WTO decision in next 3 days may worsen FTAs’ effects on developing country farmers

TWN FTA Info (Geneva) | 28 July 2008

WTO Decision May Worsen FTA Effects on Third World Farmers

Dear friends and colleagues,

The WTO is having a mini-ministerial conference in Geneva which will finish probably by Wednesday this week. It is trying to conclude the Doha Round of negotiations and the package being discussed at the moment has a number of elements may affect development.

In agriculture, the special safeguard mechanism (SSM) is one of the aspects being discussed. The SSM would ideally allow developing countries to raise their tariffs to protect their farmers if they face an increase in imports of agricultural products.

However, the SSM currently being proposed for agriculture requires large increases in imports before it can be used, does not allow tariffs to be raised sufficiently and cannot be used to protect developing country farmers from import surges due to free trade agreements. The European Union economic partnership agreements (EPAs), free trade agreements (FTAs) and association agreements (together called ‘RTAs’ for the purposes of this note) with developing countries are likely to require developing countries to remove 80% of their tariffs on agricultural products. Meanwhile, the European Union will continue its high level of subsidies which enables it to dump farm products like chicken, milk and tomatoes in developing countries. (See for example http://www.actionaid.org (which notes that according to the FAO, 102 developing countries experienced between 7000 and 12,000 import surges over a 23 year period (and this was before many of the European Union RTAs came into force)), http://www.actionaid.org, http://www.germanwatch.org, http://www.ukfg.org.uk and http://www.actionaid.org). Since developing countries can no longer protect 80 percent of their farmers by tariffs after they have signed an EPA/FTA, they need alternative safeguards.

In the February 2008 text by the Chair of the WTO’s agriculture negotiations, it was agreed that developing countries were allowed to use the SSM if the increase in imports was due to the lower tariffs under an RTA. This would have meant that if the lower tariffs under an RTA caused an increase in imports to developing countries they could raise their tariffs again to protect their farmers.

However the current SSM text being negotiated in the next 3 days does not allow it to be used for import surges due to RTAs.

For more information, please see http://www.twnside.org.sg which can be updated with the WTO Director-General’s text currently being discussed (downloadable from http://www.tradeobservatory.org). Analysis of other constraints in the WTO Director-General’s text by the intergovernmental organisation, South Centre, can be found at http://www.southcentre.org(Issue 4).

Best wishes,

Third World Network
2-1, Jalan 31/70A
Desa Sri Hartamas
50480 Kuala Lumpur
Tel: +603-2300 2585
Fax: +603-2300 2595
email: twnkl@po.jaring.my
website: www.twnside.org.sg, www.ftamalaysia.org

source: TWN