WTO Draft agri-text under fire for no level playing field

2021-09-13, 1:54pm Trade

agriculture-in-countyside-food-tank-811f7c9e52d2f40c52a8659f20e1c94e1631519698.jpg

Agriculture in countyside- Food Tank

Washington DC, 12 Sep (D. Ravi Kanth) – Many developing countries on 7 September inveighed against the draft agriculture text issued by the chair of the Doha agriculture negotiating body, Ambassador Gloria Abraham Peralta from Costa Rica, suggesting that it appears to have created an asymmetrical, unlevel-playing field that undermines the developmental priorities of the developing countries.

They alleged that the draft text is biased in promoting the interests of select countries like the United States, the European Union, and the Cairns Group of farm exporting countries led by Australia.

At an informal Doha agriculture negotiating body meeting on 7 September, the developing countries including Nigeria on behalf of the African Group, India, Indonesia, Sri Lanka, South Africa, and Jamaica on behalf of the ACP (African, Caribbean, and Pacific) group severely criticized the Chair’s proposals contained in the restricted document (Job/AG/215).

The 27-page draft text was issued on 29 July and contained nine draft decisions that are loaded with transparency provisions as demanded by the US and the European Union, domestic support proposals based on the Cairns Group proposals, and market access proposals based on a group of South American countries.

However, it did not include any proposals from the African Group, which had submitted several proposals on domestic support, the permanent solution for public stockholding programs for food security, cotton, and special safeguard mechanism among others.

Ahead of the meeting, Australia lobbied hard with the United States, the European Union and Switzerland, which is the coordinator for the G10 farm defensive countries, said people familiar with the development.

At the meeting on 7 September, the Cairns Group of farm exporting countries led by Australia, the United States, the EU and Switzerland on behalf of the farm defensive countries lent support to the chair’s highly controversial draft Doha agriculture negotiating text, said participants after the meeting.

However, the discussions brought to the fore sharp differences between the Cairns Group members, the United States, the EU and Switzerland on behalf of the G10 farm defensive countries on the one side, and a large majority of developing and least-developed countries, on the other, said participants, who asked not to be quoted.

In her introductory statement at the meeting, the chair Ambassador Peralta suggested that her draft text represents work in progress and is aimed at starting the discussions on possible landing zones for the WTO’s 12th ministerial conference (MC12) to be held in Geneva in end-November.

The chair apparently said that members can amend the text according to their priorities, said people, who preferred not to be quoted.

AUSTRALIA LEADS BANDWAGON OF SUPPORTERS

Australia, which coordinates the Cairns Group of farm exporting countries, apparently mobilized the support of the US, the EU and the G10 group of countries in endorsing the draft text as a basis for starting the negotiations and for saving the negotiating process, said participants, who asked not to be quoted.

In its statement at the meeting, Australia, on behalf of the Cairns Group, said that it “strongly supports the process of the Chair of the Committee on Agriculture in Special Session of moving to text-based negotiations and the efforts of the Chair to provide a draft text in Job/AG/215 for an MC12 agriculture package as a starting point for the negotiations.”

The Cairns Group said that it recognizes that “the draft text should be seen as a tool and a living document to be used in a collective effort to build convergence and help identify where compromises and trade-offs might lie in the development of an overall MC12 agriculture package.”

However, more work needs to be done in the coming weeks and months, it said.

On its own behalf, Australia said that “the text is not perfect”, suggesting that there is a lack of consensus across most issues covered by the text.

“Yet this draft was always going to be a starting point for Members to try and reach greater convergence ahead of MC12,” Australia argued, emphasizing that the text is a sound basis for negotiations on a package of agricultural outcomes for MC12.

“We believe this package could usefully set the direction for negotiations post-MC12”.

Australia said that it therefore supports the CoASS (Doha negotiating body on agriculture or the Committee on Agriculture in Special Session) process of moving towards a text-based negotiation based on the chair’s text.

Australia said that it is also hosting a Cairns Group ministerial meeting on 5 October on the margins of the annual Organization for Economic Cooperation and Development (OECD) ministerial meeting in Paris.

The US, which was not overly negative towards the draft agriculture text as it was with the draft Doha fisheries subsidies agreement, acknowledged that divergences seem to be very high.

However, it sounded a positive note on account of the chair’s emphasis on transparency proposals as well as the issue of market access to be linked with domestic support, said participants, who asked not to be quoted.

Significantly, the European Union, which has the largest Amber Box support of more than $70 billion and which is yet to convert its specific and seemingly opaque tariffs into ad valorem equivalents, also remained positive on the text. The EU apparently suggested that the text should not be overburdened, said participants, who asked not to be quoted.

DEVELOPING COUNTRIES CRITICIZE CHAIR’S TEXT

In sharp contrast, India, Indonesia (which is a member of the Cairns Group and also the coordinator of the Group of 33 countries), Sri Lanka, the African Group, the ACP group, and South Africa criticized the 27-page draft text on grounds that it contained proposals on domestic support and other areas, including market access, that are directly taken from the Cairns Group proposals.

Apparently, India said the text relied on applied tariffs, which has not been the practice in the Uruguay Round.

India and Sri Lanka asked the chair as to what was the criteria that she had adopted for crafting the controversial text that, for the first time, ignored the developmental proposals of the developing countries in such a blatant manner, said people, who asked not to be quoted.

Nigeria, on behalf of the African Group, challenged the textual proposals contained in document Job/AG/215.

Our expectation, Nigeria said, is that “the text would reflect: (i) the balance in the issues of interest to Members and views; (ii) the balance in terms of political perspectives; and (iii) Members’ development priorities.”

However, it said, this is not the case as the draft text “centralized the proposals of a few Members and a Group (apparently the Cairns Group) and completely jettisoned submissions by the African Group and other like-minded developing countries.”

“Consequently,” Nigeria said, “the African Group believes that the current approach adopted by the Chair is not conducive for reaching a balanced and equitable outcome on agriculture at MC12.”

It argued that “though the Chair has indicated that Job/AG/215 is a tool that would evolve over time as a result of future inputs and negotiations, the (African) Group believes that additional work needs to be done to balance the text by incorporating the proposals and submissions by other Groups and Members before the African Group could agree for it to be the basis for negotiations.”

Suggesting that a sharp reduction in trade-distorting domestic support is the sine qua non of the Doha agriculture negotiations, Nigeria said that “the Chair’s text followed the approach in JOB/AG/177/Rev.2 (the Cairns Group proposal issued on 15 July) with slight modifications such as the exemption of LDCs, which we welcome.”

Further, “the text is based on an erroneous idea that all Article 6 entitlements are trade distorting.”

Article 6.2 of the WTO’s Agreement on Agriculture contains the “development box” for developing countries.

For the past several years, the US has continued to oppose Article 6.2 along with the Cairns Group of countries.

More dangerously, it “appears the goal is to get a global number for all Art. 6 entitlements and then work out the reductions for each Member to arrive at 1/2 by 2030,” the African Group said.

“There is no clarity regarding the treatment of [Articles] 6.2 and 6.5 (Blue Box) entitlements (that are used by the US and the EU among others) which are unbounded. It appears the only way to generate these figures would be to rely on notified numbers.”

“This would unjustly punish those developing countries that have not fully used up their entitlements,” the African Group said, pointing out that “the text ignored the food security, livelihood, and rural development objectives of [Article] 6.2 and opted to subject it to further negotiations.”

Ominously, the text “disregarded the fact that S&DT is an integral part of the sustainability agenda of the WTO and suggests that [Article] 6.4 entitlements with its clear caps stipulated in the AoA which is unlikely to be concentrated in certain products in a manner that distort trade should be part of the reduction commitment,” the African Group said.

The African Group “has always maintained that the preservation of Development Box (6.2) and 6.4 S&DT is crucial for addressing the food security difficulties of developing countries.”

Further, the African Group said it “believes that in order for a form of support to have the effect of distorting global trade, it has to fulfill two criteria, the first is being granted to large scale commercial producers aiming at exportation, and the second is allowing for unlimited sums of support to be concentrated in certain products.”

“In our view,” the African Group said, “for the WTO to achieve a meaningful MC12 outcome under the Domestic Support Pillar, the starting point is for the membership to focus on leveling the playing field by addressing the imbalance and inequities of the current Domestic Support rule.”

The African Group argued that “it’s in view of this that the Group tabled a proposal on Final Bound AMS (JOB/AG/203), which offered specific options and constructive formulae for making cuts to FB (final bound) AMS.”

South Africa apparently said that it cannot “claim to be especially happy with your (chair’s) text, however, we are willing to work with you, and other WTO members, to ensure the text is transformed to a draft that we can agree to at MC12.”

It reminded the chair and other members that the reforms of the Agreement on Agriculture are aimed at facilitating real changes in trade-distorting domestic support.

South Africa said the Doha Development Round, which was launched 20 years ago, came close to an agreement (on agriculture) in 2008.

However, it seems now that under the auspices of Article 20, members are further away from the objective of real change than they have ever been, South Africa said.

South Africa apparently said the main criticism about the draft text is that it will not result in any real changes in trade-distorting domestic support.

It argued on the need for substantial reduction of support to be undertaken in such a manner as to address the historical imbalances that must ensure that those members responsible for distortions in the past will make the biggest contribution to the reduction of support.

South Africa underscored the need to preserve policy space to support resource poor farmers and rural and agriculture development under Art. 6.2 of the AoA.

Therefore, it argued, the support provided to low-income or resource poor producers under Article 6.2 of the AoA must remain exempted from any reduction commitments.

Further, there is an urgent need to address the concentration of support on specific products, and observe the sequence in the agriculture negotiations, South Africa said.

Lastly, said South Africa, it is important to ensure that special and differential treatment provisions remain a critical component of an outcome in the agriculture negotiations.

In conclusion, the draft text, which seems to be overwhelmingly tilted in favour of the Cairns Group of farm exporting countries, the United States, and the EU among others, has laid bare the reality that in the World Trade Organization, the developing countries could never get any justice from the new rules that are being crafted.

If anything, the countries from the Global South are being forced to bear the brunt of the proposed new rules while foregoing their own developmental priorities once and for all, said several people after the meeting

- Third World Network