BackProposal on subsidy cuts hits roadblock at WTO
US, EU, Australia and Pakistan block proposal exempting programmes from subsidy reduction commitments
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Geneva: Efforts to negotiate a permanent solution for public stockholding programmes for food security in India and other developing countries at the World Trade Organization (WTO) hit a roadblock after the US, the European Union (EU), Australia and Pakistan blocked a proposal that would exempt these programmes from subsidy reduction commitments.
At a closed-door meeting of select trade envoys on Thursday convened by the chair for Doha agriculture negotiations ambassador John Adank, the US, the EU and Australia maintained that these programmes cannot be included in the so-called green box disciplines as they would affect its “integrity", said people familiar with the meeting.
“We have created an edifice for the green box (over many years) and we cannot affect its integrity (by including the public stockholding programmes)," said a participant from an industrialized country.
India challenged the claim saying there is nothing sacrosanct about the edifice and integrity of the green box programmes. India’s trade envoy Anjali Prasad reminded her counterparts that the public stockholding programmes are already included in the green box. India said that if green box is so sacrosanct, then it is time to examine all the subsidy incentive programmes offered by WTO members to their farmers.
Several studies have pointed that many industrialized countries, particularly the US, the EU, Canada, Norway, Switzerland and Japan, among others, shifted billions of dollars of subsidy incentive programmes into green box to ensure they are not challenged at the WTO, analysts said.
The Doha Development Agenda negotiations that were launched in 2001 included an examination of green box disciplines. But the US and the EU stalled any move to bring new disciplines in the green box.
In the WTO’s agreement on agriculture (AoA), public stockholding programmes for food security purposes are covered in the green box disciplines in paragraph 3 of Annex II. Paradoxically, the same programmes are subjected to subsidy calculations in the aggregate measurement of support (AMS) in Annex III of the AoA.
Indonesia, which is the coordinator for the 46-member G-33 farm coalition, said its proposal for transferring the market price support for public stockholding programmes in the green box is already contained in the Annex 2 of AoA.
The G-33 would like to hear from other members on how to design a possible solution for public stockholding programmes without changing the structure of the AoA, Indonesia maintained.
India said a constructive solution can be found for including the public stockholding programmes in the green box if there is a sincere and frank discussion.
After listening to India and Indonesia at the meeting, the chair admitted that the public stockholding programmes are included in the green box while their subsidy calculation is covered in the AMS.
The US said it is disappointed that the G-33 is continuing to demand the inclusion of public stockholding programmes in the green box. The EU maintained that it will never accept the green box treatment for public stockholding programmes.
A major industrialized country acknowledged at the meeting that if there is no permanent solution on the public stockholding programmes for food security, then the G-33 will not agree to conclude the Doha Development Agenda trade negotiations at the WTO’s 10th ministerial conference at Nairobi in Kenya later in the year, said a participant.
The G-33 gave three options to find permanent solution. These include (i) adding a paragraph to include market price support for food security in the green box disciplines of the agreement on agriculture that are exempted from any subsidy reduction commitments, (ii) modifying 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 AMS, and (iii) modifying or amending the rules to calculate subsidies based on the so-called external reference period of 1986-88 prices, which was decided during the previous Uruguay Round of negotiations.
The 2008 revised draft modalities prepared by the former chair for Doha agriculture negotiations, Crawford Falconer, of New Zealand, had recommended that the requisite changes to ensure that “there is no requirement for difference between the acquisition price and the external reference price to be accounted for in the AMS".
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