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FICCI plea on WTO farm rules

Our Bureau

NEW DELHI, July 2

THE Federation of Indian Chambers of Commerce and Industry (FICCI) has suggested that the provisions of special safeguards available under the WTO agreement on agriculture should be extended to all developing countries. It also suggested that the issue b e put on agenda for the next WTO Ministerial conference at Doha.

In a study done by the WTO division of FICCI, it was evident that such special safeguards mechanism is discriminatory, as only 39 out of the 141 member-countries currently have the right to use a combined total of 6,072 special safeguards on agricultural products, the chamber said.

According to the special safeguard provisions of the WTO Agreement on Agriculture, for products whose non-tariff restrictions have been converted to tariffs, additional duties could be levied if the volume of imports of that product increases above a cer tain threshold, or if its import price falls below a trigger price.

It also specifies that the special safeguard can only be used where countries concerned have explicitly reserved the right to invoke this clause by designating the products in their schedules, the chamber said.

It is notable that the special agricultural safeguard mechanism does not require the complainant to show that imports caused by injury, FICCI said.

Such automatically triggered safeguard measures in developed countries have been used to block imports from developing countries. These trade regulations block imports when world prices fall below a pre-set threshold and when imports exceed expectations, the chamber said.

Even in its recent initiative to abolish tariffs on exports from the world's 48 poorest countries (Everything But Arms Proposal), Europe retained safeguards against flood of imported bananas, rice and sugar.

Special safeguards are supposed to provide a cushion for producers against surges in imports and precipitous reductions in world prices, FICCI said. However, these safeguards were being used as an integral part of market management systems, the chamber s aid.

FICCI analysis showed that the use of special safeguards had increased between 1995 and 1999. While less than 50 special agricultural safeguard actions (price-based and volume-based taken together) were triggered in 1995, the number went up to 179 in 199 6 and stood at 135 in 1998-99. Since 1995, EU has triggered such safeguards 172 times, US (227 times) and Japan (91 times), the chamber said.

These safeguard actions were taken mostly on products of export interest to developing countries including dairy items, animal products, sugar, tea, coffee, beverages and spices, and fruits and vegetables, FICCI said.

Developed countries such as the EU and Japan have proposed, not to the surprise of developing countries, the continuation of the Special Safeguards under Agreement on Agriculture. Several countries have come out with a support for extending this special safeguard clause to other developing countries as well.

Since most developing countries used simple tariffs prior to the Uruguay Round of Agreement on Agriculture, few of them have access to the special safeguard clause. India must press for correction of this asymmetry in WTO, FICCI maintained.