TWN Info Service on WTO and Trade Issues (Nov14/12)
26 November 2014
Third World Network  

Draft decisions on Trade Facilitation Agreement/food security
Published in SUNS #7923 dated 25 November 2014
 
Geneva, 24 Nov (Kanaga Raja) -- A draft decision on the Protocol of Amendment for the Trade Facilitation Agreement (TFA) and a draft decision on public stockholding for food security purposes were handed out at an informal Heads of Delegation (HOD) meeting at the World Trade Organisation (WTO) on Monday.
 
Both these draft decisions have been accompanied by a statement by the Chair of the General Council, to be delivered at a special meeting of the Council on 26 November.
 
The special meeting of the General Council in the afternoon of 26 November is to be preceded by a meeting of the WTO Preparatory Committee on Trade Facilitation (PrepCom) earlier in the morning on the same day.
 
The main agenda item of the PrepCom is the consideration and adoption of the Protocol of Amendment to insert the TFA into Annex 1A of the WTO Agreement, while the General Council is to consider and adopt decisions or take any necessary action on the Protocol of Amendment and on public stockholding for food security purposes.
 
All these developments have come following an official announcement by the United States and India on 13 November that both governments had reached an agreement aimed at breaking the current deadlock on the TFA/food security issue. Unlike at Bali, the two governments had negotiated directly, bypassing the WTO Director-General.
 
At the informal HOD meeting on Monday where the three documents were handed out to the members, WTO Director-General Roberto Azevedo reportedly explained these documents, adding that there were no surprises in these texts.
 
He also reportedly said that he had tried to take into account members' concerns, and that the margin for manoeuver is very small.
 
No delegation took the floor at the informal meeting.
 
The draft decision on public stockholding for food security purposes, amongst others, states that until a permanent solution is agreed and adopted, and provided that the conditions set out are met, Members shall not challenge 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.
 
[The draft decision (with footnotes) on food security appears to cover only violations of the AoA, and that too only the public distribution system (PDS) programs that were in place on the date of the Bali decision. It is subject to all the intrusive, and very burdensome (for developing countries) requirements built into it in the Bali decision. Several critiques of the Bali decision, including in India, have underscored that developing countries would be obliged to adhere to requirements that are not borne by developed countries. The decision also means that all other issues raised not only in India, but in other developing countries and by civil society organizations are not covered and have to be negotiated.
 
[The decision about the ‘peace clause' does not also cover any violations of the WTO Agreement on Subsidies and Countervailing Measures (SCM), and creates uncertainties. As for the TFA protocol, to be governed by the Amendment procedures and provisions of Article X, para 1 of the Marrakesh Treaty, it also specifies that para. 3 will apply. That apart, there is some murkiness around the legal implications of including the TFA in Annex 1A, since the TFA does change some of the rights and obligations of members under GATT 1994, and also some provisions of the pre-shipment inspection agreement. It will certainly provide much scope for trade lawyers.
 
[At the time of Bali, USTR officials had said that the US could accept it without any further Congressional action since no change in US laws and regulations are required. Some US trade lawyers had questioned it at that time. The only provision in the TFA that involves the US following the EU practices has been worded on a best endeavour basis.
 
[On the other hand, all the other Bali decisions, whether a permanent solution to food security, or other Bali decisions like those favouring LDCs may need US Congressional agreement, and changes to US laws, as also in the case of European nations, Switzerland etc. Even if bona fide or good faith negotiations are held, and by July 2015 agreements are reached, and sought to be incorporated into the Marrakesh treaty by a protocol, there is no certainty of that protocol being accepted and brought into force, once the separate protocol on the TFA is accepted and incorporated in Annex 1A. Even if the Obama administration bona fide wants to do so, the state of relations between the administration and the Republican-controlled Congress in a dysfunctional Washington DC, makes it highly unlikely. - SUNS]
 
According to the draft decision on food security, Members are to 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 by 31 December 2015.
 
Importantly, it also says that if a permanent solution for the issue of public stockholding for food security purposes is not agreed and adopted by the 11th Ministerial Conference (to be held in 2017), the mechanism (referred to in paragraph 1 of the Bali Decision, and as set out in paragraph 1 of this Decision) shall continue to be in place until a permanent solution is agreed and adopted.
 
The draft decision further states that negotiations on a permanent solution shall be held in the Committee on Agriculture in Special Session, in dedicated sessions and in an accelerated time-frame.
 
The accompanying statement by the General Council proposes that in adopting the two decisions, the General Council also agrees to complete the Work Program on the remaining DDA issues by July 2015.
 
The text of the draft decision on the Protocol of Amendment to the Trade Facilitation Agreement under the Preparatory Committee on Trade Facilitation is as follows:
 
"PROTOCOL AMENDING THE MARRAKESH AGREEMENT ESTABLISHING THE WORLD TRADE ORGANIZATION
 
"DRAFT DECISION
 
"The General Council,
 
"Having regard to paragraph 1 of Article X of the Marrakesh Agreement Establishing the World Trade Organization ("the WTO Agreement");
 
"Conducting the functions of the Ministerial Conference in the interval between meetings pursuant to paragraph 2 of Article IV of the WTO Agreement;
 
"Recalling the General Council Decision to commence negotiations on the basis of the modalities set out in Annex D to that decision, adopted on 1 August 2004, as well as the Ministerial Decision of 7 December 2013 to draw up a Protocol of Amendment to insert the Agreement on Trade Facilitation into Annex 1A of the WTO Agreement (the "Protocol");
 
"Recalling paragraph 47 of the Doha Ministerial Declaration of 20 November 2001;
 
"Recalling paragraphs 2 and 3 of the Doha Ministerial Declaration, Annex D of the General Council Decision of August 2004 and Article 13.2 of the Agreement on Trade Facilitation on the importance of the provision of assistance and support for capacity building to help developing and least-developed countries to implement the provisions of the Agreement on Trade Facilitation;
 
"Welcoming the Director General's announcement setting up, within the existing WTO structures, a Trade Facilitation Agreement Facility to manage support that Members volunteer to provide the WTO in furtherance of supplementary assistance to implement the provisions of the Trade Facilitation Agreement and to facilitate coherence of assistance with the Annex D plus agencies;
 
"Having considered the Agreement submitted by the Preparatory Committee on Trade Facilitation (WT/L/931);
 
"Noting the consensus to submit this proposed amendment to the Members for acceptance;
 
"Decides as follows:
 
"1. The Protocol amending the WTO Agreement attached to this Decision is hereby adopted and submitted to the Members for acceptance.
 
"2. The Protocol shall hereby be open for acceptance by Members.
 
"3. The Protocol shall enter into force in accordance with the provisions of paragraph 3 of Article X of the WTO Agreement.
 
"DRAFT PROTOCOL AMENDING THE MARRAKESH AGREEMENT ESTABLISHING THE WORLD TRADE ORGANIZATION
 
"Members of the World Trade Organization;
 
"Referring to the Agreement on Trade Facilitation;
 
"Having regard to the Decision of the General Council in document WT/L/x, adopted pursuant to paragraph 1 of Article X of the Marrakesh Agreement Establishing the World Trade Organization ("the WTO Agreement");
 
"Hereby agree as follows:
 
"1. Annex 1A to the WTO Agreement shall, upon entry into force of this Protocol pursuant to paragraph 4, be amended by the insertion of the Agreement on Trade Facilitation, as set out in the Annex to this Protocol, to be placed after the Agreement on Safeguards.
 
"2. Reservations may not be entered in respect of any of the provisions of this Protocol without the consent of the other Members.
 
"3. This Protocol is hereby open for acceptance by Members.
 
"4. This Protocol shall enter into force in accordance with paragraph 3 of Article X of the WTO Agreement.
 
"5. This Protocol shall be deposited with the Director-General of the World Trade Organization who shall promptly furnish to each Member a certified copy thereof and a notification of each acceptance thereof pursuant to paragraph 3.
 
"6. This Protocol shall be registered in accordance with the provisions of Article 102 of the Charter of the United Nations.
 
"Done at Geneva this xx day of two thousand and fourteen, in a singe copy in English, French and Spanish languages, each text being authentic."
 
The full text of the Draft Decision of the General Council on public stockholding for food security purposes is as follows:
 
"PUBLIC STOCKHOLDING FOR FOOD SECURITY PURPOSES
 
"DRAFT DECISION
 
"The General Council,
 
"Having regard to paragraph 1 of Article IX of the Marrakesh Agreement establishing the World Trade Organization ("the WTO Agreement");
 
"Conducting the functions of the Ministerial Conference in the interval between meetings pursuant to paragraph 2 of Article IV of the WTO Agreement;
 
"Recognizing the importance of public stockholding for food security purposes for developing countries;
 
"Noting the Ministerial Decision of 7 December 2013 on Public Stockholding for Food Security Purposes (WT/MIN(13)/38-WT/L/913) dated 11 December 2013 (hereinafter referred to as the "Bali Decision");
 
"Decides that:
 
"1. Paragraph 2 of the Bali Decision shall be read as follows: Until a permanent solution is agreed and adopted, and provided that the conditions set out in paragraphs 3 to 6 of the Bali Decision are met, Members shall not challenge 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 the Bali Decision, that are consistent with the criteria of paragraph 3, footnote 5, and footnote 5 and 6 of Annex 2 to the AoA.
 
"2. If a permanent solution for the issue of public stockholding for food security purposes is not agreed and adopted by the 11th Ministerial Conference, the mechanism referred to in paragraph 1 of the Bali Decision, as set out in paragraph
1 of this Decision, shall continue to be in place until a permanent solution is agreed and adopted.
 
"3. In accordance with paragraph 1.11 of the Bali Ministerial Declaration (WT/MIN(13)/DEC) dated 11 December 2013, the negotiations on a permanent solution on the issue of public stockholding for food security purposes shall be pursued on priority.
 
"4. 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 by 31 December 2015. 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"). The three pillars of the agriculture negotiations, pursuant to the DDA, will continue to progress in the CoA SS.
 
"5. The TNC/General Council shall regularly review the progress of these dedicated sessions."
 
In the statement of the Chairman of the General Council, to be delivered at a special meeting of the Council on 26 November, the Chair, Ambassador Jonathan Fried of Canada, proposes that in adopting the two Decisions on the Protocol of Amendment for Trade Facilitation and on Public Stockholding for Food Security Purposes simultaneously, the General Council also agrees that members will resume work immediately and that all Members will engage constructively on the implementation of all the Bali Ministerial Decisions in the relevant WTO bodies, and on the preparation of the clearly defined Work Program on the remaining DDA issues, mandated in para. 1.11 of the Bali Ministerial Decision.
 
It is proposed that in adopting these two decisions, the General Council agrees to immediately resume work on the implementation of all Bali decisions as well as the Work Program mandated in para. 1.11 of the Bali Ministerial Declaration, with a view to finalizing the Work Program by July 2015. +