Representatives of WTO member states attempt to modernize the international order with regards to agriculture, trade facilitation and duty-free quota-free market access for least developed countries – read more on the 9th ministerial conference in Bali/Indonesia from 3-6 Dec.
Agriculture is a central topic at the negotiations: WTO members have agreed to reform the present Agricultural Agreement (AoA), which is the result of the Uruguay Round. This sector has greatly contributed to the current impasse. It is often viewed as being distorted by subsidies and high trade barriers that affect the access to food, fibers for clothing and other materials, and the livelihoods of farmers around the world. Furthermore, the global economic slowdown, increasing climatic shocks and high food prices which threaten food security around the world have highlighted the urgent need for a multilateral solution.
Three elements out of the broad agricultural dossier are discussed in Bali:
- Export subsidies
- Tariff rate quota (TRQ) administration
- Public stockholding for food security purposes
// Export subsidies and TRQ administration
It has been proposed that members ensure that progress will be made in eliminating all forms of export subsidies, that actual subsidies will be well below the permitted levels, and that disciplines will apply to export policies that may have the same effect as subsidies. Even though the proposal embraces strong statements of intent, it does not go as far as to include any legal commitment.
Concerning tariff rate quota (TRQ) administration, it has been proposed to reform the methods that governments use to share these quotas among traders since parts or all of the quotas are underfilled.
// Public stockholding for food security purposes
G33 proposal’s pros
The WTO rules neither prescribe limits on the amount of food that can be bought at market prices for food stocks nor limit the amount of food that can be provided as domestic food aid at subsidised prices. However, they do impose limits on the amount of food that can be bought at administered prices. The G33 proposal seeks to remove the limits on public stockholding for food security purposes. According to this proposal developing countries would be exempt of any legal challenge while buying, stocking and supplying food among their poor. Proposed modification could potentially enable developing countries to use agriculture as a development policy tool to achieve the core objectives of livelihood security, poverty alleviation and rural employment.
Concern on the G33 proposal
Even though members agree that food security is a priority, developed and some developing countries have raised their concern on the G33 proposal. They argue that its implementation could lead to surpluses in stocks that could be sold in the global market disrupting global prices, weaken the disciplines that apply to domestic support or even create food insecurity, since about 60% of developing countries’ agriculture exports go to other developing countries.
// Decision to be made
These days it will become clear if the final decision on the topic will be reached in Bali. Some members have suggested a compromise text which includes a “peace clause” as a potential interim solution. A “peace clause” would provide legal security to developing countries and would protect them from being challenged for exceeding the limits on public stockholding for food security purposes under WTO agreements. Conditions for the implementation of this “peace clause” most likely to be discussed; while developed countries want to apply it for a period of two to three years, developing countries are advocating for ten years.
// About the ministerial conference
The topmost decision-making body of the WTO is the Ministerial Conference, which usually meets every two years. It brings together all members of the WTO, all of which are countries or customs unions. The Ministerial Conference can take decisions on all matters under any of the multilateral trade agreements.
// About the G33 proposal
In November 2012 a group of developing countries with large populations of smallholder farmers tabled an informal proposal at the WTO, seeking additional flexibility in the global trade body’s rules on agriculture. The group known as the G33 has argued that progress on agricultural trade issues was needed to balance concessions on an eventual deal on trade facilitation. That would ease restrictions and red tape at customs making it easier for goods and services to cross national borders.