More than 50 countries of the African Group as well as Pakistan have raised a red flag against seemingly asymmetrical provisions in the World Trade Organization’s Agreement on Agriculture that fail to provide a special safeguard mechanism to face sudden and unforeseen surges in food products.
While industrialized countries such as the United States, the European Union, Japan, Norway and several developing countries are able to cushion their agriculture with safeguard provisions in the WTO's Agreement on Agriculture to stop unforeseen imports of agricultural products, a large majority of developing countries do not have such a facility.
It is against this backdrop, that developing countries have consistently demanded an effective special safeguard mechanism since the WTO’s sixth ministerial conference in Hong Kong since 2005.
At a mini-ministerial meeting in 2008, which was attended by the trade chiefs of the United States, EU, India, Brazil, Australia and China to resolve a couple of agricultural issues, Washington pulled the plug at the last minute on the volume and price thresholds suggested by India.
Representatives of the US farm bureau, who were present at the Geneva meeting, opposed the high thresholds proposed by India.
Since then, the G33 coalition of developing countries coordinated by Indonesia have repeatedly raised the SSM issue at each and every ministerial meeting along with the permanent solution for public stockholding programs for food security.
Developing countries have been repeatedly frustrated by the United States at each ministerial
meeting on both the permanent solution and the SSM.
Even at the WTO’s last ministerial meeting in June 2022, Washington along with some Cairns Group of countries, including Brazil and Australia, opposed any outcome on both the PSH and SSM issues.
The African Group, which has issued a slew of issues/markers for the WTO’s 13th ministerial meeting to be held in Abu Dhabi beginning February 26, 2024, has now reissued its proposal along with Pakistan on SSM.
The restricted proposal (Job/AG/205/Rev.1), seen by WTD, cites a report of the United Nations’ Food and Agriculture Organization of 2005 on special safeguard mechanisms to point out that there were “several cases of import surges in developing countries between 1984 and 2000.”
The FAO’s report says “There have been increasing reports of developing countries, particularly lower income food-deficit countries (LIFDCs), experiencing surges in imports of various food products since the mid-1990s, often with negative effects on local production and economy. Examples include the experience of Jamaica with respect to chicken, Kenya with respect to dairy products, Senegal with respect to tomato paste, and rice in Haiti.”
The Rome-based FAO has argued that “the phenomenon was relatively frequent for some product groups, notably some meats and vegetable oils. Similarly, although all countries experienced import surges, some were affected more often than others, Guinea, Malawi, Niger, Philippines, and the United Republic of Tanzania being examples.”
In order to address unforeseen surges of imports of agricultural products, it has underscored “the need for both volume and price mechanisms as part of an SSM for developing countries.”
Further, a study by another think tank suggested that “A study of eight developing countries that experienced import surges between 2010-2018; namely, Ghana, India, Indonesia, Namibia, Philippines, Senegal, Sri Lanka and Türkiye shows that the countries have experienced import surges covering 191 to 348 tariff lines.”
“Of these, there were 3 to 209 surges across the eight countries in tariff lines where there was limited (“less than 20%) policy space to raise applied import tariffs above bound rates, therefore offering extremely inadequate options to address surges by raising current applied tariffs up to the bound rate,” the study pointed.
The African Group and Pakistan cited another paper prepared by FAO in 2011 that “shows import surges are caused by several factors including dumping in global markets as well as trade liberalization or reduction in import duty.
“This shows distortions in global markets that cause dumping are among the factors that cause import surges,” the FAO report suggested.
“Moreover, import surges are already taking place due to current (up to 2011) levels of trade liberalization,” the study suggested, adding that “such incidences of import surges have caused major challenges for livelihoods of domestic, in particular poor and vulnerable, small-holder farmers in developing countries, have also reduced the share of domestic production in total supply, and often caused collapse of the sector itself.”
Worse still, “In 2021 and with the growing number of Free Trade Agreements (FTAs) that involve significant import tariff reduction or elimination, the level and associated impacts of trade liberalization are even higher,” necessitating the urgent provision for “Special Safeguard Mechanism (to protect against import volume surges and price fall) to be tied to further market access commitments.”
Significantly, at a time when the developed countries, particularly the United States and the EU, and some developing countries continue to avail special safeguard “as mandated under Article 5 of the Agreement on Agriculture (AoA) under which these Members can protect predesignated agricultural products from import surges,” it appears as a blot on the WTO that a majority of developing countries can not avail SSM.
In short, while the developed countries can impose SSG “without any need to prove injury or negotiate compensation and without any requirement for the remedy to be bound by the Uruguay Round Bound Rate,” there is no such mechanism for developing countries.
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