India may not secure food security deal at WTO Nairobi meet

livemint, 30 November, 2015

D. Ravikanth

Snapshot

  • The G-33 farm coalition demands two deliverables at the Nairobi ministerial. Accordingly, G-33 submitted two proposals in prep meetings of WTO. The first proposal for amending the WTO’s Agreement on Agriculture by inserting a new article for the special safeguard mechanism (SSM) for agricultural commodities, to protect poor farmers from sudden surges in imports of farm products supplied by heavily-subsidized countries and, the second proposing an exemption from subsidy reduction commitments for public stockholding programmes.
  • US, EU, Australia, Brazil, Paraguay and Pakistan warn of “unintended consequences” of above measures such as the leakages from public stocks into the international market. The G-33 proposal, Australia said, will create another “green box.”
  • In return, the industrialized countries submitted the proposals in the pillar on in export competition, calling for fundamental changes in the Agreement on Agriculture to address their own export subsidies for farm products, exemption from export credits to farm produce, food aid and state trading enterprises.
  • The US, EU and Australia said that they will not agree on the SSM without discussing issues in yet another area—market access for farm products. According to them, the SSM proposal is the balancing element for the proposed deliverables in export competition.
  • India dismissed the concerns raised by Australia, the EU, Australia and Brazil saying that those talking about farm trade reforms are silent about the huge subsidies provided by a few major industrialized countries.

 

India is unlikely to secure a permanent solution for public stockholding programmes for food security at the World Trade Organization’s Nairobi ministerial next month, after the US, the European Union (EU), Australia, Brazil, Paraguay, and Pakistan effectively rejected a draft decision aimed at exempting programmes for supporting millions of resource-poor farmers from any subsidy limits.

On Wednesday, the US, the EU, Australia, Brazil, Paraguay and Pakistan said the draft ministerial decision for a permanent solution being tabled by India along with its allies in the G-33 farm coalition would distort global farm trade because of exemptions for such programmes from subsidy discipline.

The G-33 farm coalition of 47 countries, led by Indonesia, in which China, India, the Philippines, Korea, Turkey, Kenya and 40 other countries are members, has demanded two deliverables at the Nairobi ministerial beginning on December 15—a special safeguard mechanism (SSM) for protecting poor farmers from sudden surges in imports of farm products supplied by heavily-subsidized countries and exemption from subsidy reduction commitments for public stockholding programmes.

The US, the EU, Australia, and Brazil blocked the G-33’s SSM proposal on Tuesday. But, on the permanent solution for public stockholding programmes, the US, the EU, Australia, Brazil, Paraguay and Pakistan adopted a different strategy

On Wednesday, the chair for Doha agriculture negotiations Vangelis Vitalis convened a closed-door meeting to discuss the G-33 draft ministerial decision on the permanent solution. Participants invited to the meeting included the US, the EU, Australia, Brazil, Paraguay, Indonesia, China, India, the Philippines and Nigeria.

Indonesia explained the central features of the four-page draft decision, which calls for amending the WTO’s agreement on agriculture by inserting a new annex six to cover the domestic subsidies underpinning the public stockholding for food security purposes.

The decision says programmes for the acquisition of foodstuff at administered prices by developing and poorest countries “with the objective of supporting low-income or resource-poor producers,” and for subsequent distribution at subsidized prices with the objective of meeting food security requirements shall be exempted from subsidy reduction commitments.

Some countries, said India, spoke about “unintended consequences” but have not given any suggestions on how they can be addressed, according to participants familiar with the meeting.

India asked the opponents whether they are rejecting the G-33 proposal for a permanent solution on the ground that the interim solution is adequate and doesn’t require a change, said a participant, who asked not to be quoted.

In response, the EU said: “We are not rejecting the G-33 proposal but in the current form it cannot be accepted,” the person said.

Australia expressed serious doubts about the draft decision and whether it would properly address the “unintended consequences” such as the leakages from public stocks into the international market. The G-33 proposal, Australia said, will create another “green box”, implying another major exemption for programmes that do not have to be accounted for in subsidy reduction commitments.

The EU maintained that it wants to engage constructively in finding a permament solution. But the real deadline for finding the permanent solution is the eleventh ministerial conference in end-2017, and not the Nairobi ministerial, the EU argued.

At the Bali ministerial, trade ministers set a deadline for finding the permanent solution by end-2017, at the eleventh ministerial meeting while members at the General Council had mandated concerted efforts to resolve this issues by 31 December.

The EU suggested that the General Council’s decision last year is less important than what ministers had decided at the Bali ministerial meeting in 2013. Further, the best option for the G-33 countries is to start implementing the interim solution as worked out at the Bali ministerial in December, 2013, instead of pressing for a permanent solution, the EU maintained.

The US said it remains committed to public stockholding discussion but the latest G-33 proposal doesn’t change the substance of retaining such programmes in the green box, according to participants familiar with the meeting.

More pointedly, the US said that “amending the AoA [agreement on agriculture] is not the right way.

Pakistan supported the EU by saying that the Bali decision struck the right balance and that the public stockholding programmes will lead to unsustainable production as well as undermine reform of global farm trade.

Brazil said it is seriously concerned about the “unintended consequences” which the proponents have not addressed in the draft decision. Paraguay said the G-33 proposal calls for a huge carve out by exempting food security programmes from subsidy discipline.

China asked the opponents to engage constructively by suggesting what needs to be done if there is a problem of placing the public distribution programmes in the green box disciplines which are exempted from reduction commitments.

India dismissed the concerns raised by Australia, the EU, Australia and Brazil saying that those talking about farm trade reforms are silent about the huge subsidies provided by a few major industrialized countries. India challenged the EU’s interpretation of last year’s general council decision to arrive at a permanent solution by the tenth ministerial meeting. It said the General Council decision last year during the inter-ministerial conferences is hierarchically on the same footing as decisions taken by trade ministers.

 

 

India toughens stand at WTO after safeguards proposal blocked

livemint

In an attempt to find an outcome based on the G-33 proposal before the Nairobi meeting, starting on 15 December, the chair for Doha agriculture negotiations, Ambassador Vangelis Vitalis, convened a closed-door meeting with 10 countries.

The US, EU, Australia, and Brazil have rejected the special safeguard mechanism (SSM) being demanded by India along with 46 developing countries of the G-33 farm coalition. The SSM is vital for protecting millions of poor farmers from the sudden and unforeseen surges in imports of farm products.

Indonesia, on behalf of the G-33 members, explained the main features of the draft ministerial decision that calls for amending the WTO’s agreement on agriculture in order to include a new article for the SSM that would enable developing countries to impose additional import duties on farm products when they cross certain price and volume thresholds on a three-year rolling average basis.

The Philippines explained the importance of the SSM for developing countries in general, and its farmers in particular. The SSM, according to the Philippines, is essential for its farmers in the current context of volatile global farm prices underpinned by the huge farm subsidies provided in major industrialized countries.

Despite the chair’s repeated pleas for constructive engagement, Australia has flatly rejected the proposal on the grounds that it is a balancing element for the proposed deliverables in export competition, which include elimination of export subsidies and disciplines for export credits, food aid, and state trading enterprises.

Australia also maintained that it will not engage on the SSM without discussing issues in yet another area—market access. The EU said SSM cannot be delivered at Nairobi because there are no outcomes in market access for farm products.

The US said it will not agree to SSM without “new market access,” according to people present at the meeting.

Brazil argued that without outcomes in market access, it will not agree to a mechanism that is more trade restrictive.

India, in response to the statements made by Australia, the EU, the US and Brazil, said it is clear that there is a determined effort to stonewall the negotiation on SSM, according to people present at the meeting.

“If this is the level of engagement of members in negotiating an outcome on SSM, then they must be prepared for the same level of engagement in other areas,” India cautioned at the meeting, according to a person who asked not to be identified.

China said it is concerned about the fate of SSM, emphasizing that political willingness is more important.

Turkey, a G-33 member, said there is no linkage between SSM and market access, maintaining the ministers had already mandated SSM in the 2005 Hong Kong Ministerial declaration.

On Tuesday, the chair also issued a restricted report about his recent consultations about the Nairobi deliverables. On SSM, said Vitalis, “There are two groups with diametrically opposing views. On the one hand, the G-33 has made clear its expectation that this (SSM) must be a deliverable for Nairobi. On the other hand is another group of countries (US, EU, Australia, and Brazil among others) that was equally clear that it did not see this as a deliverable for Nairobi.”

A deliverable is an outcome that negotiating countries can potentially agree on.

After the SSM meeting on Tuesday, the chair held a meeting on the proposed deliverables in export competition based on a proposal tabled by the EU and Brazil, and two other proposals by the US.

The proposals by the EU and Brazil, as well as the US, call for fundamental changes in the Agreement on Agriculture to address export subsidies for farm products, export credits, food aid and state trading enterprises.

While the EU-Brazil proposal suggests adjustments to address US difficulties in export credit and food aid, the two US proposals attempt to substantially dilute the Doha disciplines on food aid and state trading enterprise for monopoly agriculture exports.

At the meeting on export competition, India raised fundamental objections saying the proposals have to be discussed in the open and not in a small group of seven countries, according to a person present at the meeting.

India’s stance on export competition is being seen as a tit-for-tat move for what the major industrialized countries and Brazil did on SSM. “India will defend interests of farmers while others are attempting at cherry-picking issues according to their interests,” according to the person quote above.

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