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Info Service on WTO and Trade Issues (May25/01) Yerevan, 5 May (D. Ravi Kanth) — Canada and China, in separate statements at the World Trade Organization last week, sharply criticized the United States over its unilateral tariffs, which allegedly breach the core provisions of the global trade rule-book. However, the US justified the imposition of the tariffs on national security considerations, said people familiar with the development. At a meeting on 30 April of the Doha agriculture negotiating body, also referred to as the Committee on Agriculture in Special Session (CoA-SS), Canada, without naming the US, is understood to have said that one member has imposed tariffs in breach of the WTO’s rules, suggesting that the tariffs will damage the multilateral trading system, said people familiar with the development. Canada’s sharply critical remarks against its largest trading partner seemingly caused some disquiet at the CoA-SS meeting, said people who asked not to be quoted. Furthermore, without mentioning the US administration’s move to provide tens of billions of dollars of subsidies to its farm producers, Ottawa expressed concern over the erosion of the current rules, particularly those that allow unlimited trade-distorting domestic support, arguing that this would increase uncertainty. Canada said that it does not expect an ambitious reform package on agriculture at the WTO’s 14th ministerial conference (MC14), to be held in Yaounde, Cameroon, in March next year. However, it emphasized the importance of renewing the commitment to the WTO and the Agreement on Agriculture to prevent a return to the volatile markets of the 1970s and 80s. Canada supported modest, trade-liberalizing food security deliverables at MC14. In a similar vein, China expressed concern over the current situation where one member is undermining the foundation of the WTO, violating the WTO rules and disrupting the global economic order by imposing the so-called “reciprocal” tariffs. China said these measures will cause tremendous harm to developing countries, while also casting a shadow over the success of MC14. In that context, members should join hands to face up to these challenges, China suggested. Following the remarks by Canada and China, the US took the floor at the meeting, saying that one intervention on tariffs and their potential non-compliance with the WTO rules is seemingly incorrect, as Washington had imposed the tariffs on grounds of national security considerations, said people familiar with the development. The US claimed that the recent duties imposed by US President Donald Trump under the International Economic Emergency Powers Act are for essential security interests and do not alter its WTO commitments. While the US justified its allegedly unilateral tariffs, it rebuffed the demands of many developing countries for a permanent solution for public stockholding (PSH) programs for food security purposes, said people familiar with the development. For the past several months at the CoA-SS meetings, the US spoke against the Bali agreement on an interim “peace clause”, insisting that it was a mistake, said people who asked not to be quoted. It is public knowledge that the US had agreed to the interim solution for PSH programs in return for India and several developing countries agreeing to the Trade Facilitation Agreement at the WTO’s ninth ministerial conference in Bali, Indonesia, in December 2013. When India refused to ratify the Trade Facilitation Agreement in early 2014, the US had agreed to make further changes in the General Council decision on strengthening the interim “peace clause”, which was mandated to be made permanent at the WTO’s 10th ministerial conference (MC10) in Nairobi, Kenya, in December 2015. Against this backdrop, the US apparently said at the CoA-SS meeting on 30 April that the Bali decision has severe negative repercussions in the global market, according to people familiar with the discussions. The apparent “double-standards” of the US, which is single-handedly “wrecking” the multilateral trading system with its slew of tariffs, in particular its proposed “reciprocal” tariffs, were exposed at the CoA-SS meeting, said a person, who asked not to be quoted. NEW CHAIR Meanwhile, the new chair of the CoA-SS, Ambassador Ali Sarfraz Hussain of Pakistan, is understood to have urged members to break with past missteps and embrace fresh thinking in the agriculture negotiations ahead of MC14. At the meeting, many members reaffirmed that agriculture remains a top priority for MC14, although the US and some farm-defensive countries could block any forward movement in the agriculture negotiations, said people familiar with the development. To recall, the US had blocked the facilitator’s text on agriculture at the WTO’s 11th ministerial conference (MC11) in Buenos Aires, Argentina, in December 2017, and in the subsequent two ministerial conferences as well, said people familiar with the development. The new chair, who has a delicate task of navigating the negotiations, apparently reported on the consultations he held with various groups and individual members since he assumed the role early last month. Ambassador Hussain said that divergences in views continue to persist on how the shared goal of making progress on the agriculture talks can be translated into a meaningful MC14 outcome, said people familiar with the development. He suggested that MC14 should result in a meaningful step forward, adding that the credibility of the WTO depends on its ability to respond to real-world challenges, particularly in the current turbulent international context. The chair encouraged members to engage constructively in an attempt to narrow differences, and said that he is committed to facilitating this effort through dialogue across all groups upon request. The chair said he intends to pursue in the coming weeks his consultations in various configurations, starting with proponents on the different topics, to explore how concrete progress can be made on their topics of interest in a pragmatic and effective manner. Contrary to the idea proposed by the WTO Director-General, Ms Ngozi Okonjo-Iweala, of establishing facilitators on different topics, the new chair indicated that there will not be a facilitator-led process for now. However, he did not rule out more technical discussions, if needed. According to the chair, the upcoming intense phase of discussions will culminate in a stocktaking session after the summer, likely in late September or early October, to evaluate progress and collectively decide on the way forward and the expected outcome, setting the stage for final negotiations ahead of MC14, said people familiar with the development. The chair’s suggestions on the process to be implemented in the coming days and weeks received support from Members. MEMBERS’ RESPONSES On behalf of the least-developed countries (LDCs), Senegal lamented that only limited progress was made in agriculture due to political tensions and emphasized the importance of addressing critical agricultural issues affecting food security and sustainable development. The LDC group, said Senegal, wants sustained focus on specific areas like cotton and food security. Nigeria, on behalf of the African Group, underscored the importance of food and livelihood security. The African members proposed a high-level political declaration at MC14 to reinforce the commitment to the agriculture negotiations as well as a comprehensive agricultural modalities package to address the needs of developing countries, particularly on domestic support and specific issues like PSH, the special safeguard mechanism (SSM), and cotton. Australia, the coordinator of the Cairns Group of farm-exporting countries, highlighted the critical importance of agriculture in WTO reform. In the face of the ongoing assault on the multilateral trading system, Australia stressed the need for a rules-based trading system, warning against measures that could harm agricultural trade and food security. On behalf of the G10 farm-defensive countries, Switzerland stressed the importance of a balanced and comprehensive approach at MC14, focusing on food security and addressing structural issues beyond MC14. The Russian Federation called for updating the agricultural rules to enhance food accessibility and affordability. It underscored the need for a conceptual framework and alternative agenda focusing on trade facilitation, food security, sustainable agriculture, technology transfer, and infrastructure. Brazil supported the coordination efforts by the Cairns Group and the African Group, stressing the importance of benefits to all WTO members. Success, in Brazil’s view, hinges on outcomes that deliver real value to all members, rather than focusing on marginal issues. India warned that delaying the decisions on past ministerial mandates, such as PSH and SSM, exacerbates the hunger crisis and violates human rights. New Delhi criticized the continued asymmetrical subsidy rules favouring the developed nations with outdated subsidy systems, as being flawed and do not account for inflation. India said that while developed countries can provide substantial support without limits, developing countries, including LDCs, struggle to offer even minimal support. The European Union highlighted the critical role of the WTO in maintaining global trade stability amidst geopolitical tensions. It highlighted the dire global food security situation, particularly in sub-Saharan Africa, which hosts over 55% of the world’s food-insecure population. Brussels called for pragmatic solutions at MC14. It supported resuming discussions on agricultural reforms, referencing the draft agricultural text and the Brazilian proposal. The EU also stressed the importance of addressing export restrictions and reforming cotton policies to support African countries. The EU further advocated for inclusive, evidence-based exchanges and long-term policy reflections to address contemporary agricultural challenges. +
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