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Info Service on WTO and Trade Issues (Aug21/01) Geneva, 30 Jul (D. Ravi Kanth) – The chair of the Doha agriculture negotiating body, Ambassador Gloria Abraham Peralta from Costa Rica, has issued a 27-page draft text containing nine draft decisions for the WTO’s 12th ministerial conference (MC12) that could impose a huge burden and cost on the developing and least developed countries, said people familiar with the development. The 27-page draft text, issued as restricted document Job/Ag/215 and seen by this writer, is excessively packed with transparency provisions, including a specific draft decision on transparency and notification requirements apparently proposed by the United States and the European Union. The transparency provisions are unprecedented as they are included in each of the eight draft ministerial decisions plus the specific “transparency” decision, as apparently proposed by the United States and the European Union, ostensibly imposing an onerous burden on the developing and least-developed countries, said people familiar with the text. At a meeting of the Doha agriculture negotiating body on 29 July, the chair presented the 27-page draft text, containing the nine draft ministerial decisions. The draft ministerial decisions relate to (1) domestic support; (2) elements for the continuation of work on market access after MC12; (3) export competition; (4) export prohibitions and restrictions; (5) cotton; (6) special safeguard for developing countries; (7) public stockholding (PSH) programs for food security purposes; (8) another draft ministerial decision on PSH programs; and (9) transparency and notifications. All these draft decisions will be further negotiated from September to November before presenting them to trade ministers at MC12, which takes place in Geneva end-November. A cursory glance at these draft decisions such as on proposed disciplines on domestic support, market access, and public stockholding programs for food security make them appear to be largely aimed at preventing the developing and least-developed countries from pursuing their development-related measures in agriculture, and without recourse to policy space, said people familiar with the text. DRAFT DECISION ON DOMESTIC SUPPORT On domestic support, the chair appears to have lifted the textual proposals made by the Cairns Group in their draft ministerial statement (Job/AG/177) issued on 15 July. She has added a few somewhat “divisive” elements and created more confusion, particularly in regard to Article 6.2 of the WTO’s Agreement on Agriculture (AoA), which is referred to as the “development box” for developing countries. Ambassador Peralta has proposed in square brackets that “[Developing countries shall be accorded special and differential treatment, including for domestic support provided by them to low-income or resource poor farmers under Article 6.2.]” The confusion created by the chair’s proposed text on Article 6.2 is over lack of clarity. For example, it is not clear whether she is referring only to low-income or resource poor farmers in regard to investment or input subsidies, which are exempt from reduction commitments. The draft text has omitted the third element in Article 6.2 concerning “diversification from growing illicit narcotic crops” by developing countries. A large majority of developing countries have consistently opposed any change in Article 6.2 on grounds that both investment and input subsidies are at the heart of their development programs, said people familiar with the development. Similarly, the chair alluded to Amber Box measures by suggesting that “Members agree to address AMS above de minimis entitlements with the aim of reducing subsidy concentration and to level the playing field” but did not call for any reduction commitments in the AMS (aggregate measurement of support) that signifies the most trade- distorting subsidies. All the developed countries and some developing countries have an entitlement for AMS – the US has close to $19 billion, the European Union has more than $70 billion, as well as billions of dollars of AMS support by Japan and other farm-defensive countries. China and India have called for the elimination of the AMS entitlements, but the chair has not adhered to that proposal. Surprisingly, the chair’s reliance on the Cairns Group proposal could raise some doubts about the integrity of her textual proposals on domestic support, said a trade envoy who asked not be quoted. The Chair’s draft ministerial decision on domestic support contains the following principles: 1. Members commit to capping and reducing the sum of current global agricultural trade- and production-distorting domestic support entitlements by at least half by 2030 [alternatively: Members commit to a substantial reduction of trade- and production-distorting domestic support entitlements] according to modalities to be negotiated. 2. To this end, these negotiations shall take into consideration all forms of trade- and production-distorting domestic support under Article 6 of the Agreement on Agriculture [taking into account the different potential of each category to distort production and trade]. [Developing countries shall be accorded special and differential treatment, including for domestic support provided by them to low-income or resource poor farmers under Article 6.2.] [Members agree to address AMS above de minimis entitlements with the aim of reducing subsidy concentration and to level the playing field.] 3. The contributions by individual Members in these reductions will need to be proportionate to the size of those Members’ current entitlements and their potential impact on global markets, taking into account the individual circumstances and development needs of Members, [to ensure the global target is reached by 2030]. 4. LDCs will not be required to undertake any new reduction commitments. 5. Members note the importance of the implementation of existing notification obligations under Article 18 of the Agreement on Agriculture and undertake to make the necessary efforts to provide all outstanding DS:1 notifications to enhance transparency with respect to existing domestic support commitments. [Members undertake to provide the value of production data as part of their DS:1 notifications.] 6. [Members shall consider reviewing and clarifying Annex 2 criteria and related transparency requirements, where necessary, to ensure that relevant domestic support measures have no, or at most minimal trade-distorting effects or effects on production.] 7. [Members also commit to simplifying and updating the current transparency requirements in G/AG/2, taking due account of the capacity constraints of some Members.] The Cairns Group’s draft ministerial decision submitted by Australia, Argentina, Brazil, and several other countries contains new disciplines on domestic support. They include: 1. The Members shall commit to cap and reduce the sum of current global agricultural trade- and production- distorting domestic support entitlements by at least half by 2030. 2. To this end, Members shall negotiate an agreement to cap and reduce trade- and production-distorting domestic support entitlements. Such negotiations shall take into consideration all forms of trade- and production-distorting domestic support under Article 6 of the Agreement on Agriculture. 3. The contributions by individual Members in these reductions will need to be proportionate to the size of those Members’ current entitlements and their potential impact on global markets, taking into account the individual development needs of Members, to ensure the global target is reached by 2030. 4. The implementation of existing notification obligations under Article 18 of the Agreement on Agriculture, thus strengthening transparency with respect to existing domestic support commitments, is imperative, and that utmost effort must be made to provide all outstanding DS:1 notifications. TWO DRAFT MINISTERIAL DECISIONS ON PSH PROGRAMS On the most fundamental issue of the mandated decision on the permanent solution for public stockholding programs for food security, the chair offered two alternative draft ministerial decisions allegedly to ensure that the permanent solution is not delivered at MC12, as demanded by the US, Australia on behalf of the Cairns Group, and the European Union. The chair’s first draft alternative text is based on the Buenos Aires draft ministerial decision that was blocked by the United States in December 2017. Perhaps, this first alternative would have been largely acceptable to a majority of developing countries and LDCs, said people familiar with the development. However, in an apparent move to deny an outcome on the permanent solution, the chair proposed her second draft alternative text that would be acceptable to the Cairns Group of countries, the United States, and the European Union. The second draft alternative text, which emphasizes on a work program, states: 1. Pursuant to the Nairobi Ministerial Decision (WT/MIN(15)/44 – WT/L/979), Members shall continue to pursue negotiations and make all concerted efforts to agree and adopt a permanent solution to the issue of public stockholding for food security purposes in dedicated sessions of the Committee on Agriculture in Special Session (CoA-SS). 2. [In the interim, Members agree to extend the Interim Solution established by the Ministerial Decision of 7 December 2013 (WT/MIN(13)/38 – WT/L/913) and the General Council Decision of 27 November 2014 (WT/L/939) to public stockholding programmes for food security purposes of least developed countries enacted after 7 December 2013.] 3. The General Council shall regularly review progress in these negotiations. The chair’s apparent bias towards the Cairns Group, the United States, and the European Union is clearly exposed, said several negotiators. TRANSPARENCY PROVISIONS After proposing transparency and notification requirements in the first eight draft ministerial decisions, the chair has created a specific draft ministerial decision on transparency, which seems to be made at the behest of the US and the European Union. The specific draft ministerial decision on transparency proposes the following disciplines: 1. Further to the provisions in Article 18 of the Agreement on Agriculture and in document G/AG/2 of 30 June 1995 on “Notification requirements and formats”, Members commit to enhancing transparency to improve monitoring in all areas of agriculture. 2. The WTO Secretariat is directed to provide information on a regular basis to the Committee on Agriculture on available technical assistance, including examples of recent cooperation, in an effort to assist Members in preparing notifications pursuant to document G/AG/2 and fulfilling other relevant transparency and monitoring requirements. 3. Members welcome the development of information technology (IT) tools through the Agriculture Informational Management System (Ag-IMS) to facilitate data processing and on-line data submission by Members in implementing their notification obligations pursuant to document G/AG/2 and other relevant transparency and monitoring requirements. 4. [Members agree to establish a work programme under the auspices of the Committee on Agriculture to implement all revisions and additions to document G/AG/2 that Members agreed to explore in other Ministerial Decisions adopted as part of the outcome on agriculture at the Twelfth Ministerial Conference by [date].] DRAFT DECISION ON MARKET ACCESS In a similar vein, the draft decision on market access excessively focuses on transparency and notification requirements while ignoring crucial issues such as tariffication based on ad valorem equivalents, as they are anathema to the European Union, and the G10 farm-defensive countries, said people familiar with the text. On market access, the chair has resorted to a proposal from Australia, the US and the European Union. The European Union does not wish to enter into market access negotiations, while Australia and the US want greater transparency and legal certainty over the application of applied tariffs. The chair’s draft ministerial decision on market access states: Scope: 1. This Decision applies to changes in MFN applied tariffs in respect of both agricultural and non-agricultural goods. Best practices in the application of changes to MFN applied tariff rates: 2. In order to promote predictability in the application of changes to MFN applied tariff rates, whilst recognizing that Members have different domestic frameworks and customs administration practices, Members agree that the options presented in Annex 1 to this Decision represent best practices in the application of such changes. 3. Members also agree to examine options to inform the WTO as soon as practicable of MFN applied tariff changes as part of broader efforts to improve transparency in the WTO. Application of Best Practices: 4. Recognizing that Members have different domestic frameworks and customs administration practices, Members [shall][should] apply at least one of the best practices listed in Annex 1 of this Decision. 5. Least Developed Country (LDC) Members in a position to do so should apply [at least] one of the best practices listed in Annex 1 of this Decision. Ongoing Development of Best Practices: 6. Members recognize that additional best practices may be developed to improve predictability and transparency when an MFN applied tariff rate changes. 7. To this end, Members are encouraged to present additional best practices to the Committee on Market Access (CMA), which will be responsible for an annual review of this Decision. If no objections are raised in the annual review, the best practice(s) shall be added to the list in Annex 1 to this Decision. Notification: 8. Members [shall] [are encouraged to] notify to the CMA the best practice(s) they use, outlined in Annex 1 to this Decision, no later than [12] [6] months after the adoption of this Decision. Members [shall] [should] notify to the CMA of subsequent changes to their practices. 9. If a Member is not in a position to implement one of the best practices presented in Annex 1 to this Decision, the Member [shall][should] notify to the CMA its current practice in this matter. 10. Members [should][shall] use the template in Annex 2 to this Decision to notify their practice(s) to the WTO. 11. The WTO Secretariat shall maintain a list of practices notified by Members. 12. Members facing resource constraints in meeting this notification shall, upon request from another Member, provide information on the current practice(s) used by them. Technical Assistance: 13. Upon request, the WTO Secretariat shall provide technical assistance to [developing] Members who encounter challenges in applying a best practice presented in Annex 1 to this Decision. In addition, [developing] Members and LDCs are encouraged to reach out to Members to discuss how to apply the best practice(s) or develop a best practice that fits their domestic systems. In a nutshell, never in the recent past has a chair of the agriculture negotiations seemingly shown such a blatant bias to promote the interests of the Cairns Group, the United States, the European Union, Japan and Switzerland of the G10 Group, said several members familiar with the text. Ambassador Peralta appears to have destroyed the high standards set by the previous chairs of the Doha agriculture negotiations such as Ambassador Crawford Falconer and Ambassador Vangelis Vitalis, both from New Zealand. Both Ambassadors Falconer and Vitalis created trust and integrity in their proposals that were largely acceptable to both the industrialized and developing countries, said a trade envoy, who asked not to be quoted.
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