Export competition a possible deliverable in Nairobi, despite gaps


The Chair of the agriculture negotiations, Ambassador Vitalis of New Zealand, told WTO members on 30 October that export competition in agriculture is broadly believed to be a possible deliverable for the Nairobi Ministerial Conference at the end of the year. “Unfortunately, it is also clear today that there are still some significant outstanding issues within this pillar,” the Chair said at an informal meeting of WTO members.

WTO members heard an update on recent consultations held by Ambassador Vitalis and exchanged views on what they see as a possible agriculture outcome at the WTO Nairobi Ministerial Conference and beyond. Members generally agreed that export competition can be a possible deliverable at the Nairobi conference on 15-18 December 2015. However, differences remain on whether export competition should be linked with other issues in agriculture and on the precise content of the possible outcome.

The G33, a group of developing countries pressing for flexibilities for developing countries to undertake limited market opening in agriculture, introduced a revised proposal on the special safeguard mechanism (SSM) — a mechanism that would allow developing countries to raise import tariffs on agriculture products in cases of import surges or price declines. Countries in support of agricultural trade liberalization voiced their concerns about the proposal, noting that a special safeguard mechanism without tariff reductions would allow countries to raise tariffs above existing bound levels and that this would be a step in the wrong direction.

A few members repeated their position that all three pillars of the agriculture negotiations — market access, domestic support and export competition — are interlinked, and asked members not to “cherry pick” at one pillar. Some members expressed the view that reform in domestic support and market access should continue to be addressed after Nairobi.

Export competition

The Chair shared his assessment of the current state of negotiations in export competition, including export subsidies and subsidies in the form of export finance programmes, non-emergency food aid and the activities of exporting state trading enterprises. He confirmed his intention to pursue in an intensive manner a text-based negotiation using the 4th revision of the agricultural negotiations text of 2008, also known as ‘Rev 4’, as a basis for engagement. He invited members to stay as close as possible to this text.

The Chair underlined the widely recognised view that an outcome on export competition in Nairobi would constitute a very significant and meaningful outcome, but he also noted that there were still some outstanding issues.

On export subsidies, the ‘Rev 4’ text specifies dates when countries shall fully eliminate export subsidies; some of the dates have already been exceeded. The Chair proposed to simply add seven years to the original dates in the text, which was supported by most members.

On export finance, the Chair noted that one member expressed several concerns, including on the maximum repayment period in export financing programmes and the need to include some kind of “safe harbour provision” to avoid legal challenges to such programmes. A few other members said the notion of a “safe harbour provision” would be backtracking and a step in the wrong direction.

Relating to the provisions on international food aid, several developing countries highlighted the importance of disciplines in this area in order to ensure that international food aid would not have unintended commercial displacement effects and risk hurting domestic agricultural production. One member considered that the Rev.4 text on international food aid was on the whole problematic.

The Chair reported that the current text on agricultural exporting state trading enterprises has not, so far, attracted specific concerns.

The Chair also noted the importance attached by many members to the various flexibilities envisaged for developing countries, in particular least-developed countries, net food importing developing countries, and small, vulnerable economies.

Cotton

Four African countries — Benin, Burkina Faso, Mali and Chad, known as the “Cotton Four” — introduced their proposal on cotton. The trade-related aspects of the proposal contain suggestions on reforms in market access, domestic support and export competition in the cotton sector, with the aim of levelling the playing field for cotton exporters in the poorest countries.

The Chair reported on his consultations on the three areas of reform. On market access, he said that the Cotton Four countries have provided a list of products that would be covered by the duty free and quota free scheme, which would allow the poorest countries to export cotton products to developed countries and some developing countries with no trade barrier. On domestic support, the Chair said the feasibility and the overall balance of a possible outcome in this area remain a central issue and “it is clear that this is going to be a very challenging area”. On export competition, a cotton-related outcome should be envisaged within the scope of a wider outcome, the Chair told members.

Public stockholding

The Chair reported on the consultations he had held on public stockholding for food security purposes. “Unfortunately, I did not see any fundamental change in members’ well-known positions,” he told the meeting.

Source: World Trade Organization (WTO)


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