Does little to address Third World problems
With a view to revive the negotiations in the multilateral trade, the WTO released two revised draft texts on Monday evening ? one on agriculture and the other on industrial goods.
The new draft issued by the chair of the farm negotiating committee, Crawford Falconer contains revised formulae for cutting tariffs and trade distorting subsidies. Falconer has claimed that the new draft text is the result of discussions held since September, last year. Similarly the chair of the NAMA group, Don Stephenson claimed that the revised draft released by him is the product of the bilateral and plurilateral consultations he had over the last few weeks and is also built upon the past years of negotiations. He, however, said “this revised text is another step in the process and might be subjected to further revision.”
The new drafts show very little areas of convergence despite the WTO director-general Pascal Lamy claiming to the contrary.
The farm draft has ignored the very basic aspect of food and livelihood security of the Third World. Though it has recognized the developing countries right to self-designate their special products based on food and livelihood security and rural development, it has proposed the minimum limit of 8% of the tariff lines and maximum limit of 20% of the tariff lines. The crucial issue is the maximum extent of self-designation of special products by developing countries which is in square bracket, implying the need for further negotiations.
One good thing is that the draft has recognized the developing countries right to self-designate special products guided by indicators based on the criteria of food and livelihood security and rural development. G-33 countries suggested the minimum limit of 20% for self-designation of special products. Many of the farm products crucial for food and livelihood security in a multi-crop country may not be covered under 20% of the tariff lines. Thus capping of special products by a percentage of tariff lines may not solve the problem.
The special safeguard mechanism (SSM) provided in the draft for protecting the developing countries farmers from a surge in imports is complex and complicated. This needs to be made simpler.
The draft does not provide for conversion of all the complex and specific tariffs in the developed countries into their ad valorem equivalent, which would lead to greater transparency. The draft reflects an uncertainty related to desired reduction in subsidies in the developed world. It only indicates some range of cuts that too within square brackets, implying the need for further negotiations.
Regarding the NAMA draft the disturbing element is the attempt to establish a link between tariff reduction coefficients and flexibilities for the developing countries. The flexibilities for developing countries should be treated separately and not linked to any other criteria.