TWN Info Service on WTO and Trade Issues (Sept08/09)
25 September 2008
Third World Network

Trade: G7 senior officials re-start talks on agricultural SSM
Published in SUNS #6551 dated 19 September 2008

Geneva, 18 Sep (Martin Khor) -- A group of seven WTO members have started discussions in Geneva to see if they can make new progress following the failure of the WTO mini-Ministerial process at the end of July.

The meeting, which is taking place at the European Commission office, started on
17 September and continued today, and is scheduled to carry on to Sunday 21 September. Participants are senior officials from capitals and from Geneva Missions, in a one-plus-one format (i. e. only two representatives per delegation are allowed).

The seven members are the United States, European Union, China, India, Brazil, Japan and Australia. The so-called G7 was established by the WTO Director General Pascal Lamy during the July mini-Ministerial.

Much of the negotiations then had taken place within this small grouping, and its inability to agree on the issue of an agricultural special safeguard mechanism for developing countries was the immediate cause of the July talks ending in failure.

The present G7 meeting is an attempt to revive the Doha talks. Lamy said at the Trade and Development Board of UNCTAD on 16 September that he still hoped to convene another Ministerial meeting this year.

But for that to happen, there must be enough progress in the sticky issues. The re-convening of the G7 in Geneva this week is the start of the new process of resurrecting the Doha talks.

Diplomats are not very hopeful. "It is a very long shot, and the chances of success are frankly very slim," said a senior diplomat of one of the G7 members.

The Ambassador of a non-G7 country told the SUNS that he did not expect anything substantial to come out of the G7 meeting this week. "The gaps are really too wide, and I don't see how they can bridge them as I don't think anything has really changed since July."

The first item on the agenda is SSM, the issue on which the July talks stalled. If there is enough progress on this, other agriculture issues could be discussed, including expansion of tariff quotas, tariff simplification and cotton subsidies.

There are seven elements on the SSM issue that are listed for discussion, according to sources. These include the scope of the products to be covered by the SSM; the "triggers" (the increase in volume or decrease in price of the imported product that has to be reached before the SSM can be used); the remedy (the increase in import duty to be allowed); the duration (how long the SSM can be in place after it starts being used on a product); the frequency of use (how many products can the SSM be used at any one time or in a given period); and the system for checking and verification for the use of the SSM.

One of the first issues discussed in the past two days has been how to distinguish between "normal growth" of agricultural imports and an "abnormal growth" which could be taken as a legitimate ground for the use of the special safeguard.

Agricultural exporting countries (the US, Australia, Brazil) argued that imports may be increasing because of "normal growth" caused by increase in population or income, and this should be taken into account when fixing the "volume trigger", i. e. how much the quantity of imports have to rise before the SSM is allowed to be used.

However, developing countries India and China with defensive concerns raised questions as to how to define or estimate what is normal or abnormal growth of imports.

Outside the meeting, a trade diplomat of a G7 country remarked it was very difficult to agree on the definition of "normal trade." The impression he had is that some of the countries with export interest would like to portray what is in fact an abnormal growth in imports (which should justifiably allow an importing country to make use of the SSM) as "normal trade growth" (and thus not eligible for use of the SSM).

This principle of "taking account of normal trade growth" could then be used to argue the case for having a high trigger, such as that the volume of an imported product has to rise by at least 40% before the country can make use of the SSM.

The diplomat also noted that in the normal safeguard (the WTO's safeguard agreement) and the present agricultural special safeguard (SSG) used mainly be developed countries, there was no concept or definition of "normal" and "abnormal" trade.

A dispute over the volume trigger was a major reason for the failure of the G7 talks during the July mini-Ministerial. The United States had insisted on a figure of 140% (i. e. that import volume must rise by 40% to "trigger" the use of the SSM), while India supported by the G33 and other developing country groupings wanted the trigger to be 110%. +