WTO commits to end farm export subsidies: Azevêdo

By: | Published: December 21, 2015 2:16 AM

Azevêdo acknowledged 'persistent and fundamental divisions on our negotiating agenda' and said members of the multilateral body 'have to face up to this problem.'

Members of the World Trade Organisation (WTO) made a commitment at the Nairobi ministerial to eliminate subsidies for farm exports, its director general Roberto Azevêdo has said in a statement, describing the move as the “most significant outcome on agriculture” in the organisation’s 20-year history.

Developed countries have committed to scrap export subsidies immediately, except for a handful of agriculture products, and developing nations will do so by 2018, according to the WTO statement. Developing nations will have the flexibility to cover marketing and transport costs for farm exports until the end of 2023, and the poorest and food-importing countries would enjoy additional time frame to trim export subsidies.

However, developed nations, ironically, refrained from making any commitment to trim massive trade-distorting agriculture subsidies (at the production level) offered by them, which make their farm products much cheaper in the export market, despite hectic negotiations that exceeded the scheduled closing of the Nairobi ministerial by almost a day from December 18. Instead, they focussed only on ending direct subsidies given for farm exports, said analysts.

The latest decision contains disciplines to ensure that other export policies are not used as a disguised form of subsidies. These disciplines include terms to limit the benefits of financing support to agriculture exporters, rules on state enterprises engaging in agriculture trade, and disciplines to ensure that food aid does not negatively affect domestic production, according to the statement. Developing countries are given longer time to implement these rules.

India had on Saturday expressed “disappointment” over the lack of a unanimity in re-affirming to conclude the 2001 Doha Development Agenda. “ Ministers acknowledged that members ‘have different views’ on how to address the future of the Doha Round negotiations but noted the ‘strong commitment of all Members to advance negotiations on the remaining Doha issues’”, said the statement.

Azevêdo acknowledged “persistent and fundamental divisions on our negotiating agenda” and said members of the multilateral body “have to face up to this problem.”

However, developing nations, including India, managed to secure commitments to allow developing nations to use a special safeguard mechanism (SSM) to protect their farmers from a spurt in imports and volatility in commodity prices, and for a work plan on a permanent solution to the issue of food security.

However, despite the difficulty in negotiations, the draft Declaration “reflects India’s demand for a reaffirmation from all members to work towards a permanent solution on public stockholding,” according to the Indian commerce ministry statement on Saturday. The draft also provides a “ministerial affirmation” that till such time a permanent solution is found, the current peace clause shall continue to be in place, it added.

A peace clause means no WTO member can drag India to the dispute panel for offering more product-specific support to farmers through procurement of grains than stipulated under the WTO until a permanent solution is found.

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