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Peter M. Rosset
The trade rules did not, for example, include agriculture in the general prohibition on export subsidies. This exceptional treatment for agriculture created the conditions that allowed the "disarray" in international markets to persist. Unstable global markets and artificially low agricultural prices created challenges for all countries. Major exporting countries increased subsidies as they fought for market share. In non-subsidizing countries agricultural productivity suffered due to downward pressure on domestic prices which created disincentives for investments to increase productivity.
Eventually, at the start of the Uruguay Round, the GATT parties agreed that there was an urgent need to bring more discipline and predictability to world agricultural trade by correcting and preventing restrictions and distortions. As a result of the Uruguay Round, WTO Members agreed to limit their trade-distorting subsidies, including export subsidies.
In addition, Members recognized that the Agreement on Agriculture was only a first step towards necessary and agreed that negotiations would continue to achieve the long-term objective of substantial progressive reductions in support and production. Another important step towards reform was taken in the at the Ministerial in Nairobi, when WTO Members agreed to eliminate their scheduled agriculture export subsidies entitlements.
Members have taken steps in this regard. Nine out of the 16 Members which had commitments to reduce export subsidies in their schedules have already certified their revised schedules, eliminating those subsidies. What allowed this progress to be made? By , many Members had already begun to phase out their export subsidies.
Food is Different
Only a few Members continued using them within their scheduled limits. Therefore, the costs of giving up the right to use these subsidies were concentrated on only a few Members — mainly Norway, Canada, and Switzerland. This made it easier to reach an agreement for the final elimination. The SPS Committee, for example, facilitates exchanges between governments on food safety and plant and animal health policies. Last week the WTO co-organized with the FAO and the WHO an international forum on food safety and trade which brought together experts to examine the challenges and opportunities arising from rapid technological change and digitalization in food systems.
The event was very well-attended, highlighting the cross-cutting importance of this issue for global health, agricultural production and the global trading system.
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Discussions showed the complexity and interconnectedness of food systems increasingly characterized by global value chains - and highlighted the important role the WTO plays in ensuring that these systems are able to respond to expected, and unexpected, change. The availability of Big Data as well as Artificial Intelligence has the ability to shorten value chains, increase efficiency for both producers and consumers, and serve the interests of human and animal health. As noted, a key interest of the agricultural sector is maintaining WTO dispute settlement. The Appellate Body is on the edge of disappearing.
Having a working dispute settlement system is extraordinarily important for American agriculture as well as this sector in other countries. It is a substantial means of enforcing obligations and it works. It is not clear how well dispute settlement will work without an appellate function. I applaud the efforts of those who are trying to find solutions.
To be sure, a gap remains between the U. There is enough of a shortfall in agriculture from what could be to what is, that a redoubling of efforts to find solutions is necessary. As reform is in the air in Geneva, it is worth taking full advantage of this opening. Members are coming forward with new ideas — to enhance the work of the regular committees; to manage agricultural trade information; to find ways to benefit from the rapid developments in the e-commerce.
Second, changing existing rules requires a deeper understanding of the current context and Members are engaging in analysis and deeper technical discussions. This takes time. Third, leadership is essential to ensure that the pace of change in the WTO can keep up with the pace of change in agriculture markets. Turning to the first point — reform is a fundamental part of on-going conversations in Geneva.
Members are addressing ways to enhance on-going WTO work. Some proposals target the work of the regular Committee on Agriculture. The record for notifications has been mixed. A recent proposal sponsored by the U. The U. These efforts can enhance the monitoring function of the Committee and strengthen compliance with the underlying rules. Work within the WTO on e-commerce and the digital economy, when adopted, will also have an important impact on agriculture. By connecting rural areas to markets, e-commerce can create opportunities for growth within countries.
At the same time, these growing markets can become opportunities for exporters. China is also a leading proponent of the use of e-commerce to solve the serious distribution problems of moving produce from where it is grown to markets where demand is higher. Its efforts can be emulated by others. Turning to my second point - changing existing rules requires both a deeper common understanding of the current context and a willingness to contribute to solutions.
The work of the agriculture negotiating group in has included candid structured exchanges among delegations which contribute to a better appreciation of concerns. This work has proceeded during this year and last — even in the presence of sustained disparate views. A lot of credit should go to the current chair, Ambassador Ford from Guyana.
Ambassador Ford has adopted a forward leaning approach — he enthusiastically leads the process and pushes delegations to engage on substance. There have also been Cotton Technical Quad Plus meetings. Some topics — such as transparency, export restrictions, domestic support and market access — have attracted more attention and detailed technical work. A number of Members, including the US, are interested in an outcome on transparency and monitoring of compliance with commitments made in the Agreement on Agriculture.
This includes identifying new approaches for addressing the lack of notifications in agriculture. Some consider that an outcome on transparency is the most realistic outcome for the next Ministerial. Others have indicated that they would be dissatisfied with a result limited to transparency. Many delegations consider that export restrictions — including the non-imposition of restrictions on foodstuffs purchased by the World Food Programme — could be a potential candidate for a stand-alone outcome at the next Ministerial.
This is not an acceptable to some others who have indicated that they would like to see an outcome on export restrictions as part of a broader package on agriculture. A few developing countries are opposed to having additional notification obligations imposed on them. They appear to be concerned that his will lead to proposals that would impose additional substantive disciplines that would restrict their policy space in the future.
Many Members consider outcomes on domestic support, public stockholding and cotton to be priority issues. At the same time, Members have divergent views on how the rules in this area should be changed. The Working Group discussions have helped increase the understanding of the diverse landscape of policies — but there is no obvious convergence on an outcome in this area.
Similarly, given the difficulty of making progress on market access, making substantive progress on these topics in the short-term is very likely to be difficult. Some Members, including the U. For example, some of the largest agricultural traders, such as India, South Africa, and Mexico, have an average level of water greater than 30 percentage points. Other Members — for example, European Union, China, the Russian Federation, and the United States — have applied agricultural tariffs at or close to the bound rate.
Reductions in bound tariffs for some Members would not require any changes in applied tariffs, while for others any change in bound duties would require that they decrease applied duties. Despite the array of views reflecting differing interests, the technical work that is being done can pave the way for future reforms.
The Working Group discussions are filling an important role in terms of building trust and a common understanding of complex issues.
However, while both of these are necessary, they are not sufficient, for achieving reforms. In July, the Chair plans to circulate an outline of possible elements and related options to delegations to reflect on over the summer. After the summer break he foresees a new phase in which delegations will begin engaging in outcome-oriented discussions.
My third point is related to the critical role of leadership within the WTO to ensure that reforms can keep pace with change. The key now in Geneva is to encourage the transition from technical discussions and information sharing to real negotiation.
WTO | Agriculture - gateway
For this to happen Members need to be prepared to make trade-offs. Every one of the major players needs to be prepared to contribute something in order to get something in return. A lot depends on the domestic agricultural constituencies.