Addressing the press Conference on the outcome of the recently concluded WTO Ministerial Conference at Geneva, Shri Kamal Nath, Union Minister of Commerce & Industry, has stated that the primary objective of the Doha Round is to put the development dimension of international trade on centre stage. While there would always be commercial interests guiding trade, these interests cannot take primacy over the livelihood interests of billions of poor and vulnerable farmers of the developing world. In the context of the current food crisis and the abnormal rise in food prices, it has become all the more important to preserve and protect the livelihood security of poor farmers and the long term food security of developing nations.
In view of the subsistence nature of farming in developing countries and the need to insulate the poor and vulnerable farmers of developing countries from the shock of large tariff reductions, the instruments of Special Products and Special Safeguard Mechanism were built into the Doha mandate. The July Framework and the Hong Kong Declaration built upon it. While the Special Products are designed to allow developing countries to take less than formula cuts on their vulnerable products, specially the products affecting the livelihoods of subsistence farmers and affecting the food security of a nation, the SSM is designed to protect the farmers from sudden import surges and price dips by applying an additional safeguard duty over and above the bound rate.
The lack of consensus on SSM was not an issue affecting only India. It affected more than 100 of the least developed and developing countries. The G33 (which has 46 members), the African Group (with 53 members), the African-Caribbean-Pacific Group, the Small Vulnerable Economies, together having a membership of more than 100 countries, had expressed their strong views on the volume and price triggers. They had issued a joint statement (copy enclosed) on 27th July, articulating their needs and their recommendations on the triggers and the remedies.
The trigger for an SSM is very important because it determines when a safeguard duty can be imposed. If the trigger is too high, the SSM loses its effect because it can only be used in the most exceptional circumstance. Thus the trigger has to be reasonable.
For our most important Special Products, we had negotiated 5% zero cut tariff lines that is 5% of the total tariff lines would take no tariff cuts. There would be some other tariff lines, which would take very low tariff cuts.
The volume trigger for such Special Products, which would either take zero or low tariff cuts because they are our most vulnerable products, was sought to be fixed at 40% higher than the average imports of the last three years by a major developed country. That is if the average imports of a product over the last three years is 100 MT, unless the imports crossed the level of 140MT, the safeguard duty could not be activated. This is much higher than the trigger for the Special Safeguards, which the developed countries themselves have used since the beginning of the Uruguay Round (1995) to protect the commercial interests of their agriculture.
The proposal was considered unacceptable by the broad coalition of developing countries because it would have rendered the SSM virtually inoperable. We have more than 30 crore people living on less than $ 1 a day. We argued that while India was prepared to be constructive and reasonable, it could simply not accept any solution that would pose a serious threat to the livelihoods of its subsistence farmers When there was a lack of consensus on this issue in the Green Room, which had the Ministers of more than 30 countries present, the matter was referred to a group of seven countries (US, EC, Japan, Australia, Brazil, China, India) by the DG, WTO. However, despite attempts by the DG, WTO and later on by 6 of the countries (in G7) to work out a solution to the problem, all the proposed solutions were found unacceptable by one major developed country. Despite all out efforts stretching over a few days, when there was no consensus, the mini-Ministerial had to be halted.
The SSM was not the only issue on which progress could not be made. There were several other important developing country issues like cotton, preference erosion, tropical products, DFQF etc. on which discussions were not held. The major developed countries also wanted the developing countries to agree to a restrictive anti concentration clause and to take part in Sectorals in the industrial goods area (NAMA). In recent weeks developed countries started a major campaign for restricting the flexibilities given to developing countries in industrial products through an ambitious ‘anti-concentration’ clause which was vigorously opposed by most developing countries as infant and vulnerable industries needed to be protected. As far as Sectorals were concerned, the Hong Kong Ministerial clearly stated that these were non-mandatory. An attempt was made by developed countries to make this mandatory, in violation of the mandate. This was strongly opposed by India and other developing countries.
The coming months, Shri Kamal Nath, said would see attempts at overcoming the current impasse. He reiterated that India stands committed to constructively engage at the WTO to move the Doha Development Round to a successful conclusion.
In view of the subsistence nature of farming in developing countries and the need to insulate the poor and vulnerable farmers of developing countries from the shock of large tariff reductions, the instruments of Special Products and Special Safeguard Mechanism were built into the Doha mandate. The July Framework and the Hong Kong Declaration built upon it. While the Special Products are designed to allow developing countries to take less than formula cuts on their vulnerable products, specially the products affecting the livelihoods of subsistence farmers and affecting the food security of a nation, the SSM is designed to protect the farmers from sudden import surges and price dips by applying an additional safeguard duty over and above the bound rate.
The lack of consensus on SSM was not an issue affecting only India. It affected more than 100 of the least developed and developing countries. The G33 (which has 46 members), the African Group (with 53 members), the African-Caribbean-Pacific Group, the Small Vulnerable Economies, together having a membership of more than 100 countries, had expressed their strong views on the volume and price triggers. They had issued a joint statement (copy enclosed) on 27th July, articulating their needs and their recommendations on the triggers and the remedies.
The trigger for an SSM is very important because it determines when a safeguard duty can be imposed. If the trigger is too high, the SSM loses its effect because it can only be used in the most exceptional circumstance. Thus the trigger has to be reasonable.
For our most important Special Products, we had negotiated 5% zero cut tariff lines that is 5% of the total tariff lines would take no tariff cuts. There would be some other tariff lines, which would take very low tariff cuts.
The volume trigger for such Special Products, which would either take zero or low tariff cuts because they are our most vulnerable products, was sought to be fixed at 40% higher than the average imports of the last three years by a major developed country. That is if the average imports of a product over the last three years is 100 MT, unless the imports crossed the level of 140MT, the safeguard duty could not be activated. This is much higher than the trigger for the Special Safeguards, which the developed countries themselves have used since the beginning of the Uruguay Round (1995) to protect the commercial interests of their agriculture.
The proposal was considered unacceptable by the broad coalition of developing countries because it would have rendered the SSM virtually inoperable. We have more than 30 crore people living on less than $ 1 a day. We argued that while India was prepared to be constructive and reasonable, it could simply not accept any solution that would pose a serious threat to the livelihoods of its subsistence farmers When there was a lack of consensus on this issue in the Green Room, which had the Ministers of more than 30 countries present, the matter was referred to a group of seven countries (US, EC, Japan, Australia, Brazil, China, India) by the DG, WTO. However, despite attempts by the DG, WTO and later on by 6 of the countries (in G7) to work out a solution to the problem, all the proposed solutions were found unacceptable by one major developed country. Despite all out efforts stretching over a few days, when there was no consensus, the mini-Ministerial had to be halted.
The SSM was not the only issue on which progress could not be made. There were several other important developing country issues like cotton, preference erosion, tropical products, DFQF etc. on which discussions were not held. The major developed countries also wanted the developing countries to agree to a restrictive anti concentration clause and to take part in Sectorals in the industrial goods area (NAMA). In recent weeks developed countries started a major campaign for restricting the flexibilities given to developing countries in industrial products through an ambitious ‘anti-concentration’ clause which was vigorously opposed by most developing countries as infant and vulnerable industries needed to be protected. As far as Sectorals were concerned, the Hong Kong Ministerial clearly stated that these were non-mandatory. An attempt was made by developed countries to make this mandatory, in violation of the mandate. This was strongly opposed by India and other developing countries.
The coming months, Shri Kamal Nath, said would see attempts at overcoming the current impasse. He reiterated that India stands committed to constructively engage at the WTO to move the Doha Development Round to a successful conclusion.
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