Info Service on WTO and Trade Issues (Jun15/02)
1 June 2015
Third World Network
DG "green room" meet on SSM raises questions
Published in SUNS #8029 dated 28 May 2015
Geneva, 27 May (D. Ravi Kanth) -- The Director-General of the World
Trade Organisation (WTO) has convened a "green room" meeting
on 28 May to discuss the issue of the Special Safeguard Mechanism
(SSM) that the large majority of developing countries have called
for incorporation in the Agreement on Agriculture (AoA), as part of
the negotiated outcome on Agriculture in the Doha Development Round
talks launched at Doha, Qatar, in 2001.
The DG's decision to convene the green room meeting (28 May) specifically
on the special safeguard mechanism has raised serious questions about
the underlying rationale to discuss an issue so vital for developing
countries while remaining silent on the existing egregious anomaly
in the AoA called the special safeguard (SSG) for developed countries,
trade envoys told SUNS.
[The developed countries have indicated their willingness to discuss
a modified SSG which they had successfully built into the Uruguay
Round agriculture agreement. See SUNS #8005 dated 20 April 2015.]
In the consultations he has held on the post-Bali work programme,
and evolving a package with which to conclude the Doha negotiations
by the time of the Nairobi Ministerial Conference this December, DG
Roberto Azevedo has avoided any discussions on two of the three pillars
of the agriculture negotiations - talks on reducing domestic support/subsidy
in agriculture in the developed countries, as well as on export competition
through various export subsidy, credits etc, focussing only on market
access and reduction in tariffs to enable exports into developing
countries. (See #SUNS #8023 dated 19 May 2015.)
Also, Azevedo's decision to convene an informal heads of delegation
meeting on Monday (1 June) has brought to the fore another set of
questions on the need to come clean on the growing attempts to impose
the so-called average formula framework in the market access for agriculture
and industrial products by replacing the 2008 revised draft modalities,
trade envoys said.
For the sake of transparency, envoys said, Azevedo, as Trade Negotiations
Committee (TNC) chair, must inform members whether he is going to
present the average formula framework in the market access for industrial
and agriculture products to the trade ministers at next week's informal
meeting being hosted by Australia on the margins of the Organization
for Economic Cooperation and Development (OECD) annual summit.
Until now, a large majority of developing and least-developed countries
have rejected the average formula with variations as introduced by
major industrialized countries and the Director-General during the
closed-door meetings with the United States, the European Union, China,
India, Brazil, Australia, and Japan a fortnight ago. (See SUNS #8023
dated 19 May 2015.)
To start with, Azevedo's decision to focus solely on SSM without discussing
other central issues, particularly the outstanding issues in the trade-distorting
domestic support and export competition pillars as well as the continuation
of the SSG, has given some clues as to what is being cobbled in the
Doha agriculture package, said a trade envoy familiar with the negotiations.
For some time now, major industrialized countries have privately made
suggestions for dropping the demands for an effective and credible
SSM on the ground that the overall level of ambition in the Doha market
access pillar is being drastically reduced and thereby, mitigating
the need for the SSM, several trade envoys said.
The developed countries also maintained that the use of SSM duties
would enable the developing countries to go beyond their Uruguay Round
ceiling as and when it is applied.
Instead of SSM, the DG and major industrialized countries have subtly
indicated that they can consider a small number of special products
(SPs) for China and other developing countries but not SSM, trade
If the argument for considering only SPs but not SSM is valid because
of the lowered level of ambition following the "re-calibration"
approach, the same logic must then be applied for the SSG.
A former Brazilian trade official had described the SSG as one of
the "grotesque" carve-outs of spoils between the US and
the EU in the Uruguay Round agriculture agreement.
Since 2010, the SSG was used by the US on 29 tariff lines at the HS
6-digit level, the EU on 15 tariff lines, and Japan on 16 tariff lines;
and Chinese Taipei on 57 tariff lines at the HS 6-digit and 7-digit
levels. These are based on their notifications.
The continuation of the SSG without addressing the SSM will signal
the reverse special and differential treatment being extended to the
developed countries in a round that was launched primarily to correct
the distortions and inequities in the existing Agreement on Agriculture,
said a former trade envoy from an industrialized country.
"If the SSG can continue without any change, how would you justify
your argument that the developing countries must give up SSM and only
avail SPs," the envoy asked.
"Clearly, this is a reverse special and differential treatment
for industrialized countries wherein they can retain SSG while the
developing countries must keep silent on SSM," said a South American
Moreover, why is the DG silent on all the outstanding issues in the
trade-distorting domestic support such as the cuts in the aggregate
measurement of support (AMS) in the amber box and the blue box disciplines
in which the United States is required to indicate whether it is going
to reduce its overall AMS below US$14.5 billion, the South American
trade envoy asked.
"We have heard from the reports that both domestic support and
export competition were not discussed at all in the DG's meetings
with the seven countries [the United States, the European Union, China,
India, Brazil, Australia, and Japan]," the envoy said.
Azevedo repeatedly maintained that he would hold "horizontal"
discussions on the difficult issues in agriculture and industrial
goods but till now there is no meeting in any configuration on cross-cutting
issues where countries could get into a give-and-take discussion based
on the mercantile framework.
"Is it the intention of the director-general to discuss only
market access issues based on the average formula framework at this
juncture while deciding all other difficult issues in the domestic
support pillar and the developmental issues like cotton, duty-free
and quota-free market access for LDCs in the eleventh hour by presenting
a take-it-or-leave-it package as he did at the ninth ministerial meeting
in Bali, Indonesia, in December, 2013," an African LDC trade
"We are sure that the LDC issues such as the cotton subsidies
or the DFQF mechanism or the simplification of preferential rules
of origin for LDCs or the services waiver will never be fully addressed
as part of a binding framework," the envoy maintained.
Another African trade official said "the Doha Round is the last
round and if it is concluded without meaningful changes in the agriculture
rules, then, there will never be another Round that will address these
In their proposal on SSM, the G-33 developing countries led by Indonesia
have consistently advanced a credible and simple approach for arriving
at the SSM.
Indonesia, on behalf of the 47 developing and least developed countries
in the G-33, gave two reasons as to why the developing countries need
First, developed countries have the largest percentage of tariff lines
of entitlements and invocations in the existing SSG while only a few
developing countries have access to this escape clause in Agricultural
And second, "of the few developing countries with SSG, the mechanism
is hardly accessible and is ineffective in addressing import surges
or price depressions due to its complicated and outdated design and
Indonesia has showed that "low and often subsidized exports would
hardly breach price triggers that are based on a fixed reference prices
of 1986-1988. Second, calculating domestic consumption data on tariff
line basis for triggering the volume SSG has been a formidable if
not impossible task. And third, availability of quality customs infrastructure
and data collection that are critical for implementing an effective
SSG regime is hardly the case in most developing countries."
Therefore, the developing countries, said Indonesia in its proposal
presented before the chair of the agriculture negotiations Ambassador
John Adank of New Zealand last month, "we need an improved, not
a worse one, that is attuned to the needs and conditions of developing
"A more simple, operable, and effective safeguard mechanism is
needed by all developing countries to better manage ourselves against
world prices and supply which are becoming increasingly volatile due
to increased climate change-induced disturbances and persistently
high subsidization, and to respond to import surges and price declines
that threatens small, subsistence farmers who overwhelmingly reside
in the rural areas and food security," Indonesia had argued.
The G33 had reminded the industrialized countries time and time again
that "SSM is an integral part of the agriculture negotiations
under the Doha Development Agenda. There should be no questions on
the mandate to advance the proposal as it was captured in Para 42
of the Doha Work Programme and Para 7 of the Hong Kong Ministerial
While a significant number of conditionalities are introduced in the
SSM in the 2008 revised draft, the SSG doesn't have the same or similar
"The SSM was and is always intended to be a more simple, accessible
and effective instrument than the SSG, which for the G-33 is a key
operationalization of the development mandate of Doha," Indonesia
In short, the ongoing attempts to knock SSM off from the final Doha
agriculture package pose a major challenge to developing countries
whether they would be able to secure any measurable gains in a round
they had invested all their negotiating capital over the last 14 years.