Blog cafe : Better trigger

Written by The Financial Express | Updated: Sep 30 2008, 03:53am hrs
The specific reason for the breakdown [in WTO talks] wasdisagreement over the extent of an increase in imports that would trigger special increases in import duties on the agricultural products of developing countries and the size of the permitted tariff response.

[The problem] is the flawed nature of the trigger mechanism for temporarily increasing tariffs that is set forth in the special safeguard measure under negotiation. A better trigger mechanism that distinguishes between when developing countries do and do not need additional import protection to maintain food security and livelihood conditions of their poor farmers is simply the percentage increase in imports divided by the average consumption of the product over a recent period.

Greater increases in import duties would be permitted with higher levels of this ratio above some minimum cut-off level. Analyses [by WTO and members] of the historical effects of increases in developing country agricultural imports as a percentage of the domestic consumption of a product would guide members in negotiating the minimum cut-off level and the permitted increases in protection.

With a measure that indicates changes in market access opportunities for farmers much more accurately than relative changes in the volume of imports alone, the issue of whether safeguard actions should be permitted to raise import duties above pre-Doha Round levels should no longer be of major concern.

The shame is that all parties now agree on the need for a special safeguard mechanism. The particular formula they have chosen, however, is too blunt to distinguish between safeguarding fragile livelihoods and old-fashioned protectionism.