TWN Info Service on WTO and Trade Issues (Feb17/10)
13 February 2017
Third World Network

DG Azevedo rebuked by India over "value-loaded" statements
Published in SUNS #8397 dated 8 February 2017

Geneva, 7 Feb (D. Ravi Kanth) -- India sharply rebuked on Monday (6 February) the World Trade Organization director-general Roberto Azevedo over his assessment that there were "wide divergences" on special safeguard mechanism (SSM) in the run-up to the Nairobi ministerial meeting in December 2015, trade envoys told SUNS.

The DG, India said, must resist making "value-loaded" statements even before starting the negotiations for the eleventh ministerial meeting in Buenos Aires, Argentina, later this year.

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

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

Azevedo also claimed there was "lot of interest" in export restrictions, a proposal that was floated time and time again by Japan but 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."

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 programs for food security and special safeguard mechanism as mandated in the Bali and Nairobi ministerial declarations of 2015.

The Nairobi ministerial declaration on 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]."

As regards substantive concerns, India said it is common knowledge that negotiations on 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 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 a special safeguard mechanism (SSM) that aims to protect resource-poor farmers in developing countries from unforeseen surges of agricultural imports.

Indonesia, India, China, the Philippines and Turkey, Barbados on behalf of the ACP (African, Caribbean and Pacific) coalition, and Lesotho, coordinating the African group of countries, maintained that the SSM is crucial for concluding the DDA negotiations.

The US had vehemently stated before Nairobi that the demand for SSM will not fly because of the attempts to lower the level of ambition in the market access for agricultural products.

The US also suggested that SSM can only be discussed as part of market access negotiations, implying that there is no need for SSM when the level of market access in the Doha negotiations is being re-calibrated.

Since the launch of the DDA negotiations in 2001, a large majority of developing countries in Asia, Africa, and the Americas consistently demanded SSM on grounds that it is vital for resource-poor farmers to counter the unforeseen surges in imports of agriculture products.

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 G-33 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 of trade-distorting domestic subsidies.

SSM, the G-33 argued, is meant "to respond to import surges and price declines that threatens small, subsistence farmers who overwhelmingly reside in the rural areas, and food security."

SSM calls for imposing special safeguard measures when imports cross agreed benchmarks either in volume or in prices.

Indonesia and Turkey had said it is wrong to link 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 most current market realities involving sudden drop in prices or a precipitous increase in volumes of imports over a period of three-year rolling average.

The G-33 has proposed a volume trigger of 110%, 115%, 135%, and above for imposing special safeguard duties.

It has argued that "the 3-decade-old fixed reference price of 1986-88 is undoubtedly outdated and flawed economic basis for triggering the price mechanism in today's realities".

During the green room meeting on 6 February, Indonesia on behalf of the G-33 group and Turkey had 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 programs at the Buenos Aires meeting.

India also cautioned against the attempts to change the goalposts in the domestic support negotiations as some countries are calling for disciplining de minimis. India said both de minimis and Article 6.2 of the Agreement on Agriculture are red lines for New Delhi.

India subtly conveyed to the DG that there was NO "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 G-33 group, are given a short shrift, while items of interest to the US and other industrial nations are being pushed and promoted by him, the envoy said. +