Implications of the 9th WTO Ministerial Conference Decision on Public Stockholding for Food Security...
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Implications of the 9th WTO Ministerial Conference Decision on Public Stockholding for Food Security Purposes. Prerna Bomzan Advocacy Co-ordinator RRN/LDC Watch. Background.

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Prerna bomzan advocacy co ordinator rrn ldc watch

Implications of the 9th WTO Ministerial Conference Decision on Public Stockholding for Food Security Purposes

Prerna Bomzan

Advocacy Co-ordinator

RRN/LDC Watch


Background

Background

  • Public stockholding for food security provision is included in the Green Box as per Annex 2 of the WTO Agreement on Agriculture (AoA) with certain condition

  • Green 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 etc

  • Government spending under such measures can be increased without limitations

  • Green Box is in favour of developed countries


Background1

Background

  • Footnote 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 Boxaccording to a formula

  • Amber 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)


Background2

Background

  • Implications of formula:

  • besides 16 developing countries (DCs), all have only a 10% product-specific de minimus subsidyand they have to remain within this limit i.e. only 10% of value of production as subsidies

  • administered price (current year acquisition price) of DCs usually above market price to ensure guaranteed remunerative price to farmers and to boost production

  • fixed external reference price is average price of imports/exports in the country in 1986-88 which is much lower than the current market price


Background3

Background

  • Implications of formula:

  • quantity of production “eligible” is interpreted as total production and NOT quantity actually procured by the govt

  • END 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!!


G33 proposal

G33 Proposal

  • The G33  is a coalition of 46 developing countries including LDCs - led by Indonesia and backed by India, China - with large populations of  smallholder farmers

  • India, 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.


G33 proposal1

G33 Proposal

  • To 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".


G33 proposal2

G33 Proposal

  • Early harvest of Annex B on Public stockholding for food security purposes of December 2008 modalities

  • NOT a new proposal

  • The 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 Bali

  • Proposal 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


Why against g33 proposal

WHY against G33 Proposal

  • Considered trade-distorting: affecting exports of other countries (mostly developed), dumping of products by DCs

  • IN 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


Bali ministerial decision on the g33 proposal

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 clause

  • Permanent solution to be negotiated and adopted by MC11

  • Limited 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.


Bali ministerial decision on the g33 proposal1

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 level

  • Safeguards requirement not ‘to distort trade’

  • Standstill clause on subsidies classified under the AMS or de minimis that are not notified under the peace clause

  • Inclusion of “ in the context of the broader post-Bali agenda” in the text


Bali ministerial decision on the g33 proposal critical assessment

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 solution

  • NO new programmes or expansion of existing programmes allowed to be introduced

  • Transparency obligations are too burdensome and outweigh developed countries’ requirements – admit “guilt” of exceeding limits therefore


Bali ministerial decision on the g33 proposal critical assessment1

Bali Ministerial Decision on the G33 Proposal: Critical Assessment

impossible to reclaim innocence after peace clause; provide detailed statistics

  • Safeguard clause “do not distort trade” is too broad and actually entails dispute settlement

  • Mixing 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 issues

  • For LDCs, no value addition as Members ‘shall exercise due restraint’ in initiating cases against LDCs.


Political dynamics of bali negotiations on g33 proposal

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 programme

  • LDC Group supportive but did not specify in their official decisions


Cso advocacy towards bali

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


Cso advocacy at bali

CSO Advocacy at Bali

  • Bilateral lobby meetings with the US, EU, Norway, India, Indonesia and other strategic developed & DCs including the LDC Group

  • Daily “mic check” demo outside Heads of Delegation meetings

  • Press statements


Cso advocacy at bali1

CSO Advocacy at Bali


Next steps cso advocacy campaigns

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 !!!!!


Thank you for your attention more power to our struggles for food sovereignty

thank you for your attention&more power to our struggles for food sovereignty


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