WTO Chair Highlights Key Challenges as
Agriculture Talks Enter Critical Phase
The Chair of the agriculture
negotiations, Ambassador Gloria Abraham Peralta (Costa Rica), has issued a new report
outlining the contours of a possible deal on agricultural trade in the run-up to
the 12th Ministerial Conference (MC12) in late November. Trade negotiators mostly
welcomed her assessment and shared their views on it at an informal negotiating
meeting held on 21 and 24 June.
The Chair’s report represents her independent
assessment of the state of play in the seven topics under negotiation: domestic
support; market access; export competition (including measures seen as comparable
to export subsidies); export restrictions; cotton; a “permanent solution” to the
problems some developing countries face when
buying food at administered prices as part of their public stockholding programmes for food security purposes; and a proposed new “special
safeguard mechanism” intended to help developing countries address sudden import
surges or price depressions.
Facilitators on each of the seven topics also
presented their final reports on consultations they had held since September 2020,
following a request from the Chair to support her in identifying prospects for possible
progress in the talks.
The Chair pointed out three key challenges in
the agriculture negotiations: time, trust and transparency. Time is short until
MC12; trust needs to be restored; and transparency is valued by all members, she
said.
Her assessments on the seven topics were as follows:
·
On
domestic support,
an agreement on new disciplines may be out of reach: negotiators could instead usefully
focus on elements for inclusion in a framework agreement, work programme or work plan for post-MC12 negotiations;
·
On
market access,
negotiators at MC12 may be able to agree on steps to improve transparency as well
as a way forward for comprehensive market access reforms post-MC12;
·
On
export restrictions,
members may be able to reach an agreement that food bought by the World Food Programme (WFP) for its humanitarian food aid should be exempt
from export restrictions. Trade negotiators might also be able to strike a deal
on measures to improve transparency and clarify current rules, including through
providing advance notice or by enhancing compliance with existing WTO requirements;
·
On
export competition,
negotiators may be able to agree on some steps to improve compliance with existing
transparency requirements, and also to enhance them;
·
On
cotton, the Chair
agreed with facilitators that the focus for now should be on improving transparency,
while continuing to seek ways to reduce trade-distorting domestic support on cotton
after MC12. The development component of an outcome on cotton should be addressed through the Director General's Consultative Framework
Mechanism on Cotton process;
·
On
public stockholding
programmes for food security purposes, negotiators are
looking for a permanent solution to the challenges some developing countries face when buying food at administered prices:
here, the challenge is to find the right balance between enabling members to have
access to flexibilities in this area while also establishing well-calibrated safeguards
and transparency requirements;
·
On
the special safeguard mechanism,
there is serious divergence “on some fundamental aspects”, with many agricultural
exporting countries continuing to link progress on this topic to market access concessions,
and proponents of the mechanism arguing it should be a stand-alone outcome.
Most members welcomed the Chair’s report and considered
it represented an accurate assessment of the situation. Several delegations intervened
to emphasise the urgency of achieving progress at MC12,
and warning that failure could be costly for the ability of members to achieve their
collective goals.
Improving transparency is a cross-cutting issue
on which most members hope to make progress at MC12, although they have different
views on how this should be done. While some members warned that discussions on
transparency should not divert attention from substantive issues such as domestic
support rules, others viewed transparency as both a procedural and substantive issue
which is essential for future negotiations. The United States presented again its
analysis of how different members were calculating and reporting domestic support,
drawing on its paper JOB/AG/181 from February 2020.
Some members supported the idea of reaching consensus
on a domestic support framework at MC12 but insisted that it should include certain
parameters such as subsidy targets, principles and methodologies. Others, with a
focus on development objectives, said that essential reforms on domestic support
involved levelling the playing field and eliminating highly trade-distorting support
that exceeds countries’ de minimis
thresholds, defined as a share of the value of agricultural production. The same
countries also argued in favour of developing countries
retaining current flexibilities to provide input and investment subsidies under
Article 6.2 of the WTO Agreement on Agriculture.
Food security and livelihoods remain top of the
agenda for many members, especially in the context of the COVID-19 pandemic. Trade
officials raised their concerns in these areas in connection with several topics,
including public stockholding for food security purposes; humanitarian food aid
purchased by the WFP, and other proposed measures on food export restrictions; domestic
support; cotton; and the proposed new “special
safeguard mechanism”.
Several members recognized public stockholding
as a practical tool to address food security in the context of the current pandemic.
Some proponents said that they are working together on an options paper (to be circulated
before or immediately after the summer break), with an aim of achieving an agreement
on this question. They indicated this would involve a stand-alone permanent solution
with less burdensome transparency requirements. Other members suggested that a work
plan in this area could form part of a holistic approach to outstanding domestic
support questions.
Many members still considered that exempting WFP
humanitarian food aid purchases from export restrictions could be a potential element
of the MC12 outcome on agriculture if negotiators made collective efforts to nail
down final compromise language. Several members also stressed again, in light of
the experience from the COVID-19 pandemic, the need for an outcome on improving
transparency of members' export restriction measures, as these may impede the ability
of low-income consumers in net food importing countries to access food at affordable
prices and increase price volatility.
The proponents of a “special safeguard mechanism”
renewed their demand for an easy-to-use and comprehensive tool which would allow
developing countries temporarily to raise tariffs to address the impact of import
surges and price drops. Some said they were conducting ongoing work to prepare technical
submissions on this topic by extracting useful elements from the WTO’s existing
special agricultural safeguard, as well as from past submissions and draft blueprints
for negotiating agreements.
Reiterating the importance of further opening
global agricultural markets, some members shared the Chair's view that the inclusion
of market access elements in an MC12 outcome could help negotiators to achieve an
overall balance. Some proponents were of the view that a framework for future negotiations
on market access, building on the joint submission in JOB/AG/198 should be achievable at MC12.
Several members supported an outcome that would
improve transparency when applied tariffs affected the treatment of shipments en
route, along the approach suggested
in JOB/AG/185/Rev.2 . Members also expressed support for an outcome
on the review of the 2013 Bali Decision on Tariff Quota Administration. However, some members
said they considered the Chair’s assessment of the prospects for a possible MC12
outcome on market access to be overly optimistic.
Noting the wide divergence in members' positions
in all seven negotiating areas, the Chair asked members to redouble their efforts
in the weeks ahead. Members should focus on how to bridge their differences with
new ideas and solutions, she said, adding that she intends to circulate her first
draft negotiating text in July to facilitate the process.
She also announced that the next agriculture negotiating
meeting is scheduled for 19 July, with the sole purpose of presenting members' new
submissions.