Consuming Nations Protest Agri Export Restrictions

WTO members continued their series of thematic discussions on issues central to the farm trade negotiations at a special session of the Agriculture Committee on 15 November. Several members called for further work under the export competition pillar regarding export financing, food aid and state trading enterprises. Some members stressed the need to address market distortions arising from export restrictions and to ensure these measures do not impede delivery of food aid by international organizations. Members also discussed submissions regarding gaps between bound and applied farm tariffs and special safeguards on agricultural imports.

Export competition

Canada kicked off the discussions with a presentation outlining its views on the remaining work in this area. For Canada, eliminating export subsidies means that WTO members must be diligent in ensuring that measures with equivalent effect are not used to circumvent the December 2015 Ministerial Decision on Export Competition, a historic agreement committing the membership to timelines for the elimination of agricultural export subsidies.

Canada emphasized the critical importance of improved transparency on export financing (which covers export credits, export credit guarantees and insurance programmes), agricultural exporting state trading enterprises (STEs) and international food aid. Looking at confidence-building steps to be considered by members, Canada suggested reducing the current maximum limit on repayment of export financing support which, under the Nairobi Decision, is fixed at 18 months. Canada also said members should consider whether more binding disciplines are needed with regards to the operations of agricultural exporting STEs (in particular, monopoly powers and whether members should continue working on improved disciplines on international food aid, including on a possible ban on export restrictions for food aid purchases). Small but credible steps in these areas can help move forward the agriculture negotiations overall, Canada argued.

Seventeen delegations took the floor to comment, some of them representing larger groups. A number of members agreed that unfinished business remained or that further work was needed on the export competition pillar, with some suggesting that members try to achieve an outcome in this area by the 2020 Ministerial Conference in Astana.

However, some other members took a more cautious tone, arguing that priority should be given to the areas causing the biggest distortions in agricultural trade, most notably farm subsidies (domestic support). Others cited the need for progress first on a permanent solution to public stockholding for food security purposes and a special safeguard mechanism for developing countries.

Export restrictions

Japan presented an overview of agricultural export restrictions (JOB/AG/149), a paper it drew up jointly with Israel, Korea, Singapore, Switzerland and Chinese Taipei. The paper describes the situation in relation to transparency and duration of measures. Japan said export restrictions impact markets and make them more volatile by reducing supply; this has a negative impact for both importing countries in terms of higher prices and greater food supply insecurity as well as the exporting countries themselves, where some groups lose income from the restrictions.

Singapore presented a paper on the impact of export prohibitions or restrictions on foodstuffs purchased for non-commercial humanitarian purposes by the UN's World Food Programme (WFP) (JOB/AG/148). Singapore said these prohibitions/restrictions lead to significant inefficiencies in humanitarian food assistance delivery by the WFP; the result is increased amount of time to deliver food, increased risk of food being lost due to longer transportation, increased administrative, transportation and distribution costs, and ultimately fewer beneficiaries receiving food from the WFP.

More than a dozen members took the floor to comment on the joint paper presented by Japan, with many agreeing that export restrictions can impact food security in countries dependent on food imports; they also agreed that more transparency was needed. One member however said that the problem was not export restrictions per se, which may be needed to provide stability and predictability in domestic food supply, but the illegitimate use of such measures.

A similar number of members took the floor to comment on Singapore's submission, with most of those agreeing on the need to ensure international food agencies can continue to carry out their relevant work. One member however cautioned that a balance needed to be struck between the need to restrict food exports in a given situation and overcoming any negative effects these restrictions may have on the supply of food aid.

In a general discussion on export restrictions which took place immediately thereafter, some developing countries expressed their concern about any new requirements or restrictions which could limit their policy space. One member said export restrictions were a vital policy instrument for handling sudden shocks in domestic food supply. The critical importance of this discussion for net food importing developing countries was also highlighted.

Market access

The United States made a presentation on its paper regarding tariff implementation issues, and specifically on bound tariffs — the maximum tariffs permitted in each member's WTO schedule of commitments — versus the tariffs actually applied on farm imports (JOB/AG/147). According to the US, the gap between bound and applied tariffs – commonly referred to as "water" – is prevalent in all major agricultural product groups. Overall, the average WTO bound rate on agricultural goods is 54.7% compared to a 14.5% average applied rate. The gap is greater in developing countries and smaller trading economies than developed members and larger trading economies, and greater for certain product sectors such as beverages and tobacco, dairy products and sugar.

The US said that further information and understanding of the situation is necessary and it called on the WTO Secretariat to compile more complete figures; WTO members should also ensure that all market access-related notifications and submissions are brought up to date.

Fifteen members took the floor to comment; while several questioned the methodologies used by the US, many welcomed the paper as a positive contribution for possible future market access negotiations. Three members cited specific examples where large gaps between bound and applied tariffs have led to recent sudden and sharp changes in tariffs on certain farm imports, to the detriment of their producers.

Members that joined the WTO after its creation in 1995 noted that average farm tariffs for those party to the original General Agreement on Tariffs and Trade were four times greater than what the newer members were obliged to accept in order to become WTO members; any outcome on market access must result in a better balancing of commitments, they said.

Questioned about its intentions regarding the paper, the US said the purpose was to provide a comprehensive understanding of the current landscape with regards to market access, not to identify specific areas for negotiation.

The Russian Federation noted that it had submitted a series of follow-up questions to members with regards to a paper it presented in October on the current state of play in the usage of special agricultural safeguards (SSG) and its effects on exports of WTO members (JOB/AG/145). Russia asked members applying SSGs to provide additional information on their practices on how (or whether) they exempt trade under free trade agreements (FTAs) and tariff rate quota (TRQ) commitments from SSG application.

One member shared its practice in not exempting FTA trade from the application of SSGs and not applying SSGs on importers holding a TRQ licence. Another member expressed interest in examining the linkage between SSGs and TRQs.