G33 defends position on SP and SSM

A number of G33 ministers present at Davos had issued a statement on behalf of the grouping emphasizing that any convergence on Special Products (SPs) and Special Safeguard Mechanism (SSM) must not "subvert the development goals and aspirations of the vast bulk of small, poor and vulnerable producers of developing countries."

They reiterated that their formal position is completely in line with the Doha and Hong Kong Ministerial Declarations, and the General Council Decision of 1st August 2004.

The G33 statement, and meeting where China, India and Indonesia reiterated their position on Special Products and issued the warning against dilution of the development agenda of Doha came even as at Davos, the US, the EC and WTO head Pascal Lamy appeared to be pressuring India and others to yield on Special Products.

These pressures came along with talk of re-energising the stalled WTO negotiations among the ministers at Davos, reinforcing the mounting pressure on developing countries to dilute their position on SP and SSM, instruments intended to deal with their concerns on food security and rural livelihoods.

The US has said repeatedly that any breakthrough in the negotiations must lead to real market access, and according to USTR Susan Schwab, the G33 grouping of developing countries' position on SP and SSM create too many "loopholes" in guaranteeing market access into the developing countries for the farmers.

Schwab had said at Davos that the administration was more likely to renew the TPA if a deal emerged that opened up export markets for their agriculture exporters.

The G33 position has also come under criticism by the World Bank, accusing these countries of undermining poverty reduction efforts, through their trade policies and position on SP and SSM.

In their statement, the G33 pointed out that their own research show that "there is no close relationship between agricultural imports and applied tariff rates." "Moreover, low tariffs do not cause imports to rise when income levels are very low." they added.

"On the contrary, the main drivers of agricultural imports in developing countries are income levels and variations in domestic harvests, not tariff levels. In this context... developing countries need time and policy space to improve their poor farmers' productivity and incomes, and to curtail the risk of dislocation from agriculture from unmanageable agricultural trade liberalization," the G33 explained in their statement.

In an interview with Reuters at Davos, Mari Pagesstu, the Indonesian Trade Minister, pointed out that 45% of Indonesians are employed in the agriculture sector, and that any deal on agriculture must include sufficient safeguards to avoid big swings in food prices that could cause serious dislocation. "We are going to be fighting for it," she said in the interview. Indonesia is the coordinator of the G33 grouping of developing countries.

Ministers noted some recent developments that foreshadow strengthening of the political will to bridge the divergences among Members on the modalities concerning effective reductions in trade-distorting domestic support and improvements in agricultural market access. They urged that these developments be brought into the multilateral process as soon as possible. The onus of movement lies squarely on the developed countries as this Round is premised on development.

Ministers expressed their readiness to further take the necessary decisions to achieve a fair and balanced outcome in agriculture in a transparent, bottom up approach and inclusive manner.