WTO 10th Ministerial Conference: The Nairobi Package

The World Trade Organization (WTO) 10th Ministerial Conference was held, for the first time in WTO history, in Africa – Nairobi, Kenya. WTO 10 Ministerial logo

Scheduled for December 15-18, 2015, extending discussions for a fifth day allowed the Ministers to reach consensus on the Nairobi Package.

In the Ministerial Declaration, WTO members reaffirmed the pre-eminence of the WTO as the global forum for negotiating trade rules and for trade governance and pledged to strengthen the multilateral trading system in a manner inclusive of prosperity and welfare for all Members. They also directly addressed the divergence of views on how to conduct the current round of trade negotiations while, essentially, endorsing the very incremental progress made to date.

Launched in 2001, the Doha Development Round was intended to negotiate new rules on a wide range of trade activities as part of a single undertaking – one package of trade rules to which everyone agrees at the end of the Round. However, the single undertaking has eluded the Members who have been unable to even agree on what they mean by the term “Development.” Agriculture trade rules have been at the heart of this impasse.

Director General Azevêdo, beginning with his first Ministerial in this role, has been identifying those portions of the Doha negotiating issues that can be agreed to in mini-packages. The highlight of the Bali Package from the 9th Ministerial in 2013 was the Trade Facilitation Agreement to expedite movement of goods across borders. The Nairobi Package contains Members’ consensus around the sticky Agriculture issues.

Nairobi Package on Agriculture:

Export Competition – This Decision introduces new rules to reform provision of financial support by WTO members for the export of their agricultural products.

  • All export subsidies are to be immediately eliminated by developed countries. Developing country members have until the end of 2018 to do so or in the case of cotton products by January 1, 2017, with exceptions with respect to support for producers of basic agricultural products until the end of 2023. For least developed countries (LDCs) and the thirty-one net-food importing developing countries these exceptions remain in place until the end of 2030. Developing countries are nevertheless required to ensure that their programs are not used to circumvent their obligations under this Decision.

 

  • Financial support in the form of export credits (but not working capital for suppliers), export credit guarantees and insurance programs can be provided for no more than eighteen (18) months and must be self-financing (covering long-term operating costs and losses), charging risk-based premiums. Developed countries must comply by the end of 2017. Developing country Member providers of export financing receive a four-year phase-in period (36-month term as of 2016, 27-month term by 2018) to achieve the 18-month term by the end of 2020. LDCs and net-food importing developing countries can receive payment terms of up to 54 months for procurement of basic foods, with extensions permitted under exceptional circumstances. Existing contracts that do not conform can be allowed to run their course, so long as they are not modified and are notified to the WTO Committee on Agriculture.

 

  • Agricultural Exporting State Trading Enterprises (STEs) must comply with these rules and refrain from using their monopoly powers to displace or impede the exports of other Members. STEs are governmental or non-governmental enterprises authorized to engage in trade with exclusive or special rights that allow them to influence the level or direction of imports or exports. STEs are prevalent in China and also function as marketing boards for specific products in many developing countries.

 

  • While reaffirming commitment to maintain adequate levels of International Food Aid, Members must ensure that such aid is needs-driven, provided as grants only, and is tied neither to the commercial exports or the market development objectives of the donors. Agricultural products provided as food aid are not, as a general rule, to be re-exported and must take into account local market conditions for the same or similar product – procuring locally or regionally where possible. Members are encouraged to provide cash-based food aid. Monetization of food aid – food exported and sold on the local market of the receiving country to support other projects – should be a last resort and be related to delivery of the aid or to address chronic hunger or malnutrition in LDCs and net food importing developing countries.

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