TWN Info Service on WTO and Trade Issues (Jun17/04)
14 June 2017
Third World Network
South stress food security and SSM outcomes at MC11
Published in SUNS #8476 dated 7 June 2017
Geneva, 6 Jun (Kanaga Raja) - A number of developing countries, at dedicated
sessions of the WTO agriculture negotiations on 1-2 June, stressed on the
importance of a permanent solution for public stockholding programmes for food
security as well as an effective Special Safeguard Mechanism (SSM), and for
meaningful outcomes on these issues at the eleventh WTO ministerial conference
in Buenos Aires this December.
The Committee on Agriculture in Special Session held dedicated sessions on 2
June on both the issues of public stockholding programmes for food security
purposes and on the SSM.
These were preceded by an informal meeting of the Committee on 1 June to
discuss the state of play in the overall negotiations on agriculture.
DEDICATED SESSION ON PUBLIC STOCKHOLDING
At the dedicated session on public stockholding for food security purposes on 2
June, the Chair of the Special Session of the Agriculture Committee, Ambassador
Stephen Karau of Kenya, said that all members recognise that they have a firm
deadline and very clear Ministerial mandates, both from Bali and Nairobi, to
find a permanent solution.
"I can confirm that none of the members contested the mandates or the
deadline for reaching a permanent solution," said the Chair.
According to trade officials, he however acknowledged that members are still
some distance away from finding common ground.
"One of the key questions that remain open is the starting point for the
discussions. The G33 maintain that their proposal should be the basis, while
many others prefer the Bali Decision," the Chair said.
Ambassador Karau said that he had detected some flexibility in the talks.
"As compared to previous reports, what has been new to me is the
increasing number of members indicating that they see the permanent solution
"My conclusion from this meeting is that members need to engage
pragmatically with each other," the Chair said.
"I am convinced that there are practical solutions that could help to
narrow the gaps between your positions," he told the members.
[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
second paragraph states as follows: "In the interim, until a permanent
solution is found, and provided that the conditions set out below are met,
Members shall refrain from challenging through the WTO Dispute Settlement
Mechanism, compliance of a developing Member with its obligations under
Articles 6.3 and 7.2 (b) of the Agreement on Agriculture (AoA) in relation to
support provided for traditional staple food crops in pursuance of public
stockholding programmes for food security purposes existing as of the date of
this Decision, that are consistent with the criteria of paragraph 3, footnote
5, and footnote 5&6 of Annex 2 to the AoA when the developing Member
complies with the terms of this Decision."
[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.
[The 2015 Nairobi Ministerial Decision on public stockholding for food security
purposes (WT/L/979) states: "1. Members note the Ministerial Decision of 7
December 2013 (WT/MIN(13)/38 and WT/L/913) and reaffirm the General Council
Decision of 27 November 2014 (WT/L/939).
["2. Members shall engage constructively to negotiate and make all
concerted efforts to agree and adopt a permanent solution on the issue of
public stockholding for food security purposes. In order to achieve such
permanent solution, the negotiations on this subject shall be held in the
Committee on Agriculture in Special Session ("CoA SS"), in dedicated
sessions and in an accelerated time-frame, distinct from the agriculture negotiations
under the Doha Development Agenda ("DDA").
["3. The General Council shall regularly review the progress."]
According to trade officials, the G33 had made a recent submission (Job/AG/97)
that recalls the various existing mandates as well as the Group's submissions
on this issue.
In its submission, the G33 urged members to immediately engage in a
At the informal session, Indonesia, on behalf of the G33, said that it supports
the Chair's approach to continue to use the dedicated session as a platform for
members to discuss the issue of public stockholding for food security purposes.
Indonesia underlined that the negotiation of this issue shall not be linked to
other issues, as it is distinct from the agriculture negotiations under the Doha
The G33 believes that it is now in the interest of members to faithfully follow
the mandate of the negotiations as stipulated in the Bali and Nairobi
ministerial decisions, as well as the General Council decision (of 2014) to
intensify the discussion with a view to deliver a concrete outcome of a
permanent solution for food security purposes no later than MC11.
We are only months away and members are yet to discuss the outstanding elements
of public stockholding, said Indonesia. It encouraged members to engage
The G33 said that it is aware that in the course of negotiations a number of
outstanding issues were raised and discussed by members.
The G33 said that it shares the view on the importance of the transparency elements
in the permanent solution for public stockholding.
However, it firmly believes that such transparency elements should not be made
so onerous that many developing countries are unable to use the mechanism.
The G33 said it has heard some members expressing their concerns relating to
the exports of public stocks and members' public stockholding programmes
adversely affecting the food security of other members.
However, it has not seen a written proposal expressing such concerns, said the
The Philippines, also a member of the G33 Group, said that it did not consider
the interim solution (agreed at Bali) a good basis for discussion, as it
"renders the instrument inaccessible for developing countries".
According to trade officials, Botswana, on behalf of the African, Caribbean and
Pacific (ACP) Group, said that public stockholding programmes are of critical
importance to address food security and rural development needs.
It pointed out that the current interim solution does not provide a satisfactory
response, "not the least because it excludes programmes that are not
currently in place".
According to trade officials, Egypt, China, Korea, Kenya, Nigeria, Dominican
Republic, El Salvador, Turkey, Uganda and Zimbabwe expressed similar views,
with many highlighting that a permanent solution should be applicable to all
developing country members and to both existing and future programmes.
According to trade officials, India expressed support for the G33 statement.
The ministerial decisions must be implemented in all seriousness, it said.
It expressed disappointment that some members are trying to link public
stockholding with the discussions on domestic support in agriculture.
It quoted the General Council decision that states that public stockholding is
distinct from the Doha agenda.
Uganda said that the outcome of a permanent solution for public stockholding is
important. It said that millions of people are under-nourished and it remains
an issue of importance for the majority of people.
Uganda underlined that the permanent solution should cover both existing and
future public stockholding programmes. The current Bali decision does not cover
future programmes, it noted.
We should not negotiate an instrument that is too difficult to use, it said.
Hungry people are usually angry people, it said, noting that it is a political
issue and the government has a duty to feed the hungry.
China also agreed with the position of the G33 that members should arrive at a
permanent solution for public stockholding and that it should be applicable to
all developing members.
The process of trade liberalisation should not infringe on the right of
developing members to ensure food security. This is more than an economic or
trade issue, said China.
The ACP Group went on to propose two options for a permanent solution: (1) to
replace the 1986-88 reference price with a moving average, or allow members to
report the amount of subsidies in US dollars in order to accommodate exchange
rate fluctuations; (2) to allow payments to be counted as Green Box subsidies,
provided that administered prices are set in a transparent manner and address
According to trade officials, Pakistan said that public stockholding programmes
could lead to distorting world trade if the stocks end up on world markets.
It said that other policy measures, such as cash transfers, could be a more
efficient way to address food security concerns.
Thailand said that price support measures could not be placed in the Green Box
with no limitation.
It maintained that the release of procured stock into the global market could
be damaging to other developing countries, especially since the members of the
G33 are some of the world's largest agriculture exporters.
Thailand proposed that a permanent solution should include a prohibition of
exports of stocks procured by these programmes.
Australia said to ensure food security is not to provide unchecked, unlimited
market support. There are already millions of tons of wheat flooded in the
market, to the detriment of neighbouring countries.
Any permanent solution should include a requirement on transparency and
safeguards for exports, it said.
According to trade officials, Argentina, Paraguay, the European Union and
Mexico voiced similar views, saying that placing these programmes in the Green
Box is against the spirit of agriculture reform.
Colombia, Brazil, Costa Rica, Canada and Japan said more information is needed
to better understand the nature of public stockholding programmes.
Uruguay and Peru highlighted a communication from the agriculture ministers of
eight Latin American countries (TN/AG/GEN/42), in which they committed to
working together in search of a permanent solution to public stockholding.
DEDICATED SESSION ON SSM
At the dedicated session on SSM for developing countries also on 2 June,
Ambassador Karau reported that divergent views persist among members on this
"Members who are proponents of the SSM emphasize that they see these
discussions as entirely separate from market access negotiations. They view the
SSM as an essential tool to protect domestic producers from import surges, to
fight against poverty, and to promote rural development," said the Chair.
"Other Members consider that it would be difficult to achieve an outcome
on the SSM in MC11 in the absence of outcomes on market access more generally.
Some also restated their concerns that the SSM would disrupt normal trade and
had lingering doubts about the rationale for the SSM in the absence of market
According to trade officials, Indonesia introduced a G33 submission on
short-term price volatility in agriculture (TN/AG/GEN/45), and another paper on
the SSM (JOB/AG/96).
According to members of the G33, the first paper diagnoses the problem, and the
second paper offers the remedy.
The proponents of the SSM include Indonesia, the Philippines, China, India,
South Africa, Korea, Ecuador, Bolivia, Turkey and the African, Caribbean and
Pacific Group of States (ACP).
According to trade officials, Botswana, on behalf of the ACP Group, said that
"SSM is of critical importance to developing countries in order to
safeguard our resource-poor farmers from import surges and price
It noted that almost all ACP countries with the right to use the special agricultural
safeguard had never been able to invoke it, on account of stringent procedural
requirements and conditions associated with its application.
The ACP Group supports the establishment of an effective and easy-to-implement
SSM for developing countries that would be able to limit, on a temporary basis,
imports in cases of volume surges or sudden price declines, by MC11.
Indonesia, on behalf of the G33, said that over the years members have been
discussing the issue with a view to arriving at an agreed solution. As a
demandeur of the SSM, the G33 has been actively and constructively engaged in
There are various proposals and technical papers being submitted by the Group
to the Committee on Agriculture in Special Session with the objective of having
more focused discussions, it pointed out.
The Nairobi ministerial decision on SSM is indeed a key milestone and
reinforces the need to establish price-based and volume-based SSM, this time
through negotiations in dedicated sessions under the Committee on Agriculture
in Special Session.
It expressed hope that members will engage more constructively with a view to
finding a pro-development and balanced SSM that ensures its accessibility and
effectiveness in addressing import surges and price depressions.
Referring to its two submissions, the G33 said that the majority of producers
in developing countries are small-scale farmers who are highly dependent on
seasonal outcomes. The small and resource-poor farmers are highly vulnerable to
short-term price volatility.
It is vital for developing country members to protect resource-poor and small
farmers from excessive price volatilty of agriculture commodities, it said.
It noted that developing country members have limited policy options due to financial,
technical and social development constraints.
The implementation of an effective and operational SSM has become an urgent
need for developing countries, Indonesia emphasised.
According to trade officials, India voiced agreement with the G33 statement.
The G33 has demonstrated a great deal of flexibility, it said.
India asked members who have concerns to table text-based proposals. It sees
members trying to link the SSM with market access. Such a linkage never
existed, India underlined.
South Africa voiced agreement with the ACP Group statement. The SSM aims at
adjusting distortions in trade, it said.
The Philippines said that the G33 has put forth constructive submissions and it
called on the negotiating partners to come forward with evidence-based
On the other hand, Argentina said that while it agreed that excessive price
volatility can affect small farmers, what it could not agree on is to impose
protectionist measures to combat price volatility.
It said that while the SSM is justified to counteract subsidies, it should not
affect countries such as Argentina that do not give subsidies.
Costa Rica said if the objective of the SSM is to deal with import surges, then
it should contain disciplines to exclude products that are not produced
According to trade officials, Brazil, Japan, Mexico, Uruguay and Australia said
that they could not support a stand-alone decision on SSM, without substantial
cuts in customs duties.
Australia also questioned the validity of a SSM in free trade agreements.
"I would encourage you to engage pragmatically and to talk to each other,
and focus on identifying practical solutions to address the remaining obstacles
in our negotiations," the Chair said.
"My hope is that through these types of exchanges members can collectively
generate new ideas to help bridge the divergent positions."
At an informal meeting of the Committee on Agriculture in Special Session on 1
June, the Chair concluded that the "discussions confirmed a certain number
of key findings, in particular the near universal support among the membership
for an outcome on domestic support."
Meanwhile, he said, "several delegations stressed again that market access
must not be absent from an outcome at MC11".
On domestic support, Ambassador Karau said that most of the members he
consulted with considered curbing domestic support as the priority for MC11.
However, members were "clearly aware of the contextual difficulties
surrounding this issue".
Therefore, members "have revised their expectations about what could be
achievable by MC11."
Acknowledging the obstacles to achieve a substantial outcome in Buenos Aires,
several members raised the issue of how to ensure that work will continue on
domestic support after MC11.
"There is an emerging consensus that whatever the outcome at MC11, it
should not be considered as a final outcome on domestic support", the
He also reported that an overwhelming majority of members support a meaningful
and specific outcome in addressing subsidies in cotton, and that an outcome on
cotton should go "one step further than for domestic support in
On market access, the Chair reported that in his consultations, "many
members expressed the view that an outcome in agriculture market access was a
He noted that some members consider an outcome in addressing higher trade
barriers in agriculture would be difficult this year in the absence of outcome
in other areas.
Nonetheless, other members continue to stress the importance of achieving
commercially meaningful results.
"Members acknowledged the difficulty of achieving outcome in this pillar
given the current negotiating context, but several members insisted on the need
to ensure the work continues after MC11", the Chair said.
On other issues such as export restrictions, and food safety standards, the
Chair said: "The issue of export restrictions emerged as being of
particular interest to a number of members which have been seeking to strengthen
disciplines in this area".
As for the way forward, Ambassador Karau said that the situation today is still
characterised by a wide range of expectations amongst members on the prospects
He urged members that have not yet tabled a submission to do so before the
"Although many positions on the negotiating issues remain entrenched, let
me remind you that (in Swahili) palipo na nia pana njia - where there is a
will, there is a way," the Chair concluded.