Triumphs and trials

The WTO’s 10th Ministerial Conference was held in Nairobi, Kenya, from December 15 to 19, 2015. Between the Bali MC and the Nairobi MC, a lot of work was done to take forward the Bali package. LDCs tabled proposals in the GCs in 2014 and 2015 to implement various decisions taken in Bali in respect of their preferential treatment: ranging from the services waiver to preferential rules of origin. The November 2014 General Council meeting agreed to extend the deadline to agree to the Nairobi work programme until July 2015. The end-year December 2014 General Council meeting also discussed various proposals for the post-Bali work programme and the agenda and discussion points in Nairobi MC.

Issues at the Nairobi MC

The Nairobi MC opened with the Chairman, Amina Mohamed, making a passioned plea for successful negotiations. She also signalled that new issues such as global value chains and environmental goods trade were also important in world trade. She also urged all countries to sign the Trade Facilitation Agreement (TFA), which was agreed to in Bali.

As the MC progressed, a draft Agriculture text was circulated among Members by the Lesotho Minister, who was acting as a facilitator. To the surprise of developing countries, the text did not properly reflect issues of importance to developing countries, such as special safeguard mechanism and public stockholding of food grains (both these issues were primary demands of the G33 group of countries, which included India, Indonesia, South Africa and Brazil). There was also no proper reflection of the elimination of export subsidies.

As the negotiations progressed, it became increasingly clear that the draft text on various issues reflected developed countries’ positions and ignored those of developing countries and LDCs. With no agreement even on the last day of negotiations, December 18, the ‘Green Room’ process was invoked by the DG, WTO, who invited the five major negotiating countries: US, EU, China, India and Brazil. The final discussions were reduced to the following issues:

* Special Safeguard Mechanism (SSM);

* A solution to the issue of public stockholding of food grains for food security;

* Export competition, which included the four issues of export subsidies, export credits, international food aid, and trade undertaken by state trading enterprises.

After protracted discussions in the Green Room, a compromise text was agreed upon which included a SSM for developing countries and the issue of public stockholding of food grains for food security. However, the USA, the EU and Brazil ensured that the text proposed by India seeking for an accelerated work programme for SSM was not included. Moreover, the SSM text had a reference to the Hong Kong Ministerial Declaration, rather than the Doha Development Agenda (DDA). The issue of public stockholding of food grains did however provide for an accelerated work programme, which was basically a repeat of the Bali decision. The basic outcome on this was the same as Bali: that the public stockholding programmes in developing countries would not be challenged under the Agreement on Agriculture until a permanent solution was found.

On export competition, there was an agreement to phase out export subsidies immediately by developed countries and by 2018 by developing countries. There were some exceptions such as those of Canada, Norway, Switzerland and EU, which were allowed to phase out export subsidies in dairy, processed foods and swine meat by 2020. India did manage to get Article 9.4 of the Agreement on Agriculture retained which allowed subsidies for marketing, handling and transportation until 2023 for developing countries and until 2030 for LDCs. On export credits, maximum repayment periods were defined (18 months for developed countries, 36 months for developing countries and 36 to 54 months for LDCs). In other words, developed countries managed to ratify and continue their export credit policies, rather than phase them out. On state trading enterprises, it was agreed that their operations should minimise trade distortions. Finally, on food aid, it was agreed that such aid should not displace commercial trade and domestic production.

The other important decision in the Nairobi package was the immediate ban on export subsidies to cotton, effective from January 1, 2017. This was a longstanding demand of the ‘cotton 4’, namely Burkina Faso, Benin, Chad and Mali, who had submitted a proposal in this regard in 2015. The decision also included duty free, quota free access to markets of developed countries.

Two other decisions were adopted as part of the Nairobi package: preferential rules of origin for LDC exports and special and differential treatment in services to LDCs, which freed LDCs from the Most Favoured Nation obligation. LDC services and service providers were given preferential market access until 2030. While the preferential rules of origin would make it easier for a product to be called ‘made in LDCs’ by easing origin requirements, the services waiver would allow LDC service providers preferential access to markets of other countries.

In all, the Nairobi package consisted of six Ministerial decisions on SSM, public stockholding of food grains, Export Competition, Cotton, preferential rules of origin for LDCs and the LDCs services waiver.

Conclusion

While the Nairobi MC was a success in that it produced a consensual ministerial declaration, it was clear that developed countries gave away very little in the main areas of the Doha Development Agenda, namely domestic support and market access in agriculture and non-agriculture market access (NAMA). Even in the areas where there was agreement, the USA, EU and Brazil prevailed over the position taken by India, particularly in the area of SSM and public stockholding of foodgrains. Not only that, developed countries managed to get a green signal to continue with their export credits and food aid. On the other hand, the Nairobi Ministerial Declaration clearly reaffirmed the Doha Development Agenda (para 30) and also committed to continue the work on the outstanding issues in Agriculture (Domestic Support, Market Access), NAMA, Services, Development, TRIPS and Rules (which includes trade remedies like Anti-Dumping, Safeguards and Subsidies). In other words, while the Nairobi MC ended on an optimistic note, the core of the Doha Development Agenda remained to be achieved. There was much more to achieve in the forthcoming negotiations.

The writer is Additional Chief Secretary, Department of Mass Education Extension and Library Services and Department of Cooperation, Government of West Bengal