TWN Info Service on WTO and Trade Issues (May08/19)
19 May 2008
Third World Network

Agriculture: Food crisis makes SP, SSM even more necessary, says G33
Published in SUNS #6473 dated 14 May 2008

By Martin Khor, Geneva, 13 May 2008

The global food crisis makes it even more necessary for developing countries to make use of effective instruments on special products and a special safeguard mechanism in agriculture as part of the Doha negotiations at the WTO.

This was emphasized by the G33, a grouping of over 40 developing countries that have championed SP and SSM as concepts to promote food security, farmers' livelihoods and rural development.

Indonesian Ambassador Gusmardi Bustami, coordinator of the G33, told an open-ended informal meeting on agriculture at the WTO on 9 May that the SP and SSM issues are even more relevant with the current crisis in food prices as developing countries need to increase their food production.

"If developing countries do not have SPs and SSM, if they have low bound tariffs and no operational effective special safeguard, they would be in a situation where their inability to produce food would be locked in permanently," said Gusmardi.

"On the food crisis, the G-33 views that as a medium and long term solution, developing countries have to produce more food. The food crisis has taught the lesson that developing countries need to provide food for themselves and for food security, as they cannot rely on imports when there is a world shortage or increased prices.

"We therefore cannot only look at the short term. In the medium term, developing countries will still need the policy space so as to maintain the minimum comfort level of local farmers to achieve greater self sufficiency in food production.

"Therefore, with the current backdrop of the food crisis, there is an even more urgent need for an effective and operational SPs and SSM. This would also provide developing countries to have long-term instruments to enable local food production."

Gusmardi was speaking on behalf of the G33 at the final meeting of the agriculture negotiating group before the Chair of the group, Ambassador Crawford Falconer of New Zealand, releases the revised draft of his text on modalities.

The G33 has advocated that developing countries be allowed to self-designate "special products" which would be subjected to no or lenient tariff cuts. It has also championed the establishment of a special safeguard mechanism for developing countries, which can use it to raise tariffs above the bound rates when import prices fall or import volumes increase beyond certain levels.

While WTO members have agreed to these two concepts in principle, there has been opposition by some agriculture exporters against operationalising these concepts in an effective way.

The differences among members on SP and SSM are a major cause of the inability to achieve a deal in agriculture modalities till now.

In its statement, the G33 said: "The paramount issue of developing countries' flexibilities is not a part of the problem. It is, indeed, a part of the solution. The interests and needs of developing countries should be appropriately placed at the heart of the Round, so that the development dimension of the Round is effectively delivered."

The G-33 also stated that it is keenly hoping that the new draft would be a complete and comprehensive text in all areas of the agriculture negotiations.

"It should therefore reflect full modalities that are not only balanced and inclusive, but also effectively accommodate the interests and concerns of all Members, particularly of developing Members," said the G33 statement.

"Such a workable revised draft text is the only course that all members can follow in order to transcend to the next level. The G-33 does not favour an incomplete text or any solution thrust upon the Members. A mutually negotiated comprehensive text of modalities is the ideal route to arrive at a solution.

"Once a workable new draft text is released, sufficient time and opportunity must be given to all Members and Groups to digest and consult with capitals, as well as coordinate within the various groupings and further negotiated multilaterally at the level of the negotiating groups. Only then, we should proceed to the horizontal process if we have to ensure its success.

"It should be therefore clear that any horizontal process shall only proceed once we all have the same level of comfort and confidence on all the agriculture issues.

"For the two important issues of SPs and SSM, the G-33 has clearly outlined the basic ingredients for a workable architecture. For the purpose of a meaningful next phase of negotiations, the Group truly hopes that all fundamental elements of this architecture are reflected in the new revised draft text.

"All issues of high interest to developing members and LDCs, shall be produced as full modalities in the next revised draft text. New, but non-workable and completely divergent positions taken by some Members recently - will not help towards closing the gaps or to achieving any possible convergence.

The G20, represented by Brazilian Ambassador, Clodoaldo Hugueney, said that the Round is at a critical juncture. Achieving a balanced and proportionate outcome in agriculture negotiations is, more than ever, necessary and possible.

"Circumstances in international agriculture trade have changed markedly since the beginning of the Doha Round in 2001," said the G20. "Rising food prices have led to growing concerns in developing countries about the food security of their populations. The Round should provide effective long-term solution to the current situation, taking into account the needs of developing countries.

"It is more than ever imperative to reduce effectively the levels of trade-distorting subsidies in developed countries. Current price levels both create the conditions for and require significant reductions of subsidy levels to meet the commitment to make effective cuts.

"The G-20 has consistently reiterated the mandate for substantial reduction in domestic-support levels. The Group has stressed the central linkage between effective cuts in OTDS (overall trade-distorting domestic support) and product-specific disciplines, including the revision and clarification of the Green Box to ensure that green payments have no, or at most minimal effects on production.

"These disciplines should not allow concentration of support, should be effective, and should address the specific mandate for cotton.

"We need real engagement from developed countries. Developed members bear the main responsibility for reform. They must demonstrate their readiness to make a decisive contribution for the success of the negotiations.

"Reformed, fairer and development-oriented trade rules in agriculture will be part of the solution to the current food crisis. They will create new conditions for the development of agriculture production in developing countries to fulfill their food needs and to increase their participation in international agriculture trade.

"In the past weeks, a great effort has been made to address key elements in the Market Access pillar. However, the constant accommodation of developed countries' sensitivities and concerns has a price in terms of the level of ambition.

"Not all results will fulfill the Mandate for substantial improvements in Market Access, and this will affect significantly the final balance of the negotiations. We should try to attain a level of convergence on Tropical Products and Preference Erosion. But if conditions are not there for such a convergence, some time should be allowed and the negotiations of the list to continue while you prepare your revised text."

The G20 added that in terms of process, the critical deadline is the presentation of the revised text.

The Brazilian Ambassador told the Chair: "The G-20 appreciates your tireless efforts and relies on your judgment to produce a revised text that is complete and balanced, that respects positions, and that provides clarity concerning the actual contribution to be made by developed countries. All the elements for assessing the contributions, the level of ambition and S&D must be on the table. Only this will create a sound basis for further negotiations.

"Once your text appears, it would be appropriate to have, after an adequate period for reflection by Members and groups, a round of discussions in the negotiating group before moving to the horizontal process.

"This is a substance-driven process, so the quality and completeness of the text are essential ingredients for gaining the support of the broad membership and for moving the negotiations to the next phase. At the same time, we cannot prolong indefinitely the process. We have a narrow window of opportunity to reconcile these realities. The G-20 will continue to work hard towards a balanced, ambitious and development-oriented outcome in agriculture negotiations." +