US trying to scupper Nairobi outcome on food security

12 November, 2015

Third World Network

Published in SUNS #8130 dated 9 November 2015

Geneva, 6 Nov (D. Ravi Kanth) - The United States, the European Union, Australia, and other countries have nearly scuppered an outcome for the proposed permanent solution for public stockholding programs for food security purposes as demanded by 47 developing countries at the upcoming ministerial meeting of the World Trade Organization (WTO) in Nairobi next month, several trade envoys told the SUNS.

In a coordinated effort to block the G-33 proposal for arriving at the permanent solution for public stockholding programs for food security, the US, the EU, Canada, Australia, Norway, Pakistan, Paraguay, Colombia, and Brazil on Thursday adopted nuanced positions for denying a permanent solution at the Nairobi ministerial meeting beginning on December 15, according to an African trade envoy, who asked not to be quoted.

The chair for Doha agriculture negotiations Ambassador Vangelis Vitalis of New Zealand convened the meeting on Thursday with select trade envoys to discuss the proposed outcome for a permanent solution for public stockholding programs for food security purposes.

Last year, the WTO's General Council mandated members to negotiate a permanent solution for the public stockholding programs for food security by the tenth ministerial conference.

Prior to the General Council's decision, the G-33 group led by Indonesia had presented three options for arriving at the permanent solution. The G-33 options include:

i) Adding a new paragraph to include market price support for food security in the so-called green box disciplines of the Agreement on Agriculture that are exempt from any subsidy reduction commitments;

ii) Amending the existing rules to ensure that the acquisition of food stocks by developing countries to support low-income and resource-poor farmers is not required to be calculated under the current method of calculating aggregate measurement of support (AMS); and

iii) Modifying the rules to calculate subsidies based on the so-called external reference period of 1986-88 prices of the Uruguay Round agreement.

The 2008 revised draft modalities for Agriculture had proposed the requisite changes to ensure "that there is no requirement for differences between the acquisition price and the external reference price to be accounted for in the AMS."

At the chair's meeting, Egypt emphasized the importance of a permanent solution for the public stockholding programs. Egypt demanded a permanent solution at the Nairobi meeting as mandated by members last year.

Canada, one of the leading opponents to the permanent solution, said that it is a red line for Ottawa to include the market price support schemes in the green box. Canada also said that the proponents have not explained why the interim solution which was agreed last year is not a good starting point to implement the scheme.

The interim solution was agreed last year after a bilateral deal between the US and India in which the two sides proposed to find a permanent solution by the tenth ministerial conference.

The bilateral deal was reached after India had held up the Trade Facilitation Agreement and the protocol for its incorporation into the WTO Agreement's Annex 1A.

In response to Canada's opposition, Indonesia lamented that the opponents to the G-33 proposal failed to give any reasons for their disagreement, according to participants familiar with the meeting.

The EU ruled out flatly including market-based support programs in the green box, saying members can look at the interim solution. Since time is short for the Nairobi ministerial meeting which is beginning on December 15, there cannot be a deliverable on the permanent solution, the EU maintained.

Pakistan and Paraguay spoke about the leakages that could take place because of the public stockholding scheme. Pakistan sought to know why countries seeking the permanent solution are maintaining huge stocks.

Kenya, the host for the tenth ministerial conference, said categorically that the G-33 coalition is looking for a permanent solution by the Nairobi ministerial.

After dismissing the concerns raised by Canada and the EU, Kenya said the solution lies in including the public distribution schemes in the green box, adding that the G-33 members are ready to look for a solution that would address unintended consequences.

Brazil said interim solution can be a good starting point for public stockholding programs. Brazil also maintained that the permanent solution can be a deliverable in Nairobi provided export competition in all areas is resolved, according to participants present at the meeting.

The Philippines demanded the permanent solution based on the G-33 proposal while Turkey expressed sharp concern at the lack of engagement to arrive at a concrete outcome. The failure to arrive at permanent solution could block the future work, Turkey cautioned.

The US said it is difficult to arrive at an agreement by the Nairobi ministerial, suggesting members cannot agree to watering down the existing interim solution.

The US also expressed disappointment over the lack of engagement over its proposal submitted several months ago, said a participant after the meeting.

India reminded the members that the only proposal on the table is the one submitted by the G-33 as per the mandate. India maintained that the US proposal is outside the Bali mandate.

India asked the opponents to the G-33 proposal why they cannot come up with a counter-proposal if they have specific concerns on what the group had presented. India said that their Prime Minister, Narendra Modi, has called for a permanent solution at the Nairobi ministerial meeting, said another participant.

Norway said it is possible to start with interim solution while Australia asked whether the G-33 is ready to find solutions outside the green box.

In the face of sharply differing views, the chair Ambassador Vitalis said he will hold bilateral consultations with members in the coming days.

However, it is unlikely that the chair's efforts will yield any result because of the continued diversionary tactics adopted by the US, the EU, and other industrialized countries, said an African trade envoy.