Analytical Note, November 2013

WTO’s MC9:  Analysis of the Food Security ‘Peace Clause’ Text

The Peace Clause is time-limited (4 years) and partial in coverage (no inclusion of the WTO’s Agreement on Subsidies and Countervailing Measures- ASCM). Countries can still be taken to dispute. It also has onerous and intrusive transparency and information requirements and conditions. Furthermore, in order to use it, countries have to effectively make an admission of ‘guilt’ – they have to notify that they have exceeded or are at risk of exceeding their very limited ceiling levels for trade-distorting domestic supports. Such an admission would not stand them in good stead after the 4-year ‘Peace Clause’ has lapsed!

If agreed to, this would have been a lost opportunity for the global community to right some of the problems in the current WTO rules in such a way that food security, the plight of small farmers across the developing world and the precariousness of their livelihoods could have potentially been supported by governments through public stockholding programmes. Most developing countries that had not provided trade-distorting domestic supports at the time of the Uruguay Round bound themselves at zero levels of such supports and today, remain constrained by these commitments. They only have a 10% de minimis allowance of the value of production of a crop.

This is a major imbalance in the context of the continued huge sums of domestic supports provided by the US (USD 130 billion in 2010) and the EU (79 billion Euros in 2009) to their producers.

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