Members of the WTO are in effervescence: Indeed the Ministerial Conference in Bali is just around the corner (3 to 6 December 2013), and despite all the meetings held to prepare this event, the WTO is being forced to face a number of critical issues after the failure of the Doha round in 2008. The WTO's new Director General, Roberto Azevedo, has admitted that difficult challenges lie ahead with the entire system underlying the WTO being put into question, and the blind ideology of trade liberalization increasingly under attack.
The G-33, a group of forty-six importing developing countries led by India, is increasingly making its voice heard within the WTO. The main goal of this group is to limit engagements in terms of market access. To this end, India submitted a new proposal in April, on behalf of the G-33 concerning the trade of agricultural commodities and food security, and aimed at rendering the rules of ‘Green Box’ subsidies more flexible – ‘Green box’ subsidies are those subsidies that have no set ceiling and are not subject to WTO reduction commitments since they are not considered to distort production or trade. This proposal is to be debated during the Bali conference, but certain members have already expressed their disagreement, for instance the United States.
As pointed out in the note issued by the FAO and the ICTSD, (excerpts included below1
), the G-33 proposal is symptomatic of the challenges faced by certain countries striving to preserve local agriculture and food security in a global context of erratic price fluctuations and unbridled financialization. The underlying question is how to adapt to the new challenges of global agriculture? How to implement new agricultural and food policies that meet everyone’s best interests and comply with the rules governing international trade? Because in the end, as stressed by the FAO and the ICTSD, although the 2007/2008 food crisis has drastically impacted the global market, it seems to have had no impact on the rules governing international trade, which are now obsolete and poorly adapted to new challenges, for instance the volatility of prices for agricultural commodities.
momagri Editorial Board
Conceptual questions around the design of WTO rules on farm trade
(…) Some countries have more recently suggested that the G-33 proposal indicates a need to renew a broader discussion over the future of domestic support ceiling at the WTO – effectively taking trade negotiators back to the issues mandated under the stalled Doha trade talks agenda.
One of the main issues that negotiators will therefore be grappling with is the question of how much can realistically be achieved in the run-up to the Bali Ministerial Conference, and which issues should be part of a post-Bali agenda. While some supporters of the G-33 proposal have argued that post-Bali discussions should be addressed once there is greater clarity on the outline of a possible Bali accord on the issues they have raised, others – including some G-33 countries – have said they also see a role for a post-Bali work programme to address trade and food security more broadly. Some countries have suggested that a workable compromise is likely to involve elements of both approaches.
Indeed, insofar as it relates to problems arising from the effects of food price inflation, the G-33 proposal can more broadly be seen as symptomatic of the challenges many countries face in designing policies to achieve food security goals in the new price environment. Although agricultural markets have evolved dramatically since 2007, global trade rules have not. Current disciplines on agriculture in the multilateral trading system deal primarily with the challenges of structural over-supply on global markets that characterized the 1980s and
1990s, but arguably do not respond effectively to problems associated with the volatile and
rising prices for food and agriculture that many experts expect will continue to predominate
in the years ahead. As a result, while exporting countries are able to rely on a relatively welldeveloped set of rules and mechanisms to address trade distortions on the import side, importing countries (including the poorest ones) are unable to rely on an equivalent regulatory framework to ensure stability and predictability in the supply of farm goods on world markets.
In a number of important aspects, these developments and trends create new difficulties in reconciling trade rules with food security objectives, not just on public stockholding but also in other areas.
The G-33 proposal has to be seen in the broader context of the difficulties many countries are facing in adjusting to the challenges of the new agricultural trade policy environment, as well as in the context of the failure to achieve more than minimal progress on the reform of the multilateral trading system since the end of the Uruguay Round, now almost two decades ago. It can also be seen as indicative of a renewed commitment on the part of some the larger developing countries to ensure that trade rules and trade policies contribute towards progress on longstanding development goals, such as food security - notwithstanding the risks that the initiative may create for the achievement of these goals in other developing countries, some of which may be unable to muster the same resources for the pursuit of these same public policy objectives.
Experience from countries around the world demonstrates clearly that policy-makers and negotiators will have to examine carefully the specific implications of new rules and mechanisms for markets if they are to be sure that public procurement policies actually deliver improved food security for market actors – not least for smallholder producers and poor consumers. While enhanced flexibilities at the multilateral level could deliver real benefits to low-income, resource-poor farmers, the design of international disciplines on public procurement and domestic food aid could have farreaching implications for global agricultural markets that need to be given careful consideration both in the run-up to the Bali Ministerial Conference and beyond.
1 Click on this link to view the complete study http://www.fao.org/fileadmin/templates/est/PUBLICATIONS/g33-proposal-early-agreement-on-elements-of-the-draft-doha-accord-to-address-food-security_1_.pdf