RP, poor nations push for removal of sp’l safeguards on agri products

Fresh from a landmark victory at the recent World Trade Organization (WTO) talks, the Group of 33 led by the Philippines and Indonesia will push for the removal of existing special safeguard mechanisms (SSMs) for protected agricultural commodities and replace these with rules that reflect new realities in the global market.

Agriculture Assistant Secretary Segfredo Serrano who headed the Philippine delegation in the recent WTO talks last week that saw developed nations consenting to bring down trade-distorting farm subsidies, said the negotiations which resume in September will have the G-33 focusing on the issues of SSM and "special products."

The highlights of the talks that ended on July 31 included the agreement on the modalities for the WTO talks on agriculture. These include requiring lesser tariff reduction commitments or tariff quota expansion commitments from developing country members; allowing developing countries to have the flexibility to assign a number of products as special products to be given preferential treatment and implementation of SSMs by developing country members.

"In the negotiations, the next step for developing countries would be to demand the elimination of the old SSMs because it didn’t work for us. We want the new SSMs to be for the exclusive use of developing member-countries, this won’t apply to developed countries," stressed Serrano.

Serrano noted that the new SSMs have to be more relevant to specific needs of developing countries because they are more susceptible to inflation adjustments and fluctuations in the foreign exchange rates and markets. Oftentimes, developing countries have no choice but to absorb these unfavorable adjustments and are forced to price their export products at below production costs just to keep their market share.

"We also want to establish a new base period for pricing because we are still using 1986 to 1988 as the benchmark which is already ridiculous. Those prices are very remote from existing realities and have not benefited developing countries," added Serrano.

Also, the new SSMs should scrap the so-called trigger price mechanisms which affected sectors can use to thwart import surges that bring down domestic prices.

"The trigger price mechanism needs to be totally eliminated. If a country has qualified that there is an influx of cheap imports that could upset local prices, then the country could invoke the SSMs to block imports, there is no need anymore to go through the process of applying a trigger mechanism" explained Serrano.

At the same time, G-33 countries will start identifying their respective sensitive products that they want to shield and include these in the "special products" category that would be protected and given preferential treatment.

In the case of the Philippines, traditionally sensitive products such as rice and sugar will be the starters under the special products category.

"If our trading partners do not allow us to maintain our quantitative restrictions on rice, we can push for its inclusion in the special products, the staple could be tarrified and given more flexible treatment," he said.

The tougher negotiations begin next month, a month after rich and poor nations struck a crucial deal that would pave the pay for a new global trade order.

The reforms being sought by poor nations include slashing billions of dollars in farm subsidies and better market access.

The framework reached at the recent WTO talks, commited the United States to exercise discipline in using its export credits and food aid, while the EU commited to eliminate farm export subsidies.