18th March 2008
Special and Differential Treatment in the Export Competition Pillar of the Wto Agricultural Negotiations
Export Competition addresses the competition for export markets through Government intervention. Export subsidies are one of the three pillars of trade negotiations in the WTO, the other two being market access and domestic support. These three pillars are interrelated. The interplay of these three factors provides for the generation of exportable agricultural surpluses that would not arise otherwise. In a competitive market, internally supported prices (domestic support) can generally be sustained above world market prices only, if import competition is curtailed (market access) and, when surpluses occur, export assistance is provided. (Export subsidies).
By definition export subsidies (as part of export competition) subsidizes consumers and distorts internal prices in target countries. These two effects have two totally different political components, especially for Net Food Importing Developing Countries. Cheap staples for the poor are politically expedient but local distorted prices are an impediment to the development of the agricultural sector. It depends on the political policies of these countries in how much export subsidised staples are a bonus or a hindrance to the development goals of these countries. If this divergence is not managed, countries may end up in political turmoil and instability in the agricultural sector.
This paper concentrates on the measures that Sub Saharan African Governments can apply and can motivate in the forthcoming agricultural negotiations in the Committee on Agriculture in the WTO in the light of the General Council Decisions of 31 July 2004 in the Doha work program. It has to be realized that the text of both, Article 13 of the Doha Ministerial Declaration and the Annex A of the General Council Decision of 31 July 2004 are generally long on promises and short on modalities and implementation issues. This is not the case with export competition measures, here the Doha Ministerial for “reduction of, with a view to phasing out, all forms of export subsidies”.
Furthermore, the General Council Decision reads: As an outcome of the negotiations, members agree to establish detailed modalities ensuring the parallel elimination of all forms of export subsidies and disciplines on all export measures with equivalent effect by a credible end date.
To address S&D Treatment of export competition one has to look at the markets, the instruments of export competition, at the present measures and how they will be affected by the General Council Decisions.