Info Service on WTO and Trade Issues (Nov15/20)
30 November 2015
Third World Network
SSM blocked by US, EU, Australia and Brazil
Published in SUNS #8143 dated 26 November 2015
Geneva, 25 Nov (D. Ravi Kanth) -- The United States, the European
Union, Australia, and Brazil on Tuesday (24 November) blocked a major
deliverable concerning the special safeguard mechanism (SSM) for the
developing countries at the World Trade Organization's tenth ministerial
meeting in Nairobi beginning on December 15, several trade envoys
told the SUNS.
The G-33 group of developing countries led by Indonesia have consistently
demanded the SSM in the Doha agriculture negotiations for safeguarding
the interests of their hundreds of millions of poor farmers from unforeseen
surges in imports of agricultural products, particularly those supplied
by heavily-subsidizing developed countries.
The chair for Doha agriculture negotiations Ambassador Vangelis Vitalis
of New Zealand convened a closed- door meeting on Tuesday with ten
countries to explore the outcome on SSM for the Nairobi ministerial
Ambassador Vitalis called the trade envoys of the US, the EU, Australia,
Japan, China, India, Indonesia, the Philippines, and Turkey to discuss
the G-33 proposal.
Indonesia made a detailed presentation of the G-33 proposal on SSM
explaining the central features of the proposed instrument, including
the volume and price triggers.
Indonesia suggested that the volume-based SSM "shall be applied
on the basis of a moving average of imports in the preceding three-year
period", hereafter "base imports".
On this basis, the applicable triggers and remedies shall be set as
a. Where the volume of imports during any year exceeds 110% but does
not exceed 115% of base imports, the maximum additional duty that
may be imposed on applied tariffs shall not exceed 25% of the current
bound tariff or 25 percentage points, whichever is higher;
b. Where the volume of imports during any year exceeds 115% but does
not exceed 135% of base imports, the maximum additional duty that
may be imposed on applied tariffs shall not exceed 40% of the current
bound tariff or 40 percentage points, whichever is higher;
c. Where the volume of imports during any year exceeds 135% of base
imports, the maximum additional duty that may be imposed on applied
tariffs shall not exceed 50% of the current bound tariff or 50 percentage
points, whichever is higher;
Indonesia spoke about other features such as the calculation of volume
and price triggers and the application of volume-based and price-based
SSM, and the exceptions.
The Philippines explained the importance of the SSM for developing
countries in general, and their farmers in particular. The SSM, according
to the Philippines, is essential for its farmers in the current context
of volatile global farm prices.
For a while during the meeting, there was silence as major developed
countries did not speak.
After considerable prodding by Ambassador Vitalis for constructive
discussion, Australia said it will reject the SSM because it is a
balancing element for the proposed deliverables in the export competition
pillar. Australia maintained that it cannot agree to SSM without discussing
issues in the market access pillar.
Australia said the SSM cannot be addressed without discussing the
trade involving free trade agreements, according to trade envoys familiar
with the meeting.
Turkey said the SSM is not linked with market access according to
the Hong Kong Ministerial Declaration of 2005 in which trade ministers
did not draw any linkage between the SSM and market access, according
to trade envoys present at the meeting.
The Hong Kong Ministerial Declaration maintained that "developing
country Members will also have the right to have recourse to a Special
Safeguard Mechanism based on import quantity and price triggers, with
precise arrangements to be further defined," Turkey pointed out.
The EU praised the G-33's work on the revised SSM proposal but maintained
that the developing country coalition did not address the central
issue of the linkage with market access.
Without addressing the market access, members can't engage in the
SSM, the EU maintained.
The US said many developing countries do not want SSM without market
access. The US said that it cannot agree for SSM without "new
market access," according to the trade envoys present at the
China lamented the lack of proper engagement despite the G-33 having
explained all the features of the SSM.
China said it is concerned about the fate of the SSM, emphasizing
that political willingness is more important.
Brazil said that it will not question the motives of the members who
have tabled the G-33 proposal. However, it cannot accept SSM without
market access, emphasizing that without market access it cannot accept
a mechanism that is more trade restrictive, Brazil argued.
From the statements made by Australia, the EU, the US, and Brazil,
it is very clear that they are determined to stonewall the negotiation,
India maintained, according to the trade envoys present at the meeting.
If this is the level of engagement that members are showing on the
SSM, then, they must be prepared for the same level of engagement
in other areas, India warned, according to the trade envoys present
at the meeting.
In response to India's statement, the US maintained that disagreement
doesn't mean non-engagement. The US sought to know whether the G-33
will allow export competition to progress or not, said a trade diplomat
familiar with the discussion.
Later in the afternoon, the chair convened a meeting of trade envoys
of the United States, the European Union, China, India, Brazil, Australia,
and Japan to discuss the proposals tabled by Brazil and the EU on
export competition and the US proposals on food aid and the state-trading
At the meeting, India objected to the process involving only seven
countries but not a larger group of countries to discuss the proposals
on the export competition pillar. India suggested that the chair must
adopt a parallel process involving a larger group of countries as
he had suggested at the SSM meeting, according to the trade envoys
present at the meeting.
In short, the US, the EU, Australia, and Brazil want to pocket outcomes
in the export competition pillar at the Nairobi meeting without yielding
ground on SSM and the permanent solution for public stockholding programs
for food security for developing countries. This will be a repeat
of the Bali meeting in which they grabbed a binding Trade Facilitation
Agreement while offering only best endeavour outcomes to the least-developed
and developing countries, a developing country trade envoy said. +