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TWN Info Service on WTO Issues (Dec03/4)

9 December 2003

Third World Network

Dear friends and colleagues

SP/SSM ALLIANCE COMPLAIN ABOUT NEGLECT OF THEIR CONCEPTS IN AGRICULTURE NEGOTIATIONS

The 33-country SP/SSM Alliance on Agriculture has complained to the Chairman of the WTO General Council that the concepts of special products (SP) and special safeguard mechanism (SSM) have not been given due attention in the post-Cancun informal agriculture discussions.

The Alliance’s main concern is to provide new instruments to protect small farmers from a surge of imports of food products.

The countries have asked that these concepts be given a central place in the framework of modalities for agriculture negotiations so as to meet their concerns on food security, poverty alleviation and rural development.  In their letter, the Alliance members called the Chairman’s attention to several procedural and substantive aspects of the consultations which were a deep cause of concern to them.

So far the SP and SSM concepts have not been given proper attention.

Below is a report of the demands made by the SP/SSM Alliance and the briefing which three of the Alliance’s Ambassadors gave after their meeting with the Chairman.

Other reports in the TWN Info Service can be found at www.twnside.org.sg

With best wishes

Martin Khor

TWN

 

33-COUNTRY ALLIANCE COMPLAIN ABOUT NEGLECT OF SPECIAL PRODUCTS AND SPECIAL SAFEGUARD MECHANISM CONCEPTS IN POST-CANCUN AGRICULTURE TALKS

TWN Report by Martin Khor, Geneva, 5 September 2003

An alliance of 33 countries on agriculture issues has told the WTO General Council chairman, Carlos Perez del Castillo, that they are deeply concerned that the concepts of Special Products (SP) and Special Safeguard Mechanism (SSM) have not been given due attention during the consultations he has held on agriculture after the Cancun Ministerial Conference.

Indonesian Ambassador, Gusmardi Butami, led the 33 delegations of the SP/SSM Alliance for a meeting on 4 December with Perez del Castillo, and presented him with a letter, asking that these concepts be given a central place in the framework of modalities, currently being discussed at the “informal consultations” by the GC chair.

Gusmardi said at a press briefing later that the Alliance had impressed upon the GC chairman to pay greater attention to its members’ concerns on food security, poverty alleviation and rural development. These are the core concerns and principles driving the demands of the Alliance.

The Alliance, Gusmardi said, had been assured by Perez del Castillo that the SP and SSM concepts are “still intact, whatever framework will come out of the negotiations.” Gusmardi said he therefore hoped to have confidence that “our concerns are still on the table now and in the future.”

In their letter, the Alliance members called the Chairman’s attention to several procedural and substantive aspects of the consultations which were a deep cause of concern to them.

They reiterated the importance they attached to the SP and SSM concepts within the agriculture negotiations, and said: “We are disturbed by the fact that these issues have not given the attention they deserve during your consultations which may lead to the erroneous impression that these issues are not central to moving the agriculture negotiations forward,” the Alliance said.

“On the contrary, we would like to stress that adequate flexibility for developing countries regarding the use of these instruments in any arrangement on agriculture constitutes one of our main priorities in the cur rent negotiations. We therefore request that elements be treated as key components in your consultations for finding a satisfactory basis for the continuation of the negotiations on agriculture.”

The Alliance said that the basic elements of any satisfactory solution on SP/SSM should be:

·        Developing countries shall have the flexibility to self-designate SP products;

·        SPs shall constitute a stand-alone category and be exempt from tariff reductions and new commitments regarding tariff rate quotas (TRQs);

·        A special safeguard mechanism (SSM) for developing countries must be established; and

·        SPs shall have automatic access to the SSM.

Said the letter: “The SP/SSM Alliance’s strong and cohesive support to these basic elements stems from their concrete experience in the implementation of the Agreement on Agriculture. They are not based on rhetoric. Neither can they be presented to choose from a trade-off exercise. We stand ready to provide to you and other WTO Members concrete drafting suggestions at the appropriate time.”

The letter added that the countries’ interests in the negotiations are not limited to the SP and SSM provisions. They thus hoped the consultation process will provide to each of their delegations ample opportunity to express and explain its position on all issues of interest, and to actively participate in the consensus building process towards at any stage of the process.

On procedural aspects, the Alliance requested the Chairman to ensure that it be represented in all agriculture consultations and that their concerns be given the same treatment and attention as those of other WTO members.

The Alliance members are Barbados, Botswana, China, Cuba, Congo, Cote D’Ivoire, Dominican Republic, Haiti, Honduras, Indonesia, Jamaica, Kenya, Korea, Mauritius, Mongolia, Mozambique, Nicaragua, Nigeria, Pakistan, Panama, Peru, Philippines, Senegal, Sri Lanka, Tanzania, Trinidad and Tobago, Turkey, Uganda, Venezuela, Zambia and Zimbabwe.

At the briefing, Dominican Republic Ambassador, Claudia Hernandez, said although the GC Chairman had assured them that the SP and SSM concepts have been accepted in the negotiations, this was not adequate. “It is not enough for these concepts to be mentioned in the text and especially if it is diluted from what we are asking for,” she said. “What is important is that special products are excluded from tariff reduction and further TRQ commitments.”

The Sri Lankan Ambassador, K. J. Weerasinghe, said his country was very keen to have a simplified safeguard mechanism to counter market volatility and deal with import surges which adversely affect its domestic agriculture.

He said that the Alliance is ready to discuss the conditions under which the SSM can be used, but was very concerned that the Derbez text (which is referred to during agriculture negotiations) is also asking that the products to be covered should be open to negotiations. Each country has its own sensitive products and it should thus be enabled to identify its own specific products, he said.

Also, the SP concept should not be diluted, for example, by being included in only one part of a three-part formula for tariffs in the Derbez text.

Gusmardi and Hernandez reiterated that members should have the flexibility to choose which products and how many to designate as special products, as each country may have different products.

Weerasinghe added that different countries may also have a different number of products it may wish to designate as special products, due to differences between countries in agricultural structure, geographical location and other conditions.

He gave the example of Sri Lanka with an average agriculture tariff rate of about 50%. There are many products where the country is unable to afford a tariff cut of even 10% because even with the existing bound rates, there are already many cases of import surges.

How many products are having problems or are vulnerable to problems if there are future tariff reductions would vary from country to country, said the Sri Lanka Ambassador. Thus it would be better not to fix a certain number of products applicable to all. “Our countries do not give export subsidy nor domestic support, so we should be allowed and able to adjust our tariffs if there is an import surge, through an SSM. This request is thus arising from genuine and legitimate concerns, not from an intention for protectionism.”

The three Ambassadors also stressed that the SP and SSM concepts should be accepted in the negotiations as “stand alone” principles and provisions, and not be tied to any part of any tariff-reduction formula approach.

In the Derbez text, the SP concept is only applied to the first category (i.  e. tariff lines to be reduced by an average rate). This, they said, was not acceptable. The concept should stand alone and be independent from any formula, so that whichever formula is eventually adopted, this will not affect the SP concept.

Weerasinghe added that developing countries should be able to use the SSM for any agriculture product, whether it is designated as an SP or not.  Developing countries require the use of an SSM, whatever formula will emerge from the negotiations, and thus it should also be a stand-alone instrument.  He pointed out that under the present Agriculture Agreement, most developing countries are unable to make use of the special safeguard clause because they are not eligible. “This is an inequity that must be corrected.”

He added the Derbez text says that a SSM for use by developing countries is to be established but subject to conditions and products to be determined, which is unnecessarily restrictive.

It is reasonable to determine the conditions in which the SSM can be used, said Weerasinghe, but there is no need to decide on the products that would be eligible. “If we determine the conditions under which the SSM can be used, then there is no need to determine which products are eligible.”

 


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