WTO members remained divided on how to proceed with work on agriculture under the 2013 Bali Ministerial Conference’s decisions, when they met informally as the regular Agriculture Committee on 16 September.

They differed broadly on two issues:

• whether the post-Bali work could go ahead anyway in the absence of agreement on the legal text on trade facilitation (streamlining customs and other border procedures), and

• which committee should handle work on a permanent solution on public stockholding for food security in developing countries – the other relevant body is the negotiations session of the Agriculture Committee, which is due to meet informally a week later on 23 September 2014.

Implementing Bali

A number of countries objected to India’s opposition to accepting the Trade Facilitation Agreement by the 31 July deadline agreed in Bali, and India’s tying this into its call for a permanent solution to be found for the currently “interim” decision on public stockholding for food security in developing countries. Some were less specific, simply calling for all the Bali decisions to be implemented.

The previous day (15 September), India had reiterated its position in a meeting of ambassadors – that members should strike a deal on a permanent solution on stockholding by the end of 2014 and that agreeing to the legally cleaned up trade facilitation text would also have to wait until then. In this agriculture meeting it said it would not repeat that statement.

The objecting countries said the back-tracking on the Bali decision had “ruptured trust” – as one delegation put it – making it difficult to progress on implementing the whole Bali package. (Details of the agriculture part of the Bali package are in the chairperson’s opening remarks).

Australia asked India to explain the difference between the G-33 group’s 17 July 2014 proposal – which calls for a permanent solution on stockholding to be agreed by 2017 (the 11th WTO Ministerial Conference) as was agreed in Bali – and India’s own position that both the permanent solution and the Trade Facilitation Agreement should be concluded by the end of 2014. India said it would explain the G-33 proposal when members start negotiating a permanent solution.

Some countries also said they were unclear about what the problem with the Bali decision on public stockholding was. If the problem arose because of lack of clarity about the duration of the present interim decision, then they would be happy to confirm that it will remain in place until a permanent solution is found, they said.

However, negotiating the content of the permanent solution would take time and could not be completed by the end of 2014, they added. However, India countered that members recently showed that they could successfully negotiate a complicated text within weeks – a reference to the trade facilitation negotiations before Bali – and therefore agreeing a permanent solution by December 2014 is possible.

The basis for this meeting’s discussion was five new Secretariat documents based on members’ replies to a questionnaire:

Which sessions?

The debate about which body should handle the talks on a permanent solution was also inconclusive, with a number of legal and procedural arguments put forward, particularly for treating the talks as a negotiation in the committee’s “special sessions”.

Some members said it didn’t really matter which sessions of the committee were used since the delegates would be the same agricultural attachés. Some argued that the “regular” committee’s routine work on implementing the present Agriculture Agreement and members’ current commitments should not be disrupted by differences over the Bali decisions.

Chairperson Miriam Beatriz Chaves (Argentina) concluded that the link between trade facilitation and public stockholding could only be settled in a broader body such as the Trade Negotiations Committee. She said she would reconvene this informal meeting later to discuss the appropriate forum for handling the permanent solution on public stockholding.

Speaking in this meeting were: the Philippines, Paraguay, the US, EU, Japan, China, Barbados, India, Brazil, Australia, Uruguay, Indonesia, Argentina, Nigeria, Ecuador, Burkina Faso.

Background

The original proposal on public stockholding was to amend the Agriculture Agreement (specifically Annex 2’s paragraphs 3 and 4 and footnotes 5 and 6) so that government purchases at supported prices for stockholding in developing countries – to benefit low-income farmers or those who lack resources and for food security – would be allowed without limits.

It arose because some developing countries said that they risked exceeding their present agreed limits because of the way the size of the support is calculated.

The interim agreement reached in Bali (explained in some detail here) is different. It shields developing countries from legal challenge for exceeding their agreed domestic support limits – when they buy food at supported prices in order to stock it for food security. It includes conditions to deal with fears that these policies could distort international markets and hurt farmers in other countries, including a requirement to provide up-to-date information on the use of stockholding policies and on domestic support in general. In Bali members also decided to work on a permanent solution, aiming to reach agreement by the 11th WTO Ministerial Conference in 2017.

Over the years, the various ideas for solving the problem of stockholding for food security, when the produce is bought at supported prices, have included:

• Putting the support in the “Green Box”, ie, not counting it as trade-distorting domestic support (aggregate measurement of support or AMS, sometimes called “Amber Box” support). This was the main proposal up to 2013. Several countries oppose this on the grounds that price support distorts trade and does not conform to Green Box criteria.

• Revising the limits on trade-distorting support that developing countries agreed under the present Agriculture Agreement, particularly for this kind of programme. Some countries had reservations and in any case the proponents preferred the “Green Box” route.

• Adjusting the base-period reference prices that are used to calculate trade-distorting domestic support to take inflation into account. This first appeared publicly in 2013 in the agriculture negotiations chairperson’s oral report on his consultations and in a G-33 document. Countries opposing this said it would alter the “architecture” of agricultural trade reform under the present agreement. That architecture was designed to prevent all WTO members from citing inflation as a reason to increase the amount of trade-distorting support they are entitled to.

• A “peace clause” shielding these programmes from legal challenge (the interim solution agreed in Bali). With the peace clause in place, limits on trade-distorting support and the methods of calculation (including reference period prices) do not come into play for these programmes.

Supplying cheap food to the poor is not an issue here: it’s allowed without limit. The Agriculture Agreement (footnote 6 applying to paragraphs 3 and 4 of Annex 2) says this is allowed when the objective is to meet “food requirements of urban and rural poor in developing countries on a regular basis at reasonable prices”.