WTO members decide to eliminate ag export subsidies

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WTO members decide to eliminate ag export subsidies

World Trade Organization members concluded their Tenth Ministerial Conference in Nairobi on Dec. 19 by securing an historic agreement on a series of trade initiatives. The Nairobi Package contains a series of six ministerial decisions on agriculture, cotton and issues related to least-developed countries. These include a commitment to abolish export subsidies for farm exports, which Director-General Roberto Azevêdo hailed as the “most significant outcome on agriculture” in the organization’s 20-year history. A number of countries are currently using export subsidies to support agriculture exports. The legally-binding decision would eliminate these subsidies and prevent governments from reverting to trade-distorting export support in the future. “WTO members — especially developing countries — have consistently demanded action on this issue due to the enormous distorting potential of these subsidies for domestic production and trade,” Azevedo declared.  The decision tackles the issue once and for all, he added. Under the decision, developed members have committed to remove export subsidies immediately, except for a handful of agriculture products, and developing countries will do so by 2018. Developing members will keep the flexibility to cover marketing and transport costs for agriculture exports until the end of 2023, and the poorest and food-importing countries would enjoy additional time to cut export subsidies. The 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. Developing countries are given longer time to implement these rules. The other agricultural decisions cover public stockholding for food security purposes, a special safeguard mechanism for developing countries, and measures related to cotton. Decisions were also made regarding preferential treatment for least developed countries (LDCs) in the area of services and the criteria for determining whether exports from LDCs may benefit from trade preferences. The decision on stockpiling commits members to engage constructively in finding a permanent solution to this issue. Under the Bali Ministerial Decision of 2013, developing countries are allowed to continue food stockpile programs, which are otherwise in risk of breaching the WTO’s domestic subsidy cap, until a permanent solution is found by the 11th Ministerial Conference in 2017. In regards to cotton, the decision stresses the vital importance of the cotton sector to least developed countries. The decision includes three agriculture elements: market access, domestic support and export competition. On market access, the decision calls for cotton from LDCs to be given duty-free and quota-free access to the markets of developed countries — and to those of developing countries declaring that they are able to do so — from 1 January 2016. The domestic support part of the cotton decision acknowledges members’ reforms in their domestic cotton policies and stresses that more efforts remain to be made. On export competition for cotton, the decision mandates that developed countries prohibit cotton export subsidies immediately and developing countries do so at a later date. “Eliminating trade-distorting export subsidies and achieving disciplines on the use of export credits will lower agricultural trade barriers and strengthen U.S. agriculture’s ability to pursue market opportunities in international trade. The measures adopted on food aid also will support U.S. programs that continue to provide food assistance around the world,” said American Farm Bureau Federation president Bob Stallman in a statement.   …
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On December 21, 2015

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