TWN Info Service on Sustainable Agriculture
5 July 2022
Third World Network

Trade: Agriculture talks could become a proverbial "Wild West" after MC12
Published in SUNS #9609 dated 5 July 2022

Geneva, 4 Jul (D. Ravi Kanth) -- The failure to arrive at any decision/declaration on agriculture apparently remains as a proverbial "eyesore" at the World Trade Organization's 12th ministerial conference (MC12) that concluded on 17 June, said several former and current trade envoys.

"It is sad that there is no decision/declaration on how to continue work on agriculture and even on the mandated issue of the permanent solution for public stockholding (PSH) programs for food security," said a former trade envoy, preferring not to be quoted.

At the WTO's eleventh ministerial conference (MC11) held in Buenos Aires, Argentina, in December 2017, the agriculture agenda was seemingly stymied by the United States, which blocked the entire text issued by the facilitator Ms Amina Mohamad, a former Cabinet Secretary from Kenya.

Interestingly, at MC12, the facilitator on agriculture, Ms Betty Maina, the Cabinet Secretary for Industrialization, Trade and Enterprise Development from Kenya, played an allegedly "partisan" role by adopting "rigged" methods and in some cases allegedly openly siding with members opposed to the permanent solution for PSH programs, as reported in SUNS #9594 dated 14 June.

The WTO's director-general Ms Ngozi Okonjo-Iweala had touched on this issue at a concluding press conference on 17 June.

She suggested that she will explore how work on agriculture could be restarted under Article 20 of the WTO's Agreement on Agriculture (AoA).

However, the moot issue is whether the DG can pursue work under Article 20 of AoA because as the chair of the Trade Negotiations Committee (TNC) that was established under the mandate of the Doha Ministerial Declaration, the DG is mandated to pursue the work program on agriculture under paragraph 13 of the Doha Ministerial Declaration, said two former trade envoys, who asked not to be quoted.

The Doha ministerial mandate referred to Article 20 of the Agreement on Agriculture, stating that: "we recognize the work already undertaken in the negotiations initiated in early 2000 (following the collapse of the WTO's third ministerial conference in Seattle in 1999) including the large number of negotiating proposals submitted on behalf of a total 121 members."

Moreover, the DG was appointed as the ex officio chairperson of the Doha TNC and she is required to pursue negotiations in agriculture based specifically on the mandate agreed in the Doha work program.

In paragraph 46 of the Doha Ministerial Declaration, it is stated unambiguously that "the overall conduct of the negotiations shall be supervised by a Trade Negotiations Committee under the authority of the General Council. The Trade Negotiations Committee shall hold its first meeting not later than 31 January 2002. It shall establish appropriate negotiating mechanisms as required and supervise the progress of the negotiations."

The mandate on agriculture, as outlined in paragraph 13 of the Doha Ministerial Declaration, states, "building on the work carried out to date and without prejudging the outcome of the negotiations, we commit ourselves to comprehensive negotiations aimed at: substantial improvements in market access; reductions of, with a view to phasing out, all forms of export subsidies; and substantial reductions in trade-distorting domestic support."

The 2001 Doha mandate states that "special and differential treatment for developing countries shall be an integral part of all elements of the negotiations and shall be embodied in the schedules of concessions and commitments and as appropriate in the rules and disciplines to be negotiated, so as to be operationally effective and to enable developing countries to effectively take account of their development needs, including food security and rural development."

It takes note of "the non-trade concerns reflected in the negotiating proposals submitted by Members and confirm that non-trade concerns will be taken into account in the negotiations as provided for in the Agreement on Agriculture."

POST-CANCUN DEVELOPMENTS

Although the modalities on further commitments ought to have been agreed to by the WTO's fifth ministerial conference in Cancun, Mexico in 2003, the EU had blocked any outcome at the Cancun meeting after failing to secure an outcome on the four so-called Singapore issues (trade and investment, trade and competition policy, transparency in government procurement, and trade facilitation), while the US opposed any substantial decisions, including on cotton.

Nevertheless, the Doha negotiations got a substantial boost when a group of trade ministers agreed on a substantial mandate on agriculture.

That mandate was immediately endorsed and adopted at a General Council meeting on 1 August 2004.

To recall, the "July Package", as it was referred to, included a comprehensive framework on agriculture, which covered all the issues in detail in an attached annex (see document WT/L/579).

In a way, the July Package resurrected the Doha negotiations. The US and the EU had endorsed the package as a trade-off for including the issue of trade facilitation in the package.

HONG KONG MINISTERIAL DECLARATION

The sixth WTO ministerial conference held in Hong Kong-China in December 2005, furthered the mandate on agriculture based on the Doha Ministerial Declaration and the July Package.

On cotton, the Hong Kong Ministerial Declaration said explicitly: "We recall the mandate given by the Members in the decision adopted by the General Council on

1 August 2004 to address cotton ambitiously, expeditiously and specifically within the agriculture negotiations in all trade distorting policies affecting the sector in all three pillars of market access, domestic support, and export competition."

It set three markers on cotton. They include:

(1) "all forms of export subsidies for cotton will be eliminated by developed countries in 2006";

(2) "on market access, developed countries will give duty- and quota-free access for cotton exports from least- developed countries (LDCs) from the commencement of the implementation period"; and

(3) "members agree that the objective is that, as an outcome for the negotiations, trade-distorting domestic subsidies for cotton production be reduced more ambitiously than under whatever general formula is agreed and that it should be implemented over a shorter period of time than generally applicable. We commit ourselves to give priority in the negotiations to reach such an outcome."

NEGOTIATIONS SUSPENDED IN 2006

However, following the sixth ministerial conference in Hong Kong-China in 2005, the negotiations were suspended in mid-2006 on grounds that the US needed time on account of its ensuing Congressional elections towards the end of 2006.

That was what the former Director-General Pascal Lamy had decided on, knowing full well that negotiations are never suspended abruptly to suit the political developments in one country, i.e., the US, said a former chair of the Doha agriculture negotiations.

Despite the suspension, following a "fire side" chat and behind-the-scene developments, the former chair of the Doha agriculture negotiations, Ambassador Crawford Falconer of New Zealand, issued a draft agriculture text in early 2008.

Subsequently, that text was modified for a meeting of seven trade ministers in mid-2008.

The US again blocked the text on several grounds, while India also blocked the text due to the high benchmarks for availing of the special safeguard mechanism.

At the eighth ministerial conference (MC8) held in Geneva in December 2011, which witnessed Russia's accession to the WTO, the chair of the conference, Mr Olusegun Olutoyin Aganga from Nigeria, issued a concluding statement in which he emphasized the need for different negotiating approaches.

The MC8 chair's statement opened the door for negotiations on a Trade Facilitation Agreement while mentioning other issues of the Doha agenda.

The crucial line in the chair's concluding statement states that "ministers commit to advance negotiations, where progress can be achieved, including on the elements of the Doha Declaration that allow members to reach provisional or definitive agreements based on consensus earlier than full conclusion of the single undertaking."

As expected, the US, the EU and other developed countries accelerated discussions on trade facilitation, while allegedly giving a short shrift to agriculture and other issues.

"For Brazil and many others, this (trade facilitation) is not a self-balancing issue," said former Brazilian trade envoy Ambassador Roberto Azevedo.

However, after becoming the WTO director-general in September 2013, Azevedo changed  course by focusing largely on trade facilitation.

India raised the issue of public stockholding programs for food security to balance out the Trade Facilitation Agreement.

Thus, at the ninth ministerial conference (MC9) held in Bali, Indonesia, in December 2013, India and several other countries secured an interim agreement (a "peace clause") on public stockholding programs for food security purposes in developing countries.

The mandate on PSH programs was further reinforced by the General Council in November 2014, which has come to be treated as a "perpetual" peace clause.

Trade ministers, at the tenth ministerial conference (MC10) in Nairobi, Kenya in December 2015, were required to arrive at a permanent solution on PSH programs but so far a decision could not be reached due to blockage by the US at MC11 in Buenos Aires in December 2017.

Subsequently, at MC12, Australia, on behalf of the Cairns Group of farm-exporting countries, the US, and the EU among others have continued their strong opposition to the permanent solution, as previously reported in the SUNS.

Although the PSH issue is dealt with as a separate issue without any linkage to the broader agriculture negotiations, the Cairns Group, the US, and the EU have sought linkages with other issues in the Doha agriculture work program.

Following MC12, wherein there is no mandate on how to proceed on agriculture, attempts could be made to block the PSH issue when it comes up for discussion in the coming months, said several trade envoys.

More importantly, the DG has suggested that negotiations on agriculture be pursued in accordance with Article 20 of the AoA.

However, under the present Doha mandate, the DG may not be entitled to pursue negotiations on a new mandate unless there is prior ministerial approval, said several former and current trade envoys, who asked not to be quoted.

But other members have maintained that there is no need for any fresh mandate to be approved, as the negotiations can be conducted under Article 20 of the AoA.

Ironically, it appears that the huge volume of work done on agriculture is being sought to be buried, with the credit allegedly going to the US and the EU for having "decimated" the Doha mandate and subsequent work on agriculture.

Meanwhile, several US senators, immediately after MC12, pressed the administration of US President Joe Biden to initiate a trade dispute against India for allegedly subsidizing its farmers over rice and wheat.

"American commodity producers are operating at a clear disadvantage to their competitors, primarily from India, where the government is subsidizing more than half of the value of production for rice and wheat, instead of the 10% allowable under (the de minimis provisions of) World Trade Organization rules," they said.

The US senators appear to have failed to acknowledge that WTO members had agreed to a "perpetual" peace clause in 2014 for subsidies to rice and wheat, and thereby, are excluded from any legal complaint.

Ironically, after MC12, the WTO seems to have become the proverbial "Wild West" in relation to agriculture. +