TWN Info Service on WTO and Trade Issues (Jul15/26)
29 July 2015
Third World Network
 
Agriculture: Chair reports little substantive progress in talks
Published in SUNS #8069 dated 24 July 2015
 
Geneva, 23 Jul (Kanaga Raja) -- The Chair of the Special Session of the WTO Committee on Agriculture, at an informal meeting on Wednesday, reported that there has been little substantive progress in the agriculture negotiations.
 
This assessment by the Chair, Ambassador John Adank of New Zealand, came following his consultations in various formats since the last informal meeting of the Special Session on 16 June.
 
Ambassador Adank reported that positions on the threshold issues in the domestic support pillar have not evolved and Members are still far from convergence.
 
According to trade officials, the informal meeting of the Special Session on Wednesday was the last one to be chaired by Adank, with many members paying tribute to him for his work.
 
According to trade officials, the informal meeting saw many developing countries underlining that the Rev. 4 draft agriculture modalities text should remain the basis for the negotiations.
 
Developing countries also stressed on the development dimension of the Doha Round and the need for special and differential treatment (S&D) for developing countries.
 
According to trade officials, Egypt (on behalf of the African Group) stressed on S&D, while Ecuador, on behalf of the ALBA countries, also highlighted on S&D and said that development is at the heart of the round.
 
In his report at the informal meeting, the Chair said that discussions in domestic support have continued to focus on different elements of the pillar and their appropriate mix in order to limit the use of trade-distorting support while enabling Members to pursue recognised policy goals.
 
According to the Chair, these elements are AMS (aggregate measurement of support), de minimis, Blue Box, OTDS (overall trade-distorting domestic support) and product-specific limits.
 
Members have continued to express different views on the relative value of each individual element, he said.
 
The Chair said he detected some willingness among some members to consider reforms in the area of blue box support.
 
This support - like the green box - is currently uncapped, and disciplining this support would therefore represent a degree of reform. Any further discussions in this area will of course require engagement with the members who continue to use blue box support.
 
While OTDS has been seen by many as important in order to limit the use of trade-distorting domestic support effectively over the longer term, it has also proved to be one of the most contentious issues.
 
This is because exemptions provided for some Members in the draft modalities have been put into question by some other Members, who argue in favour of comparable disciplines for all large subsidisers.
 
This, in turn, has made it difficult to get some members to engage on other elements such as AMS, general and product specific reductions and reductions in de minimis, said the Chair.
 
"Positions on these threshold issues have not evolved and Members are still far from convergence," said Adank.
 
The Chair noted that two non-papers have been submitted since the last Special Session with the aim of taking these discussions forward: one by Canada and Australia, focusing on the current policy space available to members, and the other by Norway focusing on existing disciplines.
 
On the market access pillar, the Chair reported that the recent discussions have focused on alternative approaches to tariff reductions.
 
"While positions have not substantially evolved, Members have demonstrated a willingness to explore alternative tariff reduction approaches on a without-prejudice basis, including averaging approaches," he said.
 
The Chair noted that on 24 June the Secretariat had circulated a background paper on general tariff reduction approaches, and that a technical workshop on this issue was held on 26 June.
 
The paper and workshop focused on three types of tariff reduction approaches that had been identified in the Chair's communication (JOB/AG/39): the tiered formula approach, an approach targeting a reduction in average bound tariffs - the so-called "cut to the average" approach - and an average tariff cut approach.
 
The Chair said that while Members have engaged constructively in these discussions, they have also expressed a range of concerns with respect to how other aspects of the market access pillar would relate to particular tariff reduction approaches.
 
Deeper discussions are needed on such issues, including minimum cuts, tariff escalation and tariff capping provisions, safeguards - and in particular the SSM - tropical products, TRQs, special and sensitive products, and specific provisions for special and differential treatment.
 
It would be useful to get a better understanding of how members see such elements in the context of any alternative approaches to tariff reductions.
 
More fundamentally, said the Chair, if members are to move into the area of alternative tariff approaches involving averaging they will need to take clear decisions on whether these approaches are based around a cut to the average or an average cut, and what is the percentage reduction level of ambition sought for members in different categories or situations in respect of each.
 
"These issues are under discussion in smaller group processes but it's fair to say we are still a long way from getting clear answers here. The fundamental difference relates to the differences of views between key participants on their respective contributions to any outcome and what they stand to get in return."
 
Export competition remains essential as part of a wider package, said the Chair. Overall, this pillar can be considered to be more mature than the two others but in the course of recent consultations, issues have been raised, particularly in respect of the areas of export credits and, in the field of international food aid, the question of in-kind food aid monetization.
 
"I would encourage delegations who have concerns in these or other areas, but have not presented any written contribution so far, to elaborate [in a detailed manner] on the scope and nature of the issues at stake, and, to the extent possible, make suggestions on how, according to them, such concerns could be addressed."
 
On cotton, the Chair reported that he held the third dedicated discussion on cotton on 9 July, back-to-back with the 23rd round of consultations under the Director-General's consultative framework mechanism on cotton.
 
On the negotiations front, he said that cotton remains a priority issue, and there is no doubt that cotton will be part of any outcome coming out of the 10th Ministerial Conference in Nairobi.
 
The Chair's assessment is that with only five months left before the Nairobi Ministerial Conference, "we need to engage in a much more focused negotiation on what could constitute a possible outcome on cotton."
 
Adank also reported on his consultations with a group of Members on the issue of Public Stockholding for Food Security Purposes, which is on a separate track.
 
On the positive side, said the Chair, those present manifested more willingness to engage and there was more apparent acceptance to take account of elements of the Bali decision in devising a potential permanent solution, though most of the views expressed were well-known ones.
 
However, despite the signs of willingness to engage, it still remained unclear how far Members would be ready to go. These consultations will need to be continued and deepened in preparation for a further Dedicated Session, said the Chair.
 
According to trade officials, the informal meeting also discussed two non-papers relating to domestic support.
 
One non-paper is by Canada and Australia, concerning the current policy space available to members, and the other was submitted by Norway, focusing on existing disciplines. Members also briefly discussed a proposal on strengthening disciplines in export prohibitions and restrictions.
 
According to trade officials, the Australia and Canada non-paper underlines that major WTO members have space between the total trade-distorting domestic support allowed under the WTO Agreement on Agriculture, and the actual amount of domestic support.
 
(See SUNS #8048 dated 24 June 2015 for details of the Australia-Canada non-paper.)
 
According to trade officials, while the proposal was welcomed by a few members, a divide remained between the developed and developing countries.
 
Several developing countries including South Africa, China, Brazil, Turkey, Argentina, and India underscored that the statistics cited in the non-paper do not take into consideration the vast social and economic differences among the developed and developing countries.
 
According to trade officials, many developing countries including Uganda, the Philippines, India and Turkey reiterated that the Rev. 4 draft modalities text should be the basis of the negotiations.
 
Benin (on behalf of the Cotton-4) called for an outcome on cotton at the Nairobi Ministerial Conference.
 
According to Brazil, a large number of developing countries share the view that agriculture is linked with development, and that in this regard, finding a ‘doable' solution should not overcome the long overdue reform in the multilateral trading system.
 
Argentina said that the non-paper does not make a distinction vis-a-vis the current policy space. For some countries, de minimis is the maximum support, while for others, they have more space under amber box support. The starting point is not the same, it added.
 
According to trade officials, China said that when members make comparisons, they need to be comprehensive. We cannot compare a member with over 500 million small-scale subsistence farmers with another member (with a much smaller number of farmers).
 
According to trade officials, Norway's one-page proposal provides a simple structure of a less ambitious outcome on domestic support.
 
The proposal introduces cuts in AMS and non-product-specific de minimis by developed countries and those developing countries with AMS, and leaves the product-specific de minimis untouched. It also introduces a new cap of the Blue Box.
 
Norway maintained that only a handful of developing countries would be affected by the cuts in the proposal.
 
While the proposal was welcomed by some members as being simple and doable, the proponents of deeper agricultural reform underlined that the level of ambition is too low.
 
According to trade officials, Indonesia and New Zealand said that OTDS cuts are missing in the Norwegian proposal.
 
India questioned why the product-specific de minimis cut was not included in the proposal, trade officials said.
 
Several members, again, referred to the Rev. 4 text as the basis for the negotiations.
 
According to trade officials, not much time was spent discussing the other two agricultural pillars - market access and export subsidies.
 
Members generally were of the view that the outcome in domestic support would determine the level of ambition in the other areas of the agriculture negotiations.
 
On the proposal on export restrictions, a few members said that at this stage, they should not "cherry pick" specific issues out of the single package, said trade officials. +