AGRICULTURE

Issues on the tableIssues on the table

• Public stockholding for food security purposes and food aid

• General services

• TRQ administration

• Export competition

Structure of the Structure of the Agreement on AgricultureAgreement on Agriculture

Green Box

Blue Box

Article 6.2 – Development Programmes

Amber Box

Export subsidies

Anti-circumvention

Export prohibitions and restrictions

Market Access Domestic

Support

Export

CompetitionTariffs

Tariff rate quotas

Special safeguards

Food purchased by governments from farmers at supported/government-set not market prices counts towards “Amber Box”.

Amber Box is limited, subject to reduction commitments.

Developing countries are allowed an amount that is conceptually minimal - up to 10% of VOP – so called “de minimis”

Amend the Agriculture Agreement so that price support (administered prices) in developing countries to benefit low-income farmers/those that lack resources not count as AMS, but be considered as “Green Box”

Expand the list of “general services” under the Green Box to include more programmes that are relevant to developing countries

Public stockholding for food security is the most suitable policy instrument for them to address food security Policy tool allows addressing two elements of food

security: availability & access to food Policy space has been eroded by increasing market prices

and therefore higher administered prices Several developing countries are in danger of

reaching/exceeding their permitted limits

Methodology for calculation of support makes it difficult to stay within permitted limits AMS calculation is not based on actual expenditure; instead price support takes

external reference prices (1986-88) and sees how much higher are a government’s current administered prices

Inflation & rising commodity prices have forced up the administered prices, and with them the AMS calculation

Lack of in-built policy constraints & adequate targeting to limit potential trade distortiveness Procurement might continue even if stocks enough for

stated objective Procurement might not benefit only low income but

also larger producers potential trade distorting consequences different situations of different developing Members –

one-size-fits all approach unlikely to address specific problems of individual Members

Systemic impact of changing current rules, outside a wider negotiation

Increasing clear that November 2012 proposal was unlikely to obtain consensus in time left

Without prejudice to November 2012 proposal, but to allow for exploration of other avenues, some ideas by subset of G-33 members

Four variables for clarification/modification De-minimis level External Reference Price eligible production administered prices

Question One:Whether Members were willing to consider that the Bali Declaration recognises, subject to the requirement of the Green Box relating to no or minimally trade or production distorting, a wide range of general services policies in developing countries, along the lines suggested by G-33.

All expressed willingness to work Make clear that chapeau to Green Box applied to these

policies Need better understanding of G-33 policies, with view of

fine-tuning list

Question Two:Taking into account what the Ministerial Conference had said in the past, could Members use Bali and send a convergent political message that recognised the role played by public stockholding and similar policies in some developing countries?

positive response at general level Message should bring some value added Need to ensure balanced message; acknowledgement

of wider dimension of food security across all pillars; encourage further reform; and greater transparency

Question Three:Whether Members were prepared in the lead up to Bali to agree on any amendment or interpretation of existing WTO AoA disciplines that might provide greater flexibility in the area of public stockholding that was currently the case. If so, what was this amendment/interpretation? If not, were Members prepared to consider further work on these issues in the post-Bali period and how would it be framed?

Those that supported a general systemic solution through amendment/interpretation

Those not convinced that amendment/interpretation was possible or desirable by Bali, but open to discussion of possibilities post-Bali

Nuanced position: half way house: temporary remedy + ongoing work post-Bali

Question Four:Whether Members were willing to consider a mechanism or process whereby any member with specific concerns that their PSH policies aimed at addressing food security objectives were at risk of breaching their WTO commitments could bring those concerns to the attention of members & seek additional flexibility on an interim basis, pending broader agreement to modify the disciplines in general.

Openness to consider mechanism but… Time-limited; non-automatic; should create no

or minimal trade or production distortions Flexibility should not be at expense of

needed economic reforms Transparency important- timely

notifications Other view: whatever the temporary

solution – must be operational and not substitute for broader solution

Three options to address G-33 concerns Option A:

Agree that developing countries use of a three year rolling average to calculate contribution of food stockholding purchases to overall farm subsidy limit

Option B: Agree on draft decision allowing Members to take into

account excessive rates of inflation (higher than 4%) in calculating AMS

Option C: Agree to a peace clause exempting these

programmes from legal challenge

As Bali approached, clearer that amending the AoA would on this point was too controversial to be agreed on time.

Focus instead shifted to work on an interim solution – due restraint/”peace clause”

Although not originally proposed by the G-33, they were willing to discuss it.

Nature of the solution (political/legally binding)

Its character (automatic/non-automatic/hybrid)

Its coverage Transparency & Reporting Safeguards to minimize distorting effects Other terms & conditions Duration & review Post-Bali work

The Ministerial Decision is LEGAL LEGAL IN NATUREIN NATURE, not political.

The G-33 were clear that they were looking for a mechanism that waslegally bindinglegally binding, effectiveeffective, and

certaincertainThe discussions pointed to a more

legalistic approach.legalistic approach.

The final legal weight would depend on the final conditionsfinal conditions,

safeguardssafeguards, and terms agreedterms agreed.

In BaliIn Bali, Ministers agreed to a Mechanism with legal effectslegal effects.

Pre-Bali, Pre-Bali, there seemed to be convergence that the Mechanism

would be subject to:

CONDITIONSCONDITIONS on Notification and Transparency,

Anti-Circumvention/Safeguard, and Consultations

Once those conditions were fulfilled, Once those conditions were fulfilled, the the implementationimplementation of the of the

Mechanism would be Mechanism would be AUTOMATICAUTOMATIC..

In BaliIn Bali, Ministers agreed that provided certain conditions are provided certain conditions are

metmet,

Members are to REFRAINREFRAIN from challenging through the WTO’sWTO’s

Dispute Settlement MechanismDispute Settlement Mechanism

Compliance of a developing country Member with its AMS obligations AMS obligations or

de minimis obligationsde minimis obligations

Meeting the Conditions = Automatic Application of the Meeting the Conditions = Automatic Application of the MechanismMechanism

Coverage of MechanismCoverage of Mechanism

In Bali, In Bali, Ministers agreed that developing country Members

benefiting should have:

Notified the COA Notified the COA that it is exceeding or is at risk of exceeding or is at risk of

exceeding exceeding either or both AMS / de AMS / de minimis minimis obligations

In relation to support provided for traditional staple cropstraditional staple crops

In pursuance of public stockholding programmes for food security

purposes

EXISTINGEXISTING as of the date of the decision

What are Traditional Staple Food What are Traditional Staple Food Crops?Crops?

These are primary agricultural primary agricultural products products that are predominant predominant

staples staples in the traditional diet traditional diet of a developing Member

There are NO NUMERICAL LIMITS NO NUMERICAL LIMITS in the decision

The Mechanism applies to existing programmes but the decision does does not preclude not preclude developing countries

from introducing from introducing programmes of public stockholding for food security

purposes,

in accordance with in accordance with the relevant provisions of the Agreement on Agreement on

Agriculture.Agriculture.

This decision shall not be used shall not be used in a manner that results in an increase in an increase

of the support subject to the Member’s Bound Total AMS Member’s Bound Total AMS or the de minimis de minimis limits limits provided under

programmes other than those other than those under paragraph 3.a.under paragraph 3.a.

In Bali, In Bali, Ministers agreedagreed that a developing country benefitting from the

Mechanism must satisfy the must satisfy the notification requirementsnotification requirements

What must a Developing Member What must a Developing Member notify?notify?

Notify the Committee on Agriculture that it is exceeding it is exceeding or is at risk of at risk of

exceeding exceeding either or both AMS AMS limits limits or de minimis levelde minimis level

Have fulfilled and continue to fulfil its domestic support notification domestic support notification

requirementsrequirements

What information must be What information must be provided?provided?

Have provided and continue to provide on an annual basisannual basis,

additional information, by completing the template in the completing the template in the

annexannex

Additional relevant statistical Additional relevant statistical information information described in the described in the

Statistical AppendixStatistical Appendix

Any information updatingupdating or correctingcorrecting any information earlier

submitted

In BaliIn Bali, Members agreed thatAny developing Member seeking seeking

coverage coverage Shall ENSUREENSUREStocks procured Stocks procured under such programmes

Do not distort not distort Trade Or adversely affect adversely affect the food

securityOf otherother Members

The SCM appliesThe SCM applies. These programmes are shielded only

against challenges on AoA.

In Bali, Members agreed to put in In Bali, Members agreed to put in place an interim mechanism and place an interim mechanism and to negotiate an agreement for a to negotiate an agreement for a

permanent solution.permanent solution.

When will the Mechanism apply?When will the Mechanism apply?In the INTERIMINTERIM, until a permanent

solution is foundPermanent Solution will be applicable

to ALL Developing CountriesALL Developing Countries

Which body is responsible for Which body is responsible for monitoring the information monitoring the information

submitted?submitted?Committee on AgricultureAgriculture

A Developing Country Member Developing Country Member benefittingbenefitting for the Decision

Shall upon REQUESTREQUESTHold consultations Hold consultations with other Members

On the operationoperation of its Public Stockholding Program notified

Members agree to establish a Work Work ProgrammeProgramme

To be undertaken in the Committee Committee on Agricultureon Agriculture

With the aim of making making recommendations recommendations for a

permanent solutionpermanent solution

Taking into account Members’existingexisting and future future

submissionssubmissions

With the aim of concluding aim of concluding it no later than the 1111thth Ministerial Ministerial

ConferenceConference

The General Council shall report shall report to MC10 on evaluation of the evaluation of the

operation operation of the Decision and the progress of the progress of the

Work ProgrammeWork Programme

wanted to make the market price support in FN 5 Green

Bali deal: the market price support remains Amber but will not be

challenged

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Annex 2

Decision recognizes the contribution of general services programmes to rural development, food security and poverty alleviation, particularly to developing countries

Subject to Annex 2 of the AOA (Green Box- Chapeau), types of programmes in the decision could be considered as falling within the scope of the non-exhaustive list of general services programmes in Annex 2, paragraph 2

  The programmes relate to land reform and rural livelihood

in order to promote rural development & poverty alleviation.

The monitoring activity of the Committee will depend on whether Members decide to use the Decision.

Conversion on the WP has already started at the January CoA meeting

Tariff Rate Quota import duties are lower on quantities within

the quotas and higher for quantities outside

Current Rules on TRQ Administration Art XIII GATT Import-licensing Agreement

 A number of methods employed for administration:

Exporting countries: methods used for administration can become an additional trade barrier. Evidence - when parts or all of the quotas are

not used (“under-filled”). Importing Countries: the under fill is

caused by supply and demand in the market.

Many TRQs have low fill ratesMany TRQs have low fill rates

Average annual fill rates (2002-2011) range from 59% to 66% in this period

Absolute annual fill rates (2002-2011) range from 27% to 100%

% of scheduled tariff quotas without notified imports also varies (from 33% to 77%)

Two distinct elements: Transparency provisions An under fill mechanism

The text was not new: it was taken from paragraphs 115–125 and Annex E of the 2008 draft “modalities” for the agriculture negotiations as a whole, and the version circulated in October 2012 was essentially identical.

Refers to existing disciplines of the Import Licensing Agreement

Highlights how ILA provisions are relevant to TRQ Administration including on: Timing of publication of information related to

tariff quota opening Processing of tariff quota applications

Obligation to notify to Agriculture Committee of tariff quota fill rates

Identifies situations where Members do not notify TRQ fill rates or fill rate is below 65%

Monitoring in the Committee on Agriculture with detailed consultative procedure

Final stage –requirement to allocate TRQs using prescribed methods, with S&D for developing countries

First Monitoring Year

Where an importing Member does not notify the fill ratedoes not notify the fill rateORORWhere the fill rate is

below 65 per centbelow 65 per centIf any of the two

conditions are present

Initiate Underfill Initiate Underfill MechanismMechanism

Third and Subsequent Third and Subsequent Monitoring YearMonitoring Year

Provide unencumbered Provide unencumbered access via one of the access via one of the

tariff quota tariff quota administration methodsadministration methods

Where the fill rate has remained below 65 per

cent

For three consecutive years

OROR

No notification has been submitted for that

period

ANDThe fill rate has not increased

For each of the Preceding Three YearsBy annual increments ofAt least 8 percentage

points when the fill rate is more than 40 per cent

At least 12 percentage points when the fill rate equals or is less than 40

per cent

ANDThe data-based

discussions regarding market circumstances

have not led to the conclusion among all

interested parties these are in fact the reason

for underfill

ANDAn interested Member makes a statement in

the Committee on Agriculture, that it

wishes to initiate the final stage of the

underfill mechanism

Where these conditions are present

Where the fill rate Where the fill rate remains below 65 per remains below 65 per

cent for two cent for two consecutive yearsconsecutive years

OR no notification has OR no notification has been submitted for that been submitted for that

periodperiod

A Member may request A Member may request that the importing that the importing

Member take SPECIFIC Member take SPECIFIC ACTIONACTION

A Member may raise a raise a specific concernspecific concern regarding a tariff quota tariff quota commitment commitment in the Committee on Committee on Agriculture Agriculture

Place this concern on a tracking register tracking register maintained by the Secretariat

RAISE A SPECIFIC RAISE A SPECIFIC CONCERNCONCERN

The importing Member shall discuss the discuss the administration of the administration of the tariff quotatariff quota with all interested Members. With the aim of understanding the concerns concerns raisedImproving the Membership’s understanding of the market circumstancesmarket circumstances and of the mannermanner in which the tariff quota is administeredAnd whether elements of the administration contribute to underfillcontribute to underfill

This shall take place on the basis of provision of objective and relevant data

Interested Members shall fully fully consider all documentation consider all documentation submitted by the importing Member

The interested Member shall provide to the Committee on Agriculture a summary of any summary of any documentation documentation submitted submitted to interested Members

The Member involved shall adviseadvise the Committee on Agriculture whether the whether the matter has been matter has been resolvedresolved

PROVIDE A SUMMARY PROVIDE A SUMMARY OF ANY OF ANY

DOCUMENTATION DOCUMENTATION SUBMITTEDSUBMITTED

DISCUSS THE TRQ DISCUSS THE TRQ ADMINISTRATION WITH ADMINISTRATION WITH

OTHER MEMBERSOTHER MEMBERS

If the matter remains remains unresolvedunresolved

Members shall provide a clear statement clear statement of the reasonsreasons why the matter requires further considerationThe clear statement is based on based on the discussions and discussions and documentations documentations providedprovidedSuch documentation Such documentation and information may and information may also be provided and also be provided and considered in the same considered in the same manner during the manner during the second and third stages second and third stages of the underfill of the underfill mechanism, as a means mechanism, as a means of addressing and of addressing and resolving Members’ resolving Members’ concernsconcerns

PROVIDE STATEMENT PROVIDE STATEMENT FOR FURTHER FOR FURTHER

CONSIDERATIONCONSIDERATION

The importing Member importing Member shall take either specific actions requested specific actions requested or such other other actions actions it considers will effectively effectively improve the fill improve the fill rate of the tariff quota

If the actions lead to a fill rate above 65 per cent above 65 per cent or interested Members Members are otherwise satisfiedare otherwise satisfied

If the fill rate remains below 65 per centbelow 65 per cent

This will be marked as RESOLVEDRESOLVED in the Secretariat Registry and will be no longer will be no longer subject to monitoringsubject to monitoring

A Member may continue to REQUESTREQUEST additional modifications to the modifications to the administrationadministration of the tariff quotas

Choose a tariff quota administration method

A first-come, first-A first-come, first-served only basisserved only basisORORAutomatic, unconditional Automatic, unconditional

licence on demand licence on demand system within the tariff system within the tariff

quotaquota

In taking a decision on which of these two In taking a decision on which of these two options to implement, the importing Member options to implement, the importing Member

will consult with interested exporting Memberswill consult with interested exporting Members

The method selected shall be maintained for a The method selected shall be maintained for a minimum of TWO YEARSminimum of TWO YEARS

Provided that timely notifications for the TWO Provided that timely notifications for the TWO YEARS have been submitted, it will be YEARS have been submitted, it will be

NOTED on the Secretariat’s Tracking Register NOTED on the Secretariat’s Tracking Register and the concern marked CLOSEDand the concern marked CLOSED

Developing Country Members MAY choose

An alternative tariff quota An alternative tariff quota administration methodadministration methodORORMaintain the current Maintain the current

method in placemethod in place

The choice should be NOTIFIED to the The choice should be NOTIFIED to the Committee on AgricultureCommittee on Agriculture

The method selected shall be maintained for a The method selected shall be maintained for a MINIMUM of TWO YEARSMINIMUM of TWO YEARS

After which time, if the fill rate has increased After which time, if the fill rate has increased by TWO-THIRDS of the annual incrementsby TWO-THIRDS of the annual increments

It will be NOTED on the Secretariat’s tracking It will be NOTED on the Secretariat’s tracking register and the concern marked CLOSEDregister and the concern marked CLOSED

Decision at Decision at 1212thth

Ministerial Ministerial ConferenceConference

Extend/Extend/ModifyModify

Members Members voluntarily voluntarily

complycomply

Annex B: Annex B: Some Some

Members Members reserve their reserve their rights not to rights not to

applyapply

All Members All Members complycomply

Absence of Absence of decision S&D decision S&D

provision provision lapseslapses

The Committee on Agriculture is expected to review and monitor the implementation of the Understanding

The monitoring to be conducted in the context of the Under Fill Mechanism will depend on Members' submissions

Hong Kong Ministerial Decision

Para 6: “We agree to ensure the parallel elimination of all forms of export subsidies and disciplines on all export measures with equivalent effect to be completed by the end of 2013. This will be achieved in a progressive and parallel manner, to be specified in the modalities, so that a substantial part is realized by the end of the first half of the implementation period”.

2008 Rev 4 text- Export Competition Pillar stabilized?

Small package for Bali - Linkages

Step forward in Bali: legal commitments to reduce subsidies, in keeping with HKD deadline

Incremental approach for the progressive elimination of all forms of export subsidies

Down payment: developed countries halve their ceilings on the

money they spend on export subsidies by the end of 2013

envisaged setting a new limit on the quantities of subsidized exports, at the average actually exported with subsidies for 2003–2005.

Developing countries to continue to benefit from Article 9.4 provisions for 5 years after the end-date for elimination

Prohibition of export subsidies on cotton

phasing in the repayment period for export credits .

Committed to elimination, but conditions to modify the legally commitments by Bali, in their view not met That could only be done as part of an overall

agricultural package within the Doha Round. Actual use decreased, therefore the proposed

freezing of subsidies at current levels would penalize those that had undertaken reforms

Another Group: proposal would have real impacts on their use, and not cut only “water”

Proposal not balanced in terms of developing country commitments.

Stopped short of making legal commitments.

But it contains some of the strongest

statements of intent that have ever been made on the subject.

First, clear message recalling that export subsidies in all forms are a highly trade distorting form of support;

Second, acknowledgement that export competition remains a key priority

Third, a reaffirmation of the final objective on export competition “the parallel elimination of all forms of export subsidies and disciplines on all export measures with equivalent effect”

Fourth, revised draft modalities (Rev 4, from December 2008) remains important basis for ambitious final outcome

First, recognition of the decrease in recent years in use of export subsidies that are subject to reduction commitments;

Second, acknowledgement that the reforms undertaken by some had contributed to this positive trend;

Third, this is not a substitute for the final objective

Fourth, emphasize importance of consolidating progress; importance of further engagement to achieve the final objective

Encouragement to maintain & advance domestic reform processes. Encourage those who have not undertaken reforms to do so

Shall “exercise utmost restraint” with regard to recourse to all forms of export subsidies

To the end above will ensure that Progress towards parallel elimination is maintained Levels of export subsidies remain significantly

below Members’ commitments A similar level of discipline is maintained on use of

export measures with equivalent effect.

Fulfilling the objective of parallel elimination as in the HKD remains a priority

Agree to continue to work actively for further concrete progress in this area, as early as feasible

Commitment to enhance transparency and monitoring of policy developments

Agreement to hold dedicated discussions in the CoA on an annual basis to examine developments in the field of export competition

Basis of examination process – timely notifications & information compiled by Secretariat on basis of questionnaire in Annex of Declaration

Agree to a review of the situation in export competition within 2 years (10th Ministerial Conference)

Declaration calls for dedicated discussions based on notifications & a questionnaire to be circulated by the Secretariat

Annex: elements for enhanced transparency which will form basis of Secretariat’s questionnaire

CoA agreed to hold the annual discussion at its June meeting. Similar timing could be appropriate for 2015

Secretariat to circulate questionnaire with view to circulating a summary of the results in advance of the June meeting.