The farm bill is the principal legislation governing US agricultural policy over a five-year period. A new bill was expected last year when the 2008 law expired on 30 September 2012. The two chambers of Congress were unable to reach a compromise on the legislation, however, and agreed instead to extend the existing Farm Bill by an additional year. In order to avoid another extension, the two chambers will have to work out any differences before the new end-September deadline.

This year’s updated Senate version would lead to US$24.4 billion in cuts over the next decade, while the current House version aims to reduce spending by up to US$39.7 billion over the same period. More details on the terms of the proposed Farm Bill will follow in next week’s Bridges, after the House Agriculture Committee completes its markup process.

Cotton “reference price” cut

The upcoming Farm Bill also represents an opportunity to resolve the long-running WTO dispute between Washington and Brasilia on the US’ support of its cotton farmers (DS267), arguably one of the most immediate concerns for Geneva-based negotiators.

The WTO had ruled against the US in the high-profile row, and had authorised Brazil to retaliate against its northern neighbour in certain industrial goods and intellectual property rights. The two sides later came to a deal that put the planned retaliation on hold, in exchange for the US providing Brazil with annual payments of US$147 million and pledges from Washington to reform the non-WTO compliant measures in the next Farm Bill.

Under the agreement, Brazil will continue to receive the payments until the passage of successor legislation, at which point a new agreement would be formalised between the two countries to finally resolve the dispute.

One of the main measures under discussion for resolving the WTO dispute is the Stacked Income Support Program (STAX), a supplemental crop insurance initiative. Observers of the farm bill process, however, note that the latest STAX proposal has been substantially revised, allowing for the programme to operate without a reference price - the price at which farmers would receive guaranteed payouts regardless of market based losses - and instead function as a normal insurance programme.

Harry de Gorter, an agricultural trade expert at Cornell University, indicated to Bridges that the reference price set in earlier 2012 versions of the House bill would have been the most trade-distorting element of the proposed change in cotton policy. The House reference price would have led to large payouts if prices fell and would have been potentially trade-distorting in such cases, de Gorter argued in a paper for ICTSD - the publisher of Bridges - last year.

Brazilian Ambassador to the WTO Roberto Carvalho de Azevêdo had echoed similar sentiments in a 2012 letter to the US Congress, urging legislators to find a less trade-distorting resolution to the dispute.

A Brazilian trade official speaking on condition of anonymity told Bridges that not having a reference price was one of the most important things in the new House proposal.

The exclusion of a reference price also resolves the earlier disagreements between the House and Senate on the subject. While the 2012 House bill had included a reference price, the Senate had not, and officials close to the process had indicated that the Senate version would likely have prevailed.

Projections from the Congressional Budget Office on the costs of the bill indicated that the US would spend identical amounts on STAX between 2014-18, regardless of which chamber’s version is used: nearly US$1.5 billion.

ICTSD reporting.

The cassava plant is known as the “Rambo” plant due to its high resilience to changing climatic conditions. The FAO has recently planned to employ it in Ghana to increase sustainability and food security being that it is championed as a ‘climate-proof’ crop, and is a potential source for biofuel production.

Alarmed at the pace of the epidemic, experts gather this week at the conference for the Global Cassava Partnership for the 21st Century and are set to announce a war against the virus.

Sources:

Washington post, Scientists: Cassava disease spreads swiftly, could threaten largest producer Nigeria - 7 May

Irin news, “Super-fly” threatens “Rambo” cassava, food security - 7 May 2013

According to a source from the WSJ, the Kimberley Process has advised member states and the diamond industry to refuse diamonds exports from the Central African Republic until a fact-finding mission can be sent to the country to fully assess the situation.

Rebels overthrew the government of the Central African Republic in March and suspicions have arisen that the Seleka movement that deposed President François Bozizé may have been, and continues to be, funded by the diamond trade.

The Kimberley Process Certification Scheme (KPCS) is a process established in 2003 to prevent “conflict diamonds” from entering the mainstream rough diamond market.

Source: Central African Republic Faces Diamond Ban, The WSJ, 10 may

The news was presented to WTO members by General Council Chair Shahid Bashir - Pakistan’s ambassador to the organisation - following the last of three “rounds of consultations” with the membership, though the results broke informally on the news wires on May 7.

Once all 159 WTO members had submitted their preferences, the outcome, Bashir told delegations on Wednesday, was “clear and unambiguous.”

“Azevêdo carried the largest support by members in the final round and has consistently done so in each round; and, he enjoyed support from members from all levels of development and from all geographic regions and has done so throughout the process,” Bashir said in his report. The global trade body will meet to formally sign off on the result at a special meeting of the General Council on 14 May.

The choice of Azevêdo - who has spent the past five years as his country’s ambassador to the global trade body - was welcomed by Brazilian President Dilma Rousseff, who called the news a win for the WTO.

“In presenting the name of Ambassador Azevêdo for this high position, Brazil was clear that, with his experience and commitment, he could lead the organisation in a direction of a more dynamic and fair world economic order,” she said.

Mexico also extended its own congratulations to the Brazilian ambassador. “Mexico is pleased to see that, for the first time, the World Trade Organization will be directed by a Latin American,” the Mexican Economy Secretary said in a statement, while praising Blanco’s efforts during the selection process. Blanco has already pledged his full support to Azevêdo, the statement noted.

While the process was conducted confidentially, reports had surfaced in the past few days that the US was planning to back Blanco, while the EU resolved an internal split that ultimately led to their backing the Mexican candidate as well.

Both the US and EU, however, made clear that they would accept either nominee. Meanwhile, Azevêdo had reportedly proved to be more popular among the emerging and developing economies.

During the campaign, Blanco and Azevêdo had both sought to dispel the notion that they were either the “rich country” or “developing country” candidate, noting in recent statements that they each enjoyed broad support from a range of countries at all levels of development.

Insider perspective vs. outsider background

Who would win the high-profile post has been a hot topic in both Geneva circles and in the international media, with pressure building in the past week as each candidate pushed to make known why he would be better suited for the job.

Before taking on the Geneva-based role of Brazil’s Ambassador to the WTO, Azevêdo was posted in Brasilia as his country’s Vice Minister for Economic and Technological Affairs, acting as Brazil’s chief Doha Round negotiator and supervising trade talks conducted under the South American customs union Mercosur. Prior to that, he was Brazil’s chief litigator in various WTO disputes, and both served on and chaired dispute settlement panels.

Blanco had previously served as his country’s trade minister from 1994 to 2000, and was Mexico’s chief negotiator for the North American Free Trade Agreement (NAFTA). Since concluding his time with the Mexican government, Blanco has spent the last 12 years in the private sector, advising governments, corporations, and international organisations.

While Blanco’s public comments in recent weeks focused on his outside perspective and insights from his private sector work, Azevêdo stressed the importance of being familiar with the Geneva scene and the intricacies of the recent negotiations.

Trade observers such as Simon Evenett, an economics professor at the University of St. Gallen in Switzerland note that Azevêdo’s status as a Geneva insider could, while having some benefits, also have its disadvantages. “He clearly knows everyone, and he’s clearly well-liked, so that must help,” he commented to Bridges. “But being in Geneva so long can also narrow one’s frame of options and creativity, so that’s the downside as well.”

Six-month process

The process to pick a new head for the Geneva-based trade body had kicked off in December, when nine of the organisation’s members submitted candidates for the post - making it the biggest field in the WTO’s history. It was also the first race to feature three women vying for the job.

Along with Azevêdo and Blanco, the original nine had also included Anabel González of Costa Rica, Alan Kyerematen of Ghana, Amina Mohamed of Kenya, Mari Pangestu of Indonesia, Ahmad Thougan Hindawi of Jordan, Tim Groser of New Zealand, and Taeho Bark of South Korea. All nine, with the exception of Groser, hailed from members that are self-designated as developing countries at the WTO, though Korea and Mexico - like New Zealand- are considered developed in other forums such as the OECD.

Once nominated, the candidates then made formal presentations to the membership at the end of January regarding their visions for the future of the organisation. (See Bridges Weekly, 6 February 2013) They have since spent the last few months working to shore up support for their bids.

Since the beginning of April, Bashir - as General Council Chair - together with Dispute Settlement Body Chair Jonathan Fried of Canada and Trade Policy Review Body Chair Joakim Reiter of Sweden, have been conducting consultations with members regarding their preferred candidates for the Director-General position, with the aim of whittling down the field to one person around which the membership could build consensus.

The first round of consultations had led to the elimination of the Costa Rican, Ghanaian, Jordanian, and Kenyan candidates, after they were unable to gain sufficient support from the membership to move to the contest’s next stage. The second round then saw Indonesia, New Zealand, and South Korea exit the race. (See Bridges Weekly, 18 April 2013 and 2 May 2013, respectively)

Under the selection guidelines for WTO Directors-General, members had until 31 May of this year to pick Lamy’s successor. While this third round had widely been expected to be the final one, the possibility of a fourth round was originally left open in case members were unable to build a consensus around a single candidate.

Bali countdown

Azevêdo will take office on 1 September, after the term of current Director-General Pascal Lamy ends on 31 August. The WTO will then be holding its Ninth Ministerial Conference in the Indonesian province of Bali in early December, giving the incoming trade chief just a few short months to get settled into his new role.

WTO members are currently working to prepare a small package of deliverables from the Doha Round negotiations in time for December’s conference, in what would mark the first major advance in years for the notoriously difficult talks. The planned package would, if successful, include an agreement on trade facilitation, as well as components involving agriculture and issues of interest to developing and least developed country members.

“[The WTO's negotiating function] is the pillar that gives us more cause for concern, for it has been effectively paralysed since the WTO was created in 1995,” Azevêdo said in his submission for Global Challenges and the Future of the WTO: Views from the Candidates Beyond the Hype of the DG Race, which was released by ICTSD - the publisher of Bridges. He stressed that that the time is right for making a move to break the impasse, and that achieving results in Bali would be the first step in that direction.

“Being appointed Director-General of the WTO in the summer of 2013 is a little bit of a ‘mission impossible’,” Jean-Pierre Lehmann, a professor of political economy at the IMD business school in Lausanne and founder of the Evian Group economic governance think tank, commented to Bridges.

Azevêdo, he noted, will face the challenges of increasing US engagement at the negotiating table, while healing the North-South rift among the WTO’s members and helping restore the organisation’s relevance. “The Doha Round was launched in 2001 - and between 2001 and 2013 the world has changed beyond recognition, practically,” Lehmann said.

ICTSD reporting.

Sources: “Mexico’s WTO Candidate Seen Getting Support From European Union,” BLOOMBERG BUSINESSWEEK, 7 May 2013; “Brazil in tight race with Mexico to head WTO,” FINANCIAL TIMES, 6 May 2013.

The need for such a database comes on the back of an increasing amount of scrutiny on new emerging powerhouses of development finance such as China, Russia and India. These have opted out of mainsteam reporting systems such as the OECD, with billions of dollars’ worth of aid flying under the radar.

China is of particular interest to researchers and practitioners because of the perceived scale and opaqueness of its activities in developing countries. Current stakeholders of China-Africa relations rely on “untested assumptions, individual case studies and incomplete data sources for information purposes” says the report.

To address this critical information gap, AidData launched its platform in 2012, with a dual objective. Firstly, to systematize a media-based methodology for collecting project-level development finance information. Secondly, it aims to create a comprehensive database of Chinese development finance flows to Africa, spanning 2000-2011.

Backers welcome its ability to shake up the status-quo, allowing easier and open access, shedding light on obscure data. Detractors criticise the lack of reliability of the data, citing limited amount of sources, vested interests, data meddling and incomplete information. The CDG report contains information on 1,673 Chinese-backed projects in 51 African countries from 2000 to 2011, and $75 billion of official finance. In her blog, Deborah Brautigam, an expert on Africa-China relations and a vocal critic of these findings, points to the fact that of the 1,673 projects, many were labelled “in the pipeline”. This signals an issue in distinguishing which projects are theoretical and which ones are underway, meaning the figures could be highly inflated.

In response to these concerns, AidData pointed to their full methodology report, insisting on the benefits of increased cross-checking and updating of data. Supporters of the methodology indicate that despite the pitfalls, the methodology provides a useful indication of the overall story and should be used as a basis for a move towards democratisation of data.

Sources:

AidData, Open data for international development

Brautigam, D., China in Africa: The real story, 30 April 2013.

Center for Global Development, China’s Development Finance to Africa: A Media-Based Approach to Data Collection, 29 April 2013.

FT, Chart of the week: Tracking China’s investment in Africa, 30 April 2013.

A relationship of mutual -cooperation and trade

According to the UK Government, the two countries will begin a new relationship based on sharing skills and knowledge, not on development funding, in recognition of the progress South Africa has made over the last two decades. The country now accounts for over a third of sub-Saharan Africa’s gross domestic product (GDP) and is a member of the BRICS (Brazil, Russia, India, China, South Africa) group of emerging economies and the G20.

“I have agreed with my South African counterparts that South Africa is now in a position to fund its own development. It is right that our relationship changes to one of mutual cooperation and trade (…)” said Greening.

South Africa warned that UK unilateral decision will affect bilateral relations

“This is such a major decision with far reaching implications on the projects that are currently running and it is tantamount to redefining our relationship” the Department of International Relations and Co-operation said in a statement.

“The UK government should have informed the government of South Africa through official diplomatic channels of their intentions.”

UK officials said in return that they had had “months of discussions” and “many meetings” with their South African counterparts prior to the decision. UK foreign Secretary William Hague responded to the accusations of Pretoria saying “No doubt there is some confusion, or bureaucratic confusion about that perhaps on the South African side. But I am not going to fling accusations about that.”

The UK move coincides with South African efforts to tighten diplomatic ties with emerging nations, for example China and India. South Africa joined the BRICS group  in 2010, however, economically speaking it remains the minnow of the group.

Sources:

DFID; Department of international Relations and Cooperation of South Africa; South Africa warns aid cut means change in relationship with UK, The Guardian, 30 april 2013; U.K to end South Africa aid in 2015, WSJ, 1 May 2013.

The need for an extended transition period

Having obtained a first deferral through a decision made by member states on November 29th 2005, LDC’s could yet receive another with the 2012 appeal seemingly well-founded. WTO negotiators point to the fact that TRIPS recognises the need for LDC’s to receive special attention when it comes to Intellectual Property (IP) by allowing for a flexible approach. Based on article 66.1, which provides for transition periods in LDC’s, they are able to apply for a transition period and the extension of an existing one, depending on their needs and development imperatives.  A request aiming to extend the transition period for as long as LDC members are considered LDC’s was presented to the TRIPS Council in November 2012 by several hundred civil society organisations who defend those who would suffer from the consequences. A new deferral would also present significant breathing space for LDC’s who remain strained economically, financially and administratively. It allows for an additional period during which the poorest countries would be exempt from applying stringent rules imposed by TRIPS in terms of IP, enabling continued easy access to generic drugs. “It would be catastrophic were LDC’s bound by pharmaceutical patents, they are in no position to pay the price of the medication”, declared Céline Grillon, coordinator of international advocacy group ActUp-Paris. This transition period is crucial for LDC’s who always struggle to cover their population’s medical needs. They should therefore grasp opportunities offered by this flexibility by following the example of India, who were exempt from complying with pharmaceutical patent law until 2005 and developed a generic drug industry which now supplies a majority of treatments available in Africa.

Members mulling over length of moratorium

If a consensus seems to be taking shape over the necessity to hand LDC’s a reprieve, deciding on a new end date is another story. Members concurred to postpone to an unspecified date while they continue informal consultations before making a decision in June. While the first option seems more logical and feasible given the different array of interests amongst members, the second seems fairer and more adapted to the current situation in which persistent constraints prevent LDC’s from the resilience necessary to overcome the challenges of open markets. Ideally, the WTO members would extend the window indefinitely, as the many civil society organisations are pressing for. This would avoid a renewal of this type of conundrum in the future.

Sources:

Prorogation de la période de transition relative à la propriété intellectuelle pour les pays les plus pauvres: limitée dans le temps ou indéfinie? Nouvelles OMC, 5 et 6 March 2013

The restrictions are too rigid

The South African view is that the current restrictions are more stringent than technically justified, based on an increasing amount of scientific evidence upheld by the Department of Agriculture, Forestry and Fisheries (DAFF).

European citrus producers want strict controls to avoid contamination and cause a similar epidemic in Europe. The DAFF in South Africa (SA)  alleged that the fungus cannot spread once the fruit is picked. In response, a scientific study by the European Food Safety Authority (EFSA) reported that the biological data provided by South Africa did not offer sufficient detail to decide whether or not contamination could occur at the point of wholesale.

Safeguard measures could be taken by the EU

Since 2012 the EU expect full compliance with the EU phytosanitary measures and a threshold of not more than 5 interceptions for CBS in one trading season has been set up. In case of failure, the EU would consider initiate  the procedure of safeguard measures against citrus fruits from SA.

South Africa’s citrus industry is valued at about 6.5 billion rand ($733 million), according to the government, and Europe is one of the country’s largest export markets. South Africa is the world’s biggest exporter of whole oranges and the largest shipper of grapefruit.

Sources

South Africa Citrus Fruit Disease Ban May cause Dispute With EU , Bloomberg,  11 April 2013

According to an article published by IPS news, Soekie Snyman, the spokeswoman for the South African Rooibos Council, who represents rooibos producers, said  that the red tea needed to receive official trademark status in South Africa itself before it could qualify as a GI. Unlike a trademark, the name used as a geographical indication will usually be predetermined by the name of the place of production.

She argued that rooibos is part of South Africa’s heritage. “It is a unique plant, coming from the Cederberg mountain area. It is a caffeine-free beverage.”

GIs are becoming a useful intellectual property right for developing countries because of their potential to add value and promote rural socio-economic development. Most countries have a range of local products that correspond to the concept of Geographical Indications but only a few are already known or protected globally for example: Basmati rice or Darjeeling tea.

South Africa still does not have a legal framework for unique indigenous products like rooibos.  Therefore, local industries cannot legally prevent other foreign companies trademarking terms such as “rooibos” as they have not registered the necessary trademarks, often because of the high costs.

Because of its unique characteristics (caffeine-free with strong anti-oxidant properties) and its geographical exclusivity (it is traditionally grown in the Cederberg region, 250 kilometres to the north of Cape Town) rooibos could qualify for protection as a geographical indication (GI) in the same way as other origin-based names such as champagne, port and sherry.

If South Africa manages to get a GI for rooibos, it could also enhance the chances of protection for other similarly unique products in South Africa such as honeybush. Also, the same criteria could apply to products from other countries of the Southern African region - such as Mozambican prawns, Botswana beef and Namibian oysters.

Source:

Storm in a teacup between EU and South Africa, IPS news,  15 avril 2013 ; Rooibos fights to protect its name, Business Day, 3 February 2013

This fisheries agreement allows EU vessels mainly from Spain, Portugal, France and Italy to fish in the Seychelles waters and is part of the tuna network fisheries agreements in the Indian Ocean.

Earlier in March, both sides agreed on the need for continuity of the current Protocol so that fishing activities could continue in the Seychelles Exclusive Economic Zone without interruption. The second round of discussions, which took place recently, focused on issues such as fishing opportunities and financial compensation.

According to the EU, negotiations were conducted in an open and constructive atmosphere which enabled progress to be made towards the finalisation of the new Protocol.

Source: EC, Fisheries - April 2013 and Negotiations between EU and Seychelles for Tuna fisheries, The Environment in Seychelles, 22 April 2013