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Grains


Main policy areas

Remarks

Tariff-rate-quota administration

  • about 17 countries have TRQs for wheat, and most do import more than the in-quota level, due to relatively low applied above-quota tariffs or due to preferential trade agreements;
  • for coarse grains, most countries with TRQs have already met or exceeded their minimum access;
  • access commitments have been increased under TRQ schemes;- for example:- Japan for maize and barley, the Republic of Korea for barley, the Republic of South Africa, India and the Philippines for maize;
  • quota fill rates are relative high for this sector, although the method of TRQ administration varies among countries;
  • some countries (e.g. China) have allocated specific quota amounts to private sector importers;
  • for the grains sector, increased market access can come from a tariff only regime, non-discriminatory allocation and administration of tariff quotas; disciplines which reduce the role of STEs, or by reduction in quota tariff rates.

Tariffs

  • for grains, the applied tariff rates are in general lower than bound rates. This gives many countries the flexibility to increase them as safeguard actions depending on the market situation and/or to sustain policy goals;
  • tariff peaks (tariffs greater then 15 percent) and tariff escalation (tariff increases as degree of processing increases) posses serious problems of market access in some countries.

Amber box

  • some developing country producers/exporters object to trade distorting domestic support in developed countries (e.g. United States, EU), where (relatively high-cost) production and exports expanded aided by support measures;
  • support provided in most developing countries has been traditionally low and under the 10 percent de minimis level and, hence, not affected by reduction commitments.

Export subsidies

  • export subsidies can displace exports of non-subsidizing competitive exporters and they can depress market prices. In addition, they could also create disincentives to domestic production in the recipient countries if they result in import surges well above normal level of imports by these countries and are imported at prices at which domestic producers cannot compete;
  • the use of export subsidy (both directly and indirectly) is more widely spread among the developed major exporting countries;
  • of the 25 countries that agreed to reduce the volume and value of subsidized agricultural exports, 10 made specific commitments to reduce subsidized wheat and flour exports and 12 made commitments to reduce subsidize coarse grains exports.

Export credits

  • used by a number of grain exporting countries;
  • can have similar distortionary effect on trade as export subsidies.

State trading enterprises

  • over one-third of world imports of wheat (and about 40 percent of exports) are conducted by STEs. With the exception of barley, the role of STEs are relatively insignificant for coarse grains, except in countries with food security concerns;
  • because they lack transparency in their operations, the behaviour of STEs can be used to disguise trade distorting policies, and can therefore circumvent URAA commitments on market access and export subsidies;
  • some progress have made by some countries by allowing increased private sector participation in grain trade.

Export restrictions and prohibitions

  • used by a few countries especially during period of poor harvests (e.g. Hungary for maize, in late 2000) but generally temporal in nature.

Food security

  • because of financial constraints and increased dependency on imports, most developing countries would prefer added flexibility to intervene in their domestic markets to mitigate the negative effects of export subsidies and market protection;
  • a distinction should be made between short-term and long- term solutions to food security problems. In the short-term, food security is best served with targeted food aid and consumption smoothing policies under the provisions of the Marrakech Ministerial decision, but in the long-term the issue of raising income levels, which can be enhanced by trade liberalization is best option for the grains sector;
  • consumption policies (in developing countries): ad hoc market intervention is continuing in a number of countries, especially those with food distribution programmes (e.g. India).

Food safety

  • of some relevance for the sector - concerns have been raised notably by China, on wheat contaminated with TCK smut and Brazil for Karnal bunt;
  • several countries have set up regulatory framework for trade in grains or other products containing GMOs grains. This and other issues related to uncertainties about phytosanitary standards are among the issues of concern during the on-going trade negotiations for both developing and developed countries;
  • “precautionary principle” adopted by some developed countries has come under strong attack.

Rural development

  • of significance for developing and transition countries in the area of non-trade concerns;
  • direct relationship between this and food security concerns in developing countries with large numbers of small holders in rural areas;
  • special provisions will be required to address this issue for the developing countries, most probably within a “development box”.

Green box

  • strengthening of the “development box” as part of green box is highly desired by developing countries, especially those still trying to achieve self-sufficiency in food production;
  • most of the support provided by the developed countries fall under this category;
  • general disagreement related to the distortionary effects of most grain support policies under the green box even when they are decoupled.

Blue box

  • not particularly relevant as only a few countries are using it.

Special agricultural safeguard

  • limited use made by developing countries as, normally, sector was already well protected by high bound tariffs.


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