WTO Members
Review Agriculture Trade Policies and COVID-19, Defer Talks on Bali TRQ
Mechanism
·
Regular Review of members' Agricultural
Policies
·
Bali TRQ Underfill
Mechanism
·
Follow-up on the Nairobi Decision on Export
Competition
·
COVID-19 and Agriculture
·
Enhancing Transparency in the Committee
WTO members discussed agricultural policies and examined
notifications at a Committee on Agriculture meeting on 23-24 September. Members
agreed to suspend discussions on the Bali tariff rate quota (TRQ) underfill mechanism, with a view to reaching
an agreement before year-end. The committee also agreed the triennial review of
the Nairobi decision on export competition should be concluded at its next meeting
in March 2022 to take account of agriculture negotiations at the 12th Ministerial
Conference. Members also received updates on the impact of COVID-19 on agricultural
trade.
Members
reviewed farm policies relating to the three pillars of agriculture trade: market
access, domestic support and export competition. Six new issues were raised concerning
agriculture programmes, policies and restrictions in Argentina,
China, Turkey and the United States.
Argentina
responded to questions on the use of exchange rate and inflation adjustment in its
domestic support calculations. China explained a one-off payment reportedly worth
USD 3.1 billion to help farmers cover the rising cost of production inputs, including
subsidies for diesel and fertilizer. Turkey provided additional information regarding
its export restrictions on pasta. The United States explained how it will execute
the US Department of Agriculture's plan to invest USD 1 billion to "purchase
healthy food for food secure Americans and build food bank capacity" and improve
the functioning of its "marketing services programme".
Fifteen
issues raised in previous committee meetings were picked up again by members, notably
Argentina's export restrictions on beef, Canada's new milk ingredient class, the
EU's environmental policies, India's pulse policies and wheat and rice stockpiling
programmes and the US farm support in response to the
pandemic.
Questions
were raised to seek clarity on members' notifications regarding tariff quota administration,
special agricultural safeguards, domestic support and export subsidy notifications.
Most of the questions focused on members' notifications on domestic support, with
13 members quizzed on their domestic support notifications to the WTO.
All questions
submitted for the meeting are available in G/AG/W/213. All questions and replies received
are available on the WTO's Agriculture Information Management System (AG IMS).
The Bali Tariff Rate Quota
(TRQ) Decision was discussed, with the focus on the future operation
of paragraph 4 of the underfill mechanism, for which there
was no agreement among members during the 2017-19 review of the implementation of
the Bali TRQ decision. As per the agreed recommendations of the review approved by the General
Council in 2019, the deadline to reach an agreement on this outstanding
issue is the end of 2021.
TRQs
allow import quantities inside a quota to be charged lower duties than those outside.
The mechanism was agreed to as a means of allowing exporters to address their concerns
on quota utilization related to burdensome TRQ administration arrangements. 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 required to change the management of its TRQs.
Paragraph
4 of the mechanism concerns its "final stage", which may be triggered
if the three initial stages of engagement between the importing member and the exporting
members remain inconclusive. The key outstanding issue on paragraph 4 is how to
arrive at “closure” on an underfill for a developing importing
member which does not achieve the required increase in the fill rate in the final
stage of the mechanism. Several members extended
their support for a proposal by one member which would ensure that the concerned
underfill raised under the mechanism would reach a resolution.
A new
issue involving a possible "conflict" between the underfill
mechanism provisions and members' schedules of commitments also formed part of the
conversation among members.
The chair,
Mr Marcos Da Rosa Uranga (Uruguay),
noted some members' request for more time to deliberate on the future operation
of paragraph 4. He announced the suspension of the agenda item, with a view to reconvening
when members are in a position to take a final decision. He plans to organize consultations
in varying formats in the coming days, in the hope of galvanizing momentum and facilitating
convergence before the year-end deadline.
Members
discussed the second triennial review of the Nairobi Export Competition
Decision. The decision commits WTO members to eliminate farm subsidies
contingent on export. This was described by the WTO Director-General at the time
as the most significant outcome on agriculture since the WTO was established in
1995.
As several
export competition issues are currently being discussed, with a possible outcome
at the 12th Ministerial Conference (MC12) in late November, the chair said that
the second triennial review will be postponed to the next committee meeting scheduled
for March 2022. He also noted that the nine main items identified by the former
chair and included in annexes 3 and 4 of G/AG/R/99 constituted
a good summary of members' discussions so far.
Members
undertook the 2021 annual dedicated discussion on export competition to monitor
the implementation of the Nairobi Decision.
The chair noted that 2021 is the first year that all members are required
to reply to the export competition questionnaire following the expiry of the grace
period for developing members stipulated in the Nairobi decision.
The chair
thanked the 33 members (counting the European Union as one) who have submitted their
replies, including four developing members replying for the first time. He urged all members to fulfil their obligations
while acknowledging the difficulties encountered by some members.
All the
submissions to the questionnaire are compiled in the WTO Secretariat's G/AG/W/125/Rev.14 and
its four addenda circulated on 14 July 2021. Several members answered questions
at the meeting regarding their policies on export competition. These questions may
be consulted in G/AG/W/213. All questions and replies received
are available in the WTO's Agriculture Information Management System (AG IMS).
There
has been no change since the last committee meeting regarding members incorporating
the elimination of export subsidies into their WTO schedules of commitments. Among
the 16 members with export subsidy reduction commitments, 12 have seen their revised
schedules certified (i.e. accepted by all WTO members) while two members — Canada
and the EU - await
certification of their draft schedules circulated in 2017. Brazil and Venezuela
have not yet circulated their revised schedules.
Brazil
said its draft schedule would be circulated after the release of the presidential
decree approving the Nairobi Decision. It assured members that no export subsidies
are currently being provided for agriculture products. Venezuela said the pandemic
has delayed the process of modifying its schedule. However, as a net-food importer,
it could continue to benefit from the provisions of Article 9.4 of the Agreement
on Agriculture on export subsidies under the Nairobi Decision until the end
of 2030.
Members
continued to discuss the COVID-19 pandemic's impact on agriculture. This has become
a standing item of committee meetings since September 2020. The EU presented the
fifth update of its ad hoc report on COVID-related measures, underlining
that all the measures are being implemented at the national level.
The United
Nations World Food Programme (WFP) () predicted that over
270 million people will be at risk of food insecurity in 2021 and 41 million people
will be on the brink of famine (G/AG/GEN/190). To meet its humanitarian food aid
objectives, the WFP needs global food supply chains to function smoothly, it said.
The WFP thanked the 81 WTO members who signed up to a declaration vowing to exempt
the WFP's humanitarian food purchases from export restrictions. It looked forward
to an agreement on this issue at MC12.
The International
Grains Council introduced its latest forecast for crop production and trade in 2021,
pointing to record production and sufficient supply of main crops (G/AG/GEN/191).
However, rising freight costs pose challenges to farmers and put upward pressure
on crop prices.
The chair
encouraged members to be transparent about their COVID-19 agricultural measures,
including within the WTO's trade monitoring mechanism, to facilitate a collective
assessment of these measures. COVID-19 agricultural
measures reported under the trade monitoring exercise are hosted on a dedicated page on the
WTO website. All ad hoc reports
on members' COVID-19 measures have been compiled in G/AG/W/209/Rev.2.
The chair
underscored two elements regarding transparency in the committee: 1) timeliness
and completeness of notifications submitted by members; and 2) the importance of
timely and complete responses to questions raised in the review process. The chair encouraged members to redouble efforts
to improve their compliance with notification obligations. G/AG/GEN/86/Rev.43, circulated
on 8 September, reflects the current status of members' compliance with notification
obligations. The chair expressed concerns on the large list of outstanding responses and
urged members to
reduce this list, including by utilizing the online response submission facility
of the AGIMS.