G33 nix EU move to link PSH solution to domestic subsidy cuts

Members of the developing-country G33 grouping which is calling for public food stock schemes to be greenlighted by the WTO have rejected attempts to link this issue with domestic farm subsidy cuts.

by D. Ravi Kanth

GENEVA: Several members of the G33 developing-country coalition dismissed on 10 May an extraneous linkage suggested by the European Union between the negotiations for a permanent solution for public stockholding (PSH) programmes for food security on the one side, and domestic support reduction commitments on the other, agriculture negotiators told the South-North Development Monitor (SUNS).

The EU’s suggestion came at the WTO in the first dedicated special session for negotiating an agreement on the permanent solution by the eleventh WTO Ministerial Conference, as mandated by trade ministers in Nairobi in December.

The EU maintained that the permanent solution for PSH ought to be discussed along with Doha reduction commitments in the domestic support pillar, according to participants at the meeting.

The WTO’s tenth Ministerial Conference in Nairobi had mandated members “to negotiate and make all concerted efforts to agree and adopt a permanent solution on the issue of public stockholding for food security purposes” by the eleventh Ministerial Conference in 2017 as proposed in the Bali ministerial mandate of December 2013.

Trade ministers at Nairobi also proposed that “in order to achieve such permanent solution, the negotiations on this subject shall be held in the Committee on Agriculture in Special Session … in dedicated sessions and in an accelerated time-frame, distinct from the agriculture negotiations under the Doha Development Agenda (DDA)” and that “the General Council shall regularly review the progress.”

In a sharp response to the EU, India, which is a leading member of the G33 farm group, said categorically that “there is no explicit or implicit link between the two issues.”

India cautioned that attempts by some members to sidestep the negotiations by raising extraneous issues should not be repeated this time around, according to an agriculture official who was present at the meeting.

Questions

Ahead of the dedicated session, the Cairns Group of farm exporting countries, led by Australia, circulated two questions on issues concerning PSH. The Cairns Group sought to know:

l     How much production procured as part of public stockholding programmes has been exported?

l     What, if any, safeguards are in place to comply with the requirement in the interim solution that “stocks procured under such programmes do not distort trade or adversely affect the food security of other members”?

Indonesia, which is the coordinator of the G33 group, told Australia and other Cairns Group members that “lingering philosophical debates and questioning justifiable objectives of the issue had proven to be counterproductive and led us to nowhere, let alone to arrive at permanent solution as mandated by our ministers.”

“It is therefore high time now for all members to demonstrate political will and constructively engage in the discussions of PSH, and deliver it in MC11,” Indonesia maintained.

Indonesia emphasized that “existing provisions on public stockholding for food security purpose under the current WTO rules will not be able to address the real need of developing members to effectively support their low-income or resource-poor farmers, nor to fight hunger and rural poverty.”

“The Agreement on Agriculture as it stands today,” said the G33 coordinator, “does not give the policy space needed by developing members to implement their justifiable food security policy.”

More important, “the envisaged permanent solution must work for all developing members who are facing food security challenges but are constrained by the current inequitable Uruguay Round disciplines,” Indonesia argued.

Indonesia drew attention to several proposals circulated by the G33 group over the past three years. In its last textual proposal for the Nairobi ministerial meeting on 15 November 2015, the G33 proposed amending the WTO Agreement on Agriculture by inserting a new Annex 6 to cover programmes for public stockholding for food security purposes. The G33 said 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 their subsequent distribution at subsidized 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.

Significantly, the above programmes “shall be transparent and conducted in accordance with officially published objective criteria or guidelines” and “shall not be required to be accounted for in the Aggregate Measurement of Support [AMS].”

The main objective, the G33 explained, is that PSH for food security shall not be subjected to AMS disciplines and will form a core part of the Green Box measures.

Indonesia said some members have raised concerns on its proposal, such as possible safeguards to overcome so-called “unintended consequences”, and disciplines on notification and transparency in applying the public stockholding programmes. The G33 has clarified these concerns several times and is ready to engage constructively on any other issues, Indonesia said.

India said that the Cairns Group question on the safeguards in the interim solution has no relevance to the negotiations on the permanent solution for PSH.

India asked Australia why it is repeatedly raising the same issue on statistical details when the G33 had already provided in 2013 the details on the exported quantity and exported value, imported quantity and imported value.

“We have gone through all this and when the time will come in September next year before the ministerial then members will say there is no time,” India cautioned.

The Cairns Group and other developed countries must not resort to the same stratagem and instead must engage in text-based negotiations, India said.

The African Group and the Africa, Caribbean and Pacific (ACP) Group maintained that the permanent solution for PSH will be such that it works for all the developing countries and it is important for all developing countries.

The United States said it is committed to public stockholding programmes but added that these should not distort markets and must not affect the food security of other members, according to negotiators present at the meeting.

Brazil said PSH programmes should not affect exports, a concern that was shared by Argentina, according to an agriculture negotiator. The exporting countries said they are ready to work for the permanent solution on the condition that it will not lead to exports, negotiators said.

In crux, it is too early to say whether the US, the EU and their allies will deliver on the permanent solution without securing payment in several other areas, a South American negotiator said. (SUNS8239)                                              

Third World Economics, Issue No. 616/617, 1-31 May 2016, pp10-11