WTO and Agriculture negotiations - United Nations ESCAP
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WTO and Agriculture negotiations
Presented by
SACHIN KUMAR SHARMA,
ASSOCIATE PROFESSOR
CENTRE FOR WTO STUDIES, CRIT,
INDIAN INSTITUTE OF FOREIGN TRADE,
NEW DELHI
sksharma@iift.edu
Regional Consultation on Harnessing Trade for Sustainable Development,
United Nation ESCAP, Thailand
7 to 9 September 2021The Chair’s Text: Issues
Domestic support
Market Access
Export competition
Special Safeguard Mechanism
Public Stockholding for Food Security
Export restriction
Cotton
Transparency
2The Chair’s Text: Domestic Support
Two alternative draft.
To cap and reduce the sum of TDDS entitlements by at least half by 2030.
TDDS limit applicable to Amber box, Blue box, and development box
Proportionate contribution to the size of a member’s current entitlements.
LDC members are exempted from reduction
[Mentioned S&DT, Green box provision, AMS entitlement and Transparency]
3Background
Developing members are concerned about the asymmetries in the AoA
• G33, ACP and African groups are demanding the elimination of Final Bound AMS entitlement (FBTAMS)
• Due to the FBTAMS entitlement, some developed members has provided more than 100 percent of value of
production (VoP) as product-specific support.
Developed members are arguing:
• Global TDDS is increasing very fast due to combined de minimis limit.
• Combined de minimis limit = Aggregate product-specific de minimis limit + Non-product specific support
de minimis limit.
• Combined de minimis limit = 20% for developing and LDC member, 10% for developed members.
• FBTAMS remain constant, however combined de minimis entitlement increase with the VoP
• Concept of Overall TDDS limit.
4
Sharma, S.K., Das, A., Neogi, S., Lahiri, T., Mathur, P. (2021). Agricultural Domestic Support Negotiations at the 12th Ministerial Conference: Diluting the Development Agenda. Working
Paper No. CWS/WP/65, Centre for WTO Studies, DelhiThe Chair’s Domestic Support Text: Analysis
Heavily drawn from Cairns Group members’ proposals.
Fixed reference model approach
Determination of base global TDDS limit:
• TDDS entitlement = Final Bound AMS entitlement (FBTAMS) + Combined de minimis
entitlement + actual support under Blue and Development box
Once the base global TDDS limit is determined, non-LDC members will take proportionate cuts.
Sharma, S.K., Das, A., Neogi, S., Lahiri, T., Mathur, P. (2021). Agricultural Domestic Support Negotiations at the 12th Ministerial Conference: Diluting the Development Agenda.5Working
Paper No. CWS/WP/65, Centre for WTO Studies, DelhiTrend in global TDDS entitlement in 2018: Analysis
1600
1,476
The base global entitlement is 1,389
1400
calculated for all 164 members with 1,235
1,309
reference to 2018 1200
1,101
1,165
1,041
985
1000 933
885
840
US$ Billion
799
Based on FBTAMS and combined 800
761
761
de minimis entitlement of each 600
member.
400 380
Each members entitlement and
TDDS limit is calculated for 2018 200
and 2030 0
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
LDC Developing Developed Base Global Entitlement (2018) New Global Entitlement
Sharma, S.K., Das, A., Neogi, S., Lahiri, T., Mathur, P. (2021). Agricultural Domestic Support Negotiations at the 12th Ministerial Conference: Diluting the Development Agenda.6Working
Paper No. CWS/WP/65, Centre for WTO Studies, DelhiResult
The outcome of proportionate reduction would require the developing members to
contribute more than the developed members.
Reduction by 2030: China (US$ 315 billion), India (US$ 182 billion) and Indonesia (US$ 56 billion) than the EU (US$ 94 billion),
Japan (US$ 24 billion), and USA (US$ 52 billion).
The TDDS limit as a percentage of projected VoP in 2030 would be significantly higher for Japan (24.6%), Switzerland (19.1%),
Norway (16.5%), and the EU (8.8%) than the developing members such as China (3.1%), India (3.8%), Indonesia (3.2%), and
Vietnam (3.1%).
The per-farmer TDDS entitlement for developed members like Switzerland (US$ 21011), USA (US$ 12944), and Japan (US$
11325) is massively higher than the developing and LDC members such as China (US$ 528), Indonesia (US$ 318), India (US$ 236),
and Bangladesh (US$ 190).
Contrary to the general belief that LDC members’ policy space would remain intact, this study found that LDC members would lose
US$ 49 billion or at least half of their TDDS entitlement by 2030 due to fixing the limits in monetary terms.
Sharma, S.K., Das, A., Neogi, S., Lahiri, T., Mathur, P. (2021). Agricultural Domestic Support Negotiations at the 12th Ministerial Conference: Diluting the Development Agenda. Working
7
Paper No. CWS/WP/65, Centre for WTO Studies, DelhiThe Chair’s domestic support text: Other concerns
Similar treatment to the combined de minimis and FBTAMS entitlement.
Fallacies regarding the FBTAMS entitlement.
Capping of TDDS entitlement would further deepen the gap between developed and
developing countries in per farmer support.
Issue related to market price support (MPS) methodology.
Capping of the Development box.
TDDS limit and public stockholding (PSH) for food security.
Poor farmers would be left without any safety net.
Sharma, S.K., Das, A., Neogi, S., Lahiri, T., Mathur, P. (2021). Agricultural Domestic Support Negotiations at the 12th Ministerial Conference: Diluting the Development Agenda.8Working
Paper No. CWS/WP/65, Centre for WTO Studies, DelhiThe Chair’s Market Access Text
A. TRANSPARENCY IN TARIFF CHANGES
• Addresses the unexpected increase in the applied duty which can lead to uncertainty.
• Adopt one of the four best practices to address this issue (LDCs exempted):
1. Treatment for en route consignments;
2. To provide advance guidance on tariff change (defining factors);
3. Pre-pay customs duties;
4. Prior notice;
B. TARIFF REDUCTIONS: Revitalise the market access negotiations based on following principals:
• Deeper cut in higher tariff (LDCs exempted).
• Consider different elements of market access and other pillars.
• The treatment of non-tariff barriers shall be explored.
• Consideration of S&DT for developing members as well non-trade concerns.
• Tariff simplification.
9The Chair’s PSH for Food Security Purposes Text
The text will replace the Bali interim solution to the PSH issue.
Product coverage: Food stuff or traditional staple crop.
Programme Coverage: Existing and future
• It fully covers the future PSH programmes of the LDCs. However, developing countries are made subject to
15% procurement limit for [future programmes or both future and existing programmes]
PSH stocks shall be used for food security purposes and not be exported.
Linking the permanent solution with the agricultural reform programme would make it difficult for members to
use the permanent solution. It may happen that PSH programmes may not be construed to be compatible with
the agricultural reform programme.
10The Chair’s Export Prohibitions or Restrictions Text
Exemption of WFP for non-commercial humanitarian purposes
Advance notification: 30 or 10 days advance information
• Exemption: LDCs, NFIDCs and other net food importing developing members.
• Progress on consultation to be reported to the CoA.
• Modification in notification format to justify the measures and due consideration.
Some members have concerns regarding advance notification.
Nothing substantial on export competition, cotton and SSM issues
11Further Readings: Sharma, S.K., Das, A., Neogi, S., Lahiri, T., Mathur, P. (2021). Agricultural Domestic Support Negotiations at the 12th Ministerial Conference: Diluting the Development Agenda. Working Paper No. CWS/WP/65, Centre for WTO Studies, Delhi. Sharma, S. K., Lahiri, T., Neogi, S., Akhter, R. (2021). Revisiting domestic support negotiations at the WTO: Ensuring a level playing field. The Journal of International Trade & Economic Development. https://doi.org/10.1080/09638199.2021.1967429 Sharma, S.K. (2020), “A Quantitative Analysis of Proposals on Domestic Support in WTO Agriculture Negotiations: Need for Reaffirming the Development Agenda. Working Paper No. CWS/WP/200/63, Centre for WTO Studies, Delhi. Sharma, S.K., Dobhal, A., Agrawal, S., Das, A. (2020), “Demystifying Blue Box Support to Agriculture Under the WTO: Implications for Developing Countries”. Working Paper No. CWS/WP/200/62, Centre for WTO Studies, Delhi. Das, A., Sharma, S. K., Akhter, R. Lahiri, T., (2020). Special Safeguard Mechanism for Agriculture: Implications for Developing Members at the WTO. Working Paper No. CWS/WP/200/59. Centre For WTO Studies, Delhi.
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