COVID-19 Farm Support Packages and Export-Restrictive
Measures under Scrutiny at WTO
At a special meeting of the Committee on Agriculture on 18 June
2020, WTO members reviewed a number of farm support packages and export-restrictive
measures adopted in response to the COVID-19 crisis. A strong call was made for
enhanced transparency of trade-related COVID-19 measures in the agriculture sector.
Various groups of WTO members, such as the Cairns Group, the Ottawa Group and a
Canada-led group of co-sponsors, introduced their initiatives and actions to ensure
food security through open and predictable trade.
The committee
meeting was the first in-person meeting held at the WTO since the lockdown. It was
supplemented by a virtual platform, allowing WTO members to also participate remotely.
The meeting was “well attended”, with 55 delegations registering for physical attendance
and 215 participants joining online, said the Chair, Christiane Daleiden Distefano from Luxembourg.
WTO members
introduced their recent initiatives to safeguard food security through “open and
predictable trade” amidst the COVID-19 crisis. This included a Canadian-led joint
statement (WT/GC/208/Rev.2-G/AG/30/Rev.2), a
Cairns Group initiative (WT/GC/218, G/AG/31, TN/AG/44) and
an Ottawa Group statement (WT/GC/217). The
Cairns Group is a group of agriculture-exporting members and the Ottawa Group describes
itself as a small group of WTO members that supports reforms to address the challenges
of the multilateral trading system.
Japan
and the European Union (G/AG/GEN/159) contributed
respectively with a statement on export restriction monitoring and with an ad hoc
report on COVID-19 measures in the agriculture sector.
Many
co-sponsors expressed their full support for the Canada-led joint statement, in
which they vowed to refrain from imposing trade-restrictive measures that “would
ultimately have negative impacts on the food security, nutrition and health of members
and their populations”. The African Group stressed the multiple challenges facing
Africa and insisted on maintaining policy space under Article 6.2 of the Agreement
on Agriculture to support low-income or resource-poor farmers. The African, Caribbean and Pacific group of members,
meanwhile, expressed concerns over the adoption of export restrictions, large stimulus
packages and other measures that could aggravate the impact of the pandemic by “incentivizing
imbalances in global agricultural trade”.
Building
on the general principles of ensuring that COVID-19 related export-restrictive measures
are “targeted, proportionate, transparent, temporary and consistent with the WTO
rules”, the Cairns Group initiative proposed greater WTO scrutiny of COVID-19 agriculture
support measures, including tracking by the WTO Secretariat, regular discussions
in the Committee on Agriculture and a voluntary, member-driven WTO COVID-19 Agricultural
Working Group. Echoing the call by the Cairns Group for open and functional international
trade markets to support global food security, another member stressed the pitfalls
of pursuing self-sufficiency policies in agriculture. Meanwhile, a developed WTO
member asked co-sponsors to “walk the talk” and submit ad hoc reports on their COVID-19
measures to the committee for the sake of transparency.
Looking
forward, 13 WTO members vowed in the Ottawa Group statement to take
trade policy actions that would support an inclusive, sustainable and resilient
recovery and agreed that trade rules should be adapted or developed to guide collaborative
policy responses to future global crises. The group called for collective actions
towards open and predictable agricultural trade and for WTO members “to lead by
example” and withdraw trade-restrictive COVID-19 measures as quickly as possible.
Several members echoed this call and said it is high time for the WTO to deploy
concrete actions as described in the Ottawa action plan.
Japan
and the European Union made statements ramping up their push for improved transparency.
Japan noted the backlog of notifications on many COVID-19 related export-restrictive
measures. It urged members to make timely notifications, clarify reasons for the
delays and withdraw temporary export-restrictive measures as soon as possible.
The EU
gave a broad brush of its ad hoc report (G/AG/GEN/159) encompassing
all COVID-19 related agriculture-specific measures, urging members to follow suit
as well as notify their export-restrictive measures. “Transparency and disciplines
on export restrictions will be a key element for our negotiations going forward
towards the 12th Ministerial Conference,” it said. The EU also underlined the need
for members to respect existing WTO commitments and warned against the sizable subsidy
packages being implemented during the COVID-19 crisis which “risk breaching existing
domestic support limits”. The EU also referred to a joint task force with the African
Union and the UN Food and Agriculture Organization to support the agri-food sector in Africa and help it deal with the impact
of COVID-19.
Several
members took the floor to share information on their COVID-19 measures introduced
to weather the impact of the crisis on agriculture. One developing member, however,
cautioned against the “narrative” pushed by some members that seeks to prohibit
the use of export restrictions on medical and agricultural products or to push for
a “permanent” tariff liberalization in response to a “temporary” crisis. It insisted
that for developing countries, export restrictions are a WTO-consistent policy tool
that are important to prevent critical domestic shortages of essential supplies.
It asked members to formulate a “balanced, inclusive and calibrated” response to
COVID-19 and to focus on addressing the historical asymmetries in aggregate measurement of support (AMS) entitlements.
Nearly
60 questions were raised with regard to members’ COVID-19 agriculture-related measures
(G/AG/W/206). In
addition to seeking clarifications on export-restrictive measures, many questions
were raised regarding major economies’ large farm support packages in response to
the crisis.
A large
number of questions were targeted at the United States and its US$ 19 billion Coronavirus
Food Assistance Program launched on 17 April 2020, which includes US$ 16 billion
in direct support to farmers and ranchers. The US said it has uploaded all answers
to the WTO's Agriculture Information Management System (searchable by the public) and
the programmes will be notified in its 2019-2020 and 2020-2021
notifications “consistent with the WTO rules”. The US claimed the programme does not distort producers’ planting decisions since
it applies to production (or inventories) during a previous period.
Members
welcomed the US replies and highlighted their deep concerns over the size of the
package. Some members asked for more clarifications on the category of subsidies
that would be specified for this significant volume of budget. Some suggested the
US roll back the measures since they are “temporary” as it indicated. The US said
it is still going through the process and cannot foresee how the programme will be notified. It said it will review all the new
questions and respond accordingly.
Canada
answered questions regarding its multiple COVID-19 measures. On the CAD$ 50 million
Surplus Food Purchase Program, it said the purpose is to dispose of food identified
as in surplus supply. In view of halting the disposal of the surplus supply of raw
milk, Canada also increased the borrowing limit of the Canadian Dairy Commission
from CAD$ 300 million to CAD$ 500 million to provide further flexibility to its
operations. It said the products purchased under this initiative would be sold back
to dairy processors at the same price. Coming to the EU’s COVID-19 support measures,
the EU reiterated that its market measures are carefully targeted within a limited
budget - less than EUR 80 million - for merely ensuring the farming sector has sufficient
liquidity. It said all the new support packages continue to respect its WTO commitments
on domestic support. The support for rural development is designed to ensure it
will qualify as Green Box subsidies. The temporary
derogations from anti-trust competition law have been adopted to allow operators
to work together to stabilize markets.
Australia,
New Zealand and Japan also answered questions regarding their respective international
airfreight support programmes. The concerned countries
highlighted that the measure seeks to support the aviation companies in view of
a dramatic reduction in air freight capacity resulting from the COVID-19 pandemic
in order to keep some critical international supply chains operational. It was also
clarified that support was not channelled to individual
exporters.
Members
expressed appreciation to four members (Kyrgyz Republic, North Macedonia, Thailand
and Ukraine,) who have notified their export-restrictive measures to the WTO and
asked follow-up questions.
Thailand
said its export restrictions on rice were effective from 26 March to 30 April. They
were meant to be temporary and the measure was notified to the WTO. Ukraine clarified
that no export restriction on wheat had been applied since 2011-2012 and the Memorandum
of Understanding for 2019-2020 of 30 March 2020 between the Ministry for Development
of the Economy and the private grain participants was not binding. As regards the
export prohibitions applied on buckwheat, Ukraine maintained that it was not subject
to advance notice obligation stipulated in Article 12 of the Agreement on Agriculture
in view of being a developing country and not being a net-exporter of buckwheat.
North Macedonia also explained that, as a net importer of wheat, it adopted export
restrictions on wheat and meslin in reaction to neighbouring Serbia’s export prohibitions on wheat flour and
to prevent critical shortages of these products.
Members
also reviewed other members’ export-restrictive measures, including those of Cambodia,
Egypt, El Salvador, Honduras, Kazakhstan, Myanmar, Romania, Russia, Tajikistan,
Turkey and Viet Nam. Questions primarily related to the absence of notifications
and the justification for invoking the concerned measures.
The chair
thanked members for a lively and constructive discussion and emphasized the importance
of the review function of the committee. Looking ahead, members agreed that the
suspended 93rd meeting of the Committee on Agriculture would be resumed on 28 July
2020 as the pandemic lockdown is eased. Meanwhile, the WTO Secretariat was asked
to organize an information session on COVID-19 and agriculture by inviting the relevant
international organizations engaged in the monitoring of agricultural policies during
the pandemic to present their work to members. It was also noted that COVID-19 and
agriculture would become a standing agenda item for future meetings.
Members
commended the WTO Secretariat’s work in tracking all trade-related measures on its
dedicated COVID-19 webpage. The
Secretariat also took note of some members’ suggestion to facilitate an easy identification
of agriculture-related measures through enhancements in the WTO's trade monitoring
linked to the consolidated COVID-19 database.