WTO members met on September 26, 2019, to examine a report circulated at the end of July by the chair of the agriculture negotiations, Ambassador John Deep Ford. The chair’s report, a summary of various suggestions and ideas put forward by members in recent discussions, called on members to identify “doable elements for meaningful outcomes” as fast as possible.
“Focus” is the verb that was repeatedly stressed by members, reflecting the growing sense of urgency communicated by the chair. One member, citing the Bali and Nairobi Ministerial Conferences as the two occasions in WTO history which delivered outcomes on agriculture, said that keeping focus on a narrow scope of specific issues is the key to achieve any success in agriculture at the 12th Ministerial Conference (MC12), which is to be held in Nur-Sultan, Kazakhstan, in June 2020. Members were urged to use their time wisely and to concentrate their efforts on addressing the most trade-distorting support.
Some members reiterated the need to improve transparency across the agriculture sector. One member warned against rushing into negotiations and insisted that the first step should be conducting more technical analysis with updated data and information.
A lively and engaged discussion ensued as a large number of members took the floor to provide preliminary feedback on the chair’s report while in-depth reviews are being conducted in their capitals. Domestic support was considered by the majority of members as the top priority for an outcome at MC12.
Cotton is the main priority for the so-called Cotton Four (Benin, Burkina Faso, Chad and Mali, with Côte d’Ivoire as observer) and high on the agenda for many other members, with some of them highlighting the strategic importance of this sector. The launch of World Cotton Day on 7 October was cited by the chair as the next opportunity to set the level of ambition for cotton and to provide concrete guidelines for an outcome by MC12. He said he will moderate on that day a ministerial-level session on cotton negotiations with the participation of ministers and high-level representatives from the Cotton Four and some other key members.
Members considered two new submissions made by the Cotton Four and the United States.
The US submission circulated on 29 July (JOB/AG/164), focused on complex tariffs. These are tariffs posed on imported goods combining various types of tariffs, such as ad valorem tariffs and non-valorem tariffs.
Complex tariffs is one of the six areas identified by the United States in a previous paper (JOB/AG/141) where it emphasized the importance of tariff reforms and suggested the following six areas for further analysis, with the aim of improving understanding of the current state of members’ tariff regimes: 1) bound versus applied tariffs; 2) complex tariffs; 3) tariff peaks; 4) issues with tariff rate quotas (TRQs); 5) special agricultural safeguards (SSGs); and 6) regional/preferential trade agreements. A detailed paper on the first theme, ‘bound versus applied tariffs’, was submitted in November 2018 (JOB/AG/147).
The new submission from the United States looked at the use of use of ‘complex tariffs’ (defined in the submission as all types of tariffs other than ad valorem and specific tariffs) across the top twenty agricultural exporting and importing members. The paper examined the use of complex tariffs in respect of various agricultural products or product groups. The United States concluded that complex tariffs are prevalent in all major agricultural product groups (with the exception of cotton). Similarly, these tariffs are found to be more prevalent in developed members and large trading economies than in developing members and small trading economies. The United States said it will continue its analysis of the other topics identified in its market access document JOB/AG/141.
A few members welcomed the US submission and looked forward to seeing its new submissions.
Benin, on behalf of the Cotton Four, introduced a revised version of its cotton proposal initially circulated in July. In addition to its three-tier plan of reducing cotton specific aggregate measurement of support (AMS) in incremental steps between 1 January 2021 and 31 December 2025, it includes language to limit blue Box support and to address the transfer of support from one box to another (sometimes called “box shifting”). It also suggests prohibiting the provision of direct payment classified as green box support to cotton producers.
Several members and groups of members voiced their support for the Cotton Four initiative and expressed their hope of reaching an outcome on cotton at MC12. Some other members expressed concerns or asked for clarification on this new submission.
The chair welcomed upcoming new submissions promised by several members and encouraged other members to also table more proposals and creative ideas.
Many members commented on the chair’s summary on domestic support. The chair noted it remains a high priority for many members. Members agreed on the need to address trade-distorting domestic support. However, they were divided on what should be the starting point for the negotiations.
One member called for investing efforts in identifying “doable elements” and suggested capping amber Box support. It asked members to leave aside the blue box and green box subsidies as they are “essential tools” for agriculture reform.
Some developing members recalled their past proposals which suggested a phase-out of the aggregate measurement support (AMS) beyond de minimis (JOB/AG/137). One member also considered that AMS and support below de minimis are different in nature, the latter being essential for meeting the subsistence needs of small farmers in developing countries.
One member said the issue of transparency stands the best chance to achieve an outcome at MC12. It called on members to engage on this issue and find ways to improve the quality of notifications by members.
The idea of tackling domestic support issues in a sequential manner was contested by some members. Some expressed their preference for a comprehensive approach for a broad package of outcomes while others made linkages between the progress on domestic support and market access. Developing members also highlighted the significance of preserving special and differential treatment as currently stipulated in Article 6.2 of the Agreement on Agriculture.
The chair, in his conclusion, said domestic support needed to be addressed in a balanced, proportional and focused way. He encouraged members to be creative and include these factors in the new proposals.
In response to the chair’s summary on cotton negotiations, many members gave words of support for an outcome on cotton. Some members asked for the focus to be on addressing all forms of trade-distorting support for cotton. Other members continued to urge the membership to address the “rules deficit” in cotton, targeting AMS beyond de minimis as the main cause of trade distortion in the cotton market.
One member stressed that an outcome on cotton should be part of overall agriculture negotiations under domestic support. If transparency cannot be improved and there is no data showing how much support is being provided by other major subsidizers, there is no way to determine the limits on domestic support, it said.
Seeing cotton as an area with “doable” elements for MC12, the chair urged members to heed the upcoming discussions at the ministerial level at the World Cotton Day launch event on 7 October. The event is being held at the initiative of the Cotton Four, and stems from the Cotton Four’s official application for the recognition of 7 October as World Cotton Day by the United Nations General Assembly, reflecting the importance of cotton as a global commodity.
Market access, stated to be of great interest to some members including for achieving an overall balance in an outcome on agriculture, triggered heated debate. However, some members asked whether it was realistic to zoom in on this issue given the complexity of the issue and the short time left prior to MC12. Some developing members repeated their concerns in taking up the market access agenda before achieving progress in domestic support reforms. Some other members, including agriculture importing members, invoked the linkage with negotiations outside agriculture in the areas of non-agricultural market access and services.
In response to the specific questions included in the chair’s July report, a number of members expressed their support to take up the issue of consignments en route. The issue arose from the discussions on enhancing transparency in applied tariffs where the proponents seek to improve the predictability of treatment of consignments en route when a member changes applied tariffs. Several members, including some developing members who are generally not demandeurs of market access negotiations, expressed interest in undertaking technical work to facilitate progress in tariff simplification. But strong reservations were heard from some members on the grounds of the enormous technical complexity and political sensitivity associated with this issue.
Varied views were heard on improving TRQ administration, with some members considering the issue to be more suitable for discussion in the regular agriculture committee. Some developing members showed interest in tariff escalation, but it was not deemed obvious as to how to make progress in the absence of broader discussions on tariff reductions.
The chair encouraged members to work on both market access and domestic support and to focus on the “doable” elements in these two areas.
The chair noted in his summary that improved transparency-related disciplines had been identified by many members as a useful doable first step on export competition. Several members confirmed their readiness to go in this direction.
The discussions on export restrictions generally confirmed members’ past positions on the exemption of export restrictions for food purchased for humanitarian purposes by the World Food programme as well as on transparency and clarification of terms used in the current disciplines. One proponent indicated it was in the process of further analysing this topic.
Special Safeguard Mechanism
Members discussed the special safeguard mechanism (SSM) in a dedicated session where the G33 informed members about their work on a new submission.
Public stockholding for food security purposes
During the dedicated session on public stockholding for food security Purposes, the proponents stressed the importance of finding a permanent solution for food security. They informed the membership about their intention to submit shortly a new paper on this topic to advance the discussions. Proponents stressed that any permanent solution should not be more restrictive than the interim solution and should be open to new public stockholding programmes. Some members considered that parallel progress in domestic support would be necessary.
Commending members’ high level of engagement, the chair called on members to focus on specific issues in order to achieve incremental and tangible outcomes on agriculture by the next ministerial conference. He reiterated the importance of the agriculture negotiations in achieving a broader outcome at MC12.
The chair said he will continue the consultations with members and that the next negotiations meeting is scheduled for October 28 -29, 2019.
The World Trade Organization (WTO) deals with the global rules of trade between nations. Its main function is to ensure that trade flows as smoothly, predictably and freely as possible.