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TWN
Info Service on WTO and Trade Issues (Feb24/09) Geneva, 14 Feb (D. Ravi Kanth) — The United States along with a few other countries on 13 February seemingly adopted an intransigent position against the permanent solution for public stockholding programs for food security (PSH) ahead of the World Trade Organization’s 13th ministerial conference (MC13) that begins in Abu Dhabi in just 12 days’ time, said people familiar with the discussions. The position adopted by the US and Brazil seemed akin to placing a proverbial spanner in the works on the PSH issue, while many members of the Cairns Group of farm-exporting countries seemed determined to secure an outcome on agriculture at MC13, said people familiar with the discussions. Given the rather painful discussions on several issues on 13 February, the chair of the Doha agriculture negotiations is reconvening the meeting on 16 February, expressing doubts about whether he can clear the party of 164 countries, said a person, who asked not to be quoted. Brazil and several other countries made some changes to the textual language in the draft text, while some other countries appear to have diluted the language on provisions like export restrictions, said people familiar with the discussions. The meeting also witnessed sharp differences as regards the time-lines on what needs to be accomplished at MC14, said people who asked not to be quoted. At the ongoing “streamlining” discussions on PSH and several other issues on 13 February, the US trade envoy Ambassador Maria Pagan, who sat through the day-long meeting, is understood to have said that there is no evidence as to why a permanent solution on PSH is needed, a position that could derail attempts at arriving at any outcome at MC13, said people who asked not to be quoted. During the short discussion on PSH, Brazil appears to have devalued the mandates agreed by trade ministers at previous ministerial meetings since 2013, suggesting that betting on the past mandates for the future is not the smartest thing to do, said people familiar with the discussions. Brazil suggested that due to the dynamics of the negotiations, mandates can be changed/altered, a position it held repeatedly, said people, who asked not to be quoted. In response to the positions adopted by the US and Brazil, India appears to have provided evidence as to why the much-delayed permanent solution on PSH since 2015 has to be concluded at MC13, a position that was shared by Indonesia and several other developing countries, said people who asked not to be quoted. The chair of the Doha agriculture negotiations, Ambassador Alparslan Acarsoy of Turkiye, provided two options for members in his draft text issued on 29 January. The two options include: “29. [Pursuant to the Nairobi Ministerial Decision (WT/MIN(15)/44-WT/L/979), Members adopt a permanent solution as set out in Annex … to this Decision]. OR 29. [Pursuant to the Nairobi Ministerial Decision (WT/MIN(15)/44-WT/L/979), Members undertake to pursue and intensify negotiations on PSH in dedicated sessions of the CoA-SS and make all concerted efforts to agree and adopt a permanent solution on the issue of public stockholding for food security purposes by MC14. The permanent solution shall be available to all developing country Members.] 30. These negotiations shall consider all relevant issues, including domestic food security targets of the programmes; product coverage; safeguards and anti-circumvention, including with respect to exports; transparency; and legal certainty. They shall also consider the impact of inflation on calculations of the Aggregate Measurement of Support. 31. [Taking into account the acute food security challenges and vulnerabilities of LDCs, and pending the adoption of a permanent solution, Members agree to extend the Bali 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 LDCs enacted after 7 December 2013.]” After the draft text was issued, the chair held one round of discussions with members last week to elicit their views on the text. While the US and Brazil among others asked the chair to delete the first option in paragraph 29 of the draft text, they stuck to the second option for extending the discussions on PSH along with issues concerning domestic support and food security, said people who asked not to be quoted. However, a large majority of developing countries led by India and Indonesia welcomed the chair’s first option and suggested a decision based on the Bali mandate of MC9, which called for concluding the permanent solution on PSH at MC11 that was held in Buenos Aires, Argentina, in December 2017. However, the previous Trump administration blocked any outcome on agriculture at MC11, a stand that is being continued by the Biden administration “letter and verse”, said people familiar with the discussions. At a time when proposals like “responsible consensus” are being bandied about by the US and its allies to advance their issues on trade and climate change without any prior consensus and also when Washington is calling for doing away with the Appellate Body, it appears somewhat inexplicable that attempts are now being made to derail the outcome on the chair’s first option, said people who asked not to be quoted. During the discussion on the chair’s first option, India proposed an annex, which was supported by many developing countries. Costa Rica expressed its unhappiness that the proponents of PSH did not provide answers to its questions and thereby refused to engage. However, the reason why the proponents of PSH did not respond to the questions posed by Costa Rica and Paraguay on PSH was because of the “divisionary” tactics adopted to derail the permanent solution on PSH, said a trade envoy, who asked not to be quoted. REPORT ON STATE OF PLAY In his state-of-play report issued on 8 February, seen by the SUNS, the chair said: “The PSH issue at the WTO is about finding a solution for PSH programmes under which the procurement of food stocks is made at administered prices and therefore involve the granting of Market Price Support (MPS) to producers.” He explained that “the granting of such support is subject to reduction commitments under the AoA disciplines on AMS. Members procuring stocks at market prices have to notify their PSH programmes under the Green Box and are not directly affected by this issue in the negotiations.” The chair said, “At the Bali Ministerial Conference in 2013, an interim solution (i.e., a peace clause) was agreed to shield support provided under PSH programmes from legal challenges at the WTO, provided certain conditions were met.” However, according to the state-of-play report, “this (interim) solution is only available to countries with “existing” programmes back then (i.e., programmes that existed in December 2013) and therefore only covers a limited number of countries, including Bangladesh, China, India, Indonesia, Pakistan, Philippines and Chinese Taipei.” The chair said that “the Bali Decision also envisaged the adoption of a permanent solution by MC11 in 2017, but Members failed to do so.” According to the chair, “The main rationale for the proposal put forward by members of the G33 and others has been the reduced policy space due to inflation resulting in higher administered prices. As a result, the AMS limits have become much more constraining than at the time when the Uruguay Round was concluded when global food prices were low.” “It is therefore the view of the proponents that the current rules prevent them from adequately taking care of the food security of their populations.” The report acknowledged that: “The main limitation is considered to stem from the AMS calculation methodology (Annex 3 of the AoA) which does not take into account current market prices in calculating the support actually being provided (as the methodology uses a “fixed external reference price (FERP)” based on 1986-88 prices to calculate support).” Also, “the situation concerning PSH support actually provided in relation to domestic support commitments is not uniform among all developing Member proponents, as only some of them have PSH support approaching their de minimis limits and could potentially breach them,” the report suggested. Giving an account of the countries seeking the permanent solution, the chair said that “currently, the proponents (i.e., the G33, the African Group, the ACP) are seeking the fulfillment of the existing mandate and the adoption of a permanent solution at MC13 after the deadline was missed at MC11 in Buenos Aires.” More importantly, “in seeking an outcome on PSH, they (the proponents) do not want any linkage to be made to other issues,” the chair said. US & OTHER NON-PROPONENTS Without mentioning names, the report said that “the non-proponents are of the view that the PSH issue cannot be resolved in isolation and that it should be addressed in the context of broader negotiations, particularly those on domestic support, highlighting the relevance of several key domestic support provisions, including those on MPS calculation methodology.” “Several Members have also urged the adoption of a holistic approach to addressing food insecurity and consider that PSH is only one tool among many others to achieve food security,” according to the report. So far, it said, “there are two proposals dedicated to PSH that have been considered by the Membership in the last year that were submitted just before MC12: one by the African Group, the ACP, and G33 re-submitted by the proponents in March 2023 and the other by Brazil.” As previously reported in the SUNS, “the first proposal by the proponents (JOB/AG/229), submitted by a large majority of developing countries, seeks to change the method of calculating MPS (notably by updating the FERP), assumes compliance with the AoA limits (Articles 3.2, 6.3, and 7.2(b)) of all support provided pursuant to PSH programmes, even when they actually exceed the established WTO limits, and extends the coverage to all foodstuffs and to all PSH programmes of developing countries.” More importantly, the proposal by the developing countries, “would also allow stocks to be exported for the purposes of international food aid, for non-commercial humanitarian purposes or when requested by NFIDCs and LDCs, or any Member facing food shortages and higher food inflation. Transparency provisions have been simplified, and the safeguard provisions require that stocks should not “substantially” distort trade.” According to the state-of-play report, the non-proponents “consider that this proposal would allow for unlimited support (notably MPS) with weaker safeguards and transparency provisions than in the Bali Interim Solution, and as such could potentially distort trade and compromise the food security of other countries. They also advocate an export ban on public stocks covered by a permanent solution.” Brazil’s “miraculous” alternative proposal (Job/AG/230), submitted a day after the developing countries offered their rationale in document Job/AG/229, calls for “the exemption, in principle, of support provided by LDCs, NFIDCs and countries listed by the FAO as those “requiring external assistance for food” in the calculation of MPS. This exemption would, however, apply only if that country’s global export share of that product and the value of stocks procured remain below certain thresholds.” Ironically, the report mentioned that “the Cairns Group proposal (Job/AG/243/Rev.2), while not specific to PSH, seeks to provide a solution to the PSH issue under the domestic support pillar through flexibilities for product-specific support, depending on whether the developing country Member is an importer or exporter of a relevant product, taking also into account its share of world trade in that product.” In short, it appears that attempts are allegedly being made to derail an outcome on the permanent solution on PSH at MC13, which for some major industrialized countries is a price worth paying, said people who asked not to be quoted.+
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