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TWN Info Service on WTO and Trade Issues (Sept07/10)

21 September 2007


Talks bogged down over special safeguard mechanism

The WTO agriculture negotiations were bogged down by a difficult initial discussion on the topic of special safeguard mechanism (SSM) for developing countries on Friday (14 September). The SSM discussions continued on the afternoon of Monday (17 September).

According to trade diplomats, the differences of views voiced at the 14 September meeting were mainly among developing countries. The countries in the G33 defended their position that a new and strong SSM instrument is needed.

Other developing countries with an export interest maintained that the SSM should not be allowed to be used to block the market access.

Some of these countries stated that the SSM should not allow the raising of import duties above the Uruguay Round levels. They indicated that the SSM issue could be a "deal breaker" for them.

Below is a report of the initial SSM discussion.  It was published in the South North Development Monitor (SUNS) on 18 September 2007, and is re-published here with the permission of SUNS.  Any reproduction or re-circulation requires permission of SUNS (sunstwn@bluewin.ch).

With best wishes
Martin Khor
TWN

Agriculture talks bogged down over special safeguard mechanism
Published in SUNS #6325 dated 18 September 2007
By Martin Khor (TWN), Geneva, 17 Sept 2007,

with contributions from Kanaga Raja

The Doha negotiations on agriculture at the WTO were bogged down by a difficult initial discussion on the topic of special safeguard mechanism (SSM) for developing countries on Friday (14 September).

The discussions on SSM continued on the afternoon of Monday (17 September) in the "Room E" process involving 36 delegations.

According to trade diplomats, the differences of views voiced at the 14 September meeting were mainly among developing countries. The countries in the G33 (representing over 40 developing countries with mainly defensive interests in agriculture) defended their position that a new SSM instrument is needed for developing countries to address import volume surges or price declines that can adversely affect domestic production and incomes of their small farmers.

Other developing countries with an export interest, including Uruguay and Paraguay, maintained their position that the SSM should not be allowed to be used to block the market access of developing countries that export agricultural products.

Some of these countries stated that the SSM should not allow the raising of import duties above the Uruguay Round levels. They indicated that the SSM issue could be a "deal breaker" for them.

At the Friday meeting, the general debate on SSM took a long time, leaving no time for technical or detailed discussion on various aspects of the issue. The Room E meeting resumed on Monday, and the discussion on SSM has gone into the technical aspects, according to a diplomat attending the meeting.

As the agriculture negotiations continued, with limited progress, the Chair of the NAMA negotiations, Ambassador Don Stephenson of Canada, announced that he would not convene open-ended meetings on all NAMA issues until the week of 8 October.

He would, however, convene meetings on "non-core" issues starting on 17 September with delegations and in "small restricted groups". In the week of 1 October, he will convene meetings on non-core issues in a Room E format while having restricted small-group discussions on "core issues" in the same week.

The Room E format refers to meetings of about 20 to 30 delegations (representing countries and groupings) and "core issues" in NAMA usually refers to the tariff-reduction formula and flexibilities such as exemptions for a limited number of products from the full formula cut.

The time schedule was announced in a fax sent by the NAMA Chair to WTO delegations on 13 September.

This schedule seems to be a revision of what Stephenson had indicated in the end-of-July meetings before the summer break. Then, he had indicated that the NAMA talks would start in earnest around 17 September, or two weeks after the agriculture talks begin.

In the past week, many delegations of developing countries had privately told Stephenson that they would like the NAMA talks, or key NAMA issues, to be discussed only when it was clear what the outcome was of the agriculture negotiations.

The developing countries have been of the view that they can take a more concrete position on the core NAMA issues when they review the outcome of the agriculture negotiations, in particular, whether and to what extent the US and EU make fresh agriculture offers.

The NAMA schedule announced by Stephenson seems to have been based on this logic.

Several trade diplomats, speaking privately, are of the view that the agriculture negotiations have been going slowly, with no breakthrough in any of the issues discussed so far.

Most delegations are still waiting for the Room E discussion to proceed to domestic support, and to see what the US has to say (or not say) on domestic support.

The Room E discussion is still stuck on market access, and is expected to move to domestic support sometime this week.

A review of the Room E agriculture meetings (since they began on 7 September) so far was presented on the afternoon of Friday (14 September) by the chair of the agriculture negotiations, Ambassador Crawford Falconer of New Zealand, at an open-ended informal meeting (to which all WTO members are invited).

According to trade officials, Falconer told the informal meeting that the meetings so far had been "constructive", but that the picture has not changed profoundly, and members still need to move faster.

He said that he had seen "some tangible progress, but not enough to warrant me bringing the champagne out of the cellar" - although enough to check whether there is champagne in the cellar.

(He told journalists outside the meeting that he could already revise some parts of his draft "modalities" if he needed to.)

Falconer said that he is also aware that members have been consulting among themselves. (He told journalists that these consultations have helped provide constructive input into his own Room E meetings.)

Some diplomats thought that he was referring to the process of the new "Group of 8." However, no one at the Friday meeting openly spoke about the G8 or its meetings, although the meeting was supposed to be for members to inform one another of what has been happening.

Falconer said that he would like to complete discussions on all three pillars
(market access, domestic support and export competition) by the end of the week
(ending 21 September).

That would complete three weeks of work and would be followed by a pause, probably for a week. The next objective would be for him (or members themselves) to produce a further revision of the draft modalities, although he could not predict when that would happen.

On the issue of market access for developed countries, Falconer reported that the Room E meetings covered the headings broadly set out in the draft modalities. These included sensitive products, tariff quota expansion, in-quota duties, tariff simplification and tariff quota administration.

On sensitive products, the Chair said that the discussion was reasonably constructive, particularly since members had agreed that tariff quota expansion would be based on domestic consumption, a point that some delegations had found difficult to accept.

A smaller group is working on how to calculate domestic consumption for detailed product categories (8-digit codes under the harmonized system, e. g. low-fat yoghurt) when available data is for broader categories (6-digit codes, e. g. yoghurt as a whole, or broader than that), he said.

On tariff quota administration, Falconer said that the discussion on this highly technical issue was constructive, with a better understanding of how members operate, and convergence on some subjects.

Discussion on other issues showed less progress although the discussion was broadly constructive, with some repetition, he said.

Under market access for developing countries, Falconer said that there was some useful clarification on the formula and sensitive products, for example, on the implications for small and vulnerable economies.

On special products, Falconer reported that the lengthy discussion was sometimes repetitive and sometimes constructive. Members looked at 12 indicators for establishing special products, under the three criteria (of food security, livelihood security and rural development).

He added that a number of practical questions were raised about the availability of data and other issues.

The discussion also covered his proposals for small and vulnerable economies and his suggestion that members might prefer a simpler "Uruguay Round" formula (involving an average cut) instead of complicated details for exemptions, Falconer told the meeting on Friday.

He said that he felt that these exchanges were "far more constructive and realistic".

On the Special Safeguard Mechanism (SSM), Falconer said that the discussion of this was like "throat clearing", i. e. getting ready for hard talk. It will have to continue on Monday, he added.

According to trade officials, no delegation spoke at the informal open-ended meeting following the Chair's report, and that the meeting lasted less than an hour.

(* With contributions from Kanaga Raja.) +

 


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