Historic Nairobi Package at WTO Conference

Current Affairs: WTO members concluded their Tenth Ministerial Conference in Nairobi on 19 December by securing an historic agreement on a series of trade initiatives.

The “Nairobi Package” pays fitting tribute to the Conference host, Kenya, by delivering commitments that will benefit in particular the organization’s poorest members.

current affairsThe WTO’s Tenth Ministerial Conference was held in Nairobi, Kenya, from 15 to 19 December 2015, the first such meeting hosted by an African nation. The Conference was chaired by Kenya’s Cabinet Secretary for Foreign Affairs and International Trade, Amina Mohamed.

The Nairobi Package contains a series of six Ministerial Decisions on agriculture, cotton and issues related to least-developed countries.

1- Agreements on agriculture

A centrepiece of the Nairobi Package is a Ministerial Decision on Export Competition (WT/MIN(15)/W/47), including a commitment to eliminate subsidies for farm exports. DG Azevedo described it as the “most significant outcome on agriculture” in the organization’s 20-year history.

Under the decision, developed members have committed to remove export subsidies immediately, except for a handful of agriculture products, and developing countries will do so by 2018. Developing members will keep the flexibility to cover marketing and transport costs for agriculture exports until the end of 2023, and the poorest and food-importing countries would enjoy additional time to cut export subsidies.

Ministers also adopted a Ministerial Decision on Public Stockholding for Food Security Purposes. The decision commits members to engage constructively in finding a permanent solution to this issue.

A Ministerial Decision on a Special Safeguard Mechanism (SSM) for Developing Countries (WT/MIN(15)/W/45) recognizes that developing members will have the right to temporarily increase tariffs in face of import surges by using an SSM. Members will continue to negotiate the mechanism in dedicated sessions of the Agriculture Committee.

In addition, a Ministerial Decision on Cotton (WT/MIN(15)/W/48) stresses the vital importance of the cotton sector to LDCs. The decision includes three agriculture elements: market access, domestic support and export competition.

On market access, the decision calls for cotton from LDCs to be given duty-free and quota-free access to the markets of developed countries — and to those of developing countries declaring that they are able to do so — from 1 January 2016.

The domestic support part of the cotton decision acknowledges members’ reforms in their domestic cotton policies and stresses that more efforts remain to be made. On export competition for cotton, the decision mandates that developed countries prohibit cotton export subsidies immediately and developing countries do so at a later date.

2- Decisions of benefit to LDCs

The Nairobi Package also contains decisions of specific benefit to LDCs, including enhanced preferential rules of origin for LDCs and preferential treatment for LDC services providers.

The Ministerial Conference adopted a decision that will facilitate opportunities for least-developed countries’ export of goods to both developed and developing countries under unilateral preferential trade arrangements in favour of LDCs.

The Nairobi Decision expands upon this by providing more detailed directions on specific issues such as methods for determining when a product qualifies as “made in an LDC,” and when inputs from other sources can be “cumulated” — or combined together — into the consideration of origin. It calls on preference-granting members to consider allowing the use of non-originating materials up to 75% of the final value of the product.

3 – LDC trade in services

The Ministerial Decision on Implementation of Preferential Treatment in Favour of Services and Service Suppliers of Least Developed Countries and Increasing LDC Participation in Services Trade (WT/MIN(15)/W/39) extends the current waiver period under which non-LDC WTO members may grant preferential treatment to LDC services and service suppliers. The period has been extended 15 years until 31 December 2030.

4 – Ministers reaffirm central role of WTO in global trade talks, acknowledge divide on future of Doha Round

In their Nairobi Declaration, ministers cited the “pre-eminence of the WTO as the global forum for trade rules setting and governance” and recognized the contribution the rules-based multilateral trading system has made to the strength and stability of the global economy.

Ministers acknowledged that members “have different views” on how to address the future of the Doha Round negotiations but noted the “strong commitment of all Members to advance negotiations on the remaining Doha issues.”

5 – WTO members secure landmark $1.3 trillion IT trade deal

In another significant outcome from the Nairobi Ministerial, WTO members representing major exporters of IT products agreed on 16 December on the timetable for implementing a landmark deal to eliminate tariffs on 201 information technology products valued at over $1.3 trillion per year.

Negotiations on the expanded Information Technology Agreement (ITA) were conducted by 53 WTO members, including both developed and developing countries, which account for approximately 90 per cent of world trade in these products. However, all WTO members will benefit from the agreement, as they will all enjoy duty-free market access to the markets of the members eliminating tariffs on these products.

The list of 201 products was originally agreed by the ITA participants in July 2015.

6 – Accessions

Trade ministers welcomed the conclusion of negotiations on the accessions of Liberia and Afghanistan at the Tenth Ministerial Conference.

Liberia will formally become a member of the WTO 30 days after notifying the organization that it has ratified its accession terms.

Trade ministers also welcomed the conclusion of Afghanistan’s WTO accession negotiations on 17 December.

Afghanistan applied for WTO membership in 2004 and will formally take its seat at the WTO 30 days after its ratification instrument is received.