G33 Ministers reiterate commitment to SP, agree on revised indicators

The Group of 33 (G33) developing countries concluded their Ministerial meeting here Wednesday with a communique outlining their continued commitment to Special Products and Special Safeguard Mechanism (SP/SSM) in the WTO's Doha agriculture negotiations, and agreeing on a revised list of indicators for the selection of Special Products.

The communique said that the revision of the indicators was made in a manner to assure transparency while enabling all developing countries to appropriately self designate an appropriate number of products based on the mandated criteria.

The indicators represent the simplest and most rational approach to operationalising the mandate for Special Products, and the indicators take into consideration the wide range of domestic circumstances of developing countries, said the Ministerial communique.

The G33, led by Indonesia, is the group of developing countries at the WTO that is championing the concept of SPs and SSM in the Doha agriculture negotiations.

The Ministerial meeting on Wednesday, inaugurated by the President of Indonesia, Susilo Bambang Yudhoyono, was preceded on Tuesday by a meeting of Senior Officials, which among other recommendations drew up a revised list of indicators for the Special Products which the Ministerial meeting accepted.

Some 130 delegates from 29 member countries attended the meeting. Also present as special invitees were: the Director-General of the WTO, Mr. Pascal Lamy; the Minister for Foreign Affairs of Brazil, Mr Celso Amorim, as the Coordinator of the G20; the Minister of Agriculture of Japan, Toshikatsu Matsuka, as representative of the G-10; the European Commissioner for Trade, Peter Mandelson; and coordinators of the African Group, African, Caribbean and the Pacific (ACP) Group, and Small and Vulnerable Economies (SVEs). These represent over 100 developing country members of the WTO.

Inaugurating the Ministerial conference, Indonesian President Susilo Bambang Yudhoyono stressed the importance of a successful completion of the Doha Round. He called on the G33 member countries to effectively advocate the implementation of the Development objectives of developing countries in the Doha Round, as well as to create a fair and ruled-based multilateral trading system. In this context, President Yudhoyono underlined the importance of solidarity and unity among the G33 and developing countries in achieving this objective. The president underlined that agriculture continues to be central to Indonesia's development strategy as it is the core for rural household incomes, provides for the livelihood for around twenty-five million households of farmers and determines the survival of fifty percent of the Indonesian poor.

For ensuring that, he emphasized the need for developed countries to muster the political will and show leadership to reform their agricultural trade policies and move the Doha negotiations forward.

In her introductory remarks, Indonesian Minister of Trade, Mari Pangestu, said that "we must all work hard to utilize the window of opportunity and work today a successful conclusion to the Doha negotiations."

Underscoring the need for fairness, Pangestu said that "the fairness comes from a level of cut in domestic support and tariffs in developed countries to a level identified as the landing zone by developing countries. In return, we, as developing countries, will need to make our contribution based on the principle of proportionality. The balance would come to developing countries from an effective and operational principle of Special and Differential treatment."

Later, at a press conference to conclude the Ministerial, Pangestu said that the G
33 conveyed two main messages. First, that the group remains solid and united. Secondly, that development must be at the heart of the Doha Round. To that end, she said, there are three important issues: substance, timing and process.

On substance, the Indonesian Minister stressed, the removal of trade distorting subsidy and high (and escalation of) tariff in agriculture of developed countries must be addressed, as well as the issue of food security and livelihoods in developing countries.

On timing, the window of opportunity is very narrow, just a few months. Therefore, it is crucial to conclude the round within that time period, she said.

On the process, Pangestu said that although bilateral and plurilateral processes are on-going, this needs to lead to a breakthrough; but the process must be brought back to the multilateral negotiations and be a transparent process.

Finally, she stressed that the G33 is not to be seen as the obstruction. "We have shown [that] we are willing to engage constructively," she said. To that end, the G33 has reviewed and approved the list of indicators, that would be refined further by negotiators in Geneva. "We are in the process of refining our negotiating position, and now developed countries must do so and bring the process back to multilateral negotiations," she concluded.

Mr. Kamal Nath, the Indian Minister of Commerce and Industry, said that Pascal Lamy has said that the breakthrough has to come by July 1. But the G33 meeting is not about breakthrough. "It is about constructive engagement," he said, pointing out further that a breakthrough needs cuts in subsidy (by the developed countries) and conclusion of other issues that are now not in convergence. He further stressed that "breakthrough is important, but content is equally important".

Mr. Amorim said that for a breakthrough to happen, there must be a precise date and numbers for subsidies cut. The G33 has made a display of engagement by undertaking the effort to reduce the number of indicators. Thus, the issue of SP/SSM should not be made into an excuse not to get a breakthrough, he stressed.

The Agriculture Minister of Japan said that the meeting was meaningful because as a representative of the G10, he is meeting the G33 as colleague and friends. April would be crucial, he said, for a breakthrough but it is important to create balance between ambition and reality. "Our last word is [that] the breakthrough has 'to be now or never'," he said.

The EU trade commissioner, Peter Mandelson, said that the EU is aware of the need for balance between reform in agriculture and sensitivity for farmers. Also, crucial numbers on subsidies are yet to be put on the table and "we have to brace ourselves to go into the final months for success or failure". He reiterated that while some have implied that developing countries are unwilling to be flexible, this is not true. The G33 meeting has demonstrated that it is flexible, he said at the press conference.

On the G20 request on market access, Mandelson said that every country has its own sensitivity, but the EU is now ready to move based on proportionality. Now, he said, other developed countries need to do the same. (He was essentially referring to the US). Mandelson also said that SP/SSM should not be viewed as the black box and loophole, as the US is doing.

In a statement titled "Seeking carefully targeted protection", Pascal Lamy said that the Doha Round is progressing at a very slow pace, although he welcomed the intensification of the bilateral activity. He said that this is due to the fact that many developed countries have yet to offer more in terms of subsidy reductions, not just in terms of overall amount but also in terms of limits per agricultural products. He said that all major players i. e. US, EU, India and Brazil must move and there is no time for "chicken and egg" type of negotiation where one party refuses to move before seeing the cards of the other.

On the SP issue, Lamy said that there are already several layers of protection in the WTO system for G33 countries. First, is that G33 developing countries have substantial amounts of "water" in their tariff (difference between bound and applied tariff) which would cushion the effect of any tariff reduction that the G33 would make.

Secondly, there is already the special safeguard (in the present Agriculture Agreement) enjoyed by ten of the G33 countries but used only by four members. Third, is the Agreement on Safeguards. In addition, there is the special and differential treatment. All these together with the SP and SSM, show that there is "no shortage of 'instruments' to protect agriculture in G33 countries," claimed Lamy.

He warned that with so many different layers of protection, some of "your trading partners are worried that these flexibilities will end up negating the market access objective of the negotiation". Thus, he said, the G33 needs to demonstrate that they are seeking carefully targeted protection and not protectionism.

However, a diplomat from a developing country privately commented that Lamy had quietly been suggesting that since the EU has moved, developing countries should move to see what the US would do. Another diplomat said that perhaps the EU and the US are playing the "good cop, bad cop" roles in order to pressure developing countries to make a move.

Guy Mayers, Minister of St. Lucia, on behalf of the ACP Group, said that the recent intensification of the bilateral and plurilateral process in the WTO has become rather prolonged.

The ACP members have been deploying significant amount of limited resources to engage in the Doha Round, but cannot continue in this "holding pattern" indefinitely. Thus, he called for the 'multilateralisation" of the process at the earliest. He further said that the SP/SSM issues are extremely important for the ACP Group. "As such, they constitute demands that we are not prepared to compromise on," he said. Another imperative for the Doha Round is the activation of the duty-free and quota-free market access for LDCs.

Reviewing a letter of the US Trade Representative to the G33, Mayers noted "with displeasure that it was apparent that (for the US) market access took prominence over development". He thus urged the chair of G33 to remind the Group of 4 that the promises of Doha must be kept, and that this round should not be a Market Access Round.

At the end of the Ministerial Conference, the G33 issued a communique that conveyed several messages.

First, it said that while small group, plurilateral, as well as bilateral discussions may be useful to help the multilateral process of negotiations, these must be accompanied by an open and inclusive process with the full involvement of all WTO members. This is to ensure transparency and equity in the process as well as the legitimacy of the results of these negotiations.

Second, the communique reiterated that the early removal of distortions, caused by huge subsidies and significant market access barriers in developed countries, would contribute to the attainment of the Millennium Development Goals. It is essential that the outcome of the negotiations upholds the proposals of developing countries resulting in real and effective substantial reduction of trade distorting domestic support coupled with meaningful disciplines, elimination of all forms of export subsidies, and substantial improvements in access to the markets of developed countries, including through tariff simplification and the elimination of tariff escalation which impede or deny market access opportunities to products of export interest to developing countries.

Third, as part of the Group's positive and constructive engagement, Ministers have reviewed and approved a revision of the list of indicators for the selection of Special Products in such a manner as to assure transparency while enabling all developing countries to appropriately self-designate an appropriate number of products based on the mandated criteria. The indicators represent the simplest and most rational approach to operationalizing the mandate for Special Products as they take into consideration the wide range of domestic circumstances of developing countries.

The communique stressed that while the G33 is ready to be responsive to significant movement in the positions held by the developed countries and contribute to the successful conclusion of the Round, the mandate on Special Products does not require developing countries to provide any compensation including through tariff quota commitments.

It also reaffirmed that the Special Safeguard Mechanism is an integral part of the modalities of the WTO agriculture negotiations. They understand that in absence of a safety net in developing countries, an effective and operable Special Safeguard Mechanism would be the only instrument which can cushion developing country farmers against import surges or price declines. They emphasized that SSM should be available to all agriculture products and that the import price and import volume triggers applied separately should alone determine which product needs the invocation of the SSM at any given time.

In a final statement, Indonesian Minister Mari Pangestu said that SP itself is no longer an issue, it has been accepted. Now, we need a mechanism and definition, she said, which is not easy within the G33 given the diversity of membership, having different needs.

But even then the G33 managed to review the list of indicators formulated last year, reduce it and make it more transparent, simplified to be used by each country to self-designate SP. To that end, technical work needs to continue in Geneva within the next four weeks, which would include work on SSM. The final position of the G33 would then be linked to the market access issue, in developed countries. Thus, the onus should not be on developing countries to move faster, rather the developed countries need to show leadership.

Unlike other WTO meetings, where NGOs are not allowed in, the Jakarta G33 meeting invited NGO participation. NGO and CSO representatives were invited to air their views and opinions during a lunch meeting with the Senior Officials. During the Ministerial, two representatives were allowed into the Ministerial meeting briefly to present their statements, while a group of farmers were given space outside the meeting venue of Hotel Gran Melia, to stage a rally and protest.