TWN Info Service on Trade and WTO Issues (July08/05)
8 July 2008
Third World Network

Agriculture: G33 makes gestures on SSM, SP proposals
Published in SUNS #6511 dated 7 July 2008

Geneva, 4 July (Martin Khor) -- The final "Room D meeting" for agriculture before the mini-Ministerial meeting was held at the WTO on Friday (4 July), with diplomats reporting little change in positions by the major developed countries with respect to their proposed commitments, while the G33 put forward its latest positions on special products (SP) and special safeguard mechanism (SSM) at the final "Room D" meeting on agriculture.

The morning session covered domestic support, tariff reduction and sensitive products, among other issues, with the Chair of the agriculture negotiations, Ambassador Crawford Falconer urging members to speak if they have any changes to their known positions.

Diplomats said that major developed country members did not make any new proposals on the key issues such the level of their overall trade-distorting domestic support (OTDS), tariff formula, tariff capping, or sensitive products.

In the afternoon, the major issues covered included SP and SSM, with the G33 group of developing countries putting their final positions to the Room D meeting, to which 37 delegations were invited.

According to delegates who were present, the G33 (with India speaking) made a significant gesture by putting forward changes in one aspect in SSM and another aspect in SP.

An open-ended agriculture meeting is scheduled for Monday afternoon, at which all delegations will hear Falconer's oral report on how he sees the state of play, and can provide their final inputs before Falconer drafts his next and final draft, which is now expected to be issued next Thursday or Friday.

The G33 had in early June at an agriculture meeting presented detailed proposals to amend the sections on SP and SSM in the Chair's 18 May draft text. (See SUNS #6489 dated 5 June 2008). Most of these proposed changes, issued as document JOB(08)/47 dated 3 June, were reiterated by the G33 at the Room D meeting.

However, according to some diplomats, the G33 has made a concession in SSM on the issue of whether the extra duty that can be imposed by the SSM mechanism should be limited so as not to exceed the pre-Doha or Uruguay Round bound level. And on SP, the G33 indicated it could agree to having two tiers instead of three tiers for treatment of SPs, provided that the principle that some SPs be allowed exemption from tariff reductions (i. e. zero cut) is retained.

On SSM, the G33 position had been that the limit (i. e. that extra duties cannot exceed the pre-Doha bound levels) insisted on by some of its opponents shall not be imposed.

At the Room D on Friday, the G33 reportedly proposed a new "architecture" with two windows. In the first window, the remedy (extra duty) shall be allowed to go up only to the pre-Doha bound level. All products shall be eligible for this remedy in any 12 month period.

In the second window, the remedy shall enable the duty to go beyond the Pre-Doha bound level without any maximum level imposed. The G33 is proposing that for this window, a reasonable percentage of tariff lines shall be eligible for use of the SSM mechanism, without any capping imposed.

The G33 also proposed that all developing countries are entitled to use the remedy of going beyond the Pre-Doha bound level, while LDCs and SVEs can have additional flexibilities in implementing the SSM.

The group did not give details on what percentage of tariff lines are to be eligible for the second window and indicated the specifics are to be negotiated.

On other elements of the SSM, the group indicated that its positions in Job (08)/47 remain. It stressed especially that high triggers are politically unacceptable to the G33 members, and asked that the figures in the new draft be close to the G33 position. It also asked that any figures on SSM be reflected in a range and put in square brackets. (In stating this, the G33 is asking the Chair to be fair to the G33 by putting its proposed figures in the paper alongside other figures proposed by others or by the Chair himself).

On the Special Products issue, the G33 viewed its proposal of having 3 grades as the most appropriate architecture for SPs. It stressed that the zero cut treatment principle is a "must" for the G33, as the most fundamental element in SPs and it must be part of the final outcome on SPs.

The G33 indicated however that it can consider a two-tier architecture, but with the condition that there is an explicit zero cut treatment in the first tier with a comfortable number of SPs in this tier.

Also, the G33 can consider a two-tier approach only if the second tier comprises a reasonable overall average cut lower than the cuts of Sensitive Products for developing Members. An overall average cut for SPs outside the zero cut tier should be less than 10%, indicated the G33.

The G33 also asked the Chair that figures in his revised draft should be reflected in a format of range of numbers that should be in square brackets, which is essential to accurately reflect the existing state of play.

The G33 reiterated its position on the minimum entitlement of 12% of tariff lines to be designated as SPs, while extra lines can be designated with the use of indicators (bringing the total to a maximum entitlement of 20%), in what has been termed the hybrid approach. The G33 also stressed that 8% of all tariff lines should be eligible for zero cut.

Moreover, the group proposed that the 20% maximum number of SPs is exclusive from the additional number of SPs to be transferred from the exchange mechanism. For the G33, all these numbers should be appropriately reflected in the next revision of the agriculture modalities text, which is a balanced way to base further negotiations. And, added the G33, any range of numbers in the revised text must also include the G33's positions.

On the exchange mechanism (i. e. that developing countries can transfer unused "sensitive products" to become "special products" at a certain rate of exchange), the G33 said that the exchange rate is still open for negotiations.

It however rejected the suggestion that converted SPs be given a differentiated treatment. For the G33, all SPs, whether converted or not, should be of the same standing and would receive the same treatment based on the graded or tiered approach.

It also stressed that this exchange mechanism provision shall be part of the Sensitive Products options available for developing countries and be reflected in the main body of the next revised draft text.

The G33 also expects that its demands that there be no tariff rate quota (TRQ) commitments for SPs (including change in in-quota tariff rates) and no tariff capping on SPs, would be clearly stipulated in the next revised draft text.

The G33 also supported the language on SP modalities for SVEs and asked that this be retained in the new draft.

On flexibilities for recently acceded members (RAMs), the G33 suggested that SP cuts for RAMs shall be one half less than the general SPs and that the maximum number of SPs available for RAMs shall be at least 1 percentage point greater than generally applicable.

The G33 concluded that it had made a constructive gesture by providing new and significant elements on SPs & SSM and that it expected others to also show positive movements and constructive flexibilities on SPs & SSM, as well as other crucial issues of the agriculture negotiations.

According to diplomats, several G33 members made additional points in support of the G33 presentation while some countries with export interest, such as Costa Rica, Paraguay, Uruguay and Australia were still not satisfied with the G33 proposals, especially that under the SSM a percentage of tariff lines should be entitled to extra duties that go beyond the Uruguay Round levels. +