WTO: Agriculture Draft Text for MC-13


Many countries lent support to the draft agriculture negotiating text issued last week by the chair of the Doha agriculture negotiations. They expressed that it could serve as a basis for advancing negotiations leading up to the World Trade Organization’s 13th ministerial conference, which commences on February 26.

During a meeting of the Doha agriculture negotiating body, several members, including Brazil and the United States, indicated their approval of the draft text put forth by Ambassador Alparslan Acarsoy of Türkiye, considering it a viable foundation for negotiations.

Members of the Cairns Group, which includes Brazil and advocates for ambitious domestic support, also noted overwhelming support for the draft text, as evident from members' comments.

The proceedings witnessed several noteworthy developments, particularly a call from many developing and least-developed countries to conclude an outcome regarding the permanent solution for public stockholding programs for food security.

Another significant development at the meeting involved Brazil and the United States, who raised the stakes on issues of domestic support and market access in separate interventions.   Washington, which had opposed the permanent solution on public stockholding programs for food security in recent months, remained silent on the issue during the meeting.

Trade envoys and coordinators of the G33 group, led by Indonesia and including the Africa, Caribbean and Pacific Group, the Africa Group, Djibouti, India, and South Africa, among others, expressed their support for their MC12 proposal (Job/Ag/229). India, along with other developing countries, expressed willingness to engage in discussions about this proposal and any new ones, including a proposal from Brazil on food security and public stockholding programs.

Interestingly, those opposing the permanent solution did not address the issue even after a large majority of countries stood united behind the MC12 proposal.

Public Stockholding for Food Security Purposes (PSH)

The chair's draft text provided two options regarding public stockholding:

Option 1: 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.

Option 2: Pursuant to the Nairobi Ministerial Decision (WT/MIN(15)/44-WT/L/979), Members undertake to pursue and intensify negotiations on public stockholding in dedicated sessions of the CoA-SS and make concerted efforts to agree on a permanent solution by MC14. The permanent solution shall be available to all developing country Members.

Domestic Support and Market Access

Brazil, which had led the G20 group of developing countries in opposing the positions of the US and the European Union on domestic support during the WTO's 5th ministerial conference in Cancun in 2005, emphasized both domestic support and market access during the meeting.

The United States, in nuanced terms, echoed Brazil's demand for attention to domestic support. Ambassador Maria Luisa Pagan, the US trade envoy, sought "parity" between farm domestic support and market access, highlighting the United States' substantial investment in domestic support. She emphasized that market access had been a significant topic of discussion in the negotiations.

It was indicated that if domestic support were to be included, it must be on par with market access. Washington argued that if the ambition for domestic support is low, the same should apply to market access.

For the United States, this is a strategic argument, as the level of ambition in market access is expected to be low due to resistance from major industrialized countries such as the European Union, Japan, and the G10 group of farm defensive countries.

Brazil, speaking before India and the United States, stressed the need for a clear and ambitious work program in domestic support. Brazil also advocated for bringing market access into the negotiations, a position supported by other Cairns Group members like Australia.

Setting a relatively low level of ambition in domestic support is a priority for the United States and China, both of which oppose the inclusion of green box subsidies and blue box subsidies.

However, the EU, Japan, and the G10 countries pushed back against demands regarding market access and domestic support during the meeting.

The chair's draft text proposed specific language on domestic support and market access:

Domestic Support

  1. Members commit to pursue negotiations on domestic support to substantially and progressively reduce trade-distorting domestic support in an equitable manner and improve disciplines, aligning with the reform objective in the AoA. Modalities shall be agreed upon and adopted by MC14, reflecting different treatment depending on the effects of the support provided.

  2. Members' contributions to the reduction effort should take into account factors such as global market participation, importer or exporter status, the needs of developing Members, and the shift towards less trade-distorting forms of domestic support.

  3. Members shall consider addressing trade-distorting domestic support, particularly in specific products, taking into account the needs of low-income or resource-poor farmers in developing countries.

  4. Members may consider reviewing and adapting the criteria of Annex 2 and related transparency requirements to address contemporary challenges such as food security, rural livelihood security, and environmental protection.

Market Access

  1. Members commit to pursue negotiations on agricultural market access to substantially and progressively improve market access opportunities for all Members and strengthen disciplines, aligning with the reform objective in the AoA. Modalities shall be agreed upon and adopted by MC14, or Members agree to work towards achieving modalities by MC14.

  2. These negotiations may encompass tariff reductions, tariff simplification, tariff escalation, high tariffs, tariff rate quotas, special agricultural safeguards, and other elements. Technical discussions shall support these negotiations to facilitate effective participation by all Members.

Export Restrictions

Russia expressed opposition to export restrictions as mentioned in the chair's draft text. Several other countries, including Argentina, India, and South Africa, joined Russia in conveying their objections.

The chair proposed the following language on export restrictions:

  1. Members agree to continue discussions on enhancing transparency and predictability of export prohibitions and restrictions as part of the negotiations.

  2. Members agree to explore ways to review and update the notification format specified in G/AG/2, aiming to provide clear and relevant information to importing Members while minimizing administrative burdens on notifying Members. Developing country Members' capacity constraints shall be considered.

  3. Members also agree to explore ways to improve the implementation of Article 12 of the AoA, including clarifying relevant terms, considering the role of evidence and data, enhancing information sharing, and improving disciplines on export prohibitions and restrictions.

Draft Text Released Last Week

The chair of the Doha agriculture negotiations issued a draft text Saturday 27 January to set the stage for finalizing an outcome at the upcoming 13th ministerial conference of the World Trade Organization.

The five-page draft text on agriculture, obtained by WTD, gives high priority to the demands of the Cairns Group concerning domestic support and the market access issue raised by the United States, according to sources familiar with the matter.

However, the draft appears to lack an "appropriate balance" and remains somewhat "asymmetrical" in treating non-mandated issues with higher importance compared to mandated issues, as noted by these sources.

The draft text acknowledges the concerns expressed by the Cairns Group regarding the permanent solution for public stockholding programs for food security. This solution is supported by India, China, Indonesia (on behalf of the G33 group), the African Group, and the Africa, Caribbean, and Pacific Group, as reported by insiders.

Critics have raised concerns about the chair's prioritization of non-mandated issues like domestic support and market access over mandated issues such as public stockholding for food security (PSH). This has raised questions about the "integrity" and "credibility" of the WTO ministerial decisions, according to those familiar with the developments.

Furthermore, the draft text seemingly ignores the concerns expressed by several members regarding domestic support and market access, as highlighted by those familiar with the text.

The draft text, after outlining the matters ministers must decide at MC13, begins with:

  1. Domestic support, raised by the Cairns Group of farm-exporting countries.
  2. Market access, which the United States raised in small group meetings last week.
  3. The Special safeguard mechanism, which the Cairns Group and Washington link with market access for farm products, and so on.

More on Public Stockholding for Food Security Purposes (PSH):

Member countries are presented with two options regarding PSH. The first option is to adopt a permanent solution as set out in an annex, while the second option involves intensifying negotiations in dedicated sessions of the Committee on Agriculture-Special Session (CoA-SS) to reach a permanent solution by MC14. Both options are discussed in detail, including issues related to domestic food security targets, product coverage, safeguards, transparency, and legal certainty.

PSH, an important mandated issue, is pushed to the penultimate paragraph 29. The chair provides two options on the permanent solution in square brackets, implying that ministers must either conclude the permanent solution for PSH programs at MC13 or defer it to MC14, as revealed by a source from the Cairns Group who preferred not to be quoted.

The chair's all-or-nothing approach to PSH could set a dangerous precedent at MC13, where either trade ministers agree on PSH or the entire agriculture package could face failure, according to the Cairns Group source.

While the text appears positive regarding domestic support and market access, it is criticized for lacking an "appropriate balance" and being somewhat "asymmetrical," as emphasized by the source.



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