Agriculture in the WTO ministerial negotiations in Nairobi

Nairobi | Kenya | 18 Apr 2016
The ministerial negotiations in Nairobi, in December 2015, revealed a wide range of different members’ priorities. Developing countries submitted proposals on a new agricultural safeguard and on public food stockholding, whereas a number of members from developed countries rather focused on negotiating agricultural export subsidies to secure an agreement on export competition.

Despite the differences, the ministers came to an agreement to eliminate agricultural subsidies. But they also agreed on several other points, that will frame the future of trade in agriculture.

A safeguard mechanism was negotiated and agreed upon. The proposal came from the developing countries and set out conditions that would enable them to respond to sudden surges in the volume of imports or price erosion by raising tariffs on farm goods until crisis settles. It foresees that the least developed countries (LDCs) and climate change affected countries would be granted greater flexibility, whilst the tariff ceilings would remain close to forty percent with less flexibility for new members and countries with already signed agreements for lower ceilings. The decision also included a negotiation mechanism to settle any proceedings to breach the ceilings.

The decision grouped export subsidies with other types of export support instruments that can distort competition. It determines that developed countries will immediately eliminate their remaining agricultural export subsidies, with some exceptions that go until 2023.

The developing countries also strove to come to an agreement on public stockholding for food security purposes that will allow them “to exclude food purchases at government-set prices from their calculation of trade-distorting farm subsidies at the WTO”. The decision text acknowledges the Bali decision made on the subject and plans for future negotiations in the WTO’s agriculture committee.

One US proposition on food aid moved to remove the distinction made in previous agreements between emergency and non-emergency situations and also remove the prohibition on the “monetisation” of food aid. Previous WTO talks sought to secure a “safe box” for food aid in humanitarian emergencies that does not harm local producers. The US also proposed to establish firm commitments on agricultural exports of state trading enterprises. The decision ensures that WTO members will warrant that state trading enterprises will not be allowed to operate in a way that effectively subsidises exports and that export monopoly powers don’t distort trade. The food aid agreement commits members to refrain from providing in-kind food aid that may cause adverse effect on agricultural production. Furthermore international food aid should not negatively impact established and functioning commercial agricultural markets. “Monetisation” of food aid was also clearly explained and limited to certain situations.