Africa needs substantial cuts in domestic subsidies of North, US told

5 October, 2015

Third World Network
Published in SUNS #8103 dated  1 October 2015

Geneva, 30 Sep (D. Ravi Kanth) -- The African Group on Monday (September 28) has told the United States that they will need substantial reduction commitments in the domestic support pillar of agriculture based on the 2008 revised draft modalities to conclude the Doha Round, African trade envoys told the SUNS.

At a closed-door meeting on September 28, specifically arranged by the US with the African Group, several trade envoys from the African Group demanded that there should be an explicit statement for continuing with the Doha negotiations on all unresolved issues at the Nairobi meeting.

Several African countries said the Doha negotiations are important for formulating their national policies to pursue the Sustainable Development Goals.

The African countries expressed their unhappiness over the small package being proposed by the US, and said that they need credible and comprehensive outcomes on major issues in the domestic support pillar at the Nairobi meeting.

In response, the US trade envoy spoke about the small package and also Washington's proposal on voluntary reduction commitments by all members in market price support and input subsidies in the domestic support pillar.

The US envoy said Washington's proposal was rejected by a major country, according to an African trade envoy.

The US envoy also said that there would be no consensus to end the Round, nor any consensus to continue the Doha Round, at Nairobi.

Several African trade envoys said that they remained unhappy with the US stance to pursue the small package without resolving the core issues in the domestic support pillar.

Meanwhile, in a separate meeting with select trade envoys on market access in the Doha agriculture package, many developing countries demanded that the Nairobi outcomes must be based on the 2008 revised draft modalities.

The chair for Doha agriculture negotiations Ambassador Vangelis Vitalis convened the meeting with select trade envoys to discuss the way forward in the market access pillar.

But many developing countries - Turkey, Barbados on behalf of ACP (Africa, Caribbean, and Pacific) group, the Philippines, India, China, and Egypt on behalf of African Group - among others called for credible outcomes in the market access pillar, including on special products and special safeguard mechanism, according to several trade envoys who took part in the meeting.

Turkey demanded "a comprehensive outcome based on Rev. 4," maintaining that there will be no tariff reduction without an outcome in the domestic support pillar. Turkey said the tiered formula has to be at the core of the outcome with SP flexibility for the developing countries.

Turkey said SSM must be a core deliverable in the market access pillar on a standalone basis. South Africa said deliverables in market access can only become clear after members know the outcomes in the domestic support pillar.

Barbados emphasized the importance of Rev. 4 and the flexibilities accorded to developing countries. The ACP group wants special products and special safeguard mechanism to tackle unforeseen surges in imports.

Argentina and Colombia demanded the elimination of the special safeguard (SSG) availed by the developed countries.

Brazil argued that without substantial outcome in the market access pillar, the Doha Round cannot be concluded.

Paraguay said the SSM proposal from the G-33 gives too much flexibility.

The European Union said outcomes in the market access pillar of the Doha agriculture package are linked with market access in industrial goods and domestic support pillar. The EU called for a simple re-calibrated and flexible approach.

Egypt, on behalf of the African Group, said the Rev. 4 should be the basis. The African Group called for tariff simplification, and for tackling tariff peaks and TRQs, and SSM.

Indonesia said S&DT is important while emphasizing that regardless of the approach, SP and SSM must remain as deliverables. SSM should be a standalone outcome, Indonesia maintained.

New Zealand said SSM should not be there if there is tariff reduction, but Chinese Taipei, on behalf of the Recently Acceded Members, called for the SSM as a main deliverable.

India said that what it can do at Nairobi is contingent upon agreement on post-Nairobi work. India said Rev. 4 must remain as the basis for finalizing the Nairobi outcomes. The mandates are the bedrock for pre- and post- Nairobi work, India argued. India also challenged the underlying rationale of re-calibration and doability, saying they create space for doing away with "the Ministerial decisions."

In his concluding remarks, the chair Ambassador Vitalis said there were five points of agreement. They include the importance of agriculture and its relation with development. Members need urgent solutions and each member has to be constructive to the other.

Also, there is an acknowledgement that what happens in market access is related to what happens in domestic support and the importance of the post-Nairobi work program.

The disagreements, according to the chair, include on re-calibration and the approach to be adopted for tariff reduction. +