International Trade Daily | September 27, 2001 | By Daniel Pruzin
GENEVA--A group of developing countries has called for the establishment of a temporary mechanism that would allow them to impose countervailing measures on subsidized agricultural imports from wealthier nations in order to prevent unfair competition. The proposal was made by five developing country members of the Cairns Group of agricultural exporting nations--Argentina, Bolivia, Paraguay, the Philippines, and Thailand--and presented to a Sept. 24-26 informal special negotiating session on agriculture at the World Trade Organization.
The five said the mechanism would be justified under WTO rules allowing for special and differential treatment on behalf of developing countries and would remain in place as long as WTO negotiations on agricultural reform continue. The WTO launched talks on further reform of agricultural trade in early 2000, talks which were mandated by the Agreement on Agriculture concluded during the Uruguay Round.
The United States and Canada expressed reservations about the proposed countervailing mechanism, arguing that the focus should be on reducing farm subsidies, according to officials who attended the meeting.
The mechanism would be applied to all domestic subsidies provided by developed countries that are deemed to be trade-distorting under WTO rules, without the need to prove injury arising to domestic producers from the subsidies.
The five noted that domestic support for agriculture in Organization for Economic Cooperation and Development (OECD) member countries is as high as it was in the late 1980's and that most domestic support is excluded from WTO reduction commitments. They added it would be difficult on their part to accept demands for further cuts on their agricultural tariffs, particularly from those countries still using export subsidies.
The five also said they were opposed to the idea of seeking relief through the WTO's existing safeguard mechanism for agricultural goods since such safeguards could have a negative effect on exports from countries which do not subsidize their farmers.
Safeguard Defects Alleged
The WTO's Agriculture Agreement allows a member to impose safeguards on farm imports which are sold below a specified reference price or which are deemed to be causing, or threatening to cause, serious injury for domestic producers. A safeguard may only be applied to products specifically listed by a member in its schedule of concessions. However, under the Agriculture Agreement, the safeguard mechanism should only remain in place as long as negotiations on further reform of agricultural trade are ongoing. Some officials argue that if WTO members fail to launch a new trade round at their upcoming ministerial meeting in Qatar next November and the agriculture talks falter as a consequence, the right to use the safeguard mechanism will lapse.
Several countries addressed the issue during the Sept. 24-26 special negotiating session, with Japan, South Korea, Norway, the European Union and other European countries arguing for the continuation of the special safeguard mechanism or even the extension of the mechanism to new products. Cairns Group members argued that any extension of the safeguard should only be granted to developing countries.
Thirty-eight of the WTO's 142 member countries have reserved their right to apply special safeguards on some 6,000 agricultural imports.
Copyright c 2001 by The Bureau of National Affairs, Inc., Washington D.C.International Trade Daily:
