The conclusion of the Tenth Ministerial Conference in Nairobi on December 19 has delivered new commitments that will benefit in particular World Trade Organization’s poorest members.
The historic agreement which applies to a series of trade initiatives dubbed “Nairobi Package”, contains six Ministerial Decisions on Agriculture, food security, and other issues related to least-developed countries (LDCs)
World Trade Organization’s (WTO) Tenth Ministerial Conference (MC10), the first such meeting hosted by an African nation, was chaired by Kenya’s Cabinet Secretary for Foreign Affairs and International Trade, Amina Mohamed.
Among the issues the agreement seeks to deal with include a commitment to abolish export subsidies for farm exports. WTO Director General Roberto Azevêdo, hailed the pledge noting that it is the “most significant outcome on agriculture” in the organization’s 20-year history.
“WTO members — especially developing countries — have consistently demanded action on this issue due to the enormous distorting potential of these subsidies for domestic production and trade,” Mr Azevêdo declared adding that “today’s decision tackles the issue once and for all.”
The pursuant of the 2013 Bali Ministerial Declaration on Export Competition will see to it that the legally binding decision would eliminate the subsidies and prevent governments from reverting to trade-distorting export support in the future.
Since, a number of countries are using export subsidies to support agriculture exports, developing countries have until 2018 to eliminate export subsidies, while developed countries, under the decision, will have to remove them immediately except for a handful of agriculture products.
Developing members have until 2023 to keep the flexibility to cover marketing and transport costs for agriculture exports. Moreover, the poorest and food-importing countries would enjoy additional time to cut export subsidies.
However, to ensure that other export policies are not used as a disguised form of subsidies, the decision contains a set of disciplines. These disciplines include terms to limit the benefits of financing support to agriculture exporters, rules on state enterprises engaging in agriculture trade, and disciplines to ensure that food aid does not negatively affect domestic production.
Stockpiling Programmes in Developing Countries
Concerning the Public Stockholding for Food Security Purposes, the ministers adopted the Ministerial Decision which commits members to engage constructively in finding a permanent solution to this issue. Under the Bali Ministerial Decision of 2013, developing countries are allowed to continue stockpile programmes, despite the fact that they are against WTO’s domestic subsidy cap. This will continue until a permanent solution is arrived at by the 11th Ministerial Conference in 2017.
In the face of import surges, developing countries have the right to have a recourse to temporarily increase tariffs by using a Special Safeguard Mechanism (SSM). The Committee on Agriculture in Special Session (“CoA SS”) shall regularly review progress in these negotiations.
Other agreements arrived at by the Ministerial Decisions include the major role played by the cotton sector to LDC’s. The decision calls for cotton from LDCs to be given duty-free and quota-free access to the markets of developed countries — and to those of developing countries declaring that they are able to do so — from 1 January 2016.
According to Ms Mohamed, actions put together towards a conclusive “Nairobi package” were faced with challenges which required an extra day of intensive negotiations to conclude. “Tough calls had to be made but we did bite the bullet.” She added: “We have reaffirmed the central role of the WTO in international trade governance,”.
The Conference was opened on 15 December by Kenya’s President, Uhuru Kenyatta. The conference was also addressed by Ms Mohamed, DG Azevêdo and the Chair of the WTO’s General Council, Fernando de Mateo. President Ellen Johnson Sirleaf of Liberia, whose country concluded its WTO membership negotiations on 16 December was also at the Opening Ceremony.