Accession to the WTO offers new opportunities for agriculture in the CIS countries
15 November, Kiev - Lower trade barriers as a result of joining the World Trade Organization (WTO) may facilitate growth in the agricultural and food sector, but at the same time require significant changes in agricultural support policies of the CIS countries, said David Sedik, Senior Policy Officer of the Food and Agriculture Organization (FAO), at the regional training workshop for the CIS countries in Kiev today.
The majority of the CIS countries actively pursued the goal of joining the WTO after having become independent states. Six of them – Armenia, Kyrgyzstan, Moldova, Russia, Ukraine and Tajikistan – as well as Georgia are now members of the WTO. Kazakhstan and Azerbaijan are actively engaged in accession negotiations.
The seminar, organized by FAO with the support of the Ukrainian Ministry of Agrarian Policy and Food and the WTO, facilitated exchange of practical experience on adjustments in the agricultural sector to the new trading arrangements among current and the future WTO members in the CIS.
Using the example of countries that already have significant experience with WTO membership, such as Ukraine, other CIS countries can better assess the benefits and challenges of WTO accession and to take the necessary steps to develop agricultural exports. “Ukraine has managed to lower production costs, improved logistics and management practices, but above all improved the quality and safety of its products”, said Ivan Bisyuk, First Deputy Minister of Agrarian Policy and Food of Ukraine, in his opening remarks at the seminar.
Changes in domestic support to agriculture
The adoption of new trade commitments in the context of WTO accession also poses the challenges for the Ministries of Agriculture and other relevant government agencies to review the measures of state support to comply with the obligations to limit trade-distorting subsidies.
Under the WTO rules, payments that could directly stimulate the growth in agricultural production, such as fertilizer subsidies or payments per unit of output should be limited to a certain level. Meanwhile, broader support measures, such as scientific research, technical assistance, veterinary and phyto-sanitary control, dissemination of market information, maintenance of strategic food reserves and crop insurance (the so-called “green box measures”) can be used without restriction.
The benefits of WTO membership and the possible risks
Increased competition from imports due to lower trade barriers usually benefits consumers as domestic prices on certain food products would decrease and greater variety of products would be available, but can adversely affect some producers that used to be protected. At the same time, WTO membership allows countries to use the mechanisms for consultation and dispute settlement to defend their trade interests, and allows them to participate in the development of negotiations of new international trade deals. “The rules-based multilateral trading system provides us with the necessary instruments to request clarifications and to challenge actions to restrict imports introduced by our trading partners”, said Mr. Bisyuk.
“WTO accession does not guarantee by itself that the CIS countries will participate more effectively in global agricultural trade” - said Ekaterina Krivonos, Economist from FAO’s Trade and Markets Division – “To take full advantage of the opportunities that the WTO membership provides requires aligning the domestic regulatory framework governing trade with the international rules, as well as introduction of complementary measures to improve the overall competitiveness of the agricultural sector. "
Ensuring safety of agricultural products
Revision of domestic standards is particularly relevant in the case of Sanitary and Phytosanitary Measures. During the seminar, experts from the International Plant Protection Convention (IPPC) and Codex Alimentarius emphasized the importance of adopting international science-based sanitary and phytosanitary standards in the region to ensure transparent and predictable trade. This would prevent using measures to protect human, animal and plant health as hidden protectionism and reduce the number of trade disputes.
The seminar was attended by representatives of the Ministries of Agriculture of ten countries of the CIS, sanitary, phytosanitary and veterinary services and associations of agricultural producers.