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THIRD WORLD ECONOMICS

Azevedo rebuked by India over “value-loaded” statements

The WTO Director-General has come under fire from India for making “value-loaded” statements claiming “wide divergences” among the WTO membership over the setting up of a special safeguard mechanism to protect developing-country farmers.

by D. Ravi Kanth

GENEVA: India sharply rebuked the WTO Director-General Roberto Azevedo on 6 February over his assessment that there were “wide divergences” on the special safeguard mechanism (SSM) in the run-up to the WTO’s tenth Ministerial Conference in Nairobi in December 2015, trade envoys told the South-North Development Monitor (SUNS).

The DG, India said, must resist making “value-loaded” statements even before starting the negotiations for the eleventh Ministerial Conference, which is to be held in Buenos Aires this December.

During a closed-door meeting with over two dozen trade envoys, held at India’s insistence, on agriculture-related issues for the Buenos Aires meeting, the DG mentioned that the permanent solution for public stockholding programmes for food security and domestic support are among the issues for Buenos Aires.

On the SSM, he said, there had been “wide divergences” in the run-up to the Nairobi meeting.

Azevedo also claimed there was a “lot of interest” in export restrictions, a proposal that was floated time and again by Japan but that has failed to garner any support, according to trade envoys present at the meeting.

India, which spoke at the end of the meeting, raised both process-related and substantive concerns.

On the process side, India said, it would urge the Trade Negotiations Committee chair “not to make value-loaded statements on issues such as about having divergent views and lot of interest.” (Azevedo also serves as chair of the Trade Negotiations Committee.)

India said it is much too early to make such statements when the negotiations for the Buenos Aires meeting are yet to start in full earnest.

Such statements, said India’s trade envoy Ambassador Anjali Prasad, “would poison the discussions, as we all know how things would work and in which way they will go when chairs make pronouncements,” according to a trade envoy who was present at the meeting.

India demanded clear and unambiguous outcomes on public stockholding programmes for food security and the SSM as mandated in the Bali and Nairobi ministerial declarations.

The Nairobi ministerial declaration on the SSM, which referred to the 2004 July framework agreement and the 2005 Hong Kong ministerial declaration, had emphasized the “critical importance of instituting an accessible and effective trade remedy tool i.e. the SSM, that is responsive to the needs and conditions of developing countries which, if not immediately and effectively addressed as they occur, undermine poverty reduction efforts, livelihood and food security, and rural development in developing country members.”

It further said “members shall engage constructively to negotiate in order to ensure adoption of the Special Safeguard Mechanism by the eleventh ministerial conference [Buenos Aires].”

Blocked

As regards substantive concerns, India said it is common knowledge that negotiations on the SSM were blocked and stonewalled by key members in the run-up to the Nairobi ministerial meeting.

Several countries such as the United States, Australia, the European Union and Brazil had simply refused to engage in any negotiations on the SSM, saying that they would not discuss the issue without discussing all other issues in the market access pillar.

In the run-up to the Nairobi meeting, the US had rejected a demand for an SSM that aims to protect resource-poor farmers in developing countries from unforeseen surges of agricultural imports.

Indonesia, India, China, the Philippines, Turkey, Barbados on behalf of the African, Caribbean and Pacific (ACP) coalition, and Lesotho on behalf of the African Group of countries, maintained that the SSM is crucial for concluding the WTO’s Doha Development Agenda (DDA) negotiations.

The US had vehemently stated before Nairobi that the demand for the SSM will not fly because of the attempts to lower the level of ambition in market access for agricultural products. It also suggested that the SSM can only be discussed as part of market access negotiations, implying that there is no need for the SSM when the level of market access in the DDA negotiations is being recalibrated.

Since the launch of the DDA negotiations in 2001, a large majority of developing countries have consistently demanded the SSM on grounds that it is vital for resource-poor farmers to counter unforeseen import surges.

In the failed 2008 ministerial meeting, India’s then Commerce Minister Kamal Nath maintained that without a credible SSM, India will never sacrifice the interests of its poor farmers.

On behalf of the 47-member G33 developing-country coalition, Indonesia led the charge for a “simple, operable, and effective safeguard mechanism” to ensure that farmers in developing countries are not undermined by volatile supplies from countries that provide billions of dollars in trade-distorting domestic agricultural subsidies.

The SSM, the G33 argued, is meant “to respond to import surges and price declines that threaten small, subsistence farmers who overwhelmingly reside in the rural areas, and food security.”

The SSM would enable special safeguard measures to be imposed when imports cross agreed benchmarks in terms of either volume or price.

Indonesia and Turkey had said it is wrong to link the SSM with market access, saying that regardless of the level of ambition, farmers in developing countries need a mechanism to face harmful surges of imports of agricultural products.

Indonesia said the mechanism will only be triggered based on current market realities involving a sudden drop in prices or a precipitous increase in volumes of imports over a three-year rolling average.

During the 6 February closed-door meeting, Indonesia on behalf of the G33 and Turkey supported India’s demand for the SSM.

India, Indonesia, Turkey and Kenya also strongly demanded a clear outcome on the permanent solution for public stockholding programmes at the Buenos Aires meeting.

India cautioned against attempts to shift the goalposts in the domestic support negotiations in light of calls by some countries for disciplining de minimis support. India said both de minimis and Article 6.2 of the WTO Agreement on Agriculture are red lines for New Delhi.

India also subtly conveyed to the DG that there was not a “lot of interest” for export restrictions except from one member.

In the face of India’s rebuke, the DG said “it is my duty to give an assessment and I will keep doing my duty.”

In a nutshell, the DG is already setting the markers for the Buenos Aires meeting in which issues raised by developing countries, particularly the G33, are given short shrift, while items of interest to the US and other industrial nations are being pushed and promoted by him, said a trade envoy. (SUNS8397)           

Third World Economics, Issue No. 632, 1-15 January 2017, pp3-4


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