Domestic Support, Border Restrictions Feature
in WTO Farm Committee Review
WTO
members discussed a wide range of agricultural border measures and subsidy interventions
at the 17-18 June meeting of the Committee on Agriculture. Members also heard from
several international organizations about the impact of COVID-19 on world agricultural
trade, including warnings of rising commodity prices and growing food shortages
in certain regions. They continued to monitor the implementation of WTO ministerial
decisions regarding tariff rate quota usage, public stockholding and export competition
policies.
The committee
continued to examine members' agriculture support policies, including those related
directly or indirectly to exports. Twenty-one issues of concern were raised for
the first time in the committee regarding agriculture programmes,
policies and restrictions in Argentina, Canada, China, India, Japan, Morocco, South
Africa, Tajikistan, Turkey, Ukraine, the United Kingdom, the United States, Viet
Nam and four EU member states (Austria, France, Germany and Italy).
Argentina
was asked to explain its new export restrictions on beef, including on how the measure
conforms to the WTO rules. Turkey and Ukraine also responded to members' concerns
on actual or proposed export-limiting measures. Canada received specific queries
on its recent announcements to support the wine sector and measures to improve vulnerable
consumers' access to food in the wake of the COVID-19 pandemic. Agricultural policy
developments and financial support in some EU member states were subject to review.
Japan explained its newly launched market development support for rice paddy renovation.
Tax and tariff policy developments in Morocco, South Africa and Tajikistan were
also subject to specific queries by members.
Members
welcomed the United Kingdom's 2020 Agricultural Act and the direction of agricultural
support policies that it intended to pursue; they simultaneously questioned the
UK's calculation and amount of its proposed aggregate measurement
of support (AMS) entitlement for farm subsidies in its WTO schedule
of commitments.
India
explained the reasons behind the recent increase in its cotton support and the US
responded to some specific questions on its environmental and other support policies.
A number
of specific notifications in the areas of tariff quotas as well as agricultural
subsidies were reviewed at the meeting. India's two recent domestic support notifications
invoking the Bali Ministerial Decision
on Public Stockholding (PSH) for the breach of its rice de minimis limit received numerous questions,
including on how India complies with the specific terms of that decision. In light
of the safeguard provisions of the Bali PSH decision, India was also asked when
it could provide outstanding information on support for rice other than under
public stockholding.
Domestic
support policies in the United States and recent support interventions, including
in response to the COVID-19 pandemic, were subject to extensive review. Concerns
were expressed on a sharp increase in the US's current total AMS in 2018 compared
to a much smaller total amount in 2017. There were questions to the Republic of
Korea, which reported a sharp rise in its current total AMS in 2017. Other domestic
support notifications, including by Brazil, the EU, China and Nigeria, also figured
in the committee discussions.
All questions
submitted for this meeting are available in document G/AG/W/212. All
questions and replies received are available on the WTO's Agriculture Information
Management System (AG IMS).
On the
issue of transparency and efficiency of the committee's process for reviewing members'
agriculture-related notifications to the WTO, the chair Maria Araceli Escandor of the Philippines noted two elements of the issue
being: 1) timeliness and completeness of notifications from members, with specific
concern regarding the large number of overdue notifications - especially in relation
to domestic support and export subsidies; and 2) the importance of the timely and
complete responses to questions raised in the review process. The chair urged members
to redouble efforts in both these areas.
The monitoring
of the Bali Tariff Rate Quota
(TRQ) Decision was discussed. Members also continued the follow-up
discussions on the recommendations approved
by the General Council in 2019 following a review of the implementation
of the decision.
The discussion
on the Bali Decision focused on the future operation of paragraph 4 of the underfill mechanism, with the key issue being how to arrive
at "closure" of an underfill matter for a developing
importing member which does not achieve the required increase in the fill rate in
the final stage of the mechanism. The deadline to reach an agreement on this matter
is the end of 2021.
TRQs
allow import quantities inside a quota to be charged lower duties than those outside.
The mechanism was agreed as a means of allowing exporters some access to other countries’
markets when the normal tariffs on imports are high. The underfill
mechanism deals with cases when the fill rate of a TRQ in any given year is below
65% or the fill rate is not notified. In the absence of an improvement in the fill
rate or a satisfactory resolution of the concern, the importing WTO member may be
obliged to change the management of its TRQs.
Members
continued discussions on the implementation of the Nairobi Export Competition
Decision, which commits WTO members to eliminate subsidies for farm
exports. The decision was described by the WTO Director-General at the time as the
most significant outcome on agriculture since the WTO was established in 1995.
With
regards to the modification of schedules of commitments pursuant to the Nairobi
ministerial decision, the situation has not changed since the last committee meeting:
out of the 16 members with exports subsidy reduction commitments at the time of
adoption of the Nairobi decision, 12 members had their revised schedules certified;
Canada and the European Union circulated their draft schedules in 2017, but they
are not yet certified. Brazil and Venezuela have yet to circulate their draft schedules.
Brazil said it had nothing new to report beyond what it told the committee at its
March meeting, that the Nairobi decision had been approved by Brazilian Congress.
The 2021
dedicated discussion on export competition will be conducted
at the next committee meeting in September. The chair informed the committee that
24 replies to the WTO Secretariat questionnaire have been received so far. The 2021
export competition exercise is important, as for the first time all members, including
developing members, are expected to reply to the questionnaire following the expiry
of the five-year grace period for developing members.
The chair
also reported on members' discussions on the second triennial review of the Nairobi Export Competition
Decision. Paragraph 5 of the decision mandates members to review the
disciplines contained in this decision every three years. The chair invited members
to continue work aimed at identifying which deliverables could be envisaged in the
context of this second review. She also asked them to identify which issues could
be included as part of a specific post-review work programme
and which issues are not mature enough to require any action as a result of the
review, or that would be better addressed under the negotiations track.
Since
September 2020, WTO members have included discussions on trade measures taken in
response to the COVID-19 pandemic as a standing item on the committee agenda.
The World
Food Programme (WFP) and the UN Food and Agriculture Organization
(FAO) presented submissions to members for the discussions on COVID-19 and agriculture
(G/AG/GEN/188 and
G/AG/GEN/189).
The WFP
said it was of paramount importance to ensure well-functioning food supply chains;
any export restrictions or quotas would inevitably hamper the timely and efficient
delivery of life-saving assistance to the most vulnerable. The WFP considers the
12th Ministerial Conference to be a key opportunity for the WTO to contribute to
Sustainable Development Goal 2 towards ending hunger and malnutrition. Any measure
adopted by WTO members to facilitate the smooth movement of the WFP's goods for
humanitarian purposes will help save lives, it said.
The FAO
submission examined developments in global food and agricultural markets and trade
in 2020 and 2021. Despite initial predictions of a likely significant contraction
resulting from the COVID-19 pandemic, global trade remained remarkably resilient,
with world agri-food markets and trade emerging as the
most robust sector. Since mid-2020, a significant increase has been registered in
the prices of agricultural commodities, with many reaching multi-year highs. The
provisional forecast for the world food import bill in 2021 points to a record US$
1.715 trillion, suggesting a 12% increase from the previous year. This may not,
however, translate into a uniform increase of food availability as rising prices
may raise unit costs of imports.
The World
Bank said its Agricultural Commodity Price Index remained near its highest level
since 2013, and as of 15 June was approximately 35% above its January 2020 level.
Cereal prices remained approximately 43% higher than their January 2020 levels.
These trends were observed despite the favourable overall
agricultural commodity assessment. Strong demand for feed commodities, continued
weakness of the US dollar, weather uncertainties in North and South America, higher
energy and fertilizer prices, and policy initiatives in favour
of biofuel production appear to be driving these price increases, which have been
substantial and affect all commodity groups, it said.
Several
WTO members took the floor to comment on the submissions, with many stressing the
need to keep markets open and avoid disruptions to supply chains to ensure the food
needs of vulnerable populations. Several underlined the importance of securing a
WTO agreement on the exemption of WFP purchases from export restrictions.
The chair
noted that these discussions provide an important opportunity for holistic engagement
on COVID-19-related matters in order to appreciate the challenges posed by the pandemic
on global agriculture and food systems and collectively reflect on ways to deal
with the crisis and its aftershocks.
The chair
also noted the creation by the Secretariat of a separate page on the
WTO website for COVID-19 agricultural measures in an effort
to enhance transparency on the actions of WTO members in this area.
Argentina,
Brazil, Chile, Paraguay and Uruguay presented to WTO members the agricultural ministerial
declaration by the Southern Agricultural Council (CAS) on "Principles and Values
of the Region Regarding the Production of Food Within the Framework of Sustainable
Development" (G/AG/GEN/187). The
co-sponsors also shared the communication with the WTO Committee on Trade and Environment.