Positions unchanged on public stockholding, SSM, says chair

Major differences persist among the membership over two key demands of many developing countries in the WTO agriculture talks – a greenlight for public food stocks and a Special Safeguard Mechanism against market volatilities.

by Kanaga Raja

GENEVA: The chair of the agriculture negotiations at the WTO has reported that members’ basic positions remain unchanged on the issues of public stockholding for food security purposes and the Special Safeguard Mechanism (SSM) for developing countries.

The report by the chair, Ambassador Vangelis Vitalis of New Zealand, came at separate dedicated discussions on 17 November on each of these issues.

According to trade officials, during the dedicated discussion on public stockholding, the chair reported that nothing new has come up and the only thing that is relatively fresh is that developing countries are now asking for the programme to be available to all developing countries, and not only to those which are already using the programme as outlined in the Bali decision.

He said that there is no disagreement among the members that there is a mandate to finish the negotiations on a permanent solution for these program-mes by the end of 2017. However, members disagree on the way forward, he added.

Food security concerns

According to trade officials,  Botswana, on behalf of the African, Caribbean and Pacific (ACP) Group, underlined that public stockholding for food security purposes is important for ACP countries, especially in times of emergency.

Public stockholding programmes are necessary to ensure adequate food supply, and finding a permanent solution must address legitimate food security concerns of developing countries. They must cover all new and existing programmes, Botswana added.

Indonesia, on behalf of the G33 grouping, said in the context of the post-Nairobi discussion, there have already been two dedicated discussions on public stockholding. However, the G33 remains concerned that some members are still questioning the public stockholding programmes, and this tendency is counterproductive. The Nairobi mandate must be kept in mind and the discussions continued, it stressed.

The G33 strongly believed that a permanent solution must contain elements of document JOB/AG/27, which says that such programmes should have no limitations.

The G33 also said that the WTO Agreement on Agriculture, as it stands today, does not give policy space for public stockholding programmes. It also believed that a solution must be available to all developing-country members.

India voiced agreement with the G33 statement. It also expressed disappointment that some members are trying to link the issue of public stockholding with the overall discussions on agricultural domestic support.

According to trade officials, other members voiced caution over what they said are the unintended consequences that such programmes could have on international markets. They also highlighted the systemic issue that such programmes could go against the direction of agriculture reform to curb subsidies.

Members which raised these concerns included Pakistan, Brazil, Colombia, Argentina, Paraguay, Uruguay, Thailand, the European Union, Canada, Australia and the United States.

The US said that while it remained committed, there is a need to allow such programmes without affecting other countries. It also said making changes to the Agreement on Agriculture will lead to unintended consequences, including affecting poor countries’ food security. There is also a need to make sure that the stocks are not exported.

The EU said that it is aware of the need to find a permanent solution by MC11 (the eleventh WTO Ministerial Conference, to be held in Buenos Aires next December) and will fully engage to do so. It understands the food security concerns. However, such food security schemes should not disrupt markets.

According to the EU, proposals to put everything in the Green Box will not find consensus. The issue cannot be looked at in isolation from the domestic-support context, it said. Instead, with broader discussions on domestic support, new trade-distorting measures can be sought to be avoided.

According to trade officials, Australia said that tougher safeguards need to be in place to prevent trade effects. It maintained that China is the world’s largest producer of wheat and India the largest exporter of rice, and that price support programmes in these large countries would have an impact on the global market, in particular when stockpiled food is leaked to the international market by private exporters or by public bodies.

Pakistan shared its experience in addressing food security and rural development through cash transfers to farmers instead of purchasing and stockpiling food.

According to trade officials, some members called upon countries that currently have public stockholding programmes to share more information and explore alternative ways to address food security concerns.

No consensus on SSM

Meanwhile, at the dedicated discussion on the SSM issue, the chair also said that there was nothing new to report. “There is no consensus whether an SSM for developing countries would form part of the Buenos Aires ministerial outcome,” Vitalis said.

He said that while there is no question on the Nairobi decision to continue negotiations on the mechanism, the issue is when and how. It is also clear that the division on the issue is not neatly between developed and developing countries, he added.

According to trade officials, South Africa said that it is one of the developing countries that have access to the existing special agricultural safeguard (SSG). This is a matter of great interest to it and more can be done to define the appropriate trigger levels of safeguards.

Botswana, on behalf of the ACP Group, said that the SSM is of critical importance to protect resource-poor farmers in developing countries. It is worth noting that most ACP countries have never been able to invoke the SSG allowed under the WTO agreement, it said. As a result, the SSG by default fails to protect the ACP farmers, and in this connection, the SSM would be necessary.

South Korea said that it has poor farmers whose livelihood and rural security have worsened since the Uruguay Round. There is growing discontent with globalization and it is high time to take these views into account. It remains positive that the SSM would be established towards MC11.

According to trade officials, the G33 said that an SSM would respond to the objectives of developing countries on food security and rural development. It said that the current SSG is too burdensome to apply, asking for a more accessible mechanism for developing countries.

Indonesia, on behalf of the G33, said that it supports the work programme on the SSM through the dedicated discussions. It pointed out that it has proposals on the table on this issue.

On the paper prepared by the WTO secretariat on the SSG, it said that the price-based trigger for the SSG is more commonly used than the volume-based trigger, which is used by few developing countries. The G33 is not in a position to accept an SSM less than the SSG, it said. There is a need to design a truly accessible SSM.

Both China and India endorsed the G33 statement.

According to trade officials, the major agriculture exporting countries, on the other hand, expressed concern over the potential negative effects that an SSM would have on South-South trade.

Australia, Argentina, Paraguay, Brazil, Colombia, Canada and the EU, among others, were of the view that an SSM can disrupt agriculture trade and hinder export opportunities for farm exporters in developing and developed countries.

The US was of the view that any discussion on the SSM can only be pursued in the context outlined in the Ministerial Conferences based on broader market access negotiations.

The chair took note of the persisting gaps in members’ positions and encouraged them to talk with each other and focus on identifying practical solutions to address the remaining obstacles in the negotiations. (SUNS8361)                    p