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WTO challenges and
agriculture sector
By Hashim Abro
Pakistan is an agricultural country. Therefore, the ensuing
WTO challenges have sparked heated debates among various
circles. A sub-set of four WTO agreements specifically deals
with agricultural issues.
These include: agreement on agriculture, agreement on the
application of sanitary and phytosanitary measures, agreement
on technical barriers to trade and agreement on trade-related
aspects of intellectual property rights. In this scenario a
question crops up in the mind. What does it exactly entail
from the member countries? Yes, members of the WTO are bound
to fulfil the conditions. They are supposed to bring their
trade-related laws into conformity with the WTO agreements. It
calls for substantial institutional change.
These should bring about greater transparency in their
trade-related laws, regulations and practices, and participate
fully in WTO negotiations on the rules and disciplines that
govern international trade in goods, services and intellectual
property, and engage in periodic rounds aiming at stantial
reduction of tariffs and other barriers to trade.
As far as Pakistan is concerned, it needs to cope with two
opposite pulls. On the one hand, it has a strong interest in
earning higher prices for its agricultural exports and on the
other hand, being net importer of food, it always looks
forward to arrangements that lower international prices of its
agricultural imports. For this very reason, Pakistan could
never wholeheartedly support regimes that led to a reduction
in rich countries' agricultural subsidies and consequent
prices in internally market for agri-products.
Fortunately, this tension has now subsided because Pakistan's
agricultural trade is more or less in balance. In fact, the
current mild imbalance should soon turn into a surplus.
Pakistan, therefore, should step up its efforts in the WTO to
bring about a lowering of domestic support and export
subsidies among organisation of economic co-operation and
development or OECD countries. While agreement on agriculture
does require the OECD countries maintaining high subsidies to
reduce them, it allows ample room to the developing countries
to support its agricultural products.
Had Cancun conference succeeded, a process would have raised
international prices of agricultural products and improved
incomes, productivity and competitions of developing
countries' products. According to some studies sponsored by
the World Bank and the IMF, termination of OECD agricultural
subsidies, is likely to lead to a 10-20 per cent increase in
the prices of cotton, 20-40 per cent increase in dairy product
prices, 33-90 per cent price increase in the case of rice and
a 20-40 per cent rise in the international prices of sugar. No
doubt, Pakistani producers and the Pakistani economy will be
better off provided that the government of Pakistan allows
higher international prices to reach the farmers. Pakistan has
no reason to be afraid of the WTO round of negotiations on
agriculture.
As the Harbinson proposal envisages average tariff cuts from
bound rates of 40 per cent for tariffs above 120 per cent, a
cut of 35 per cent for tariffs between 60 per cent and 120 per
cent, a cut of 30 per cent for tariffs between 20 per cent and
60 per cent and an average reduction of 25 per cent in tariffs
below 20 per cent. These cuts are to be implemented over ten
years.
Moreover, cuts are not to apply to products considered
strategic by the developing countries. Even the Harbinson
proposal was accepted in its entirety. And the resulting bound
tariffs of Pakistan would still be higher than its applied
rates. This is so because the average agricultural bound rates
of Pakistan are higher than 100 per cent. Rationally speaking,
Harbinson proposal virtually makes no difference to the actual
level of protection available to the producer. It needs to be
understood clearly that a country of the size of Pakistan
cannot remain a free rider for very long.
Whereas, the agreements on sanitary and phytosanitary measures
has attempted to develop a multilateral, rule based discipline
for adopting or enforcing measures necessary to protect human,
animal or plant life or health. Food safety is one of the
central concerns of this agreement. In view of this it is
vital for the ministry of food, agriculture and livestock to
expedite up-dating and revising laws of the land, collecting
rules of major trading partners and disseminating among the
concerned business organisations. Pakistan must seek technical
assistance in the areas of processing technologies, research
and establishment of national regulatory bodies.
On the agreement on technical barriers to trade, which is
concerned with the use of technical regulations and standards
including packaging, marking and labelling requirements and
procedures for assessment of conformity to the regulations and
standards should not create unnecessary obstacles. Indeed, the
agreement has a direct bearing on international trade in
processed foods and beverages. Therefore, Pakistan needs to
modernise its laws, regulations and standards to promote its
relatively new agricultural exports such as fruits, vegetables
in raw and processed forms and to educate its producers and
traders in the requirements of its international trading
partners.
The extension of TRIPS to agriculture, of course, is pregnant
with difficulties. The development of commercial seed
industry, the tension between the rights of plant breeders and
the rights of the farmers in the context of new varieties of
plants, the conflicts between different readings of the TRIPS
and the convention on biological diversity, issues relating to
disclosure of origin and the protection of traditional
knowledge are matters which have generated a very lively
controversy all over the world.
Pakistan needs to develop an exhaustive policy not only on the
TRIPS on Agriculture but also about multilateralism,
bilateralism and regionalism. Hastily designed, overlapping
preferential agreements will create a mess for the business
community and encourage corruption in the ranks of those who
matter. And that does not augur well for global free trade in
the country.
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Pakissan.com;
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