CIS countries: Issues and challenges for
agriculture in the WTO context
Lars Brink CIS Agricultural Trade Policy Network, Food and Agriculture Organization of the United Nations Conference: Integration processes in the CIS region and their implications for agricultural trade Kaliningrad State Technical University 26-27 March 2015, Kaliningrad, Russia [email protected]
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Value of production in agriculture: average 2010-12
USD billion
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2 Source: Gross production value, FAOSTAT. Uzbekistan estimated by author.
Not CIS
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WTO accession process
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Value of production in agriculture: average 2010-12
USD billion
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3 Source: Gross production value, FAOSTAT. Uzbekistan estimated by author. Year indicated is year of WTO accession.
2013
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– Market access • Bilateral negotiations with many countries in parallel
– Bound tariffs; also tariff rate quotas for some candidates
– Export subsidies • Plurilateral negotiations
– No accession with export subsidy entitlements (after 1997)
– Domestic support • Plurilateral negotiations
– Bound Total AMS for some, nil for some AMS = Aggregate Measurement of Support
– De minimis percentage
– Entitlement to use Article 6.2 exemption?
Accession negotiations in agriculture
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– Privatization
– State-owned or state-trading enterprises
– Agricultural taxation
– SPS and TBT Sanitary and phytosanitary; Technical barriers to trade
– Export subsidies in agriculture
– Sugar
Agr policy change in accession process
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• Do recent policies meet green box criteria? – Georgia: only green box; all others: both green and AMS
• No WTO definition of developing vs. developed country – Makes difference for policy space: de minimis and Article 6.2
» Tajikistan acceded as developing country
» Kyrgyz Rep, Georgia, Armenia, Moldova, Ukraine, Russia: developed
» Kazakhstan and Azerbaijan: outcome not yet known
• Value of production VOP defines de minimis levels – Kyrgyz NPS at 4.87% of VOP vs. Russia NPS at 5.07% of VOP
Domestic support issues in accessions
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• Tajikistan – 2009 writeoff of cotton debt gave Bound Total AMS of $183 million
• Armenia – Very little AMS support through 2011 notification
• Moldova – 1996-98 AMSs for many products; Bound Total AMS only $20 mill.
• Georgia – Only country in CIS region to report nil AMS support in all years
– Notified up through 2013, much more up to date than most Members
• Kyrgyz Republic – 1998 (!) latest notification
Base data, commitments, notified support
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Domestic support parameters: five smaller WTO members
Base years Base Total AMS Final Bound Total AMS De minimis % Special features
Tajikistan
2008-10 183 USD mill.
183 USD mill.
10% Used Article 6.2 exemption in base years
Armenia
1995-97 0 USD 0 USD De minimis 10% through 2008, then 5%
Moldova
1996-98 16 SDR mill.
13 SDR mill. in 2004 5% Reduce by 20% in 2001-04 from Base Total AMS
Georgia
1996-98 0 GEL 0 GEL 5% -
Kyrgyz Republic
1994-96 0 KGS 0 KGS 5% -
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billion USD Russia: Applied support and limits on support
Current Total AMS (applied)
Bound Total AMS (limit)
Green
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9 Source G/AG/W/141-02
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Bound in USD RUB Equivalent
USD billion
Russia: WTO commitment in US dollars USD
2015 Bound Total AMS = USD 7.2 billion
Equals RUB 224 billion at 2012 exchange rate
Equals RUB 465 billion at February 2015 exchange rate
RUB billion
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USD Equivalent Bound in UAH
Ukraine: WTO commitment in Ukrainian hryvnia UAH
2015 Bound Total AMS = UAH 3.0 billion
Equals USD 381 million at 2012 exchange rate
Equals USD 124 million at February 2015 exchange rate
USD million UAH billion
• Meets 3-4 times per year – Questions on trade policy and on notifications
• Most questions to Ukraine, Georgia, Armenia – Green box compatibility of domestic support programs
– Price support for sugar beets: adjustment of reference price
– Quota allocation, import licensing, in-quota sugar imports
• Russia started to notify in 2013 – Numerous questions; some lack of transparency
• Export restrictions notified – Ukraine, Russia, Kyrgyz Rep and Moldova
WTO Committee on Agriculture
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– Azerbaijan – How large are input subsidies relative to VOP? De minimis %?
– Belarus – Input subsidies; also Market Price Support?; budget support declining
– Kazakhstan – Large increasing support: input & output subsidies, price support?
– Base period? De minimis 5, 10, or 8.5%? Article 6.2 questionable
– Uzbekistan – Input subsidies, government control of cotton production and trade
• Turkmenistan – Accession process not started, preparations underway, negative support
Countries in process of accession
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– Many tariff settings at play • Applied tariffs before Customs Union: different in each country
• Applied external tariffs of Customs Union
• Bound WTO tariffs: Russia, Armenia, (Kyrgyz Rep.)
• Negotiated tariffs earlier in WTO process: Kazakhstan, Belarus
– Which tariffs are lower or higher than those of Customs Union? • Consequences for accession negotiations? Kazakhstan, Belarus
• How to negotiate bound WTO tariffs in accession? Kazakhstan, Belarus
• Renegotiate bound WTO tariffs? Russia, Armenia, (Kyrgyz Rep.)
– Diverse agricultural trading relations of smaller CIS countries • Considerable trade with neighbours other than Russia
Customs Union and EaEU integration
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– Rules in Single Economic Space SES agreement • Modelled after WTO Agreements
• Unusual, possibly unique in regional trade agreement
– Severely distorting measures not allowed • Similar to export subsidies in Subsidies Agreement ASCM
– Distorting measures and support • Similar to Annex 3 in Agr Agreement, including WTO market price support
• Ceiling at 10% of VOP, declining to 10% for Belarus
• Upon WTO accession, WTO rules override SES rules
– Notification requirements: Advance notifications
Rules on “state support to agriculture”
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– Legal obligations as a WTO member • Defending non-compliance can be costly
• Correcting non-compliant policy can impose adjustment costs
– WTO rules help to resist domestic pressure for costly support • Green box criteria are a policy filter to improve transfer efficiency and
generate less distortions
– Agricultural and economic data becomes policy priority • Need data-based analysis for policy design
• Need to meet requirements for WTO notifications – E.g., estimating de minimis thresholds
Meeting WTO rules and commitments
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– Contribute to work of Committee on Agriculture • Review countries’ implementation of Agreement
– Participate in negotiations • Doha negotiations; accession of other countries
– For those in process of WTO accession • Continuity and communications with working party are vitally important
– How much support and protection in the future? • Competition among neighbouring countries
• Address in accession negotiations
Opportunity to shape WTO processes
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Thank you!
References Brink, L. 2014. Countries in the Commonwealth of Independent States: Agricultural policy issues in the context of the World Trade Organization.
Rome: Food and Agriculture Organization of the United Nations. http://www.fao.org/3/a-i3883e.pdf Brink, L. 2015 (forthcoming). Farm support in Ukraine and Russia under the rules of the WTO. In Transition to Agricultural Market Economies: The
Future of Kazakhstan, Russia, and Ukraine, ed. A. Schmitz and W. Meyers. Cambridge, USA and Wallingford, UK: CABI. Brink, L. 2014. Evolution of trade-distorting domestic support. In Tackling Agriculture in the Post-Bali Context. Geneva: International Centre for
Trade and Sustainable Development. http://www.ictsd.org/sites/default/files/research/Tackling%20Agriculture%20in%20the%20Post-Bali%20Context_0.pdf
Brink, L. 2011. The WTO disciplines on domestic support. In WTO Disciplines on Agricultural Support: Seeking a Fair Basis for Trade, ed. D. Orden, D.
Blandford and T. Josling. Cambridge: Cambridge University Press.
