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Proposals at WTO to
hit local farmers
By Tahir
Hasnain
 PAKISTAN
recent proposal at the World Trade Organisation (WTO) can
hit agriculture and especially the farmers. It has made up
its mind to relax its position on Special Products (SPs) in
future negotiations on Agreement on Agriculture (AoA) as
compared to current position of the G33 that 20 per cent of
the tariff lines be exempted from sharp tariff reductions
that are crucial for country food security, rural
development and livelihood security. A paper is being
presented and discussed by the government at various forums
informally and right now it is being discussed in the Cairns
group (a group of exporters of agriculture products).
One of the key issues in negotiations at the WTO that kept
talks recently suspended is the flexibilities in market
access. Developing countries, led by the G33, have
articulated their position on SPs and the Special Safeguard
Mechanism (SSM). Recent developments show that US and EU are
about to make a deal on agriculture. If this happens,
pressure would be built around developing countries and
specifically on G33 to step back from its position (20 per
cent tariff lines).
As there is no solid proposal on SPs on table except the
extreme positions of G33 (20 per cent tariff lines) and the
United States (five products) and Pakistan, being a G-33
member, feels that there should be some balancing proposal
in order to have progress on this issue.
Islamabad also believes that as far as its defensive
interests are concerned, since bound rates for agricultural
products in Pakistan are rather high (average 101 per cent),
it is not likely that the applied rates would be touched
after applying the current G-20 formula (maximum cut in
tariff of 40 per cent).
However, on the other hand, Pakistan does have offensive
interests as in future it is expected to have surplus
production in several agricultural products such as milk and
horticultural products (citrus fruit, potato, tomato and
onion etc.) and it does not want that because of excessive
application of SPs by other countries, it may face
difficulty in finding export markets in the South.
The critics however believe that the paper on SPs is too far
from the G33 (20 per cent tariff lines) and actually
supports US position of five products. It takes the main
indicators only and ignores sub-indicators as per the G33
proposal. It suggests that Special Products (SPs) be ranked
according to a scoring system based on the data and
percentage of any product under a specific indicator i.e.
food security, rural development or livelihood security.
Members may agree on a benchmark score; therefore all
products scoring more than the benchmark would be eligible
for designation as SPs.
Taking the case of Pakistan, the paper takes 15 agricultural
products that are important considering food security,
livelihoods and rural development. These crops are cotton,
wheat, rice, potato, sugar, edible oil, tomato, onion,
citrus fruit (kinoo), apple, tea, beef, mutton, poultry and
milk. The paper ignores other products of regional
importance such as maize, gram, groundnut, chilli, banana,
other vegetables, hides and skin, etc. Among the prioritised
crops, the paper says that only rice has high regional
importance from the food security perspective and rice,
tomato, onion, citrus, apple and tea have high regional
importance from the livelihood perspective. As regards rural
development, the paper categorises six products (cotton,
potato, tomato, citrus, apple, milk) as highly important
because of their potential for value addition.
While grading products by three indicators, the paper says
that wheat and rice have maximum aggregate score (21)
followed by citrus (16), apple (15) edible oil (14), tomato
(14), milk (14), cotton (13), sugar (13), onion (13), tea
(12), potato (11), beef and mutton (9), and poultry (8).
Based on this criterion, it appears that Pakistan would only
be able to designate five crops (wheat, rice, citrus, apple
and edible oils) as SPs. All other important crops with
strong export potential might be excluded from the list of
SPs and would be subject to sharp tariff reduction. The
critics also doubt that reductions would actually go beyond
the country current applied tariffs.
The designation of SPs is in fact one of the crucial
development instruments in trade for developing countries
and for Pakistani farmers. It is the basic trade safety net
that will go a long way in providing a country legitimate
time and policy space to adjust to the multilateral trading
framework. The SPs paper provides little hope to local
farmers and development in the country. Already, Chinese
products are threatening many local sensitive agricultural
products in the market and governments proposal, if
accepted, will give free hand to rest of the countries i.e.
India to stop our farmers growing anything except the
designated crops as SPs.
Seemingly Pakistan is attempting to bridge gap between the
G-33 stance and that of the US, but the critics believe that
the proposals are quite away from G33 as well as development
needs of the poor countries. As mentioned earlier that
expected US/EU deal is likely to put pressure on G33 for a
compromise and G33 member countries need more unity at the
moment to resist these pressures. Pakistan should rather
show solidarity with G33 and tackle the pressures from US
using the pressures of G33 and G20. Pakistan should be
cautious, as any limiting criteria or exclusion of products
as proposed by Thailand and Malaysia could dilute this
privilege, while many countries may not be able to designate
even a single product based on the criteria proposed by
Pakistan.
The stance that the excessive application of SPs could hurt
Pakistan in finding export markets also seems irrelevant as
SPs are not forever and already we have only 11 export
products at the moment of which more than 80 per cent goes
to developed country markets. We are rather loosing market
in developing countries i.e. of mango and citrus because of
high cost of production, inadequate storage facilities and
faulty trade facilitations. Similarly the food import is
already on increase, many farmers are leaving their innate
profession and hence, there are less chance that Pakistan
will start growing huge surpluses in near future. .
As compared to designating products on the basis of data,
concessions on percentage basis is fine with all poor
countries as most of these countries, including Pakistan,
lack proper data. Concessions on percentage basis also gives
us the option to assess the impact of trade flows and in
cases where short-term import surges cause serious
instability in prices, developing countries would have the
flexibility to shift the lines categorised as SPs.
The proposal of limiting SPs to a few lines was not in any
way endorsed in Hong Kong; rather it was a percentage.
Developing countries were granted the privilege of
self-designating an appropriate percentage of agricultural
products with flexibility to avoid strict reduction
commitments based on the criteria of food security,
livelihood security and rural development needs.
Before and during the Doha ministerial summit, Pakistan was
champion of the Development Box and SPs and got support from
majority developing countries. We know that something
happened during the Doha meeting and the government started
stepping back from its proposals made for the Development
Box. Despite the claim it would be its third attempt to
accelerate the Doha Round including its initiatives earlier
for Trade Facilitation and NAMA but the other circles show
concerns that Pakistan, in the meantime, has rather been
weakening resistance movements of development countries in
the WTO and as compared to developing countries, rich member
countries are quite happy..
The concerned persons in the NGO sector in Pakistan are
planning to convene a workshop in this regard to analyse the
paper more technically. They do have plans to come up with
an alternative paper as they feel their duty to provide
policy makers a peoples perspective alternative view point
in order to save peoples rights in the ongoing hegemony of
unfair economic interests of rich industrialized nations.
Tahir
Hasnain is Director of an Islamabad based civil society
initiative EJAD (Economic Justice and Development
Organization).
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