Trade Policy Note Final-rev08 - Development
Trade Policy Note Final-rev08 - Development
Trade Policy Note Final-rev08 - Development
Create successful ePaper yourself
Turn your PDF publications into a flip-book with our unique Google optimized e-Paper software.
Box 18: Applying Special Safeguards<br />
Article 5 of the WTO Agreement in agriculture institutes a system of Special Safeguards<br />
(SSG) under which countries can apply additional charges to imports based on trigger<br />
volumes or trigger prices. This facility is available only for items which have been “tariffied”<br />
and have been designated for SSG by the country concerned. While some 21 developing<br />
countries have been able to make use of this facility it has been used overwhelmingly by<br />
developed countries.<br />
Agricultural markets are by nature cyclical and are affected by natural factors such as<br />
weather. To this is added the man-made factors of subsidization and the behaviour of trading<br />
firms. The food price index has actually become more volatile since the WTO’s<br />
establishment. 58 .As a consequence of massive subsidization in the United States and the<br />
European Union, export prices of key food commodities are below the costs of production,<br />
for example wheat (by 43%), rice (by 35%) and maize (by 13%). 59<br />
The further reduction of bound tariff rates on agricultural imports could expose vulnerable<br />
producers in developing countries to severe external shocks that could drastically affect their<br />
livelihoods. 60 It was confirmed at the sixth WTO Ministerial Conference that developing<br />
countries should have access to a Special Safeguard Mechanism (SSM) which would be used<br />
to shield vulnerable producers from surges of low priced imports. The SSM would be<br />
activated by trigger volumes and prices. The G33 proposed that the trigger price would be the<br />
average monthly price of that product, and the trigger volume would equal the average annual<br />
volume, for the most recent three year period. The SSM would apply to all products and all<br />
trade including that under FTAs. The specifics of the proposal are yet to be agreed.<br />
Defining the indicators for these special protective measures is a crucial element in<br />
both national trade policies and in the ongoing multilateral trade negotiations, as well<br />
as in FTAs. The SP criteria and SSG mechanisms should be incorporated into national<br />
regulations so as to provide the basis for their inclusion in the WTO agreement and<br />
any FTAs.<br />
SPS regulations present a serious barrier to exports of agricultural products,<br />
particularly those of small scale farmers. Improvement in the implementation of the<br />
WTO SPS regime is being sought in the Doha Round. The aim is both giving more<br />
time to developing countries to adjust to new regulations, and seeking a commitment<br />
on the part of the importing country to provide the technical and financial assistance<br />
necessary to permit the developing country to meet the standards. This should also be<br />
a priority in any Aid for <strong>Trade</strong> programme.<br />
Agricultural products have proven a complex issue in the negotiation of FTAs. In<br />
some cases, North South FTAs have excluded major export products of interest to the<br />
developing partner (rice, sugar), while failing to impose any disciplines on the<br />
subsidization provided by the developed partner (although agreements not to apply<br />
export subsidies to mutual trade have been included in some FTAs) FTAs often<br />
preclude the possibility of excluding “Special Products”. While some FTAs include<br />
58 Pal, op. cit., and Paz, Julio, “Identificación de Productos Especiales y Mecanismos de Salvaguardia<br />
Especial en el Peru”, ICTSD, Geneva 2005.<br />
59 IATP<br />
60 See Hathaway, Dale, “A Special Agricultural Safeguard: buttressing the market access reforms of<br />
developing countries ”, comments in FAO Papers on Selected Issues Relating to the WTO Negotiations<br />
on Agriculture, FAO, Rome 2002 (http://www.fao.org/docrep/005/Y3733E/y3733e05.htm).<br />
38