TWN Info Service
on WTO and Trade Issues (Apr07/10)
26 April 2007
Pakistans SP paper causes stir as WTO agriculture talks resume
A paper on special
products by Pakistan
has caused a stir at the WTO as delegations prepared for resumption
of agriculture negotiations.
What is especially
interesting about the paper is that it is submitted by a member of the
G33 (the group of 45 countries that is the main proponent and champion
of the cause of special products), yet it directly contradicts the G33
position in many aspects, and also greatly reduces the effectiveness
and practical usefulness of the SP concept.
The paper is to be
the subject of a WTO agriculture meeting on Wednesday.
Below is an article
on the Pakistan
paper and reactions from some diplomats as well as Pakistani NGOs.
It was published in SUNS on 25 April.
Pakistan's SP paper
causes stir as WTO agriculture talks resume
By Martin Khor (TWN),
23 April 2007
The agriculture meeting this
Wednesday at the WTO is expected by many diplomats to be eventful as
it will be on the eve of the issuing of a "provocative" paper
by the Chair of the agriculture negotiations.
Ambassador Crawford Falconer
of New Zealand
said that his paper would "challenge" the WTO members to review
their positions, and that it would also reflect on the "centres
of gravity". These gravity centres are what he presumably sees
as the "middle ground" between the positions which are considered
to be on the extreme.
But what is considered "extreme"
and what is seen as the "middle ground" are in the eye of
the beholder. What one party considers to be moderate and reasonable
may be taken to be extreme by another party.
One interesting item on Wednesday's
agenda is a paper by Pakistan
on special products. The paper, dated 10 April, had been circulated
at the last agriculture meeting on 13 April but Pakistan
did not make a presentation on it and there was limited discussion on
it. The Wednesday meeting will discuss it at length, and the discussion
could be heated.
What is especially interesting
about the paper is that it is submitted by a member of the G33 (the
group of 45 countries that is the main proponent and champion of the
cause of special products), yet it not only directly contradicts the
G33 position in many aspects, but it also in effect greatly reduces
the effectiveness and practical usefulness of the SP concept.
This has not, of course,
escaped the notice of other G33 members. In fact, many of them have
expressed, in their own discussions, not only disappointment but also
a sense of outrage and betrayal that a fellow G33 member could present
such a paper, while still being a member of the group.
"Of course, each member
of the WTO has the right to present its own views," remarked the
Ambassador of a G33 country today. "But we must make it clear that
this paper, though submitted by a G33 member, in no way represents the
view of the G33. On the contrary."
Some diplomats belonging
to G33 countries are concerned that the Pakistan paper is serving the
interests of the countries most opposed to the special products concept,
such as the United States and a few agricultural exporting developing
countries such as Thailand, that have spoken up strongly in the past
against the G33 proposals.
Indeed, many of the ideas
in the Pakistan
paper (such as the proposal to have a list of "negative criteria"
in order to weed out items from the special products category) were
first put forward by these SP opponents.
These diplomats also point
to the timing of the paper, just before the issuing of a new paper by
the Agriculture chair. Opponents of the SP concept could be provided
with a new opportunity to claim that the Pakistan
paper represents a "middle ground" or "centre of gravity"
on the SP issue.
Indeed, the paper does portray
itself as a bridge or middle ground. It mentions the G33 position and
the Thai proposal and says that it aims to "narrow the gaps between
the negotiating positions."
It is strange that in attempting
to bridge the gaps, the paper jumps away from the G33 position, although
the author is a G33 member, and takes the opposite side.
On 21 March, a Ministerial
meeting of the G33 in Jakarta
adopted a Communique that reaffirmed their commitment to SP and special
safeguard mechanism (including reaffirming that SSM should be available
to all agricultural products). The Communique adopted a revised list
of indicators for SPs, halving the number of indicators to 12.
In the 13 April agriculture
meeting at the WTO, Indonesia
(the G33 coordinator) explained that this streamlining of indicators
was a unilateral shift in position (implying that it was a concession
made as a contribution to getting the agriculture talks going) and asked
for major economies to shift their negotiating stance in response.
said that the indicators represent the "simplest and most rational
approach to operationalizing the mandate for special products."
paper contradicts the G33 approach of countries self-designating their
own SPs in accordance with the three criteria and 12 indicators. The
paper comes up with its own list of 10 indicators, placed in a matrix,
in which products are "scored" in line with the percentage
by which they meet the criteria. Only if a product meets a minimum overall
score can it be considered a "special product."
This complicated scoring
system removes the simplicity of the G33 system in which countries can
designate a product as a SP as long as it is in line with at least one
indicator. In the Pakistan
system, a product must attain a minimum benchmark score to qualify as
a SP, which is contrary to the G33 system.
paper also proposes a second set of indicators that a product must be
in line with in order to be eligible to be a SP. A product cannot be
designated a SP if it was either: ( a) a staple food product where imports
represent more than (80%) of domestic food consumption of that product;
or ( b) a product exported by developing countries that cumulatively
constitutes over (80%) of world exports of that product; or ( c) a product
imported from developing countries that cumulatively constitutes over
(80%) of the importing country's total import of such product; or (
d) a product that is not declared as SP in any bilateral/regional trade
agreements involving the country concerned.
If this "negative list"
approach is used, a country may find that many of its important products
would not qualify to be SPs. The first criterion may involve an important
staple food, and the country may wish to produce at least a certain
minimum ratio even though not large; it would not be able to do so.
Under the second criterion,
a country may heavily rely on a staple food product (for example, rice)
for small farmers' livelihoods and food security, but it may not be
able to designate this as a SP because the product is mainly exported
by developing countries.
Regarding the fourth criterion,
a country may not list a product as SP in a particular bilateral agreement
for various reasons, such as that the FTA does not allow exceptions
or does not have a special-product category, or the trading partner
does not have export capacity for that product. Yet for this reason,
the country is now unable to designate the product as SP.
paper's section on treatment of SPs directly contradicts the G33 position
in many aspects:
proposes that all SPs are subject to the tiered tariff-cutting formula;
and the reduction rate for SPs would be two-thirds the level required
under the formula. This contradicts the G33 position (in its 22 November
2005 paper) that at least 50% of SPs will not be subject to tariff reduction;
another 25% of SPs will be subject to 5% tariff reduction; and the remaining
SPs are subject to not more than 10% reduction.
proposes all SPs be subject to a cap on maximum allowable tariff level,
which would be 50% higher than for normal products. This directly opposes
the G33 position that SPs shall not be subject to tariff capping.
proposes that SPs that have a tariff rate quota shall be subject to
expansion though at a lower rate than the formula expansion for normal
products. This directly contradicts the G33 position that SPs shall
not be subject to any new tariff rate quota commitment.
proposes that SPs are not eligible to be protected under the Special
Safeguard Mechanism (except when their bound tariff is 15% or less).
This is directly opposite to the G33 position that SPs "shall not
be precluded from recourse to the Special Safeguard Mechanism for developing
proposals would severely restrict the eligibility (and thus the number)
of products to be designated as SPs. And once a product passes the strict
tests and becomes a SP, the Pakistan
proposals severely restrict the benefits that the product would be able
to enjoy as a SP.
The result would be to render
practically ineffective the aim of having the SP concept in the first
place, i. e. to promote and protect food security, farmers' livelihoods
and rural development goals of developing countries.
is not the only WTO member seeking to impose onerous conditions on the
use of the SP concept. It is however the newest and most surprising,
being itself a G33 member, and which apparently subscribed to the outcome
of the G33 Ministerial meeting in Jakarta just a few weeks before it
issued its paper contradicting that same outcome.
States is recognized as the main opponent
of the use of the SP and SSM mechanisms by developing countries that
seek to defend their farmers' livelihoods.
However, the US
is itself not shy to maintain high protection, especially through domestic
support measures, to shield its agricultural sector from true global
And the US
administration is under heavy pressure not to make any new offer on
domestic support, although it is well recognized that its present offer
is most inadequate.
In October 2005, the US
offered to fix the maximum limit of its trade-distorting domestic support
(AMS plus blue box plus de minimis) at $22.7 billion, which is above
the actual level of $19.7 billion in 2005. The Doha
talks have not made progress, mainly because the US
has not improved on this offer.
On 12 April, 58 US Senators
wrote a letter to President George W Bush stating that "Some recent
press reports suggest that the US may now consider even greater cuts
in our farm programs without achieving the market access ambition included
in the October 2005 US proposal.
"As discussions on the
Doha Round resume, we urge you to direct your negotiators not to make
further concessions on domestic support but instead to insist that our
trading partners put forward ambitious market access proposals that
will produce sufficient market opening to ensure that any final deal
will generate increased net income for American farmers and ranchers."
It would thus be difficult
for the US negotiators
to improve on their inadequate offer, yet the US
is expected to pile on the pressure on developing countries, and especially
for them to give way on SP and SSM in agriculture, as well as in NAMA.
civil society groups have been critical of the government for allegedly
playing along with the major developed countries. A Civil Society Declaration
issued by 103 Pakistani groups during the recent Cairns Group Ministerial
on 16-18 April said that "while developing countries seem united,
there is a lot of internal and external pressure to divide them."
The Pakistani CSOs claimed
that the US and EU are trying to divide the developing countries' groupings
by pushing some of the groups' members to raise a dissenting voice,
citing as an example Pakistan's proposal on Special Products. "The
paper has been seen as an attempt to divide G33 opinion and dilute the
pressure maintained by the Group," said the Declaration. The Pakistani
groups urged the government to come away from the influence of "international
manipulating forces" and to act in the interests of the people.
In a paper prepared for a
CSO convention held parallel to the Cairns Group Ministerial, the coordinator
of a Pakistani trade network, Tahir Hasnain, said that many G33 members
were surprised and disappointed by both the content and the procedure
of the Pakistani proposal on SP.
"On the procedure, the
G33 members were not aware that Pakistan
intended to make such a proposal and were not told in advance before
circulated it to the WTO membership. The position in the paper is in
contradiction with much of the G33 position on SPs. This has sent a
very confused message since Pakistan
is a member of the G33 and signed on to the G33 Ministerial Communique."
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