguay Round Agreement on Agriculture (AoA) so that all WTO members would be governed by a multilateral trading system under the WTO which is not only open, transparent, and market-oriented but also, more importantly, development-oriented, fair, and provides a level playing field."

The G-33 group said "the quest for a permanent solution on public stockholding programmes for food security goes beyond mere trade concerns."

"Such [PSH] programmes," according to the G-33 group, "are aimed at meeting food security requirements of urban and rural poor, maintaining adequate availability of foodstuff and ensuring food price stability."

"Whenever the discussions on permanent solution come up," the G-33 group said, they have been "hearing some Members express their concerns such as those relating to exports from public stocks and a Member's public stockholding programme adversely affecting the food security of other Members."

However, the countries such as the US, Pakistan, and Australia, which often raise these concerns about affecting the food security of other members, have not circulated a "written proposal" or "elaborated" with material evidence, said a G-33 trade envoy who asked not to be quoted.

In short, while attempts are made round the clock for an outcome on fisheries subsidies which is being justified on "food security grounds" of the United Nations Sustainable Development Goals, the actual physical food security requirements for hundreds of millions of people living below the poverty line in developing and the poorest countries as set out in the G-33 proposals are being denied because of the stonewalling/diversionary tactics adopted by "some members" at the WTO.

The permanent solution for PSH will remain as the acid test for the WTO's eleventh ministerial meeting in Buenos Aires starting on 10 December.

"If the G-33 fails to secure an easy and effective permanent solution for PSH at Buenos Aires, then it is safe to assume that developing countries will never secure "developmental outcomes" at the WTO," said a trade envoy who asked not to be quoted.

 


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