Negotiations on the establishment of a special safeguard mechanism (SSM) for developing countries, such as the Philippines, and least-developed countries (LDCs) ended in stalemate on the third day of the 11th World Trade Organization (WTO) Ministerial Conference (MC11).
Raul Q. Montemayor, national business manager and program officer of the Federation of Free Farmers (FFF), told the BusinessMirror that some member-countries have asked for deeper tariff cuts in exchange for their nod for SSM.
”It’s a stalemate; we are still having meetings until the evening. There were negotiations earlier, and it seems nothing has been agreed upon,” Montemayor said in an interview early Wednesday (December 13, Philippine time).
“Some of the countries want to link the SSM with tariff cuts. They are saying that SSM cannot be stand-alone. They are arguing that ‘we will give you SSM, but lower your tariffs in exchange,’” he added.
Montemayor, who is part of the Philippine delegation to MC11 in Argentina, said Philippine negotiators will remain firm in pushing for SSM without reducing the tariffs of developing countries and LDCs.
“In the previous ministerial conferences, there have been ministerial declarations that there would be an SSM. However, it was not stated in those declarations that it would be linked to tariff cuts,” he said.
“So, that is what our negotiators are pushing here right now. This is for the developing countries so that their farm sectors will not be hurt and they could compete in the international market, especially against countries who have highly subisidized products,” Montemayor added.
The Philippines has proposed an improved special safeguard (SSG) on agriculture as an alternative to SSM. Under the its proposal, the trigger price for SSG, which is currently being computed based on the import price in 1986-1988, will use a rolling three-year average price of imports. Also, the Philippines had proposed the phase out of the current complicated formula for SSG remedy.
Under its proposal, once the SSG is invoked, countries could slap an additional tariff on imported goods by as much as 90 percent of the price difference between the trigger price and imported price.
”For example, your trigger price for poultry imports is P100 per kilogram [kg] and chicken priced at P80 per kg enters your borders, so, that will allow you to invoke SSG. So 90 percent of P20 pesos is P18. That will be your additional tariff,” Montemayor said.
The FFF official said the Philippines’s proposal has a ”50-50” chance of getting the nod of other WTO members, as negotiators go into another set of talks during the final day of MC11.
A post-work program would be the likely outcome of MC11 for agriculture if negotiations would break down, according to Montemayor.
”Countries want to come up with an agreement on agriculture, that’s why there is more pressure tomorrow,” he said.
A source who is privy to negotiations in Buenos Aires told the BusinessMirror that WTO member-countries did not find ”convergence” on any negotiated outcome in agriculture.
The WTO member-countries are now “focusing on a work program post-Buenos Aires,” according to the source.
Quoting Minister Facilitator for Agriculture Amina Mohamed, WTO Spokesman Keith Rockwell said member-countries have not reach a middle ground on the ministerial text for agriculture so far.
“She has been conducting consultations in various configurations. She urged members to put forward a compromised text, none did so,” Rockwell said in a news briefing on December 13 (Philippine time).
“She asked everyone to approach the text with an open mind—it may not contain everything you like but it strikes a careful balance. She urged members to progress on this area, without progress on agriculture it would be difficult if not impossible to make progress elsewhere,” Rockwell added.
Montemayor said the establishment of SSM is a “crucial trade remedy” for the Philippines, as Filipino farmers are vulnerable to import surges.
“Our tariffs are already low, so there’s more tendency for imports to come in. So there’s really a need for trade remedies like this, that’s the value of SSM for us,” he added.
“That’s why the countries who export to us do not want this because the cost of goods they sell to us would be more expensive,” Montemayor said.
SSM is a trade measure that will allow developing countries to raise tariffs temporarily to deal with import surges or price falls, according to the WTO.
Earlier in his speech before fellow farm ministers at MC11, Agriculture Secretary Emmanuel F. Piñol said the Philippines will not agree to a new farm deal sans a concrete SSM for developing countries and LDCs.
Piñol urged WTO member-countries to act upon the Philippines’s proposal on establishing SSM if they want to get Manila’s nod for any agricultural deal in the
ongoing MC11.