【News】 U.S., China refuse to compromise in WTO negotiations for farm subsidies (July 25, 2015)


Satoko Adachi  – Geneva

The stand-off between industrialized nations and developing countries remained in the agricultural negotiations for the Doha Round of the talks under the World Trade Organization, as the members discussed the issue of cutting farm subsidies in their meeting held in Geneva on Wednesday, July 22. The United States and China refused to make concessions, despite common understanding among the members on the need to seek compromise in reducing the subsidies first in order to proceed with negotiations on other issues including tariff cuts on farm products and abolishing export subsidies.

Negotiators at the meeting focused on two proposals regarding reduction of farm subsidies. One proposal is to make China, which is categorized as a developing country and has been exempted from the discussed measure of establishing a ceiling on its overall trade-distorting domestic support (OTDS), commit to adopting the new cap. This would be calculated by adding a country’s “amber box” payments – those that are subject to reduction under WTO rules – to its “de minimis” (minimal) support and its production-limiting “blue box” payments which are seen as less trade-distorting. Australia and Canada, which jointly made the proposal, claim that the new caps on these payments would not necessarily require immediate policy changes in either the U.S. or China, as there is a large amount of policy space between members’ limits on trade-distorting domestic support and actual support levels.

While industrialized nations support the proposal, countries like China, India, Brazil and South Africa objected, claiming that it does not take into account differences between the economic structures of industrialized and developing countries, as well as those between their farm subsidizing policies accepted under the WTO. They said the draft Doha “modalities” text, issued by the chairperson of the agriculture negotiation group in 2008, should remain the basis for future talks on farm trade.

The other proposal, presented by Norway, calls for smaller cuts in subsidies, but some exporting countries and developing nations expressed concerns over the fact that it does not include setting of a ceiling on OTDS and that it exempts product-specific de minimis support from subsidies subject to reduction.

While prospects for agricultural negotiations, which are at the center of the Doha Round of talks, remain unclear, the latest meeting was the last one for the current chair, New Zealand ambassador John Adank, who is scheduled to leave the post in the end of this month. Mexico’s ambassador Fernando de Mateo, president of the WTO’s General Council, is asking member nations to recommend candidates to succeed Adank, but a new chair has not yet been decided. The new chair will face a number of challenges, including discussing ways to reduce farm tariffs, ahead of the ministerial meeting expected in Nairobi in December.

Meanwhile, WTO Director-General Roberto Azevedo, who was planning to hold an informal meeting on the Doha Round on Friday, July 24, canceled the meeting, in response to calls that the nations should continue negotiating until Friday, July 31, the WTO-imposed deadline for signing a trade facilitation agreement. The meeting of the General Council, the WTO’s highest-level decision-making body, will be held on Monday, July 27, and Tuesday, July 28, as scheduled. However, there is little chance that the situation will change drastically before the deadline.

(July 25, 2015)

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