1 Prerna Bomzan Advocacy Co-ordinator RRN/LDC Watch Implications of the 9th WTO Ministerial Conference Decision on Public Stockholding for Food Security PurposesPrerna BomzanAdvocacy Co-ordinatorRRN/LDC Watch
2 BackgroundPublic stockholding for food security provision is included in the Green Box as per Annex 2 of the WTO Agreement on Agriculture (AoA) with certain conditionGreen Box contains domestic support measures, considered “minimally or non-trade distorting”: such as direct payment to producers, decoupled income support not tied to production, insurance payments etcGovernment spending under such measures can be increased without limitationsGreen Box is in favour of developed countries
3 BackgroundFootnote 5 of the Green Box sets the condition that developing countries could also build up public stocks at administered prices, provided it was accounted for in the Amber Box according to a formulaAmber Box contains trade distorting domestic support measures therefore has limitations: such as the Aggregate Measurement of Support (AMS)Formula: AMS entitlement = quantity of production eligible(administered price- fixed external reference price)
4 Background Implications of formula: besides 16 developing countries (DCs), all have only a 10% product-specific de minimus subsidy and they have to remain within this limit i.e. only 10% of value of production as subsidiesadministered price (current year acquisition price) of DCs usually above market price to ensure guaranteed remunerative price to farmers and to boost productionfixed external reference price is average price of imports/exports in the country in which is much lower than the current market price
5 Background Implications of formula: quantity of production “eligible” is interpreted as total production and NOT quantity actually procured by the govtEND RESULT: the amount of subsidy is inflated/magnified due to the large price differences used for calculation including the basis of total production as against actual procurement hence NOT ALLOWED, TRADE-DISTORTING!THIS FORMULA IS UNFAIR AND AN IMBALANCE IN THE TREATMENT OF SUBSIDIES!!
6 G33 ProposalThe G33 is a coalition of 46 developing countries including LDCs - led by Indonesia and backed by India, China - with large populations of smallholder farmersIndia, on behalf of the G33, proposed in the informal meeting of the Special Session of the Committee on Agriculture of 14 November 2012 that the provisions on Public stockholding for food security purposes, already included in the Draft modalities of 6 December 2008, be taken up for a formal decision by the 9th WTO Ministerial Conference (MC9) in December 2013 in Bali.
7 G33 ProposalTo modify last sentence of Footnote 5 by“Acquisition of stocks of foodstuffs by developing country Members with the objective of supporting low-income or resource-poor producers shall not be required to be accounted for in the Agreement on Agriculture’s Aggregate Measure of Support (AMS) but to be counted into the Green Box or Annex 2 of the Agreement on Agriculture, where there are no limits on the subsidies that can be provided”.To delete "the difference between the acquisition price and the external reference price is accounted for in the AMS".
8 G33 ProposalEarly harvest of Annex B on Public stockholding for food security purposes of December 2008 modalitiesNOT a new proposalThe text on this issue in the draft modalities was already included without square brackets denoting consensus and already “stabilised” hence pre-negotiated and only to be adopted in BaliProposal in line with the 2001 Doha Ministerial mandate as well as 2005 Hong Kong mandate recognising the need of DCs to safeguard food security, rural livelihoods and rural employment
9 WHY against G33 ProposalConsidered trade-distorting: affecting exports of other countries (mostly developed), dumping of products by DCsIN FACT, developed countries esp. US & EU want to safeguard their exports and continue imposing on DCs to open up their markets for non-agricultural exports as trade-off (case of Trade Facilitation)Strong corporate lobby
10 Bali Ministerial Decision on the G33 Proposal Temporary/Interim peace clause for 4 years – shall refrain from starting dispute settlement cases for countries using public stockholding programmes under the conditions of this clausePermanent solution to be negotiated and adopted by MC11Limited coverage : only subjected to AoA; only for ‘traditional staple food crops’ (mostly low value cereals) i.e. programmes for pulses, dairy, cotton, poultry, vegetable oils etc not covered.
11 Bali Ministerial Decision on the G33 Proposal Notification and Transparency requirements – “that it is exceeding or at risk of exceeding” the AMS limits and/or de minimus levelSafeguards requirement not ‘to distort trade’Standstill clause on subsidies classified under the AMS or de minimis that are not notified under the peace clauseInclusion of “ in the context of the broader post-Bali agenda” in the text
12 Bali Ministerial Decision on the G33 Proposal: Critical Assessment Peace Clause will not shield DCs completely as they can still be sued under the Agreement on Subsidies and Countervailing Measures (ASCM) which states that income or price supports should not cause “adverse effects”NO guarantee of permanent solutionNO new programmes or expansion of existing programmes allowed to be introducedTransparency obligations are too burdensome and outweigh developed countries’ requirements – admit “guilt” of exceeding limits therefore
13 Bali Ministerial Decision on the G33 Proposal: Critical Assessment impossible to reclaim innocence after peace clause; provide detailed statisticsSafeguard clause “do not distort trade” is too broad and actually entails dispute settlementMixing this issue with “the broader post-Bali agenda” is problematic as DCs will be prone to trade off with “new issues” such as the Singapore issuesFor LDCs, no value addition as Members ‘shall exercise due restraint’ in initiating cases against LDCs.
14 Political Dynamics of Bali Negotiations on G33 Proposal In Bali, the African Group, many members of the G-33 and the Latin American and Carribbean group were very upset with India for having bilaterally negotiated with the US a very weak text.Pakistan opposed fearing dumping of rice by India hence affecting its exports as well as Pakistani farmers demanding a similar programmeLDC Group supportive but did not specify in their official decisions
15 CSO Advocacy towards Bali Diverse Southern and Northern CSO groups like LDC Watch, the Right to Food Campaign India, Africa Trade Network, Arab NGO Network for Development, Third World Network, ITUC, People’s Coalition on Food Sovereignty, Solidarite, Peoples’ Health Movement etc mobilised political lobbying under the banner of Our World Is Not For Sale !Letters demanding a ‘permanent solution’ were sent to the US, EU, India, DG Roberto Azevedo
16 CSO Advocacy at BaliBilateral lobby meetings with the US, EU, Norway, India, Indonesia and other strategic developed & DCs including the LDC GroupDaily “mic check” demo outside Heads of Delegation meetingsPress statements
18 Next Steps: CSO Advocacy & Campaigns Civil society both in the global North and South must JOIN FORCES to “partner & pressure” DCs to take the offensive against the US and the EU who have everything to lose because it is easy to show that they do not comply with the AoA rules to a huge extent and this will encourage DCs to sue them at the WTO so as to force them to rebuild the rules upholding food sovereignty – USE ALL FACTS/EVIDENCES TO DENOUNCE AoA VIOLATIONS BY US & EU! PUSH FOR “GREEN BOX” PERMANENT SOLUTION !!!!!
19 thank you for your attention & more power to our struggles for food sovereignty