WTO: Agriculture Committee discusses Bali and Nairobi Ministerial decisions, farm policies and COVID-19 impact

At a meeting of the Committee on Agriculture on 21-23 September, WTO members examined their respective agriculture policies and continued their follow-up to the 2013 Bali Decision on Tariff Rate Quotas and the 2015 Nairobi Decision on Export Competition. Members also discussed COVID-19’s impact on agriculture, with the aim of improving transparency and members’ policy responses to the pandemic. Samoa was added to the WTO list of net food-importing developing countries.

The new chair, Ms Maria Araceli Escandor (Phillipines), facilitated the meeting.

Review of the Bali Decision on TRQ Administration

At an informal meeting on 21 September, members followed up on the recommendations approved by the General Council in December 2019 on the review of the Bali Tariff Rate Quota (TRQ) Decision (G/AG/29).

The aim of the 2013 Bali Decision is to improve the utilization of TRQs related to agricultural products. It provides new transparency guidelines for the administration of TRQs, which allow import quantities inside a quota to be charged lower duty rates than those outside the quota.

Discussions were based on two new documents prepared by the WTO Secretariat — a background paper on TRQ administration and fill rates (G/AG/W/183/Rev.1) and a draft Tracking Register to record matters raised under the underfill mechanism. The two papers, prepared in accordance with the recommendations contained in G/AG/29 (Annex 2), were welcomed as “thorough and comprehensive” and instrumental in enhancing transparency on TRQ administration.

The chair urged members to examine and provide comments on the draft Tracking Register by the committee’s November meeting. It was also noted that the finalized Tracking Register would be operational once a matter was raised under the mechanism.

One member’s suggestion to abolish some scheduled tariff rate quotas on the grounds that they were “without tariff advantage” was met with questions, with one member citing the linkage of such tariff quotas with the special agriculture safeguard (SSG) and market access negotiations. A tariff quota “without tariff advantage” means the out-of-quota tariff is the same or lower than the in-quota tariff.

Regular review of agriculture policies

Members’ discussions of their respective agriculture policies have intensified, especially since the start of the COVID-19 pandemic. Pointing to the record number of questions (520) raised by members in 2020 regarding the implementation of their respective commitments, the chair said: “This level of engagement reflects the value that members place on the review function of the WTO Committee on Agriculture.”

The policies discussed relate to the three pillars of agriculture trade: market access, domestic support and export competition. In addition to discussions on COVID-19 agricultural measures under the committee’s new standing agenda item on “COVID-19 and agriculture”, several questions related to this topic were posed by members during the review process. The full list of questions from members can be found in G/AG/W/207.

China’s border measures designed to avoid transmission of COVID-19 were questioned by some members citing the lack of scientific evidence to suggest transmission of COVID-19 through food and agricultural products. These members urged China and all members to ensure that COVID-19 regulatory measures were proportional to the risk and science-based.

China disagreed with the questioning members, noting that its measures were based on available scientific evidence and consistent with the guidelines of the relevant international organizations. The measures were applied only to food products transited through the “cold-chain” — temperature-controlled transportation — and were regularly monitored in view of the evolving situation. In response to China’s reference to discussions in the Committee on Sanitary and Phytosanitary Measures and the Technical Barriers to Trade Committee, members pointed out that the matter also fell under the purview of the Committee on Agriculture.

The air transport assistance schemes of Australia and New Zealand were subject to continued scrutiny. Both members were asked how their respective schemes were not an export subsidy within the definition of Article 9.1(d) of the Agreement on Agriculture and how those measures could be reconciled with their revised “Nil” export subsidy schedules pursuant to the Nairobi Decision. Both members emphasized that their measures were temporary, targeted, proportionate emergency measures. New Zealand also noted that its air transport scheme was a services measure and hence outside the scope of the Agreement on Agriculture.

Regarding the US government’s additional direct farm payments in response to the COVID-19 pandemic, the United States said it did not have additional comments on 2020-2021federal government outlays beyond what had already been announced. These short-term programmes were designed to minimize market impacts and were targeted to help mitigate the negative impacts of COVID-19 on US agriculture and consumers, the United States said, adding that it remained fully committed to respecting its WTO domestic support commitments.

Addressing some members’ concerns about the recent EU-US tariff reduction agreement, the European Union said it saw “this initiative as a first step to de-escalate bilateral trade tensions and to support the settlement of on-going disputes. No agricultural products were concerned by this agreement” (meaning no product falls under the HS tariff codes set out in Annex 1 of the Agreement on Agriculture). The United States echoed the EU’s view and confirmed that “tariff reductions associated with this agreement will be extended on a most-favoured-nation basis”.

The United Kingdom provided clarifications on its upcoming phase-in of border-control measures with the EU starting from 31 December 2020, saying that the measures would only apply to imports from the EU, and that import controls for traders from outside the European Union remained unchanged. It stressed that the new border controls would be applied on a risk-assessment basis as currently applied to all other members.

India answered questions on the agriculture policies and transparency issues arising from its domestic support notifications. The recurring matters included India’s quantitative restrictions on pulses, subsidies for the sugar industry, and export subsidies through its transport and marketing assistance scheme. India provided detailed information on its sugar production for the 2020-2021 season. It said that, according to the Nairobi Ministerial Decision on Export Competition, as a developing country, India could provide export subsidies under Article 9.4 of the Agreement on Agriculture until the end of 2023.

Members showed continued interest in India’s public stockholding programmes. One member encouraged India to provide a table with information for all products included in its food stockholding programme, given India recently invoked the Bali Public Stockholding Decision  to notify 2018-2019 de minimis  support for rice, in excess of its WTO limit. India said there was no breaching of commitments for other products and provided the link to its public stockholding scheme guidelines, which showed stocks would be utilized domestically by the bidder and not exported.

The detail of all the committee questions and answers is publicly available on the Agriculture Information Management System (https://agims.wto.org/).

Discussion of the Nairobi Ministerial Decision on Export Competition

Members conducted their annual dedicated discussion on export competition to monitor the implementation of the Nairobi Ministerial Declaration on Export Competition of 19 December 2015.

With a few exceptions for processed and dairy products as well as swine meat, the 2015 Nairobi decision stipulates that developed members immediately eliminate their remaining scheduled export subsidy entitlements for agricultural products. As a general rule, also with some exceptions, developing members were similarly required to eliminate their export subsidy entitlements by the end of 2018. Developing members have until 2023 (2030 for net food-importing developing countries) to eliminate export subsidies used for reducing the costs of marketing exports and for internal transport and freight charges on export shipments.

The new WTO Secretariat background paper (G/AG/W/125/Rev.12 and four addenda, circulated on 20 July) which provides detailed information on export subsidies, export financing support, agricultural exporting state trading enterprises and international food aid was welcomed by many delegations.

New Zealand, a member of the Cairns Group — a group of agricultural exporting nations lobbying for agricultural trade liberalization — said it was important for WTO members to reply to the questionnaire on export competition (30 members replied this year). Together with other members, it reminded delegations that the five years grace period foreseen in the Nairobi Decision will come to an end in 2021 and that all members would be required to answer the questionnaire, including all developing members.

Many members emphasized the importance of transparency in this area and regretted the persisting low rate of replies. They stressed the need to look at ways to enhance it, including by identifying and addressing the difficulties that may be encountered by some developing countries.

Canada presented a room document entitled “Observations on agricultural exporting state trading enterprises (STEs)”. This included data on the export share of STEs in global trade, which Canada considered to be useful to supplement the monitoring of the activities of exporting agricultural STEs.

Some developed members also suggested enhancing transparency on the use of the so-called “Article 9.4 of the Agreement on Agriculture flexibility” (export subsidies consistent with the special and differential treatment provisions for developing country members) in the context of this annual discussion.

Members were also updated on the situation regarding modification of members’ schedules of commitments pursuant to the Nairobi decision. The chair noted that out of the 16 members with export subsidies reduction commitments in their schedules, 11 members have had their revised schedule certified (i.e. made binding under WTO rules). Two members — Canada and the EU — circulated their draft schedule in 2017 and three members (Brazil, Indonesia and Venezuela) have not yet circulated their draft schedule.

Indonesia said it is currently working on its revised schedule and would soon submit it to the WTO. Brazil stated that revising its schedule remained the government’s priority despite the pandemic disruption. Brazil clarified that it has not provided any export subsidies and will submit its revised schedule soon. Venezuela noted that, as a net food-importing developing country, it has the right to use export subsidies until 2030.

The chair asked members to reply or update their replies to the questionnaire by 16 October 2020 and announced that the next dedicated discussion on export competition would take place during the September 2021 meeting of the committee, taking into account the current working hypothesis regarding the date of the next Ministerial Conference.

Enhancing transparency and the committee’s review process

Summing up the situation of overdue notifications, the chair noted that G/AG/GEN/86/Rev.39, circulated on 9 September, reflected the current status of compliance with notification obligations by WTO members. She commended the Dominican Republic, the Kyrgyz Republic and Nepal for bringing their notifications fully up to date. Meanwhile, she pointed out that a significant proportion of domestic support (34%) and export subsidies (31%) notifications remained pending for the period 1995 to 2018. She urged members to “step up efforts towards meeting their notification obligations”.

Monitoring pending responses to questions in the committee review process, the WTO Secretariat document circulated on 9 September (G/AG/W/204/Rev.1) finds that, as of 8 September 2020, the number of pending replies for the period 2013-2018 amounts to 82, higher than the 2012-2017 period figure (55). The chair encouraged members to continue their efforts to reduce outstanding responses and collectively enhance transparency in the committee.

The chair noted members’ concerns regarding outstanding notifications and the lack of timely responses to questions. Several members expressed appreciation to the WTO Secretariat for the “organic improvements” made to the Agriculture Information Management System, which will help enhance transparency in the committee. Modifications to the system will improve members’ ability to identify repeat questions in the AG IMS, identify outstanding responses, and follow up on matters that were previously raised. Some members suggested additional features for the Secretariat to consider, such as allowing members to follow issues of interest raised by other members. An information session on transparency and the AG IMS will be organized on the margins of the November committee meeting, the Secretariat said.

Review of the list of net food-importing developing countries

Members approved Samoa’s request to be listed as a net food-importing developing country (NFIDCs). The Secretariat circulated an updated list of NFIDCs (G/AG/5/Rev.11).

In its statement, Samoa highlighted its increasing dependence on imported food which accounts for 27% of Samoa’s total merchandise trade. It also stressed that, as a small island developing state, it is vulnerable to geographic weaknesses, trade disadvantages, economic volatilities and natural disasters, issues which were further compounded by the COVID-19 pandemic.

Samoa hoped to enjoy the benefits of being an NFIDC. According to the WTO Ministerial decision on measures concerning the possible negative effects of the reform programme on least-developed and net food-importing developing countries, in the event of short term difficulties and aimed at financing normal levels of commercial imports, all least developed countries (LDCs) and NFIDCs are eligible to draw down on the resources from the various action mechanisms that the decision establishes, including those within the domain of international food aid.

Including Somoa, 79 developing and least-developed countries are currently eligible as beneficiaries of the NFIDC Decision based on a list established by the Committee on Agriculture.

Discussion on COVID-19 and agriculture

The subject of COVID-19 and agriculture is listed as a standing agenda item of the committee following members’ request at the June special meeting. Members discussed nine ad hoc reports of COVID-19 related agriculture measures and four joint statements submitted by members.

Four international organizations — the United Nations Food and Agriculture Organization (FAO), the Organisation for Economic Co-operation and Development (OECD), the World Food Programme (WFP) and the Inter-American Institute for Cooperation on Agriculture (IICA) – shared their studies and work on COVID-19’s impact on agriculture (G/AG/GEN/168, G/AG/GEN/169, G/AG/GEN/170 and G/AG/GEN/171).

The nine ad hoc reports were submitted by the EU (G/AG/GEN/159/Add.2), Israel (G/AG/GEN/160), the US (G/AG/GEN/161), Paraguay (G/AG/GEN/162), El Salvador (G/AG/GEN/163), Switzerland (G/AG/GEN/164), Brazil (G/AG/GEN/165), Canada (G/AG/GEN/167/Rev.1) and Japan (G/AG/GEN/166).

Four joint statements were submitted by members (WT/GC/208/Rev.2 — G/QG/30/Rev.2, WT/GC/218/Rev.1 — G/AG/31/Rev.1 — TN/AG/44/Rev.1, RD/AG/77, RD/AG/79).

Some members stressed the importance of having both the regular notifications and ad hoc reports to improve transparency during emergency situations such as the COVID-19 pandemic. They commended the WTO goods measures tracker on the WTO’s COVID-19 website page as a useful tool to monitor members’ agriculture measures. Some suggested adding an agriculture measures tracker or finding a way to easily search all agriculture measures.

One developed member regretted the small number of ad hoc reports and the absence of data in some reports. Several members encouraged the submission of ad hoc reports. Some noted that the WTO tracker could provide a format for all ad hoc reports so that it was easy to compare and consolidate the information. A few members, however, pointed out the need to focus on improving regular notifications, which could not be replaced by ad hoc reports. One developing member said the crisis only made the negotiations on public stockholding programmes even more urgent.

A few members welcomed specifically the WFP statement. Highlighting the importance of humanitarian food aid in the pandemic to ensure food security for vulnerable communities, they called on members to expedite negotiations in the committee in order to reach an agreement to exempt WFP purchases for humanitarian purposes from any export restriction.

Events

An OECD side event titled “Trends in agricultural markets and policy” was held on the margins of the committee meeting. The event highlighted insights from the new OECD Monitoring and Evaluation Report and the OECD-FAO Agricultural Outlook. The OECD analysis of agricultural markets and policies during the COVID-19 pandemic underscores the continuing need to invest in building productive, resilient and sustainable food systems in the face of uncertainties.

Next

The next meeting of the Committee on Agriculture is scheduled for 30 November — 1 December 2020.

The Secretariat announced that the annual agriculture symposium will be held virtually on 2—3 December 2020, coinciding with the celebration of the 25th anniversary of the WTO Agreement on Agriculture.

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