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EU submits revised schedule implementing commitment on farm export subsidies

On 17 October the European Union submitted, as part of the draft goods schedule for its 28 member states, a change of commitments incorporating the implementation of the landmark 2015 decision by WTO members to eliminate farm export subsidies. The new EU28 schedule was circulated just before the meeting of the WTO’s Committee on Agriculture.

The chair of the committee, Alf Vederhus (Norway), noted that the EU became the second WTO member with export subsidies reduction commitments after Australia to formally initiate the process aimed at implementing the landmark 2015 Nairobi Ministerial Decision to eliminate export subsidies. The changes will take effect in three months if no members raise any objections during that period.

Under the 2015 Decision, WTO members agreed to abolish agricultural export subsidies and set disciplines on export measures with equivalent effect, levelling the playing field for farmers around the world.

Canada informed the committee that it is currently engaged in internal procedures to modify its schedule of commitments to implement the 2015 Decision. Canada said it expects to submit its draft revised schedule later this fall.

Members also exchanged information on their farm policy practices during the 17-18 October committee meeting. Seven new issues were raised at the meeting. The questions and answers to each query can be found in the Agriculture Information Management System (AG IMS).

Argentina:  Reintegros programme

The European Union sought information from Argentina regarding its Reintegros tax refund programme, which aims to promote the export of agricultural goods.  The questions regarded products benefitting from support, which sectors are profiting the most, the tax rates and the types of taxes reimbursed. Argentina said the programme was not new  but rather an update of a current programme which now takes account of indirect internal taxes affecting various agro industrial products that Argentina exports. The refund system covers a wide range of exportable products.  The EU, Ukraine and the United States thanked Argentina for the reply and said they would get back to Argentina with any follow-up questions.

Canada:  new dairy programmes

New Zealand questioned Canada about a new budget allocation of CAD$ 350 million to support the competitiveness of its dairy sector. The two new programmes appear designed to directly help dairy processors and are intended to be exempt from domestic support reduction commitments, New Zealand said, adding that it wanted more information from Canada on whether the programmes were really non trade-distorting. Canada said detailed information on the programmes was available on Agriculture and Agri-Food Canada’s website and that the programmes will be notified to the WTO in due course.

EU: intervention stocks of skim milk powder

Canada noted the EU has 375,000 metric tons of skim milk powder in its intervention stocks which it has yet to sell and asked how the EU eventually planned to release these stocks on the global market in a way which does not distort trade.  The EU said it would avoid distorting markets and would comply with its international agreements.

India: quantitative restrictions on beans

Australia asked India why its Commerce Ministry announced a quantitate restriction of 300,000 tons for imports of certain beans last August and why this has not been notified to the WTO. India said it would submit a notification to the relevant WTO committee in due course.

Indonesia:  new regulation on milk

The United States asked Indonesia about a new regulation that requires local milk processors to procure local milk and requires dairy product importers to fund activities to promote milk consumption; it also asked Indonesia how these requirements were consistent with WTO rules, including those related to local content requirements.  Indonesia said the programme aims to ensure quality milk processing and reinvigorate the sector while giving milk producers access to market opportunities, investment, skills and knowledge. The EU, New Zealand and Switzerland said they had an interest in the matter and would be following developments.

Pakistan: sugar policies

Brazil asked Pakistan to provide information on its direct export subsidies for sugar, inland freight subsidies for sugar exports, and domestic support programmes for sugar, and how it intended to notify these programmes to the WTO.  Pakistan said it is not providing any payments to sugar exporters and that it would notify the programmes in due course.

Russia: railway subsidies for exports

The EU said it learned from various sources that Russia plans to offer a 10% discount on railway shipments of exported grain originating from seven Russian regions. The discounts, which were to take effect on 1 October and run up to 30 June 2018, were valued at EUR 43.4 million, according to Russia’s agriculture ministry. The EU asked how this was compatible with the commitment of WTO members to eliminate agricultural export subsidies. Russia replied that the discounts had limited geographical coverage and would have a modest effect on the agricultural sector. Russia is fully committed to eliminating export subsidies and takes that pledge seriously, it added. The EU, the US, Ukraine and Australia all said they would be following the matter closely.

New domestic support notifications

India

Five WTO members – Australia, Canada, the European Union, Thailand and the United States – posed 26 questions to India regarding its latest domestic support notification (G/AG/N/IND/11) and domestic support policies in general.  Most of the questions grouped around the following themes:  transparency issues; public stockholding for food security purposes; input subsidies for low-income or resource-poor farmers; and market price support.

India was quizzed on why its domestic support notification did not include the annual value of production for products where India claimed support was below de minimislevels. India replied that its data on value of production would be shortly posted on the AG IMS. On public stockholding, before the onset of the marketing season the government consults agencies concerned to make an assessment of availability of food grains for procurement which must be based on various factors; farmers in India are primarily low-income farmers, and only a portion of marketable surplus offered by farmers conforming to prescribed specifications is procured under market price support operations. On input subsidies, India said all support is provided in line with Article 6.2 of the Agreement on Agriculture granting special flexibilities to developing countries for such support. India said it would need more time to answer some of the other questions posed.

Turkey

Australia, Canada, the EU, Thailand and the US all raised questions about Turkey’s new notifications on domestic support, the first since 2002 (G/AG/N/TUR/15 and G/AG/N/TUR/16). The five members all welcomed the new notifications but noted that it only covered the years 2002 to 2004, and that the membership was still in the dark regarding Turkey’s current subsidy practices. Turkey said it was aware of the problem of overdue notifications and that it was working hard to catch up.

Review of the Bali decision on tariff rate quota administration

The chair noted that members are required to commence a review of the operation of the 2013 Bali Ministerial Decision on tariff rate quota (TRQ) administration no later than the end of 2017. The object of the review is to promote improvements in the utilization of TRQs and to enable members to make recommendations to the WTO’s 12th Ministerial Conference (normally in 2019). The review began with the WTO Secretariat circulating a background document to facilitate the discussions. A proposed timeline for organizing the review will be put together by the Secretariat for the committee’s next meeting.

Overdue notifications

The chair, once again, called on members to keep up-to-date with their notification requirements. He welcomed the fact that a number of members (Turkey, India) have submitted notifications covering multiple years since the last meeting in June. Nevertheless, a significant portion of domestic support (35%) and export subsidy (33%) notifications remain outstanding from the period 1995 to 2015. Further details are available in G/AG/GEN/86/Rev.29.

Source: WTO
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