TWN Info Service
on WTO and Trade Issues (Apr07/11)
Pakistan's SP paper comes under heavy fire at WTO
paper by Pakistan on Special Products (SPs) drew strong opposition from
an overwhelming number of developing countries at an agriculture meetng
at the WTO on Wednesday 25 April.
Group of 33 (G33) - supported by the African Group, the ACP Group, the
Small and Vulnerable Economies and several other individual countries
strongly criticized the Pakistan paper. India said the paper did not
narrow gaps between WTO members but provide a basis for more contentiousness.
Pakistan's paper was supported by a handful of developing countries
and also a few developed countries.
is an article on the meeting. It was published in the South North Development
Monitor (SUNS) on 27 April.
SP paper comes under heavy fire at WTO
Kanaga Raja (SUNS), Geneva, 26 April 2007
paper by Pakistan on modalities for the selection and treatment of Special
Products (SPs) by developing countries drew strong opposition from an
overwhelming number of developing countries at an informal meeting of
the Special Session of the WTO Committee on Agriculture Wednesday.
Group of 33 (G33) - supported by the African Group, the African, Caribbean
and Pacific (ACP) Group, the Small and Vulnerable Economies and several
other individual countries - strongly criticized the Pakistan paper,
arguing amongst others that it violated the mandate as spelled out in
the July 2004 Framework Agreement and the 2005 Hong Kong Ministerial
which supported the G33 statement, argued that the proposals by Pakistan
do not achieve their stated objective of narrowing the gaps between
the negotiating positions. On the contrary, by moving away from the
mandate on a number of issues, they provide a basis for more contentiousness.
a handful of countries (in some cases with a few reservations or questions)
came out in support of the Pakistani paper. According to trade officials,
these included Thailand,
Costa Rica, Uruguay,
Zealand and Paraguay.
trade officials attempted to portray the discussions as a South-South
debate, several trade diplomats said that, at the meeting itself, it
appeared to be more of Pakistan
against most of the developing world.
society groups in Pakistan
have also been critical of the government for allegedly playing along
with the major developed countries. During the recent Cairns Group meeting
on 16-18 April, a civil society declaration issued by some 100 Pakistani
groups said that "while developing countries seem united, there
is a lot of internal and external pressure to divide them." The
declaration by the civil society groups cited the Pakistan
paper, saying that "the paper has been seen as an attempt to divide
G33 opinion and dilute the pressure maintained by the Group.")
Chair of the agriculture negotiations, Ambassador Crawford Falconer
of New Zealand,
praised the discussion for its level of "engagement" and told
members that he hoped that Pakistan's
paper would serve as an ice-breaker that would encourage more ideas
to be submitted.
he said that what he will propose (presumably in his 'challenges' paper
to be issued either late Friday or on Monday) will be considerably different
to what he heard in this meeting.
to journalists after the meeting, Falconer elaborated that while there
had been engaged discussions over an issue of substance that mattered
to members, what he had heard in the meeting in response to Pakistan's
ideas, from whatever side of the debate, is not going to work.
that I heard in there will work. We are going to have to try harder,''
the Chair told journalists.
the paper by Pakistan
(JOB 07/46) was first circulated at the last agriculture meeting on
13 April, this was the first time that the paper was discussed in detail.
to Pakistan, which
is a member of the G33 (and was at Jakarta
and party to the G33 paper and indicators agreed at that meeting), its
paper is an attempt to compromise on Special Products between the G33
and countries such as Thailand.
told the informal meeting that the paper is also an attempt to help
the Chair conduct the negotiations multilaterally by providing new input.
Without new input, negotiations cannot take place, said Pakistan.
officials said that the Pakistan
paper uses tighter indicators than the G33's proposal, and proposes
ranked scores for these. It also proposes "exclusion" indicators
(for excluding products so that they cannot be special products) reflecting
what it views as the development interests of farmers producing for
paper also envisages a trade-off between the amount of flexibility and
the number of special products (more products mean less of a deviation
from the cuts in the formula). (See SUNS #6238 dated 25 April 2007.)
on behalf of the G33, Indonesia (the group's coordinator), in a critique
of the Pakistan paper, said that Special Products play a crucial role
in achieving the objectives of food security, livelihood security, and
rural development, which are extremely important political, social and
economic development imperatives, not only for the G33 but also for
most developing countries.
recalled the G33 Ministerial meeting in Jakarta on 20-21 March, where
the Ministers displayed their commitment to the Doha Development Round
and their constructive engagement in these resumed negotiations by approving
a streamlined list of indicators for the selection of Special Products
in a manner that is faithful to the development mandate while assuring
the trading partners transparency and fairness.
on behalf of the G33 acknowledged the submission by Pakistan
on SPs and took note of Pakistan's
stated intention that this is a work in progress and for purposes of
narrowing the gap between the negotiating positions and to operationalize
the G33 revised indicators.
said the G33 statement, the Pakistan paper fails to achieve either of
the two objectives, for the following reasons: firstly, it is not consistent
with the mandates as spelled out in the Framework Agreement and the
Hong Kong Declaration; secondly, it is not practicable, considering
the realities of many developing countries; and thirdly, it is unlikely
to strike a balance among the different negotiating positions on this
very important issue.
pointed out that the Pakistan
paper also does not explicitly mention any new criterion. However, in
introducing negative indicators, the so-called "exclusion indicators",
it, in effect, adds a new criterion, based on trade considerations,
which responds primarily to the commercial concerns of a few exporting
countries. "Furthermore, the new criterion eventually overrides
the three agreed criteria of food security, livelihood security and
rural development, and thus, the inconsistency with the mandate."
proposed methodology of assigning a score to a product on each indicator,
it becomes implicit that all or more than one indicator must be met
simultaneously by a product in order to be designated as SPs. The complicated
scoring system in the Pakistan
said, removes the simplicity of the G33 approach in which countries
can designate a product as SP as long as it complies with any one indicator.
fact, said Indonesia,
if there will be a complex set of negative indicators, then for balance,
perhaps, it may mean that Members must also devise negative indicators
for the use of domestic support.
appears that the (Pakistan)
paper has arbitrarily chosen some indicators from the G33 indicators.
This subset of indicators does not reflect the reality of the diverse
situations in developing countries and to that extent it is impracticable.
The designation of SPs cannot be reduced to a mere mathematical exercise,
as the result will not guarantee that the developmental objective will
be met," stressed Indonesia.
paper also suggests a non-linear graph indicating the number of SPs
designated by a country in terms of deviation from the tariff formula.
The more the SPs, the lesser the deviation from the formula cut and
vice versa. Implicit in the proposal is a provision for a penalty for
designating larger number of SPs."
effect, said Indonesia,
this may amount to penalizing a country which has a large number of
poor farmers producing diverse agriculture products at a subsistence
level and thus may need a larger number of SPs. In other words, the
proposal could lead to promoting higher poverty in a country.
the treatment proposal mentioned in the Pakistan
paper is diametrically contrary to the position held and periodically
reiterated by the G33. As already stated above, there should be no linkage
of SPs with the formula for tariff reduction as SPs have a stand-alone
mandate. The G33 proposal of graded approach should serve as a basis
for the discussions, said Indonesia.
also said that the concept of tariff capping has no place in discussing
SPs, explaining that a product is special because of food security,
livelihood security and rural development and not because of the tariff
is also no economic justification for the proposed ineligibility of
SPs for Special Safeguard Mechanism (SSM) treatment," said Indonesia.
SSM is basically a temporary measure for emergency situations, such
as import surge and price fluctuation. SPs may also face such a situation
to require the imposition of SSM.
said that the G33 would present specific comments on the Pakistan
paper prior to the issuance of the Chair's paper.
to trade officials, among the countries that shared the G33's views
are the Small and Vulnerable Economies Group (Dominican Republic speaking),
the ACP Group (Kenya speaking), the African Group (Uganda speaking),
and countries such as Honduras, Venezuela, Nicaragua, Cuba, India, Nigeria,
Korea, Panama, Guatemala, El Salvador, Turkey, Bolivia, the Philippines,
associated itself with the G33 statement and said that "to the
extent that Special Products enable developing countries to address
the problems of food security, livelihood security and rural development
needs, they constitute a concrete expression of the right of developing
countries to development. It is essential that this flexibility is not
circumscribed in a manner that negates its basic objectives."
believed that the impact of Pakistan's
proposals, however well-intentioned, would be to severely restrict the
ability of developing countries to use Special Products to address their
basic development concerns in agriculture.
highlighted five broad areas of concern with respect to the Pakistan
first issue is the choice of indicators. Pakistan
has selected a few indicators from the G33 list, ignored others which
are equally significant for various G33 members and added another which
the G33 had considered but rejected, as it was thought to be superfluous.
revised indicators of the G33 which were ''strenuously negotiated within
the Group, and to which negotiations Pakistan
was party,'' reflect the particularities and circumstances of all G33
the absence of any explanation in the paper for editing the G33 indicators,
India said that it can only conclude that the indicators included in
Pakistan's proposals reflect Pakistan's own situation and not of other
second issue concerns the proposal for the cumulation of scores on all
the indicators to determine the selection of Special Products. The mandate
speaks of three criteria - food security, livelihood security and rural
development. Obviously, the three criteria stand alone and individually
in the determination of Special Products and are not required to operate
cumulatively, said India.
There may be some products which are required to be designated for food
security reasons, others for livelihood security and so on, it added.
give an example from the indicators proposed by Pakistan,
a product may score very highly in 'share in crop income of the poor',
but may not reach the benchmark figure to determine selection because
it does not score so highly in other indicators." It would be little
consolation for a poor farmer to have his product excluded "in
the name of some pretty arbitrary mathematics," said India.
also said that the other problem with assigning scores for indicators
is that it implicitly assigns the same value to the numbers in each
indicator. So, a number reflecting 'share in crop income of the poor'
would have the same weightage as, say, a number indicating 'share of
imports from developed countries'. This would expose members to complex
issues of welfare economics.
third issue relates to the so-called exclusion indicators in Pakistan's
proposal. In effect, the exclusion indicators which are based on trade
criteria, would have veto powers over the selection of products based
on indicators which are based on the mandated criteria. Thus, a non-mandated
set of parameters will override the self-selection based on the mandated
criteria. This, in India's
view, would constitute a serious subversion of the mandate for SPs.
criteria, however, have a role to play in acting as a filter where products
are sought to be protected on the ground of trade sensitivities. India
expressed interest to know whether the exclusion criteria proposed by
could be used in the selection of sensitive products (a criteria applicable
to the developed countries with high domestic subsidies, and intended
to exclude from tariff cuts or subject to lower tariff cuts).
fourth issue relates to Pakistan's
proposal to link deviation from the tariff reduction formula for SPs
with the number of SPs selected. The mandated criteria and the indicators
provide an objective basis for selection of Special Products.
proposal to link the number with the treatment would amount to penalizing
some countries for having more poor farmers. In India's
view, this would again constitute a subversion of the mandate.
said India, the
proposals in the Pakistan
paper for treatment of SPs reflect a market access perspective rather
than a development perspective.
recalled that in the July 2004 Framework, the principle of substantial
improvement is reiterated in the portion on sensitive products and does
not find place in the portion on special and differential treatment.
By prescribing a one-size-fits-all solution, the Pakistan
proposal fails to take into account the different circumstances of various
also said that the proposal to exclude products designated as Special
Products from the provisions of the Special Safeguard Mechanism, compares
apples with oranges.
SSM is designed to enable developing countries to cope with emergency
situations arising from import surges and price volatility. By its nature,
it is a temporary measure meant for short term situations. On the other
hand, SPs are designed to address structural situations in developing
country agriculture. Thus, there cannot be any justification for excluding
products designated as SPs from the SSM."
these reasons, said India,
it believed that the proposals by Pakistan
in its paper do not achieve their stated objective of narrowing the
gaps between the negotiating positions. On the contrary, by moving away
from the mandate on a number of issues, they provide a basis for more
contentiousness. While India
welcomed the opportunity to engage in a constructive debate on this
vital issue, it said that the debate can only progress if it remains
firmly anchored to the mandate.
far as the Pakistan
proposal is concerned, in its present formulation, it strays significantly
from the mandate in a number of ways, and cannot constitute a good basis
for such a constructive discussion, India
to the African Group, agriculture is a way of life and thus attention
needs to be paid to livelihood, rural development and the food security
concerns of the African countries. The Special Safeguard Mechanism should
be operationally effective to deal with the circumstances of the African
countries. The Group also supported the G33 proposal on Special Products
and its revised indicators.
on behalf of the ACP Group, said that it fully endorsed the statement
made by Indonesia
on behalf of the G33 with respect to the proposal by Pakistan.
ACP Group raised concerns over some areas of the Pakistan
proposal. "We are at a critical stage of the negotiations during
which it is of paramount importance that members strictly adhere to
the mandates in the Doha Declaration, the July Framework and Hong Kong
Ministerial Declaration in order to enable us to realize progress in
this regard, said the ACP, it will be recalled that the Hong Kong Ministerial
Declaration clearly states that developing countries will self designate
Special Products guided by indicators that are based on food security,
livelihood security and rural development. The ACP underscored that
the principle of self-designation as agreed upon by the Ministers in
Hong Kong must be fully respected.
Group pointed out that the mandate does not include any criteria for
the exclusion of Special Products. "The exclusion indicators proposed
therefore are not within our mandate and are contradictory to the agreed
upon principle of self-designation."
the treatment of Special Products, the ACP Group said that the Pakistan
paper draws a direct link between treatment of Special Products and
the tariff reduction formula. The ACP Group emphasized that "there
is no link drawn in the mandate between Special Products and the tariff
reduction formula or the other market access provisions such as sensitive
products, tariff rate quota (TRQ) expansion and tariff capping."
ACP Group believed that the graded approach proposed by the G33 should
be the basis for further discussions on the treatment of Special Products.
trade officials said that support for Pakistan
(but in some cases with a few reservations or questions) came from Thailand,
Costa Rica, Uruguay,
Zealand and Paraguay.
to trade officials, while Brazil
welcomed the initiatives from both the G33 and Pakistan,
it argued that the mandate justifies Pakistan's
efforts. It said that the mandate refers to "appropriate"
numbers of products, and the fact that "criteria and treatment"
are to be determined by negotiation, which justifies discussion of these
to Brazil, having
exclusion criteria also makes sense because by using the G33's indicators,
would be able to select all the products it produces as special products.
This includes poultry, because of its high contribution to nutrition
in Brazil, even
is the world's largest exporter of poultry.
Rica also said that the G33 proposal
would allow it to select all its products as "special".
to trade officials, Australia
broadly supported the approach of the Pakistan
for reflecting its concerns, and reiterated its argument that the Doha
mandate requires substantial improvements in market access. Thailand
said: "There exist poor farmers in exporting countries whose livelihood
security depends on the exportation of their farm produce." Uruguay
and Chinese Taipei said that they agreed with some of Pakistan's
points, but disagreed with others. The EU meanwhile sought clarification
on some points in the Pakistan
to trade officials, the United
States did not comment on the issue.
Chairperson Falconer provided members with more details of his upcoming
plans. He said that he will produce his ''challenges'' paper on Friday
or possibly on Monday, with a second instalment a week later. Members
would be able to provide their reactions to the first installment at
the next informal meeting scheduled for 4 May. These reactions would
eventually be used to revise the draft modalities that he circulated
in June 2006.
told members that his forthcoming paper will not consist of questions,
but will be based on his judgement of where agreement might be possible
and where it might not.
to journalists after the meeting, Falconer explained that he would indicate
possible "centres of gravity" (approximate areas of possible
agreement) in some areas; suggest "splitting the difference"
between outstanding positions in other areas; and in a third group of
areas, he will say that he will need more movement from members because
it is unclear how to bridge the gaps.
also indicated that he might mention some numbers with respect to the
possible ''centres of gravity''. Falconer told journalists that about
two or three weeks will be needed for discussions or reflections over
what he has put on the table before he comes up with his draft modalities
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