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TWN
Info Service on Trade and WTO Issues (July08/48) Trade:
100 developing countries in show of strength on SP, SSM Geneva, 28 July (Kanaga Raja) -- In the most significant development on Sunday, the 7th day of WTO talks, groups representing about a hundred developing countries issued a joint statement criticizing the points in the Lamy draft on Special Products (SP) and Special Safeguard Mechanism (SSM), and demanded that their own proposals be taken on board instead. The common position of so many countries was a powerful counter to the view projected by developed countries, that it was mainly India and a few other countries like Indonesia that were against the SP and SSM portions of the Lamy draft. The statement on Special Products and the Special Safeguard Mechanism was issued Sunday evening by the G33, the African Group, the ACP Group and the Small and Vulnerable Economies (SVEs). It was made available at the Green Room meeting on Sunday night and circulated at the Trade Negotiations Committee meeting on Monday. Indian
Commerce Minister Kamal Nath announced the statement's existence when
he entered the WTO for the Green Room meeting on Sunday night. Speaking
to journalists, he said there are 100 countries which have made a statement
on SP and SSM, expressing their concerns. "It's not [The propaganda attempt of the developed countries, in particular the US and the EU, to project the opposition as coming only from India, Indonesia and one or two other "recalcitrants" has been propagated by the western media around the world, with one western agency citing an unnamed African diplomat as questioning Kamal Nath's claim, and faithfully reproduced in the daily WTO clippings file, as part of the WTO's management of news. - SUNS] The statement of about 100 developing nations said that the groups had stated that the present G33 positions, which have evolved considerably over the last few months, reflect a fair basis for a final settlement. It gave figures on SP and SSM which reflect the limits of the flexibility that they can show on these issues. The joint statement said that the sharp rise in global prices and the food crisis in large parts of the developing world have lent added urgency to the call of developing countries for effective safeguards in the WTO negotiations for trade liberalization in Agriculture. These safeguards are at the core of the development outcome of the Round as they involve the concerns of food security, livelihood security and rural development in developing countries. The most essential of the safeguards involve the instruments of Special Products and the Special Safeguard Mechanism. It is essential that the outcome on Special Products and SSM fully reflects the concerns of developing countries. "In the present context, when we are poised to complete the modalities in Agriculture, we have reviewed our position and come to the conclusion that the present G33 positions, which have evolved considerably over the last few months, reflect a fair basis for a final settlement." Nevertheless, said the statement, in a spirit of constructive engagement, we are willing to show some flexibility in order to obtain a reasonable outcome. The numbers in the statement reflect this understanding based on the consultations among the G33, African Group, ACP and SVEs. "We would also like to emphasize that in our view, these reflect the limits of the flexibility that we can show on these issues." On
the issue of Special Products, the groups said that they agree to the
proposal in [Para 121 of the Agriculture Chair's text says that SVEs may, if they choose to do so, apply the moderated tariff tiered formula for SVEs provided for in Paragraph 65 - moderate the cuts specified in paragraph 63 (i. e. the formula cuts for developing countries) by a further 10 ad valorem percentage points in each band - plus the SP entitlement. Alternatively, they may choose not to apply the tiered formula but simply meet an overall average cut of 24% through having in effect opted to designate as many tariff lines as they choose as SP. The tariff lines so chosen need not be subject to any minimum tariff cut and need not be guided by the indicators.] The groups said that they can accept the Director-General's proposal of a single tier approach for SPs and 5% tariff lines with zero cuts subject to the following conditions: (i) Overall number: 15% as against our latest position of 18%; (ii) Overall Average Cut: 9% as against our position of 12% cut in the second tier for non-zero cut SPs; (iii) For recently acceded members (RAMs), 1 percentage point more for overall number of SPs and 1 percentage point less for overall average tariff cut. On
the SSM, the statement said that the overall structure in the text should
not be changed. Triggers and remedies as in [Paragraph 124 states: As regards the volume-based SSM, it shall be applied on the basis of a rolling average of imports in the preceding three-year period (hereafter "base imports"). On this basis, the applicable triggers and remedies shall be set as follows: (a) where the volume of imports during any year exceeds 110% but does not exceed 115% of base imports, the maximum additional duty that may be imposed on applied tariffs shall not exceed 25% of the current bound tariff or 25 percentage points, whichever is higher; (b) where the volume of imports during any year exceeds 115% but does not exceed 135% of base imports, the maximum additional duty that may be imposed on applied tariffs shall not exceed 40% of the current bound tariff or 40 percentage points, whichever is higher; ( c) where the volume of imports during any year exceeds 135% of base imports, the maximum additional duty that may be imposed on applied tariffs shall not exceed 50% of the current bound tariff or 50 percentage points, whichever is higher; (d) where, formally, these triggers could be met, but the absolute level of imports is manifestly negligible in relation to domestic production and consumption, remedies would not be applied.] Triggers
for Para 134-136, where remedies would go above the Uruguay Round bound
levels should be the same as in [Paragraphs 134 says that LDCs can apply the maximum remedy even if this would otherwise breach a pre-Doha bound tariff, provided that the maximum increase over a pre-Doha bound tariff does not exceed 40 ad valorem percentage points or 40% of the current bound tariff, whichever is higher. Paragraph 135 says that SVEs may apply the maximum remedy provided even if this would otherwise breach a pre-Doha bound tariff, provided that the maximum increase over a pre-Doha bound tariff does not exceed 20 ad valorem percentage points or 20% of the current bound tariff, whichever is higher, for up to a maximum of (10-15)% of tariff lines in any given period. Paragraph 136 says that other developing countries may apply the maximum remedy even if this would otherwise breach a pre-Doha bound tariff provided that (a) the maximum increase over the pre-Doha bound tariffs would be no more than 15 ad valorem percentage points or 15% of the current bound tariff, whichever is the higher; (b) the maximum number of products for which this provision would be invoked would be no more than 2-6 in any given period; and ( c) this would not be permissible for two consecutive periods.] The
statement said that the structure of remedies for breaching the Uruguay
Round bound levels should be stabilized according to the following (Para
134-136): LDCs - 100% or 100 percentage points; SVEs - 75% or 75 percentage
points; Other developing countries - 30% or 30 percentage points. The
number of tariff lines which can breach the On other issues in SSM, the statement said: -- Triggers are to be calculated on the basis of a rolling average of imports of the most recent 3-year period for which the data are available. -- Since a Member is free to raise the applied duties to the Doha Round bound levels, the requirement of additional duties applying on applied tariffs should be removed from the text. --
[Paragraph 128 states: Developing country Members shall not normally take recourse to the price-based SSM where the volume of imports of the products concerned in the current year is manifestly declining, or is at a manifestly negligible level incapable of undermining the domestic price level.] -- The exclusion of Preferential Trade from calculation of triggers is not acceptable. "We are ready to show flexibility from our original position and agree to the inclusion of preferential trade in the calculation of triggers and applying the remedies to preferential partners (and vice versa)." -- The exemption of shipments en route from SSM remedies is to be applicable only in volume-based SSM and not in price-based SSM. --
The period of remedy for all products should be 12 months, irrespective
of whether the product is seasonal or not. Limiting the duration of
remedies to two consecutive periods is not acceptable. This condition
should be withdrawn from [The relevant parts of Paragraph 131 says that the volume-based SSM may be maintained for a maximum period of 12 months from the initial invocation of the measure, unless a seasonal product is involved, in which case the SSM shall apply for a maximum of six months or to cover the period of actual seasonality, whichever is the longer... No product shall be subject to the volume-based SSM consecutively for more than two periods and where such consecutive application has occurred this may not be resorted to again before the elapse of a further two consecutive periods.] -- Where the Uruguay Round bound levels are breached, limiting the duration of the remedy to one period and not allowing it in the next consecutive period is not acceptable. --
The requirement to make available "ongoing calculations of rolling
averages" of import volumes and prices for any "potential"
SSM invocations is too cumbersome for developing countries.
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