WTO Ministerial Agreement Gateway to World Ag Trade Reform

Members of the World Trade Organization have agreed to adopt multilateral agreements on efforts to reduce barriers at borders as well as several agricultural provisions. U.S. Grains Council Director of Trade Policy Floyd Gaibler – who was at the WTO Bali Ministerial – says trade facilitation measures that reduce transaction costs and red tape should improve overall trade benefits – including agriculture related products. An agreement was reached on provisions that will improve the administration of tariff rate quotas and reconfirm the commitment to complete elimination of export subsidies and reductions in export guarantee programs that were agreed to at the 2005 Hong Kong Ministerial. Most importantly – Gaibler says the 9th Ministerial agreement provides a pathway for broader post-Doha multilateral negotiations. He says these will encompass the remaining agricultural pillars – domestic subsidies and market access – that have been delayed since the suspension of the Doha negotiations in 2008.

WTO members also established an interim food security program that will allow countries with existing food stockholding programs to continue to operate those existing programs even if they exceed or will result in exceeding their allowable domestic subsidies for an interim period until a final agreement is reached. While the agreement sets a target for reaching a final solution in four years at the 11th WTO Ministerial – Gaibler says it’s not a binding duration. He says the agreement does require strong transparency and safeguard provisions – including protections to ensure that the operation of food stockholding programs will not distort trade or food security of other countries. According to Gaibler – countries will be allowed to participate in the work program to ensure that the transparency and safeguard provisions are met – and they will have input in development of a permanent solution.

USTR Provides Information on Bali Ministerial

According to the Office of the United States Trade Representative – the multilateral agreement reached by the WTO membership in Bali takes important steps to address some key issues with regard to agricultural trade. One new decision will provide developing country members in danger of breaching their domestic support limits for food stockholding programs freedom from legal challenge in order to give them time to bring their policies in line with their WTO commitments. The USTR notes the United States worked to ensure this freedom from challenge is only available to members if their programs do not distort trade and if they meet certain transparency conditions to share the details of their support mechanisms. A new decision on export competition will require transparency to help members understand how their trading partners are proceeding toward the commitment of preserving well-functioning markets by facilitating competition amongst market actors. According to USTR – this result will ensure a balanced approach across all forms of export competition and provide an important impetus for members to resume the WTO agriculture negotiations – addressing the other pillars of these negotiations – market access and domestic support – along with export competition.

An understanding on the administration of Tariff Rate Quotas – according to USTR – facilitates increased opportunities for U.S. farmers, ranchers, workers and food processors to enhance exports to a number of WTO member countries. USTR says this understanding provides American agricultural producers more market access by addressing the issue of chronically low fill rates in members’ WTO bound TRQs.

Source: NAFB News service