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TWN Info Service on WTO and Trade Issues (May06/11)

16 May 2006
 

4 Developing Country Groups Issue Joint Manifesto in WTO to Defend Special Products, Special Safeguard Mechanism

In a major event at the WTO, four major groupings of developing countries have issued a joint statement warning that the WTO's Doha negotiations are being threatened by attempts by some members to restrict the use of the instruments of special products and special safeguard mechanism that have been proposed during the agriculture talks for the use of developing countries.

The Group of 33, the African Group, the ACP Group and the LDC Group have also warned that they cannot agree to any WTO deal in agriculture which does not accommodate their needs of food and livelihood security and rural development, and especially in the areas of tariff reduction, SPs and SSM.

This is the first time the four groupings, which represent a sizable majority of developing country members in the WTO, have come together to issue a collective defence of their interests in the agriculture negotiations.

A press release accompanying the joint statement says that the attempts to restrict the use of SPs and SSM threaten the Doha deal, and that there will be "no deal" without adequate treatment of SPs and SSM.

Indonesia's Ambassador, Gusmardi Bustami, coordinator of the G33, today said that "no deal is possible that treats SPs and SSM from a purely market access or commercial perspective, or that detracts or derogates the developmental value and dimension of SPs and SSM."

He added that the SPs and SSM instruments "address the needs of millions of resource-poor farmers all around the world whose food security, livelihood security and rural development concerns are threatened with unbridled market access openings."

Below is a report of the joint statement of the 4 groupings.

With best wishes
Martin Khor
TWN

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Trade: G33, Africa, ACP, LDC Groups declare joint defence of SPs, SSM


By Martin Khor (TWN) Geneva 11 May 2006


Four major groupings of developing countries have issued a joint statement warning that the WTO's Doha negotiations are being threatened by attempts by some members to restrict the use of the instruments of special products and special safeguard mechanism that have been proposed during the agriculture talks for the use of developing countries.

The Group of 33, the African Group, the ACP Group and the LDC Group have also warned that they cannot agree to any WTO deal in agriculture which does not accommodate their needs of food and livelihood security and rural development, and especially in the areas of tariff reduction, SPs and SSM.

This is the first time the four groupings, which represent a sizable majority of developing country members in the WTO, have come together to issue a collective defence of their interests in the agriculture negotiations.

A press release accompanying the joint statement says that the attempts to restrict the use of SPs and SSM threaten the Doha deal, and that there will be "no deal" without adequate treatment of SPs and SSM.

Indonesia's Ambassador, Gusmardi Bustami, coordinator of the G33, today said that "no deal is possible that treats SPs and SSM from a purely market access or commercial perspective, or that detracts or derogates the developmental value and dimension of SPs and SSM."

He added that the SPs and SSM instruments "address the needs of millions of resource-poor farmers all around the world whose food security, livelihood security and rural development concerns are threatened with unbridled market access openings."

Describing the background to the joint statement, the Ambassador of another prominent G33 country today said: "Our most important concern is that our millions of farmers must not be sacrificed in this Round. Our sensitivities in agriculture must be fully addressed.

"Otherwise there is nothing for us in this Round. Unfortunately, some countries have recently been attacking the mandate we have won for SPs and SSM. If they continue to do so, there is no point having any further negotiations. The majority of developing countries are so upset, they have decided to come together to jointly defend our common position."

Said the Ambassador of another signatory country: "This is a joint manifesto of groups that represent the majority of the WTO members, declaring their full support for SPs and SSM mandated by the Hong Kong Declaration."

The G33 is a group of 42 developing countries that include Indonesia (the coordinator), India, China, the Philippines, Sri Lanka, Peru and Venezuela as well as many African and Caribbean countries. The other three groupings (which are often referred to as the G90 with 62 WTO members) comprise countries in Africa, the Caribbean and the Pacific as well as LDCs outside these three regions, such as Bangladesh, Nepal and Cambodia.

According to the joint statement: "The G-33, African Group, ACP, and LDCs could not be expected to join consensus on any package on agriculture unless their food security, livelihood security and rural development needs are accommodated effectively and comprehensively through the commitments called for from them in the market access pillar, in particular the tariff reductions, SPs and SSM."

The coming together of the groups reflect a growing anger among a majority of developing countries that their prime concern of defending their small farmers from adverse effects of further import liberalization is being brushed aside by some agriculture-exporting countries.

Describing the background to the joint statement, the Ambassador of a prominent G33 country today said: "Our most important concern is that our millions of farmers must not be sacrificed in this Round. Our sensitivities in agriculture must be fully addressed.

"Otherwise there is nothing for us in this Round. Unfortunately some countries have recently been attacking the mandate we have won for SPs and SSM. If they continue to do so, there is no point having any further negotiations. The majority of developing countries are so upset they have decided to come together to jointly defend our common position."

The G33, backed by other groups, has been championing the concept of SP (in which developing countries can self-designate at least 20% of their agriculture tariff lines as SPs, and they do not need to reduce the tariff for 50% of the SPs while the remainder of SPs will have 5 or 10 per cent tariff reduction).

They have also advocated for a SSM in which developing countries can raise tariffs beyond the bound rate to protect agricultural products from an import surge, should prices fall below or the import volume rise above certain "trigger" levels.

At meetings in the past few weeks, the United States has issued papers on SSM and SP that severely restrict the conditions under which these two instruments can be used, and also restrict the extent of action that can be taken. A number of other countries have also supported restrictions to the use of the SSM, while a few others (especially Thailand) have also joined the attack on the G33 position on SPs.

This turn of events infuriated the members of the G33 and other groups, and the situation worsened when the Chair of the agriculture negotiations, Crawford Falconer, issued a Chairman's reference paper on SPs which showed disagreement with some key points of the G33 approach, and which produced some data on the coverage of SPs under the G33 position, which is being challenged by the G33.

The serious disputes over SPs boiled over in two meetings held on Friday 5 May, one of which was a small-group meeting and the other a meeting open to all members. Following this, the G33 got together with the other developing country groupings to work out a joint position (now reflected in their joint paper) that they will take in future negotiations.

The issue is expected to feature prominently at the resumed agriculture talks on Thursday and Friday.

In their formal joint paper on SPs and the SSM (TN/AG/GEN/17 dated 11 May) the four groups said that the July Framework was explicit in its recognition that the balance in the negotiations under the Doha Work Programme will be achieved only when the modalities incorporate operationally effective and meaningful provisions for special and differential treatment for developing country Members.

It recognized the critical importance of agriculture to the economic development of developing country Members and that they must be able to pursue agricultural policies that are supportive of their development goals, poverty reduction strategies, food security and livelihood concerns.

The paper said that the Hong Kong Ministerial Declaration marked the first step towards evolving modalities in SPs and SSM agreed to in the July Framework.

"Primacy was accorded to the self designation of Special Products guided by indicators based on the criteria of food security, livelihood security, and rural development needs," added the paper. "Developing countries would thus attune their selection of SPs with their domestic policies for food security, livelihood security and rural development needs. Regarding SSM, two separately applicable import quantity and import price triggers were agreed as the core of the modalities for the SSM.

"In order to advance the discussions to an early conclusion, the G-33 has presented comprehensive proposals covering each facet of the modalities for SPs and SSM. The African Group, ACP, and LDCs support meaningful modalities to secure simple and operationally effective instruments of SPs and SSM, which is also the spirit in which these proposals have been presented by the G-33. Given the diversity of agricultural systems among the countries represented in the G-33, African Group, ACP and LDCs, by necessity these proposals seek to address their common concerns.

"Suggestions and proposals made recently by some overtly export-oriented Members of the WTO require the standard of substantial market access improvements to apply to both SPs and SSM. Further, they seek to limit the scope of the SSM to the extent that the mechanism becomes inoperable and to restrict SPs to a handful of tariff lines.

"These proposals have thus necessarily invoked serious concern among the G-33, African Group, ACP and LDCs. These countries together account for the vast majority of people dependent on agriculture for livelihood and of the global labour force/employment in agricultural activities.

"These four Groups also contain within them the bulk of rural and urban poor in the world for whom access to food at fair and affordable prices remains at the heart of poverty alleviation programmes. The interlinked and complex criteria of food security, livelihood security and rural development cannot be viewed through the filter of export interests of a few developed and developing country Members. The negotiating mandate cannot now be redefined.

"Studies by eminent research bodies across the world confirm that reduced tariff protection in developing countries, including under Structural Adjustment Programmes, have been the primary cause of import surge, with attendant decrease in employment in agricultural activities, lowering of returns to farmers, and increased levels of poverty in rural areas.

"The absence of income and insurance safety nets compounds their problems leading to desperate and irreversible, actions by the afflicted farmers.

"These studies conclude that the SSM must be simple, operable, and effective, and that price triggers are as effective as volume triggers depending upon the emergency they seek to address. Equally, for SPs, the studies conclude that the appropriateness of the number of SPs and their treatment is clearly linked to the characteristics of the agricultural sector of the designating developing country and the policies designed to meet the three agreed criteria.

"Some other studies make it evident that modalities of SPs and SSM aimed squarely to address these legitimate concerns of their proponents will in no way undermine the export interests of the export-focused developed and developing country Members. There is no justification for their alleged fears and apprehensions regarding these instruments.

"The G-33, African Group, ACP, and LDCs could not be expected to join consensus on any package on agriculture unless their food security, livelihood security and rural development needs are accommodated effectively and comprehensively through the commitments called for from them in the market access pillar, in particular the tariff reductions, SPs and SSM."

 


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