Agriculture faces most glaring distortions in trade WTO

Agriculture faces most glaring distortions in trade  WTO

Agriculture has the most glaring distortions in international trade; this is according to some members of the World Trade Organization (WTO).

During the Plenary Session on the 10th Ministerial Conference at the KICC, developing and Least Developed Countries (LDCs) asked the WTO to deal with Agriculture issues.

India’s Minister for Commerce and Trade Smt. Nirmala Sitharaman stated that the Agricultural sector is very important to developing countries for economic growth.

“We are concerned that the reform process appears to be in peril,” said Sitharaman. “The agricultural issues raised have been taken up to suit a few members. We need to deal with these issues for food security purposes.”

Nigeria noted that Agricultural trade is in need of fundamental reforms.

“Agriculture is important,” said Nigeria. “ We provided solutions to cotton trade. We all need to be flexible and open to solutions. We are prepared to engage constructively for the benefit of Africa and for all members at large.”

Nigeria is currently in the process of ratifying its Trade Facilitation Agreement (TFA).

“Agricultural issues can only be dealt with on the basis of multilateral framework,” said Brazil’s Foreign Affairs Minister Mauro Luiz Lecker Vieira. “We need to deliver on agriculture issues. Export subsidies are the most pernicious form of trade.”

“It will not be acceptable to complete MC10 without an outcome on agricultural export,” said Australia’s Trade Minister Andrew Robb. “We are committed to a credible export competition outcome that will benefit developed and developing countries alike.”

Agriculture is one of the most important and politically sensitive issues on the WTO negotiating agenda.

“The elimination of agricultural export subsidies, new rules for export credits, international food aid and exporting state trading enterprises are expected to make up an important part of the Nairobi package. Collectively, these issues are known as “export competition”.

Under the current WTO rules, only 16 WTO members are allowed to subsidize exports of certain agricultural products.

In addition, developing countries have been permitted to subsidize exports in order to reduce marketing and domestic transport costs under certain conditions.

However, a survey in 2015 indicates that many of these countries have significantly reduced their export subsidies in recent years, and only a handful of WTO members still use export subsidies.

A decision to fully eliminate any form of export subsidies would be a significant step in the reform of agricultural trade because it would ensure that countries will not resort to trade-distorting export subsidies and would thereby level the playing field for agriculture exporters.

It would be particularly meaningful for farmers in poor countries who cannot afford to compete with rich countries that artificially boost their exports through subsidization.

Tags:

WTO Trade World Trade Organization (WTO) agriculture 10th Ministerial Conference declarations

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