US offers some specifics on food aid plan with three boxes idea

U.S. officials over the last few weeks have offered some additional specifics about how it might be able to agree to new disciplines on food aid in the ongoing Doha round, but sources said the U.S. proposal nonetheless still seems likely to draw opposition from those who fear U.S. food aid in the form of bulk commodity shipments distort markets.

Specifically, the U.S. is suggesting that food aid be divided into three different categories or boxes, with the first two boxes not subject to any new disciplines, sources said. These two boxes are food aid for emergencies, and food aid for very poor countries.

The third box is food aid for other countries, and the U.S. has said some disciplines would be needed for this box.

Sources that both support and oppose U.S. food aid programs said the ideas floated by the U.S. do not differ significantly from the longtime U.S. position on food aid, and that they would not appear to make any current U.S. food aid programs vulnerable to disciplines.

The concept floated by the U.S. would lead to the same problems that exist today with food aid, according to one European government source. The EUs most controversial demand has been to require that all food aid be delivered in the form of cash donations and not as bulk commodities, which the EU charges is a way for the U.S. to dump surplus commodities.

Every important food aid measure that would now be used would be in the first or second category, said one Geneva-based agriculture negotiator.

At the same time, a supporter of U.S. food aid programs said the U.S. proposals leave so much undefined that they at least open the door to real disciplines in future negotiations. For example, the U.S. so far is not specifying what countries would fall into the very poor category, and it is also not defining what entails an emergency, another source said.

Another key question is whether there will be a requirement on who can declare a food aid emergency, a private sector source said. Current rules allow a food aid emergency to be declared by a government, a non-governmental organization or an international organization, but the EU has pushed for rules that would only allow food aid to be delivered for an emergency declared by United Nations agencies.

This source warned that the U.S. and EU would not be able to make negotiations on food aid a bilateral decision because developing countries that are recipients of food aid will want to ensure that new disciplines do not infringe on their ability to receive food aid.

The U.S. ideas on food aid were first floated at meetings in Paris late last month with the EU, India, Brazil, Japan, Canada and other World Trade Organization members, but have become more clear as they have been shared at meetings with other delegations in Geneva. Delegation sources said the U.S. has not floated an actual proposal on paper yet, but that it has indicated it will eventually come forward.

U.S. trade officials, under pressure from members of Congress, have said they will not agree to the EU demand that food aid be delivered only through cash payments. This demand is also opposed by many developing countries that are recipients of food aid.

One delegation source said the U.S. ideas have support from developing country recipients of food aid as well as at least one developed country, Japan.

INSIDETRADE-23-40-14