Africa: WTO Members Secure a Package for Africa

Africa: WTO Members Secure a Package for Africa

Posted on :Tuesday , 5th January 2016

 Members of the World Trade Organisation (WTO) concluded their tenth ministerial conference in Nairobi recently by securing an agreement on a series of trade initiatives.

 
The Nairobi package contains a series of six ministerial decisions on agriculture, cotton and issues related to least-developed countries such as Uganda.
 
A centrepiece of the Nairobi package is a ministerial decision on export competition, including a commitment to eliminate subsidies for farm exports, which the WTO Director General, Roberto Azevedo, hailed as the "most significant outcome on agriculture" in the organization's history.
 
The other agricultural decisions cover public stockholding for food security purposes, a special safeguard mechanism for developing countries, and measures related to cotton.
 
Decisions were also made regarding preferential treatment for least developed countries (LDCs) in the area of services and the criteria for determining whether exports from LDCs may benefit from trade preferences.
 
"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," he declared. "Today's decision tackles the issue once and for all."
 
A number of countries are currently using subsidies to support agricultural exports. The legally-binding decision would eliminate these subsidies. Under the decision, developed members have committed to remove export subsidies immediately, except for a handful of agriculture products, and developing countries will do so by 2018.
 
The decision contains disciplines to ensure that other export policies are not used as a disguised form of subsidies. These disciplines include the benefits of financial 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.
 
Developing countries were given more time to implement these rules. LDCs got a breakthrough with a package on preferential trade access after members agreed on the rules of origin.
 
Concerns were raised over ambiguities in the terms used in the agreement with fears that this could give leeway to developed countries to reject exports from the LDCs if they had 75 per cent imported inputs. However, it was later agreed that the ambiguities be removed.
 
"The only two issues which have been approved by all without contentions are rules of origin, and services waiver for LDCs," WTO Spokesperson Keith Rockwell said.
 
Ministers also adopted a decision on public stockholding for food security purposes. Developing countries are allowed to continue food stockpile programmes, which are otherwise in risk of breaching the WTO's domestic subsidy cap, until a permanent solution is found by the 11th ministerial conference in 2017.
 
A ministerial decision on a Special Safeguard Mechanism for developing countries recognises that developing members will have the right to temporarily increase tariffs in the face of import surges.
 
In addition, a ministerial decision on cotton stresses the vital importance of the cotton sector to LDCs. The decision includes three agriculture elements: market access, domestic support and export competition.

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