Agriculture Undersecretary Segfredo Serrano told reporters at the inaugural of the 6th WTO Ministerial Conference here stressed that developing countries want to protect their local agricultural industries by designating and imposing special products (SS), special safeguard measures (SSM) and the retention of the "de minimis."

"We want no less than that," Serrano told reporters at the inaugural of the WTO conference that seeks to break the impasse and put forward the Doha Development Agenda that has been stalled since the failed WTO Ministerial in Cancun two years ago.

"International trading is still as polluted as before," Serrano added noting that even if the developed countries such as the US and EU agree to cut their agricultural export support by as much as 80 percent they still have "hundreds of billions" in domestic support.

Thus, Serrano called it rhetorical and theoretical whatever offers in cuts that developed countries’ export subsidies if there is not substantial reduction of their huge domestic support.

Under the Doha Development Agenda, developing countries have flexibility to designate appropriate number of SPs based on the criteria of food and livelihood security and rural development.

In a meeting in Indonesia this year, G-33 member-countries agreed to further elaborate SPs through operational indicators against specific objective criteria demanded by the developed countries.

The G-33 has maintained its position of self-designating SPs, which shall not be subject to further market access commitments as coverage would depend on specifications on sensitive products.

The block is advocating that SSM rates be based on volume duty by as much as 50 percent of bound rates or 40 percentage points, whichever is higher from the threshold of 10 percent of applicable volume trigger.

SSM covers the imposition of additional import duty and quantitative restrictions (QRs) on imports.

On the retention of the "de minimis, Serrano said this is a major country position.

"Our major strategy is to retain the de minimis and this would be the offensive side and at the same time push for the protection of our local agricultural industries by imposing SP and SSM," Serrano, the government negotiator for agricultural trade, said.

De minimis is the maximum allowable aggregate measure of support or total subsidies that a country can extend to its agriculture sector.

For developing countries, the de minimis is pegged at 10 percent of the total value of production of the commodity enjoying the support. For developed countries, the de minimis is set at 5 percent.

G33 PROPOSAL ON SPs

Earlier, the G33 has proposed the inclusion of "the importance of particular products for the subsistence strategies of the rural poor and small and vulnerable farmers; the importance that a product may represent a source of livelihood for the population of a disadvantaged region; the significance of a crop or product for the consumption profile of a country .; the potential structural effects of an import substitute in the consumption profile of the country; and the contribution of a product to the economy as a whole "

Given the profound and complex nature of these considerations, the G33 said that they "are of the view that the application of a common set of indicators across the developing world for designating SPs would be very difficult."

To come up with a "multilaterally agreed threshold level for each plausible indicator, capable of capturing the size and diversity of the agriculture sector in all developing countries, would be even more difficult," the G33 explained.

Therefore, the designation of special products would require maximum flexibility, the G33 said. In its proposal, the G33 assured members that this flexibility should not be equated to "arbitrariness."

"Only under this flexibility will the fundamental importance of SPs be recognized as stated in paragraph 41 of the Framework," the G33 concluded in its proposal. The G33 also pointed out that the list of special products could also be revised by the developing country concerned to respond to changes to domestic circumstances.

In this framework, the G33 spelt out in greater detail the elements that would constitute "more flexible treatment for special products."

These elements include:

* In accordance to the July Package, "only developing countries will have the opportunity to designate an appropriate number of such products."

* "no concessions should be asked for in return" for having more flexible treatment for SPs.

* SPs will not have to be subjected to tariff reduction, and "neither will these products be subject to commitments on TRQs."

* "SPs shall also have access to the Special Safeguard Mechanism (SSM)"

Many developing countries including the ACP group fully supported the G33 proposal on special products.

However, some members such as the US, the EU, New Zealand, Australia, Thailand, Malaysia, Chile, Argentina and Colombia voiced their concern that the bigger picture of liberalization and market access opening will be watered down.

Consequently, they want the number of special products to be restricted. Chile also pointed out that there should be a trade off between the number of special products and their treatment. Colombia added that if a certain amount of a product is exported, then that product cannot be designated as a special product. The US opposed the exemption of SP from tariff reductions or tariff rate quota (TRQ) expansion.

SSM PROPOSAL

The G33 put forward a set of parameters to guide negotiations on modalities on SSM. The group said that a safeguard measure shall be automatically triggered and be available to all agricultural products to provide relief from import surges and decline in prices.

On the issue of triggers, the G33 said that the SSM may be invoked if a) the volume of imports of the product concerned entering the custom territory of the Member invoking the measures during any year exceeds the average volume of imports of the three preceding years for which date are available, or

( b) the price of imports of the product concerned entering the custom territory of the Member invoking the measures is below the trigger price defined as the monthly average c. if the import price of the product concerned over the three preceding years for which data is available.

In relation to the remedies available under a volume-triggered SSM, an additional duty can be applied "to the extent necessary to address the import surge."

According to the G33 proposal, quantitative restrictions (QR) can also be used, although "the measure shall not reduce the quantity of imports below the average volume of imports of the three preceding years for which data are available."

In relation to the price-triggered SSM, the G33 proposed that developing countries could also use both remedies of additional duty and quantitative restrictions. The additional duty shall not exceed "any positive difference between the CIF import price of the shipment concerned and the trigger price as defined."

With regards to the QR remedy, this "may be applied only when the measure is being implemented on a regular time intervals rather than on a shipment basis, but the results are ineffective in halting the continued fall in prices."

Similarly, as in the case with the volume-triggered SSM, the QR measure here "shall not reduce the quantity of imports below the average of imports of the three preceding years for which data is available."

These remedies "shall be maintained for a period not exceeding one year from the date the measure was invoked." At the end of the first period, "the SSM may again be invoked if the relevant triggers are met."

If the price-triggered SSM is applied on a shipment basis, no specification of duration is necessary, the proposal said.

The G33 also laid down some transparency requirements in their proposal. According to the G33 proposal, members using the SSM need to give notice in writing to the Committee on Agriculture "as far as in advance as practicable and in any event within 30 days of the implementation of the measure".

On the issue of product coverage under the SSM, New Zealand argued that only those products that have undergone substantial tariff reduction could use the SSM. Argentina was also against the idea that all products are eligible for SSM. It said that only products receiving subsidies could use SSM. G33 members reiterated that SSM is for all products.

The US and New Zealand also questioned the need for having both price and volume triggers and suggested that having only the latter is sufficient.(BCM)