Agriculture in the WTO’s 12th Ministerial Conference (MC12)

Agriculture in the WTO’s 12th Ministerial Conference (MC12)

link to page 1

August 19, 2021
Agriculture in the WTO’s 12th Ministerial Conference (MC12)
The United States is one of the world’s largest agricultural
Japan), submitted a July 2021 proposal for a Ministerial
trading countries and has a major stake in negotiations on
decision calling for enhanced transparency obligations on
trade rules and disciplines. Congress continues to seek to
export restrictions and prohibitions, along with other
influence and monitor ongoing trade negotiations involving
reporting commitments on market access and domestic
agricultural trade, including multilateral negotiations within
support (JOB/GC/204/Rev.6; JOB/CTG/14/Rev.6). The
the World Trade Organization (WTO), to ensure that U.S.
United States sees enhanced transparency and a streamlined
agricultural, food industry, and consumer interests are
notification process on export competition (described
reflected in their outcomes. Discussions on agricultural
below) as a feasible outcome for the MC12.
trade are expected to take place at the WTO 12th Ministerial
Figure 1. U.S. Agricultural Trade, 1998-2020
Conference (MC12) scheduled for late November 2021.
Previous multilateral talks involving agricultural trade often
have been highly contentious and hampered by a lack of
consensus and by divergent agenda and reform priorities.
Importance of U.S. Agricultural Trade
U.S. food and agricultural exports totaled $149.7 billion
and U.S. imports totaled $146.3 billion in 2020, resulting in
a trade surplus of $3.4 billion, according to data from the
U.S. Department of Agriculture (USDA). In recent years,
the United States has seen its once sizable agricultural trade
surplus—which reached $40 billion in 2011—shrink to
below $10 billion in 2018 and 2020 and post a deficit in

2019. This trend reflects both rising U.S. imports and
slower growth in U.S. exports (Figure 1). Some officials
Source: CRS from USDA’s Global Agricultural Trade System data
and industry representatives contend that policies by some
(FATUS product group). Data are calendar year.
U.S. trading partners may be impeding U.S. food and
The July 2021 proposal for decision by the United States
agricultural exports. The Office of the U.S. Trade
and other WTO members, if implemented, would establish
Representative (USTR) in its annual National Trade
a new, single “streamlined export competition notification”
Estimate Report on Foreign Trade Barriers highlights a
covering export subsidies, export financing, international
range of such tariff and nontariff concerns.
food aid, and exporting State Trading Enterprises. The
Multilateral Talks on Agricultural Trade
proposal also outlines ways that WTO members might
better specify and explain calculations in their notifications
For many years, WTO members have been conducting
related to domestic support. It further encourages members
multilateral negotiations to reform agricultural trade. These
to report fill rates of their tariff-rate quotas (the amount of
talks started under the mandate in the Agreement on
imports that qualify for lower tariffs) and to report bound
Agriculture (AoA) adopted during the Uruguay Round of
and applied tariff rates applied to products both under quota
WTO negotiations in 1995 and later continued as part of the
and outside quota. The proposal also seeks reporting on the
Doha Round initiated in 2001. These negotiations continued
volume of goods affected by special safeguards (i.e.,
in the 2013 and 2015 ministerial conferences. Agreed-on
temporary import restrictions), among other commitments.
reforms included a decision to eliminate agricultural export
subsidies. The United States expects to continue these and
The WTO defines transparency as the degree to which
other discussions at the MC12. Certain unfulfilled Doha
“trade policies and practices, and the process by which they
mandates involving agricultural trade continue to be a
are established, are open and predictable.” WTO member
sticking point for some WTO members that call for more
governments have agreed to general notification obligations
ambitious reforms to domestic farm support programs and
to inform other members “to the maximum extent possible”
subsidies, among other policies. As a WTO member, the
of any newly adopted or modified trade measures. Such
United States has committed to abide by WTO rules and
notification constitutes a transparency obligation requiring
disciplines that govern domestic farm policy as defined in
member governments to report trade measures that might
the AoA and agreed to by the United States.
affect other trading partners. Many WTO agreements
require that trade measures taken by WTO members be
In advance of the MC12, the United States has called for
notified to other member nations to allow members to
increased transparency in domestic support notifications
monitor and raise concerns with any new trade measures.
(JOB/AG/181). The United States, with other WTO
The WTO estimates that about one-third of its members
members (including Canada, the European Union (EU), and
have failed to provide timely notification of their
https://crsreports.congress.gov

Agriculture in the WTO’s 12th Ministerial Conference (MC12)
agriculture-related trade actions, while fewer than half of
and allowing developing countries to raise tariffs
WTO members have notified the WTO of their subsidies or
temporarily to address import surges or price declines.
countervailing measures, which often involve agricultural
commodities. Calls for greater transparency in the WTO
The Cairns Group is seeking commitments to “cap and
notification process cover information related to domestic
reduce” current trade and domestic support entitlements by
support and how it is calculated, bound and applied tariff
at least half by 2030 (JOB/AG/177/Rev.2), which could
rates, tariff-rate quota fill rates, and export restrictions (such
present certain challenges at the MC12 talks. Under the
as those related to COVID-19), among other policies .
AoA, the United States is currently committed to spend no
more than $19.1 billion annually on those domestic farm
Separately, the United States and other WTO countries are
support programs most likely to distort trade under the
seeking to address nontariff barriers to trade related to
WTO—referred to as amber box programs and measured by
sanitary and phytosanitary (SPS) and other technical
the Aggregate Measure of Support (AMS). Since 2018,
measures that are generally regarded as necessary to ensure
however, USDA has initiated several large ad hoc spending
product safety and quality. The proposed SPS Declaration
programs—valued at up to $60.4 billion cumulatively in
for the MC12 (G/SPS/GEN/1758/Rev.7) seeks to address
2018, 2019, and 2020—in response to international trade
changes in global agriculture since the adoption of the
retaliation as well as economic disruption caused by the
WTO Sanitary and Phytosanitary Measures Agreement in
COVID-19 pandemic. These ad hoc payments are in
1995. It seeks to establish a “work program” to explore
addition to existing U.S. farm support programs. These
ways to promote the adoption and use of “safe, innovative
payments have raised concerns among some U.S. trading
plant-protection products and veterinary medicines, and by
partners and policymakers that U.S. domes tic farm subsidy
encouraging the use of international standards, guidelines,
outlays on market-distorting farm support programs might
and recommendations” by recognized standard-setting
exceed its annual WTO spending limit of $19.1 billion for
organizations, including support for “basing SPS measures
one or more of those years, which could violate U.S.
on scientific evidence and principles.” For more
commitments under the AoA. The United States has not yet
background, see CRS In Focus IF11903, Addressing
reported this spending to the WTO. For more background,
Nontariff Barriers to Agricultural Trade at the WTO.
see CRS Report R45305, Agriculture in the WTO: Rules
and Limits on U.S. Domestic Support.
The prospects for achieving these outcomes at the MC12
remain uncertain. Agricultural negotiations tend to be
Considerations for Congress
highly contentious. Consensus among WTO members on
Congress and its farming constituencies have typically
what the upcoming talks should address related to
closely monitored WTO negotiations related to agricultural
agricultural trade, and submissions from more active WTO
trade matters, particularly involving tariff and nontariff
members, often diverge widely. Draft negotiating text
barriers that may limit U.S. agricultural exports. Several
released by the chair of the agriculture talks outlines seven
U.S. agricultural trade associations and farm support
areas for discussion in the MC12: domestic support, market
organizations have outlined a range of recommendations in
access, export restrictions, export competition, cotton,
advance of the MC12 and other related efforts to institute
public stockholding for food security purposes, and a
WTO reforms more broadly. Specifically, these farm
special safeguard mechanism. The MC12 also is to address
groups contend that “WTO reform should lead toward
transparency as a “cross-cutting” issue. Furthermore, as
further market-based and sustainable trade liberalization,
emphasized by the chair of the agricultural negotiations, the
reduced distortions, enhanced transparency, and a more
AoA calls for establishing a “fair and market-oriented
effective and efficient dispute settlement system.” These
agricultural trading system” (Article 20), which involves
groups further emphasize the need for “predictable and
“progressively reducing support and protection; and taking
transparent trade rules” to ensure business certainty and to
account of all members’ interests, including special and
enforce multilateral rules, as well as to ensure that new
differential treatment for developing countries, non-trade
areas of negotiation (such as climate change mitigation and
concerns such as food security, and protection of the
sustainability) are pursued in a science-based and data-
environment.” This broad agenda makes it difficult to
driven manner. They also express concerns that some WTO
anticipate the talks’ outcome.
members want to add new special safeguard mechanisms or
institute changes allowing for public stockholding that
A May 2021 joint statement by the Cairns Group and the
involve purchases from farmers at fixed government prices.
African Group of WTO members calls for “ambitious,
concrete and equitable” agriculture reforms. Members of
Many in Congress and in the U.S. food and agricultural
the Cairns Group represent a coalition of 19 agricultural
sectors have also expressed concerns that the Biden
exporting countries—including Australia, Brazil, and
Administration has not yet named a candidate for the Chief
Canada—plus one observer. The Africa Group includes
Agricultural Negotiator. The Chief Agricultural Negotiator
members from 54 African Union Member States. Previous
position was created as a USTR post in the Trade and
efforts by these groups and similar efforts initiated in the
Development Act of 2000 (P.L. 106-200; 19 U.S.C. §2171)
Doha Round have often contributed to deadlocked
to conduct trade negotiations and enforce trade agreements
agricultural negotiations. Issues raised by these groups and
relating to U.S. agricultural interests and products. If this
other WTO members have included designating additional
position remains vacant, it could have implications for the
products as “sensitive” along with establishing new tariff-
upcoming MC12 agricultural negotiations.
rate quotas; designating developing country products as
“special” and thus exempt from tariff reduction obligations;
Renée Johnson, Specialist in Agricultural Policy
https://crsreports.congress.gov

Agriculture in the WTO’s 12th Ministerial Conference (MC12)

IF11906

Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff to
congressional committees and Members of Congress. It operates solely at the behest of and under the direction of Congress.
Information in a CRS Report should not be relied upon for purposes other than public understanding of information that has
been provided by CRS to Members of Congress in connection with CRS’s institutional role. CRS Reports, as a work of the
United States Government, are not subject to copyright protection in the United States. Any CRS Report may be
reproduced and distributed in its entirety without permission from CRS. However, as a CRS Report may include
copyrighted images or material from a third party, you may need to obtain the permissio n of the copyright holder if you
wish to copy or otherwise use copyrighted material.

https://crsreports.congress.gov | IF11906 · VERSION 1 · NEW