Two recent submissions by Costa Rica and Ukraine in the World Trade Organisation (WTO) on the use of special safeguard measures (SSMs) by developing countries against an import surge of sensitive agricultural products bring to the fore the complexities of concluding the Doha Round at the earliest. These proposals point to three viewpoints among the developing countries with regard to the use of SSMs to safeguard farm interests.
Costa Rica, a member of the Cairns Group of agricultural exporters, has argued that an easy use of SSMs would hurt export prospects of developing countries and, therefore, hurt South-South trade. The other developing countries that have espoused the cause of restricting the use of SSMs are Paraguay, Uruguay and Malaysia.
Ukraine, on the other hand, has argued that since it is a recently acceded member in the WTO, it must be allowed additional flexibility in imposing SSMs since it needs to protect the “livelihood concerns” of millions of poor farmers who may be hit hard by a surge in imports as also volatile global prices of agricultural products. China has put forward a similar view.
Countries like India that are part of the G33 group have been in the forefront in seeking strict SSMs to protect small farmers with livelihood concerns.
Apart from these three developing country dimensions on SSMs are the different viewpoints of developed country members like Australia, the US, the European Union, Japan, etc. While aggressively exporting nations would support the Costa Rican viewpoint, others like the EU and Japan may be willing to concede a little ground on SSMs as long as their defensive interests in agriculture are protected.
The new submissions on the SSM issue show that this specific area of negotiations, which has been an unfinished agenda for long, may take longer now with some new dimensions introduced into the discussion. It is important to look at some of the possible areas that need to be addressed to move this important aspect of negotiations forward.
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The first issue is that the WTO is not a platform for furthering South-South trade but a forum for building multilateral trade flows. Therefore, the Costa Rican submission needs to be reviewed in that perspective. The submission states that out of 223 cases analysed, in 98 per cent of the cases a simple volume-based safeguard trigger could have been used on Costa Rican exports.
Though the data provided by Costa Rica may be right, the WTO cannot be the right forum for sorting trade issues among developing countries. There are enough platforms that help build South-South trade and these need to be used. If developing countries that are part of the G33 agree to dilute their proposal on SSM, the benefit would not just flow to developing countries but also other large developed countries like Australia or Canada. A simulation exercise by the International Centre for Trade and Sustainable Development in Geneva in April this year showed there is a need to have a strong agenda on SSMs.
For the talks to move ahead, it is important that such issues when raised as a South issue do not dilute the developmental objective and steer the negotiations away from more important issues that will provide developing countries greater access to the developed country markets.
Interestingly, only recently India, China and Argentina circulated an unofficial paper that listed several issues (about three dozen of them) that need clarification.
The next six months are crucial if the Doha Round can progress. With every passing year, the target is moving and it is getting difficult to seek a balanced outcome that will also deliver on the developmental objective.
Member countries should not just focus on bringing new topics to the table but resolve differences on the pending issues. The Doha Round has been dragging its feet under the weight of several unresolved issues. Introducing new issues and dimensions will only delay the process of a conclusion.
What developing countries like Costa Rica may need to consider is the rise of non-tariff barriers like the Sanitary and Phytosanitary measures (SPS) that can trip exports to other markets. There has certainly been an increase in the use of SPS measures in the last few years that hit exports of products of interest to developing countries.
It may be worthwhile to build a large developing country grouping to submit a paper on agricultural non-tariff barriers, especially in the developed world. India, even with its largely defensive position on agriculture negotiations in the Doha Round, should be an important proponent of this paper.
The author is principal advisor APJ-SLG Law Offices