Texts: state of play in WTO farm talks and the crisis-meeting invitation

This technical note accompanies
WTO ministers’ meeting — no interaction, no movement, just speeches,
Ministers preparing for WTO crisis meeting told they need to compromise and
India in silent protest over Cairns Group subsidy proposal in WTO farm talks

By Peter Ungphakorn
NOVEMBER 24, 2023 | UPDATED NOVEMBER 24, 2023

On November 22, 2023, an invitation was issued for a group of about 24 key World Trade Organization ministers to meet online on November 28 in an attempt to rescue the WTO agriculture negotiations. Accompanying the invitation was an 8-page document describing the state of play in the beleaguered talks. It included an assessment of discussions among senior officials the previous month.

The two documents are below. They are a useful reference on where members agree and mainly on where they disagree in the talks.

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Invitation letter

State of play in the agriculture negotiations
Introduction | Domestic support | Market access | Export restrictions | Export competition | Cotton | Public stockholding for food security purposes | Special safeguard mechanism | Senior officials meeting, facilitator’s report

Members’ documents cited in the state-of-play report
See also

The invitations came from WTO Director-General Ngozi Okonjo-Iweala and UAE Foreign Trade Minister Thani bin Ahmed Al Zeyoudi, who will chair the Abu Dhabi Ministerial Conference in February 2024.

They were issued after strong words were exchanged in negotiations on November 20 and 21, showing how deep the divides are.

India refused to discuss a new Cairns Group proposal on cutting trade-distorting domestic support on the grounds that the group had “ambushed” the agenda, which India said should focus specifically on the question of domestic support used to procure food security stocks.

Some Cairns Group members accused India of of “blame-shifting”, “attempting to silence others”, and “fighting for a narrative” instead of negotiating.

The Senior Officials Meeting held on 23–24 October could not give a clear sense of direction

The question of whether the talks should tackle broad issues like domestic support or focus on stand-alone topics is one of the blockages that ministers have been asked to resolve (Question 1 in the invitation letter below).

The “state-of-play” document’s introduction sums up the challenges that the two dozen ministers and the WTO’s 164 members face in the agriculture negotiations:

“Agriculture is more than ever a priority in the WTO negotiations for virtually all Members as we approach [the February 2024 Ministerial Conference].

“With the exception of the outcomes from the Bali and Nairobi Ministerial conferences, notably those on Public Stockholding [when subsidies are involved in buying into the stocks] and Export Competition [agreement to ban export subsidies in agriculture and related disciplines], respectively, there has not been any substantive outcome in the agriculture negotiations since they were launched in 2000.

“Members are particularly concerned that there was no outcome on the core agriculture negotiating issues at the last two Ministerial Conferences.

“With rising food insecurity and numerous challenges facing the agricultural sector, including climate change and an increasing global population requiring adequate and nutritious food, it is the considered view of many Members that given the role that trade could play in addressing some of these contemporary challenges, it is important for the stalemate in the negotiations to be broken by actively searching for compromises.

“The Senior Officials Meeting held on 23–24 October could not give a clear sense of direction (see SOM’s Facilitator Report attached).

“The exchanges broadly confirmed the differences in Members’ views.

“Whereas some Members consider that an outcome in agriculture should be holistic, comprehensive and balanced pursuant to Article 20 of the Agreement on Agriculture (AoA), others emphasize the need to agree first and foremost on a permanent solution for PSH, including possibly a change in the methodology to calculate market price support (see section on PSH below).”

Those few sentences highlight the most serious immediate sticking point — the clashes over food security stockholding programmes when the food is procured with subsidies.

Fundamental to the disagreement is whether the solution should be stand-alone or part of broader disciplines covering the whole of trade-distorting domestic support.

The issue is explained here, with accounts of the clashes in October here, and in November here.

“PSH”: A MISLEADING NAME
Subsidising purchases into food security stocks is nicknamed “public stockholding for food security in developing countries” or just “public stockholding” (PSH) for short.

The name is misleading because WTO rules do not prevent stockholding. They only discipline subsidised procurement. Even that is allowed, so long as the developing country stays within its subsidy limit, usually 10% of the value of production, which can be a large amount.

This could be described as something like “over-the-limit subsidies used to procure food security stocks”.

The practice is not widespread. A 2022 paper by a Canada-led group found tentatively that since 2013 “only five members notified expenditures […] for stocks acquired at [a supported] price at least once” and only nine since 2001.

Only one country — India — has exceeded its domestic support limit when using subsidies to buy into stocks, and for only one product: rice. For 2021–22, the fourth successive year of the breach, India’s subsidy was calculated at $7.55bn, exceeding its $5.0bn limit by 52%. (The following year the excess subsidy fell back to 20%.)

An “interim” 2013 WTO ministerial decision modified by another decision in 2014 — called a “peace clause” — has protected India from facing a legal challenge despite breaching its WTO commitment.

One problem is that the peace clause is only available to countries with “existing” programmes in December 2013. The few covered include China, India, Indonesia, Pakistan, Philippines and Taiwan, according to a November 2023 WTO Secretariat summary.

The present deadlock is over an unresolved permanent solution originally intended to replace the interim one in 2017. Details are here.

(Updated April 22, 2024)

The invitation letter

The letter as originally formatted is here.

Abbreviations and jargon:
CET = central European time
CoA = (WTO) Committee on Agriculture
CoA-SS or CoA special sessions = agriculture negotiations
MC13 = 13th WTO Ministerial Conference, scheduled for February 26–29, 2024, in Abu Dhabi and hosted by the United Arab Emirates (UAE)
HoDs = heads of delegations (usually ambassadors in Geneva)
HoDs + 1 = heads of delegations accompanied by no more than one official

Ngozi OKONJO-IWEALA
Director-General

22 November 2023

Excellency,

We are writing in connection with the virtual mini-Ministerial meeting on agriculture which would be held on Tuesday, 28 November 2023 from 12:30 to 15:30 (CET).

Attached, you will find a summary of the state of play in the agriculture negotiations prepared by the Secretariat under its own responsibility. It is intended to facilitate the discussions by Ministers.

The objective of this meeting is for Ministers to provide clear political guidance to enable Members in the CoA Special Session process to overcome the stumbling blocks that have prevented substantive progress in the agriculture negotiations since they were launched in 2000. Ministers would therefore not be expected to delve into the technical details of the negotiating issues. In that regard, Ministers would be expected to deliberate on the following two questions:

Q1: Some Members are demanding a holistic approach to the negotiations leading to comprehensive outcomes in all the negotiating areas, while others are seeking stand-alone outcomes on issues of priority to them. Still others believe that there are some low hanging fruits which could realistically be harvested at MC13. What guidance could Ministers give to reconcile these opposing views?

Q2: Considering the state of play in the agriculture negotiations, what political direction and guidance can Ministers give to negotiators in Geneva to support the CoA Special Session Chair’s process and ensure a meaningful outcome on agriculture at MC13?

This is a virtual mini-Ministerial meeting. Participating Ministers will receive the details on how to connect to the meeting in due course. To ensure transparency, there will be a listening-in room at the WTO in Room W for all Members to follow the discussions. Given room capacity constraints, and to ensure that every delegation has an equal opportunity, access will be limited to HODs + 1. Interpretation in the three official WTO languages will be provided.

Dr. Thani bin Ahmed Al Zeyoudi, UAE Minister of State for Foreign Trade, MC13 Chair
Dr. Ngozi Okonjo-Iweala, WTO Director General

State-of-play in the agriculture negotiations

This document accompanies the invitation letter. It’s in its original format here.

Some abbreviations and jargon ministers will have to master to understand the document:
GATT = General Agreement on Tariffs and Trade, the WTO agreement covering trade in goods
AoA = Agreement on Agriculture
CoA = Committee on Agriculture
CoA special sessions = agriculture negotiations
MC13 = 13th WTO Ministerial Conference, scheduled for February 26–29, 2024, in Abu Dhabi and hosted by the United Arab Emirates (UAE)
MC10 to MC14 = WTO ministerial conferences, listed here (the 14th conference has not been scheduled yet)
SOM = senior officials meeting
PSH = public stockholding. The actual issue is domestic support used when procuring public stocks
MPS = market price support
DS = domestic support
AMS = aggregate measurement of (trade-distorting) support (explained here)
Final Bound Total AMS = legally binding limits on total trade-distorting domestic support
de minimis = notionally small amounts of domestic support (explained here)
FERP = fixed external reference price
Green Box = category of domestic support that does not distort trade or minimally does (explained here)
LDCs = least-developed countries
NFIDCs = net-food-importing developing countries
Export competition = export subsidies and other measures having similar effects
ECQ = export competition questionnaire
C-4 = Cotton Four, proponents of disciplines on cotton
DGCFMC = WTO Director General’s Consultative Framework on Cotton
SSM = special safeguard mechanism

STATE OF PLAY IN THE AGRICULTURE NEGOTIATIONS

NOVEMBER 2023

This summary document has been prepared by the Secretariat under its own responsibility to facilitate discussions among Ministers. It does not purport to represent or capture all the views of Members on the negotiating issues.

Introduction

1. Agriculture is more than ever a priority in the WTO negotiations for virtually all Members as we approach MC13. With the exception of the outcomes from the Bali and Nairobi Ministerial conferences, notably those on Public Stockholding and Export Competition, respectively, there has not been any substantive outcome in the agriculture negotiations since they were launched in 2000. Members are particularly concerned that there was no outcome on the core agriculture negotiating issues at the last two Ministerial Conferences. With rising food insecurity and numerous challenges facing the agricultural sector, including climate change and an increasing global population requiring adequate and nutritious food, it is the considered view of many Members that given the role that trade could play in addressing some of these contemporary challenges, it is important for the stalemate in the negotiations to be broken by actively searching for compromises.

2. The Senior Officials Meeting held on 23-24 October could not give a clear sense of direction (see SOM’s Facilitator Report attached). The exchanges broadly confirmed the differences in Members’ views. Whereas some Members consider that an outcome in agriculture should be holistic, comprehensive and balanced pursuant to Article 20 of the Agreement on Agriculture (AoA), others emphasize the need to agree first and foremost on a permanent solution for PSH, including possibly a change in the methodology to calculate market price support (see section on PSH below).

3. This note summarizes the state of play in the agriculture negotiations.

Domestic Support

4. Domestic support has been at the heart of agricultural negotiations since they began in 2000 and continues to be a top priority for the vast majority of Members considering that Members entitlements amount to nearly USD 1 trillion, which could double to USD 2 trillion in 2030 if nothing is done to stem the upward trend as a result of increased production and prices of major staple products. In its recent publication, the OECD estimates that countries provided around USD 851 billion in support of the agricultural sector.¹ Over the years, these negotiations have been strongly influenced by the evolution of the level of support actually provided by Members.

¹ The variances in the methodologies employed by the OECD and WTO for calculating support are also acknowledged.

5. The main objective (all Members agree on) is the need to further discipline trade-distorting domestic support. However, Members views differ significantly on the key issues, notably on what constitutes “trade distorting” DS (all Article 6 support or some sub-categories²) and how a reduction in trade-distorting DS may be achieved (should all categories be addressed at once or should some categories be given priority, i.e., issue of sequencing of reform steps).

² Different subcategories of Article 6 support are: Aggregate Measurement of Support (AMS) above de minimis (Art. 6.3), AMS not exceeding de minimis (Art. 6.4), Blue Box (Art. 6.5) support and Art. 6.2 (Development Programmes). In addition, there is also Green Box (Annex 2, i.e. non trade-distorting support). Some Members (notably the African group) has been arguing also that Green Box direct payments have also a trade distorting impact and have called for imposing a limit on this type of payments.

6. Whereas some Members would like to address all Art. 6 support, including support provided under Articles 6.2 and 6.5 of the AoA on the grounds that all subcategories are trade distorting, some Members would like to see AMS above de minimis addressed first (i.e., the issue of sequencing), and Art. 6.2 support exempted from any new disciplines. In that regard, some Members have pointed out that the support they provide to their low-income or resource-poor farmers is so miniscule as to distort trade.

7. There is broad support for the view that that Green Box support needs also to be addressed to ensure that support notified as “green” (i.e., non-trade distorting) actually does not distort trade. Some Members have also suggested that Green Box disciplines might need to be reviewed to ensure that contemporary challenges, such as sustainability issues, can be more effectively addressed.

8. Currently, there are two main submissions being discussed in the CoA-SS: one by the African Group (JOB/AG/242, 9 June 2023 and its revision) and the other by the Cairns Group (JOB/AG/243/Rev.1, 2 November 2023 replacing the earlier proposal by Costa Rica (JOB/AG/243, 9 June 2023)). The proposal by the African Group suggests the gradual reduction and elimination of AMS above de minimis and some additional flexibility for developing country Members experiencing severe food crises. It also calls for imposing a limit on Blue Box and Green Box direct payments.

9. The proposal by the Cairns Group seeks to address all Article 6 support and would impose an overall limit and additional disciplines on product-specific support. It embodies the “proportionality” principle, under which Members with the greatest potential to distort trade as a result of the size of entitlements would assume more obligations than the others. The disciplines on the product-specific support depend nevertheless on whether the country is an importer or exporter of the product in question (more flexibility is given to importers, but stronger disciplines would be applied to exporters, especially those with a big share in the world exports). The additional flexibilities (e.g., increased policy space for importers) is also invariably considered as the solution to the Public Stockholding issue. The proposal also includes a safeguard against imported products that have been subsidized above a certain limit. This proposal is supported by the several Members as a basis for further work on domestic support.

10. None of the proposals imposes new obligations on Least Developed Countries (LDCs).

11. On 16 October 2023, India resubmitted its revised proposal (JOB/AG/216/Rev.1). This proposal advocates for the elimination of AMS above de minimis, therefore supporting the proposal by the African Group.

Market Access

12. With a vast majority of Members prioritizing progress on domestic support, relatively scant attention has been paid to the negotiations in the market access pillar for the last several years. There has been virtually no engagement among Members on the core market access negotiating issue of tariff reduction modalities almost since MC10 in Nairobi in 2015.

13. Over the last few years, Members in the market access pillar negotiations have targeted an agreement on a framework (or work programme) to guide market access negotiations, including on the core issue of tariff liberalization. Simultaneously, they have focused on some select market access transparency issues, the most prominent being the improvement of applied tariff transparency and treatment of shipments en route. In respect of both the “work programme” and “transparency” tracks, the latest proposals were received almost two years ago, respectively, in JOB/AG/198 of 20 May 2021 by Argentina, Brazil, Ecuador, Paraguay, Ukraine and Uruguay on “Framework for Negotiations on Market Access” and JOB/AG/212/Rev.1 of 11 October 2021 by Australia, Brazil, Canada, European Union and Ukraine on “Transparency in Applied Tariff Rate Changes”.

14. Despite the current lull in the market access negotiations, some Members consider that making progress on market access reforms is critical for ensuring an overall balance in the agriculture negotiations. Accordingly, several Members, including those whose main priority lies in the domestic support negotiations, lend their support also for revitalizing market access reforms.

15. The recent submission by Argentina, Brazil, Paraguay and Uruguay (JOB/AG/255, 16 November 2023) is the first submission on this topic since MC12. It contains substantive suggestions on several market access elements (i.e., tariff simplification, tariff escalation, high tariffs and tariff peaks, and tariff rate quotas), proposes phasing out special agricultural safeguards, and calls for a tariff-reduction formula to be agreed by MC14.

Export Restrictions

16. Members’ positions differ on how to address this topic: a first group considers that a deliverable on export restrictions could constitute an important component of a food security-oriented outcome at MC13; a second group acknowledges the impact of export restrictions on global food security, but does not consider it a priority and instead seeks a broader outcome encompassing other topics; finally a third group is very reluctant to accept any new disciplines that could limit domestic policy space when such measures are resorted to.

17. Article 12 of the Agreement on Agriculture (AoA) contains disciplines that a Member must observe when instituting “[e]xport prohibitions or restrictions temporarily … to prevent or relieve critical shortages of foodstuffs” within the meaning of Article XI:2(a) of the GATT 1994, including notably notification and transparency requirements on the Member imposing the measure.³ Since MC11, the discussions in the agriculture negotiations on export restrictions have focused on the issue of how to make these disciplines on export restrictions more effective, so as to enhance the transparency and predictability of these measures.⁴

³ Under Article 12.2, such requirements do not apply to any developing country Member unless the measure is imposed by a net-food exporter of the specific foodstuff concerned.

⁴ These negotiations had also covered the issue of exempting humanitarian food purchases by the World Food Programme (WFP) from export restrictions until MC12, when such exemption was agreed upon.

18. Key elements noted by the proponents in their recent proposals⁵ include the timing and content of notification, review of measures of long duration, technical assistance and support provided by the Secretariat, clarification of the relevant terms of the AoA Article 12 and the GATT 1994 Article XI:2(a) such as “foodstuffs”, “net food exporter”, as well as other elements such as improving the transparency of consultations, creating a dedicated session to discuss export restrictions at the Committee on Agriculture or considering exempting certain shipments under existing contracts from export restrictions.

⁵ See Communication from the United Kingdom, JOB/AG/250 (12 October 2023); and Communication from Japan, JOB/AG/252 (17 October 2023). In the latter, Japan resubmitted a July 2021 proposal by the G10 on export restrictions, JOB/AG/207 (14 July 2021)).

19. While many Members acknowledge the potential impact of export restrictions on global food security, including for vulnerable importing developing country Members, some Members emphasize the fact that this topic can only be addressed as part of a comprehensive and balanced outcome at MC13.

20. Several Members consider that the existing disciplines are sufficient and are reluctant to accept any new disciplines, either procedural (i.e., on notifications) or substantive (i.e., on conditions for imposing such measures) in light of their capacity constraints and desire to preserve policy space in this area to ensure domestic food security. The view has also been expressed that export restrictions should be considered in the broader context of measures impacting trade flows.

21. Finally, given the food security challenges of LDCs and Net Food-Importing Developing Countries (NFIDCs), the issue of exempting food exports to them from the imposition of export restrictions has also become more prominent over the past year. In its recent submission, the LDC Group has formally proposed that net food-exporting Members, “shall refrain from imposing export restrictions on foodstuff imported by” LDCs and NFIDCs “for their domestic use”.⁶

⁶ Communication from the LDC Group, JOB/AG/251 (13 October 2023).

Export Competition

22. Export Competition has been in a unique position compared to other topics under negotiations since the adoption of the December 2015 Nairobi Ministerial Decision on Export Competition. The Decision mandated the elimination of export subsidies for agricultural products according to different timelines.⁷ The Decision also contains disciplines for three categories of “export measures with equivalent effect” namely, export credits, export credit guarantees and insurance programs; agricultural exporting state trading enterprises and international food aid to minimize the risk of commercial displacement and ensure that food aid does not negatively affect domestic producers and local or regional markets. The Decision also incorporates various flexibilities to accommodate the specific concerns of LDCs and NFIDCs.

⁷ [As] of today, out of the 16 Members with export subsidies commitments at the time of adoption of the Decision, 13 have modified their schedules to eliminate their entitlements, 2 (EU and Canada) have submitted revised draft schedules in 2017 but these schedules have not yet been certified, and one (Venezuela) has not yet submitted its revised draft schedule. Developing countries are allowed to use the flexibility under Article 9.4 of the Agreement until the end of 2023, [except] LDCs and Net Food-Importing developing countries who have an extension until the end of 2030,

23. The regular Committee on Agriculture (CoA) is monitoring the implementation of the Nairobi Decision, mainly through an annual “dedicated discussion” process based on Members’ notifications and responses to an annual export competition questionnaire (ECQ).

24. The Nairobi Ministerial Decision also instituted a triennial review by the CoA of the disciplines contained in the Decision to ensure the absence of circumvention of its commitments. The first triennial review held in 2018 concluded in September 2018⁸ and the second one initiated in March 2021 and held in parallel to the pre-MC12 negotiations concluded in March 2022.⁹ The next triennial review is expected to take place in 2024.

⁸ See report G/AG/28.
⁹ See report G/AG/33.

25. Members positions can be described as follows:

● Most Members consider that export competition was largely settled by the Nairobi Ministerial Decision and should therefore not be a priority. Many developing countries have expressed reservations against possible additional transparency obligations. Some Members support focussed discussions on ways to improve the existing transparency requirements.

● A small group of Members has expressed the view in the past that further work is required on export competition, as regards issues such as maximum repayment term for export financing schemes, in-kind food aid and monetization as well as the practices of some exporting state trading enterprises practices. For them the negotiations must continue to achieve better outcomes in these areas.

26. The discussions have mainly focused in recent years on the implementation and monitoring of the Nairobi Ministerial Decision and possible ways to enhance transparency to this end and have mainly shifted towards the CoA following MC12. Proponents have not submitted any new proposals on this topic in the CoA Special Session context following MC12.

Cotton

27. How to address trade distorting Domestic Support for cotton has been the central element in the negotiations since 2003. Ministers agreed that this topic should be addressed ambitiously, expeditiously and specifically, as part of the agriculture negotiations.

a. A very recent proposal by the C-4¹⁰ for a Ministerial outcome on cotton was circulated on 10 November 2023. The proposal seeks to impose a limit on the sum of AMS and Blue Box cotton specific support to ensure that it is below the de minimis threshold. It further seeks to impose a numerical cap on the level of cotton specific AMS and to eliminate Green Box Direct payments for cotton producers.

¹⁰ Benin, Burkina Faso, Chad and Mali who launched the “cotton initiative” in 2003 to have cotton specifically addressed in the agriculture negotiations. Côte d’Ivoire is now an active observer in the group.

b. Consistent with the positions adopted by them in the overall negotiations on domestic support, several Members insist on the need to first address the AMS granted to Cotton beyond the de minimis level and oppose any new disciplines on de minimis for developing country Members without Final Bound total AMS.

c. It is the view of some Members that an outcome on cotton should be part of a holistic and comprehensive outcome in agriculture.

d. The view has also been expressed that it is necessary to differentiate between trade distorting support under AMS on the one hand and Blue Box and Green Box support on the other hand.

28. Finally, WTO Members have also recognized since the launch of the cotton initiative, the coherence between the trade and development aspects of the cotton issue, as part of a “two- track” approach. While the trade-related aspects of cotton are addressed within the agriculture negotiations, the development-related aspects fall within the Director General’s Consultative Framework on Cotton (DGCFMC) under which the WTO Director-General coordinates with the development community to mobilize resources for the support of the cotton sector in the most vulnerable countries. Since the Bali Ministerial Conference, the practice has been to develop inputs for a Ministerial outcome in relation to cotton development assistance activities under the DGCFMC and incorporate them in the cotton section of the draft Chair text on agriculture once stabilized.

Public Stockholding for Food Security Purposes

29. The public stockholding (PSH) issue at the WTO is essentially about finding a solution for PSH programmes under which the procurement is made at administered prices and therefore involves the granting of market price support (MPS) to producers. Members procuring stocks at market prices are not directly concerned about this issue.

30. At the Bali Ministerial in 2013, an Interim Solution (i.e., a Peace Clause) was agreed to shield support provided under PSH programmes from legal challenges at the WTO, provided certain conditions were met. The problem is that this solution is only available to countries with “existing” programmes back then (i.e., programmes that existed in December 2013) and therefore only covers a limited number of countries, including China, India, Indonesia, Pakistan, Philippines and Chinese Taipei. The Bali Decision also envisaged the adoption of a Permanent Solution at MC11 (in 2017). However, this deadline was missed.

31. The main rationale put forward by the G33 for their proposal has been the reduced policy space due to increasing world food prices necessitating higher administered prices. As a result, the AMS limits have become much more constraining than at the time when the Uruguay Round was concluded when global prices were low. It is therefore the considered view of the proponents that the current rules prevent them from adequately taking care of the food security of their populations. The main limitation is considered to stem from the AMS calculation methodology (Annex 3 of the AoA) which does not take into account current market prices in calculating the support actually being provided (as the methodology uses a “fixed external reference price (FERP)” based on 1986-88 prices to calculate support). The situation is not the same for the proponents, as some of them are approaching their de minimis limits and could potentially breach them. So far, only India has invoked the Bali Interim Solution in respect of rice.

32. Currently, the proponents (i.e., the G33, the African Group, the ACP) are seeking the fulfilment of the existing mandate and the adoption of a permanent solution at MC13 after the deadline was missed at MC11 in Buenos Aires.

33. The non-proponents would, however, like to see some parallelism in terms of ambition with the negotiations on domestic support. Several Members have urged the adoption of a holistic approach to food security and consider that PSH is only one tool among others to meet the challenges of food security.

34. Currently, there are two proposals that are being discussed, both submitted just before MC12: one by the African Group, the ACP, and G33* and the other by Brazil.

* ++Co-sponsoring Members: Antigua and Barbuda; Barbados; Belize; Benin; Bolivia; Botswana; China; Congo; Côte d’Ivoire; Cuba; Dominica; Dominican Republic; Grenada; Guyana; Haiti; Honduras; India; Indonesia; Jamaica; Kenya; Madagascar; Mauritius; Mongolia; Mozambique; Nicaragua; Nigeria; Pakistan; Saint Kitts and Nevis; Saint Lucia; Saint Vincent and the Grenadines; Senegal; Sri Lanka; Suriname; Tanzania; Trinidad and Tobago; Turkey; Uganda; Venezuela, Bolivarian Republic of; Zambia and Zimbabwe.

35. The first proposal (JOB/AG/229, 31 May 2022) by the proponents seeks to change the method of calculating market price support (notably by updating the FERP), assume compliance with the AoA limits (Articles 3.2, 6.3, and 7.2(b)) of all support provided pursuant to PSH programmes, even when they actually exceed the established WTO limits, extend the coverage to all foodstuffs and to all PSH programmes of developing countries. The proposal would also allow stocks to be exported for the purposes of international food aid, for non-commercial humanitarian purposes or when requested by NFIDCs and LDCs, or any Member facing food shortages and higher food inflation. Transparency provisions have been simplified, and the safeguard provisions require that stocks should not “substantially” distort trade.

36. The non-proponents consider that this proposal would allow for unlimited support (notably MPS) with weaker safeguards and transparency provisions than in the Bali Interim Solution, and as such could potentially distort trade and compromise the food security of other countries. They also advocate an export ban on PSH stocks (currently exports are allowed on condition that they are made at market prices).

37. The alternative proposal by Brazil (JOB/AG/230, 31 May 2022) seeks in principle to exempt from MPS calculation the support provided by LDCs, NFIDCs and countries listed by the FAO as those “requiring external assistance for food”. This exemption would, however, apply only if that country’s global export share of that product and the value of stocks procured remain below certain thresholds.

38. The Cairns Group proposal, while not a PSH proposal per se seeks to provide a solution to the PSH issue under the DS pillar through flexibilities for product-specific support, depending on whether the developing country Member is an importer or exporter of a relevant product, taking also into account its share in world trade in that product.

Special Safeguard Mechanism

39. The SSM negotiations have been held in a Dedicated Session pursuant to the 2015 Nairobi Decision. However, Members maintain different reading of the Nairobi mandate, especially on the issue of linkage between SSM and market access. This has remained the most challenging issue in the SSM negotiations virtually preventing any serious technical engagement and progress on this file since 2015.

40. The proponents (from among the G33, LDC, ACP and the African Group) continue to accord priority to achieving an outcome on SSM, which would give developing countries the right to impose additional safeguard duties to protect small holder farmers against import surges and price declines, including in the context of the current food security challenges. The other side, comprising major exporters both from developing and developed Members, maintain their position that an outcome on SSM could be conceived only as part of a broader market access outcome. Another noteworthy reality is that agricultural market access negotiations, especially on tariff liberalization, have remained dormant for several years now.

41. Among the recent submissions, a detailed modality-like proposal was submitted by the African Group in JOB/AG/205/Rev.1 of 9 June 2023. Some developing Members, including the LDC Group, have routinely justified the importance and need for an SSM to remedy negative spill over effects of subsidized imports on their small holder farmers. Costa Rica in its recent domestic support proposal in JOB/AG/243 of 9 June 2023 has included the idea of a “special countervailing measure” to remedy subsidized imports. The proponents have so far not yet responded with significant interest.

42. The Chair has been urging Members to reflect on how a satisfactory solution could be found on the issue of linkage consistently invoked by several Members between SSM and market access, as well as on their expectations on the SSM file for MC13.

43. In view of the linkage consistently invoked by several Members between SSM and market access, and very limited substantive engagement hitherto on the market access file, it remains to be seen whether the substantive proposal on market access by Argentina, Brazil, Paraguay and Uruguay in JOB/AG/255 (17 November 2023) could make it more conducive for Members to engage in technical discussions on SSM.

[On October 23, 2023, senior officials met in Geneva to prepare for the next Ministerial Conference. The delegate from Türkiye was the facilitator for the agriculture session. This is his report, attached to the state-of-play document.]

REPORT BY THE FACILITATOR OF AGRICULTURE INCLUDING FOOD SECURITY
H.E. MR. MUSTAFA TUZCU (TÜRKIYE)

23 OCTOBER 2023

1. At the outset let me also thank the Senior Officials for their active engagement in the sessions that I facilitated. In all three sessions on agriculture and food security, almost all Members stressed the importance of an outcome in agriculture and food security at MC13 bearing in mind that the current global context of rising hunger and malnutrition making it unlikely for SDG 2 to be met by 2030. I must commend Members for answering directly the two questions posed to them and for their positive and constructive approach during the discussions.

2. With respect to the first question about what would constitute the most optimal results on agriculture at MC13, and what could be the contribution of MC13 to food security, there were divergences in Members’ positions.

3. For many developing Members, it was important for previous Ministerial mandates to be fulfilled. In that regard, they called for the adoption of a Permanent Solution to the PSH issue at MC13 considering the pivotal role it could play in alleviating the food security crisis and improving the livelihoods of farmers. They called for text-based negotiations as soon as possible. Some Members thought that reaching an agreement on a permanent solution would enhance the WTO’s credibility and unlock progress in the broader agricultural reform process. It was suggested by some LDCs that government-to-government sales from PSH stocks at discounted prices to LDCs and other vulnerable Members should be allowed to alleviate the food security crisis they are facing.

4. While recognizing the role of PSH programmes, some Members expressed the view that it was only one of the tools that could be deployed to improve food security and considered that food security challenges would be better addressed within an open and less distorted trading system. For these Members, a permanent solution can only be achieved within the broader negotiations on domestic support to address the structural causes of food insecurity.

5. While proponents called for the updating of the external reference prices (ERPs) to better reflect current realities, some other Members observed that this issue should not be assumed to be a mere technical exercise as it would entail wider ramifications on Members’ domestic support commitments.

6. Most Members also identified the disciplining of trade-distorting domestic support as a priority for MC13. However divergent views were expressed as to how this overarching objective could be achieved. For some Members, it was necessary to level the playing field. Several Members thought that it would not be possible for an agreement to be reached on modalities at MC13 and that the optimal result would be to agree on broad parameters to guide the negotiations post-MC13 for a substantive outcome at MC14. Whereas some Members were of the view that a holistic approach should be adopted by considering all trade-distorting support, others mainly developing countries considered it essential to preserve the flexibility under Article 6.2. Several Members were of the considered view that the various submissions on the table constituted a good basis to pursue the negotiations.

7. The need for an outcome on cotton was also mentioned by several developing Members, particularly the C-4, who recalled that Ministers had agreed that cotton would be dealt with ambitiously, expeditiously and specifically.

8. Some Members identified Market Access as a priority for them in the lead up to MC13. They urged addressing both tariff and non-tariff barriers and alluded to the link between market access and food security.

9. Many developing countries also expressed the view that an optimal outcome on agriculture should include a special safeguard mechanism for developing countries to counter import surges and steep price declines. The challenge posed by the entry of subsidized agricultural imports was also raised by some.

10. While acknowledging the relevance of all topics in providing a comprehensive response to the food security crisis, several Members stressed the importance of well-functioning supply chains and considered that a substantive outcome on Export Restrictions at MC13 could constitute a concrete contribution by the WTO in addressing the current crisis. It was mentioned that enhanced transparency, including through clarification of some relevant terms would be apposite. Some Members, however, said that they were opposed to any limitation on their current policy space to take recourse to such measures to assuage their domestic food security concerns.

11. Some other Members opined that an MC13 outcome should especially focus on possible immediate deliverables focussing on the needs of LDCs and NFIDCs. It was stressed in that connection that positive outcomes needed to be achieved on the follow-up to the work programme established under paragraph 8 of the MC12 Ministerial Declaration on Food Insecurity. The possible exemption of these Members from the imposition of export restrictions by net food-exporting countries was also mentioned.

12. Several Members urged a holistic approach, within the outcome on agriculture through the reform process mandated by Article 20 of the Agreement on Agriculture and stressed the complementarity between the reform process and the food security goal.

13. Regarding the second question about how can MC13 best prepare the agriculture negotiations to achieve substantive outcomes, there were also divergences in Members’ positions.

14. For some Members, it may still be possible to have some key deliverables at MC13. However, several Members cautioned against heightened expectations given the wide divergences in Members’ positions on almost all the negotiating issues. They would therefore like MC13 to prepare the ground for intensive evidence-based negotiations thereafter with the expectation of reaching major outcomes at a later stage. In that regard, they believe that clear political guidance should be provided by Ministers at MC13. While some Members were of the view that it was important to distinguish among the negotiating issues, many others also stressed the need for a comprehensive, balanced and holistic outcome on agriculture and food security at MC13.

15. In conclusion, I remain optimistic that with the necessary political will and flexibility and thanks to the extensive work undertaken thus far, it should be possible for Members to reach an agreement on a credible food security package at MC13, with a clear commitment to continue negotiations on the other negotiating issues on the basis of principles or parameters to be agreed at MC13.

Members’ documents cited in the state-of-play report

* restricted = not available publicly

Domestic support

African Group — “Domestic support” — JOB/AG/242, June 9, 2023 (restricted*) and its revision JOB/AG/242/Rev.1 (with Pakistan)
Cairns Group — “Towards a strengthened negotiation framework in the domestic support pillar: building a comprehensive approach to negotiations on domestic support” — JOB/AG/243/Rev.1, November 2, 2023, replacing the earlier proposal by Costa Rica (JOB/AG/243, June 9, 2023
India — “Elimination of AMS beyond de minimis: reducing distortions in global agricultural trade (revision)” — JOB/AG/216/Rev.1, October 16, 2023 (restricted*)

Market access

Argentina, Brazil, Ecuador, Paraguay, Ukraine and Uruguay — “Framework for Negotiations on Market Access” — JOB/AG/198, May 20, 2021
Australia, Brazil, Canada, European Union and Ukraine — “Transparency in applied tariff rate changes: Proposal for 12th WTO Ministerial Conference” — JOB/AG/212/Rev.1, October 11, 2021 (restricted*)
Argentina, Brazil, Paraguay and Uruguay — “Reform of agricultural trade in terms of market access” — JOB/AG/255, November 16, 2023

Export restrictions

United Kingdom — “Export restrictions and prohibitions on agri-food products – Draft Ministerial Decision” — JOB/AG/250, October 12, 2023 (restricted*)
Japan — “Elements to be examined for improving the transparency of export prohibitions and restrictions to ensure medium- to long-term food security” — JOB/AG/252, October 17, 2023 (restricted*)
G10 — “Proposal on export prohibitions or restrictions” — JOB/AG/207, July 14, 2021 (restricted*)
Least-developed countries (LDC) group — “Ministerial Decision on least developed countries and net food-importing developing countries exemption from export prohibitions or restrictions: draft” — JOB/AG/251 October 13, 2023

Export competition

Monitoring by the Agriculture Committee — reports G/AG/28, September 26, 2018, and G/AG/33, March 17, 2022

Cotton

No documents cited

“Public stockholding for food security purposes”

This is really about trade-distorting domestic support provided when buying into the stocks, not stockholding as such

African Group, the ACP, and G33 — “Public stockholding for food security purposes” — JOB/AG/229, May 31, 2022 (restricted* but available on this page or directly here)
Brazil — “Communication” — JOB/AG/230, May 31, 2022 (restricted*)
Cairns Group — included in “Towards a strengthened negotiation framework in the domestic support pillar: building a comprehensive approach to negotiations on domestic support” — JOB/AG/243/Rev.1, November 2, 2023

Special safeguard mechanism

African Group — “Special safeguard mechanism for developing country Members” — JOB/AG/205/Rev.1 of June 9, 2023 (restricted*)
Costa Rica — “countervailing measure” in domestic support proposal in JOB/AG/243 of June 9, 2023
Argentina, Brazil, Paraguay and Uruguay — possibly covered in “Reform of agricultural trade in terms of market access” — JOB/AG/255, November 16, 2023