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TWN
Info Service on Sustainable Agriculture Geneva, 2 Aug (D. Ravi Kanth) — More than 50 developing countries comprising the African Group as well as Pakistan on 25 July raised a red flag against the seemingly asymmetrical provisions of the World Trade Organization’s Agreement on Agriculture (AoA) that has failed to provide a special safeguard mechanism (SSM) for developing countries facing sudden and unforeseen surges in food imports, said people familiar with the development. While the industrialized countries such as the United States, the European Union, Japan, Norway and several developing countries cushioned their agriculture with safeguard provisions in the WTO’s Agreement on Agriculture (a result of the Uruguay Round of trade negotiations) to stop unforeseen imports of agricultural products, a large majority of developing countries do not have such a facility. It is against this backdrop that the developing countries have consistently demanded an effective special safeguard mechanism (SSM) since the WTO’s sixth ministerial conference held in Hong Kong-China in 2005. At the mini-ministerial meeting held in Geneva in 2008, which was attended by the trade chiefs of the United States, the European Union, India, Brazil, Australia, and China, crucially to resolve a couple of agricultural issues, the US pulled the plug at the last minute on the volume and price thresholds as suggested by India. Representatives of the American Farm Bureau Federation, who were present at the meeting, opposed the high thresholds proposed by India, as reported by this writer. Since then, the G33 coalition of developing countries, coordinated by Indonesia, repeatedly raised the SSM issue at each and every ministerial meeting along with the permanent solution for public stockholding (PSH) programs for food security. The developing countries were repeatedly frustrated by the US at every ministerial meeting on both PSH and the SSM, after Washington allegedly “pocketed” the Trade Facilitation Agreement at the WTO’s ninth ministerial conference in Bali, Indonesia, in December 2013, as reported by this writer. Even at the WTO’s 12th ministerial conference (MC12) in Geneva last June, the US along with some members of the Cairns Group of farm-exporting countries, including Brazil and Australia, opposed any outcome on both the issues of PSH and SSM, as reported in the SUNS. AFRICAN GROUP & PAKISTAN PROPOSAL The African Group, which has issued a slew of proposals for the WTO’s 13th ministerial conference (MC13), to be held in Abu Dhabi from 26 to 29 February 2024, has now re-issued its proposal along with Pakistan on SSM on 25 July. The restricted proposal (Job/AG/205/Rev.1), seen by the SUNS, cites a report of the United Nations Food and Agriculture Organization (FAO) of 2005 on the special safeguard mechanism to point out “several cases of import surges in developing countries between 1984 and 2000.” The FAO report says: “There have been increasing reports of developing countries, particularly lower-income food-deficit countries (LIFDCs), experiencing surges in imports of various food products since the mid-1990s, often with negative effects on local production and economy. Examples include the experience of Jamaica with respect to chicken, Kenya with respect to dairy products, Senegal with respect to tomato paste, and rice in Haiti”. The Rome-based FAO argued that “the phenomenon was relatively frequent for some product groups, notably some meats and vegetable oils. Similarly, although all countries experienced import surges, some were affected more often than others, Guinea, Malawi, Niger, Philippines, and the United Republic of Tanzania being examples”. In order to address the unforeseen surges of imports of agricultural products, it underscored “the need for both volume and price mechanisms as part of an SSM for developing countries.” Further, another think tank has suggested that, “A study of eight developing countries that experienced import surges between 2010-2018, namely, Ghana, India, Indonesia, Namibia, Philippines, Senegal, Sri Lanka and Turkiye shows that the countries have experienced import surges covering 191 to 348 tariff lines.” “Of these, there were 3 to 209 surges across the eight countries in tariff lines where there was limited (less than 20%) policy space to raise applied import tariffs above bound rates, therefore, offering extremely inadequate options to address surges by raising current applied tariffs up to the bound rate,” the study pointed out. The African Group and Pakistan cited another paper prepared by the FAO in 2011 that shows that “import surges are caused by several factors including dumping in global markets as well as trade liberalization or reduction in import duty.” “This shows distortions in global markets that cause dumping are among the factors that cause import surges,” the FAO report suggested. “Moreover, import surges are already taking place due to current (up to 2011) levels of trade liberalization,” the report said, adding that “such incidences of import surges have caused major challenges for livelihoods of domestic, in particular poor and vulnerable, small-holder farmers in developing countries, have also reduced the share of domestic production in total supply, and often caused collapse of the sector itself.” “In 2021 and with the growing number of Free Trade Agreements (FTAs) that involve significant import tariff reduction or elimination, the level and associated impacts of trade liberalization are even higher,” necessitating the urgent provision for a “Special Safeguard Mechanism (to protect against import volume surges and price fall) to be tied to further market access commitments.” Significantly, at a time when the developed countries, particularly the US and the EU, and some developing countries continue to avail of the special (agricultural) safeguard “as mandated under Article 5 of the Agreement on Agriculture (AoA) under which these Members can protect predesignated agricultural products from import surges,” it appears as a blot on the WTO that a majority of developing countries cannot avail of an SSM. In short, while the developed countries can impose a special (agricultural) safeguard (SSG) “without any need to prove injury or negotiate compensation and without any requirement for the remedy to be bound by the Uruguay Round Bound Rate,” there is no such mechanism for the majority of developing countries. DRAFT MINISTERIAL DECISION In this context, the African Group and Pakistan have proposed the following draft ministerial decision to be agreed at the WTO’s 13th ministerial conference: SPECIAL SAFEGUARD MECHANISM FOR DEVELOPING COUNTRY MEMBERS DRAFT MINISTERIAL DECISION OF THE 13TH MINISTERIAL CONFERENCE OF THE WORLD TRADE ORGANIZATION (WTO) The Ministerial Conference, having regard to paragraph 1 of Article IX of the Marrakesh Agreement Establishing the World Trade Organization 1. Acknowledging paragraph 42 of Annex A of the General Council Decision of August 2004 (WT/L/579) mandates that “a Special Safeguard Mechanism (SSM) will be established for use by developing country Members”; 2. Recognizing that paragraph 7 of the Hong Kong Ministerial Declaration of 2005 (WT/MIN(05)/DEC) mandates that developing country Members will have the right to a Special Safeguard Mechanism (SSM) based on import quantity and price triggers; 3. Recognizing that the Nairobi Ministerial Decision of 2015 (WT/MIN(15)/43 – WT/L/978) reaffirms the 2005 Hong Kong Ministerial mandate for the establishment of an SSM for developing country Members; 4. Recalling that a Special Safeguard (SSG) is currently available to 39 Members as mandated under Article 5 of the Agreement on Agriculture (AoA), under which these Members can protect pre-designated agricultural products from import surges; however, only 22 of these are developing country Members; 5. Noting that the SSG can be used without any need to prove injury or negotiate compensation and without any requirement for the remedy to be bound by the Uruguay Round Bound Rate; Policy space 6. Taking into account the continuing evidence of import surges in many developing country Members since 1984 as noted by the Food and Agriculture Organization of the United Nations (FAO). Further evidence is noted over the past decade when many developing country Members experienced 200-350 surges per year across a wide range of agricultural products, including many cases where increasing current applied tariffs to bound rates offered very limited policy space to address the adverse impacts; 7. Underlining that such incidences of import surges have caused major challenges for the livelihoods of domestic, in particular, poor and vulnerable, smallholder farmers in developing countries by creating volatility, instability, and price declines in local markets and also constraining domestic production, thus threatening the long-term food security of large populations, as well as aggravating risks to poverty reduction and rural development efforts; 8. Recognizing that the COVID-19 pandemic has created major challenges for farmers’ livelihoods and food security of billions across developing countries due to pandemic-related illnesses and deaths, lack of access to and adequate functioning of market mechanisms, lack of access to inputs & finance for agricultural production among other issues; (1. For greater certainty for the purposes of this Decision, “developing Member” includes least-developed Members unless otherwise specified.) 9. Emphasising that developing country Members need a safeguard mechanism against import related volume surges and price declines that is easy to operationalize and effective in its remedies in order to ensure livelihood and food security of large sections of their populations; Decides as follows: A. The Agreement on Agriculture (AoA) shall be amended by including a new Article 5bis as provided in Attachment 1 of this Decision and for consistency purposes amendments as provided in Attachment. B. The Protocol of Amendment, as provided in Attachment 3 to this Decision is hereby adopted and submitted to the Members for acceptance. C. The Protocol of Amendment shall remain open for acceptance [until 31 December 202…] or such later date as may be decided by the Ministerial Conference. D. The Protocol of Amendment shall enter into force in accordance with Article X:3 of the WTO Agreement. E. Pending entry into force of the Protocol and the amendment, developing country Members may use the special safeguard mechanism as contained in Attachment 1 to this Decision and Members shall not challenge through the WTO Dispute Settlement Mechanism the compliance of a developing country Member with its obligations under Articles 4 and 5 of the Agreement on Agriculture with respect to any use by that Member of these special safeguard mechanisms. Now that the African Group and Pakistan have brought to the centre stage the issue of SSM, it is important that they remain united in the ensuing negotiating battle where the US and other developed countries are likely to try hard to thwart any chance of securing an SSM at MC13 in Abu Dhabi. An important lesson from the history of the Doha Development Agenda negotiations is that raising proposals on developing country issues is one thing, but securing a credible result based on these proposals is another. So far, the record of the developing countries in this regard is anything but satisfactory. +
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