Yesterday, we wrote about the enormous pressure being put on India and China to agree to a deal at the WTO. Today, let's get into some of the details of what this fight is really about.
Exporters such as the U.S., Australia, Thailand and Uruguay want to sell their agricultural commodities abroad. But the targeted importers, countries like China and India, worry about the disruption that uncontrolled agricultural imports will bring to their millions of farmers, the overwhelming majority of whom are among the poorest people in these already poor countries. They want to open their markets, but less, and not to all products. Many have learned from experience that the damage done by agriculture dumping cannot be undone by the post-facto imposition of some kind of corrective - especially if that corrective has to wait several years for a WTO trade dispute panel to meet, deliberate and judge, and then for the country at fault to change its laws (with the strong risk the party at fault will ignore the ruling, as both the U.S. and EU have done in some cases).
At its heart, this fight is about protection: countries like India and China (but with the solid support of close to 100 other of the 150 or so WTO members) insist they need a higher level of tariff protection than countries like the U.S. and members of the European Union think they should have. In return - make no mistake about this - the U.S. and EU are fighting to protect their own interests (they spend money on protection in the form of support to industries, rather than using taxes such as tariffs, but it is all about protecting interests).
A main point of contention concerns something called the Special Safeguard Mechanism, or SSM. The idea behind the SSM is not new. The Uruguay Round Agreement on Agriculture included a so-called Special Safeguard (SSG). The mechanism was created to give further protection to countries that converted non-tariff barriers (such as restrictions on the quantity of a good that could be imported) into tariffs (which were often extremely high). About 30 developing and most developed countries had the right to use the SSG.
When the Doha negotiations were launched in 2001, a group of countries (at that time led by Pakistan) explored with a group of NGOs (including IATP) the idea of a "development box" for agriculture. The notion was to protect food security and rural livelihoods from the commercial fight over market share. In addition, the Doha negotiations were called (once upon a time) a Development Round because they were supposed to include an agenda of some 100 or more items that surfaced as the Uruguay Round (UR) was implemented and that developing countries wanted addressed before undertaking any new commitments in Doha. It never happened, and this latest text continues to ensure that it will not happen, at least not in this round.
Fast forward to today and you have the G33, a group of developing countries, fighting for two particular measures (see IATP's Agreement on Agriculture glossary for more details):
1. Special Products (SPs): a list of agricultural products that would be subject to their own, milder, tariff reductions or exempt altogether because of their importance to livelihoods and/or food security.
2. The Special Safeguard Mechanism (SSM): the right to increase tariffs sharply to curb an import surge, to protect a domestic industry from short-term swings in global markets.
On Monday, day eight of the latest attempt to agree to modalities for Doha: the whole day was taken up with fighting over the the terms for the SSM, and when governments broke for the night (at 2.30 am or so), they were still in disagreement. The disagreement is over rules proposed in text by DG Lamy on July 25 for when an SSM measure could be used. The text has been widely criticized (see for instance issue 4 of the on-going commentary from the South Centre). A lot of background is also available on this issue - a recent paper by TWN is a good place to start.
In the end, the fight is really about everyone trying to simultaneously protect and aggress (India is after new export markets like everybody else at the WTO), a process known as mercantalism. Deeply out of favour with theorists, it is nonetheless the driving force behind much of the trade policy codified in international trade agreements.
Mercantalism makes for ugly negotiations. Not much room to discuss the right-to-food, or decent work or climate change. Anyone else ready for a new way to do business?
