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WTO Conference took a landmark decision abolishing export subsidies in agriculture

20.12.15

The WTO Ministerial Conference, held in Nairobi (Kenya), took the decision to abolish export subsidies in agriculture, which is the first decision favorable for Russia from a practical point of view.

The Russian delegation at the negotiations was headed by the Minister of Economic Development Alexey Ulyukaev.

For five days the Ministers of the 160 participating countries of the WTO held consultations in Nairobi, trying to work out a solution.

The head of the Russian delegation Alexey Ulyukaev recalled that for 15 years the Doha round had made only one agreement - on trade facilitation. He stressed that efforts must be redoubled.

"Diplomacy is always a compromise. We need to draw inspiration from the past and focus on the future", - the head of the Russian delegation said.

The Minister reaffirmed the commitment to support the multilateral trading system and, especially, the achievement of real results in Nairobi. "We need to work with a lot of effort to make it in time", - he said.

The final Declaration adopted at the WTO Ministerial Conference at Saturday states that from today it prohibits the use of export subsidies in agriculture.

Negotiations on this issue were held for twenty years.

Nevertheless, the WTO decision on export competition in agriculture provides for a complete ban on the provision of export subsidies from today, with a few exceptions. These are the countries that in the past three years did not provide subsidies, and they will not be permitted to further provide them. Countries that provide subsidies now will continue to provide them, but with a time limit - for developed countries - until the end of 2022, for emerging economies - until the end of 2023, the least developed countries - until the end of 2030.

"This is the first conference, the results of which bring real advantages for one of the most important sectors of the Russian economy - agriculture, ensuring the stability and predictability of the domestic and world market of agricultural products," - the representative of the Ministry of Economic Development stressed, recalling that Russia did not apply export subsidies in the agricultural sector and had no right to apply them to the commitments accepted when joining this organization, that put Russian producers in unequal conditions with competitors from other countries.

"Our farmers have always said that export subsidies in other countries, mainly manufacturers of dairy products, some kinds of meat and grain not only hinder them not only in foreign markets, but also in the domestic market too. Now the conditions for competition will be justified", - he concluded.

For the first time in the WTO history, the Declaration on the results of the Ministerial Conference notes that opinions about the future of the negotiation process in the WTO are divided.

"Up to now there have still been no Ministerial Declarations, where some parties said one point of view and others another. Now some parties say that the Doha mandate should be confirmed, and others that it should not be confirmed. This idea is laid as a continuing controversy," - the Director of Department for Trade Negotiations of the Ministry of Economic Development of the Russian Federation Maxim Medvedkov said.

According to him, "due to the fact that for the first time the countries have acknowledged in this document that there is a serious contradiction in their development, so in the coming months this will lead to a very lively debate about what to do next."

"From our point of view, this is positive, because any discussion will end sooner or later by reaching a general opinion and it will only spur future negotiations," - he added.

The Declaration stipulates that "the WTO remains the principal forum for negotiating multilateral trade rules".

In this case the Declaration states that the centrality of the multilateral trading system does not preclude the development of regional integration agreements, and all regional trade agreements do not replace the multilateral system, but complement it.

"For us it is absolutely important thing, about which the leadership of our country has been talked. Because we had concerns after establishing the Trans-Pacific partnership, and conducting negotiations of the US and the EU on Trans-Atlantic partnership, resulted in a parallel system of agreements that will affect our interests. As a result, the Ministers of all countries, including those which have already entered into agreements and will enter into them in the future, acknowledged that regional agreements should be subordinated to WTO rules", - Maxim Medvedkov said.

According to him, another important issue for Russia was the clause stating that "there will be taken additional measures to strengthen the system of trade dispute resolution, and that it will remain only a unique mechanism to settle the trade conflicts in world trade". "There are problems, sometimes they are related to inaccuracy of the rules, sometimes to physical shortage of arbitrators. We now have only one case that is not settled yet, because there are simply no arbitrators", - the representative of the Ministry of Economic Development said.

The Declaration contains a special paragraph, which concerns state trading enterprises in agriculture. The Ministers agreed that the existing WTO rules will be fully applied in respect of these enterprises. "Up to now, WTO rules have not been applied in full to such enterprises and agriculture has had "grey areas" from the point of view of WTO rules," - Medvedkov said.

The important point of the Declaration is a clause on the rules of international food aid that is aimed at approaching conditions of providing such assistance to market ones. "This means that assistance, naturally, is provided free of charge or with significant discount, but its provision should not interfere with the local market, compete with this market, that is, it should not fall to the market to bring down prices. And, certainly, it is prohibited to export such assistance", - he explained.

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