Food Security, G33 and the WTO: will food security move WTO trade talks

The WTO… what can we say? It’s complex. Here is an older but still very relevant guide to help you out: http://www.iatp.org/files/451_2_77538.pdf

The G-33  is a coalition of developing countries with large populations of  smallholder farmers. They have recently proposed that WTO members seek to fast-track agreement on three paragraphs of the draft Doha accord, at the Organization’s Ministerial Conference in Bali, Indonesia, in December 2013.

Some developing countries have argued that progress on agricultural trade issues is needed in order to ‘balance’ concessions on an eventual deal on ‘trade facilitation’. The aim would be to ease restrictions at customs. They argue that focusing food security could help to advance negotiations so as to achieve at least some outcomes in agriculture.

They are focused on the ‘aggregate measure of support’ (AMS) which countries have agreed at the global trade body.

About the WTO

The WTO was designed to integrate nation states into a transnational trade regime through the reciprocal opening of markets between members. It has a flexible organisation, and is ostensibly a servant of its members, although there is certainly evidence that decision-making and coordination of operations do not operate in that manner (World Trade Organisation 2005). The WTO framework revolves around four key principles.

1) The first is the “Most-Favored-Nation”(MFN) principle, which requires any member to accord treatment in tariffs and trade as favorable as would be given to any other member-country (Shrybman 2001). When this privilege is extended to investors, corporate penetration of national governments is assured—especially by provisions for enforcing agreements through the WTO dispute settlement process.

2) A second key plank is the “National Treatment” principle, which requires a WTO member not to put goods, services or persons of other WTO members at a competitive disadvantage to goods or services it is producing domestically (Shrybman 2001).

3) A third measure is the requirement that whenever restrictions are placed on products, they should be expressed in numerical equivalents as tariffs. That is, instead of quotas, categorical limitations or embargos, all constraints on trade must be translated into a monetary equivalent of tariffs. The result has been that sanctioning of trade in products is translated into a statistical risk equivalent that can be expressed in monetary terms as a tariff (Shrybman 2001).

4) Fourth, negotiations are embedded in the premise of progressive liberalisation, assuming that integration will continually increase through progressive elimination of trade barriers. The WTO also has dispute settlement procedures for imposing sanctions on members as was seen in the “Banana Wars” between the U.S. and the E.U.

What do the G33’s proposal entail?

The G-33’s first proposed amendment is to include an additional sub-category for developing country programmes alongside other payments currently allowed under the existing category of ‘general services’ in the green box. This category is used by governments to report not more than minimally trade-distorting support in areas such as research, pest and disease control, extension and advisory services, and certain kinds of infrastructure payments. The G-33 propose creating an additional sub-category to cover:

“policies and services related to farmer settlement, land reform programmes, rural development and rural livelihood security in developing country Members, such as provision of infrastructural services, land rehabilitation, soil conservation and resource management, drought management and flood control, rural employment programmes, nutritional food security, issuance of property titles and settlement programmes, to promote rural development and poverty alleviation.”

The second change put forward by the G-33, on developing countries’ public stockholding programmes for food security purposes, aims at modifying the current requirement for subsidised food purchases for these programmes to count towards the country’s AMS. The WTO Member concerned should not have to do so, the G-33 propose, if the purchases have been made with the objective of supporting low-income or resource poor producers:

For the purposes of paragraph 3 of this Annex,  governmental stockholding programmes for food security purposes in developing countries whose operation is transparent and conducted in accordance with officially published objective criteria or guidelines shall be considered to be in conformity with the provisions of this paragraph, including programmes under which stocks of foodstuffs for food security purposes are acquired and released at administered prices, provided that the difference between the acquisition price and the external reference price is accounted for in the AMS. However, 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 AMS.

The third change sought by the group relates to a footnote to eequirements on food stockholding and domestic food aid. Once again, the language seeks to exempt food purchases procured generally from low-income or resource-poor producers” from the requirement to count this support towards the AMS:

For the purposes of paragraphs 3 and 4 of this Annex, the acquisition of foodstuffs at subsidised prices when procured generally from low-income or resource-poor producers in developing countries with the objective of fighting hunger and rural poverty, as well as the provision of foodstuffs at subsidised prices with the objective of meeting food requirements of urban and rural poor in developing countries on a regular basis at reasonable prices shall be considered to be in conformity with the provisions of this paragraph. This is understood to mean, inter alia, that where such programmes referred to in this footnote and paragraph 4 above, including those in relation to lowering prices to more reasonable levels, involve also the arrangements referred to in footnote 5 to paragraph 3, there is no requirement for the difference between the acquisition price and the external reference price to be accounted for in the AMS.

Source:  http://ictsd.org/downloads/2013/10/g33-proposal-early-agreement-on-elements-of-the-draft-doha-accord-to-address-food-security.pdf

 ICTSD FAO discussion paper: http://ictsd.org/downloads/2013/10/g33-proposal-early-agreement-on-elements-of-the-draft-doha-accord-to-address-food-security.pdf

For a economist’s perspective on public stockholding for food security and related rules of the WTO, see:  http://agents.cirad.fr/pjjimg/franck.galtier@cirad.fr/Note_ENG_.pdf 
Credit where credit is due: Thanks to Sophia Murphy for the heads up.

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