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Info Service on WTO and Trade Issues (Apr24/08) Geneva, 5 Apr (D. Ravi Kanth) — Several Latin American countries, including Brazil, the largest farm-exporting country, are yet to indicate whether they are prepared to accept the final revised draft text on agriculture which was apparently prepared and circulated by the European Union at the failed World Trade Organization’s 13th ministerial conference (MC13) that ended on 2 March, said people familiar with the negotiations. Without mentioning the EU, which prepared the draft text (WT/MIN(24)/W/13/Rev.1) and circulated it at MC13 on 29 February, the WTO’s Director-General, Ms Ngozi Okonjo-Iweala, merely spoke about a “common text.” In her restricted statement (Job/GC/390) at a meeting of the Doha Trade Negotiations Committee (TNC) on 21 March, seen by the SUNS, the DG, as the chair of the TNC, said that “it was encouraging that for the first time in a very long time – despite Members’ political [sensitivities], you were working off a common text.” Surprisingly, the DG echoed a different view in her opinion piece in Project Syndicate on 28 March despite “a common text” which included a permanent solution on public stockholding (PSH) programs for food security in paragraph 21. She said: “… While a united bloc of mostly developing countries called for deep cuts in developed countries’ agricultural subsidies, clear divisions appeared among emerging markets regarding “public stockholding”- the practice of purchasing agricultural goods, often at fixed prices, to bolster domestic food security – and its potential effects on trade …” The DG’s use of the term “emerging markets” has also caused some confusion as the general classification of countries at the WTO comprises developed countries, developing countries, and least-developed countries. She should have explained which are the “emerging markets,” said a trade envoy, who asked not to be quoted. Nevertheless, the DG said that “these differences stymied efforts to move forward on outstanding agriculture negotiations, which unfortunately led some members to block an agreement further restricting harmful fisheries subsidies.” It is rather intriguing how the head of an intergovernmental organization, who is mandated to work on an independent and impartial basis, can make the above statement knowing full well that there has been little or no evidence to show that PSH programs undermined global trade since MC9, said a trade envoy who asked not to be quoted. Thailand’s trade envoy, who caused bedlam at MC13 with her allegedly open outburst against India on the issue of rice exports apparently drawn from PSH stocks, has failed to provide any demonstrable data or evidence to justify her charges, said an Asian trade envoy, who asked not to be quoted. EU’S DRAFT AGRICULTURE TEXT Regarding the EU’s revised draft text on agriculture tabled in the final hours of MC13, some South American countries that worked with the EU in finalizing the revised draft text appear to be developing “cold feet” in aligning with that text, said a trade envoy, who asked not to be quoted. The “devil is in the details” of the revised draft text, as it has raised the proverbial issue of whether “the chicken comes first or the egg”. On behalf of several developed countries, including the US and the EU, the G10 farm-defensive countries led by Norway, Switzerland and Japan have raised several concerns over the issue of modalities and time-lines on domestic support. The revised draft MC13 text on domestic support, which drastically changed the language as contained in document WT/MIN(24)/W/13, merely said the following: “Members commit to pursue and intensify negotiations on domestic support, with a view to reducing substantially and progressively trade-distorting support in a fair and equitable manner, to encourage a shift towards less trade-distorting support, and improving disciplines in accordance with the reform objective in the AoA [Agreement on Agriculture] within a reasonable implementation period to be agreed by Members. These negotiations shall preserve the special and differential treatment of developing country Members and LDCs, including support to low-income or resource-poor farmers, as well as to encourage diversification from growing illicit crops. Members will agree on the elements and the methodology of implementation of the reform according to the Timeline of Implementation section below.” In contrast, the pre-MC13 draft text on agriculture issued on 16 February proposed the following language on domestic support: “1. Members commit to pursue and intensify negotiations on domestic support, including by discussing and analysing all forms of trade-distorting support, with a view to reducing substantially and progressively the most distorting forms of such support in a fair and equitable manner and improving disciplines in accordance with the reform objective in the AoA within a reasonable timeframe to be agreed by Members. [Modalities shall be agreed and a decision adopted by MC14.]/[Members agree to work toward agreeing modalities at MC14.] 2. Members’ contributions to the reduction effort should take into account, inter alia, their global market participation, the needs of developing Members, and the interests of exporters and concerns of importers; and encourage a shift towards less trade-distorting forms of domestic support. Product specific concentration of support should also be considered. Modalities should reflect different treatment depending on the effects of the support provided. 3. These negotiations shall preserve the special and differential treatment of developing country Members and LDCs, including support to low-income or resource-poor farmers, as well as to encourage diversification from growing illicit crops. 4. Members are advised to provide the value of production data, including for specific products, in their DS:1 notifications to substantiate de minimis claims.” SOUTH AMERICAN COUNTRIES’ CALL ON DOMESTIC SUPPORT A day before MC13 on 25 February, trade ministers from a group of South American countries – Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Ecuador, El Salvador, Guatemala, Honduras, Panama, Paraguay, Peru and Uruguay – issued a clarion call on domestic support. The South American ministers emphasized that “in order to arrive at modalities for the Fourteenth Ministerial Conference (MC14), the following elements should be considered: a. Modalities for a substantial, progressive and gradual reduction in all forms of domestic support, including support that allows the concentration of trade-distorting subsidies. Efforts should be proportionate and take into account Members’ responsibility for distortions in international markets. b. Analysis of the Green Box and its criteria, in order to prevent production- and trade-distorting effects, bearing in mind the objectives of food security, rural livelihood security and environmental protection. c. Better market access conditions for food and other agricultural products, with a view to creating new and better opportunities in order to produce safe and nutritious food, and to foster sustainable and resilient agri-food production systems. d. A transparent and effective special safeguard mechanism that takes into account the specific needs of developing country Members. e. Effective special and differential treatment for developing and least developed countries that takes into account each Member’s realities, needs, capacities and level of development. f. Alignment of the regulatory framework, bearing in mind the interests and sensitivities of all Members, as well as the situation of Members from the region that made wide-ranging reduction commitments upon accession to the WTO.” The statement issued by the South American countries appears to be in variance with the revised draft text on agriculture prepared by the EU in which Brazil participated, said people familiar with the negotiations. However, it remains to be seen whether Brazil will now identify with that revised draft text (WT/MIN(24)/W/13/ Rev.1), said a trade envoy, who asked not to be quoted. Brazil had already indicated at the TNC meeting last month that it would soon circulate an approach paper on agriculture. Until now, it has not circulated the paper, said people familiar with the negotiations. In contrast, countries like India, Indonesia and the G-33 group of developing countries, and the African Group had already indicated their willingness to address issues raised by the South American countries in domestic support provided they first agree on the permanent solution for PSH, as contained in paragraph 21 of the revised draft text. The proposed text on PSH is as follows: 21. [Pursuant to the Bali Ministerial Decision (WT/MIN(13)/38-WT/L/913), the General Council Decision (WT/L/939), and Nairobi Ministerial Decision (WT/MIN(15)/44-WT/L/979), Members adopt a permanent solution as set out in Annex […] to this Decision.] OR 21. [Pursuant to Bali Ministerial Decision (WT/MIN(13)/38-WT/L/913), the General Council Decision (WT/L/939), and the Nairobi Ministerial Decision (WT/MIN(15)/44-WT/L/979), Members commit to pursue and intensify negotiations on PSH in Dedicated Sessions of the CoA-SS. A permanent solution on the issue of public stockholding for food security purposes shall be available to all developing country Members. Public stockholding programmes shall not distort trade or adversely affect the food security of other Members. Members will agree on the elements and the methodology of implementation of the reform according to the Timeline of Implementation section below.] In short, as the chair of the Doha agriculture negotiations, Ambassador Alparslan Acarsoy of Turkiye, kick-starts the negotiations on 16 April, the EU’s draft text issued at MC13 seems like a proverbial minefield and raises innumerable challenges, said people familiar with the negotiations. +
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