The difficulties encountered with SSMs in the Doha Round concern (a) the level of increase in exports at which they can be applied, (b) the tariffs that can be levied in response, and (c) the duration they can be implemented. Many LDCs champion these provisions by claiming that the abundance of small, vulnerable farmers in their countries makes it difficult for them to quickly establish proof of injury as required by conventional special safeguards (SSGs). This claim may be partially borne out by there being very few invocations of SSGs by LDCs over the WTO's history. LDCs believe that, in the time it takes to establish material injury, these small farmers may have already been adversely affected.Reuters brings us news that the so-called G-33 group of developing countries is putting forth a new document at the WTO to hopefully get matters moving on this particular impasse with the above in mind:
"The main idea of the submission is to provide not only a political argument but also a technical one," said Indonesia's ambassador to the WTO, Erwidodo, who like many Indonesians goes by a single name. Indonesia chairs the G33, the group which is spearheading proposals for the safeguard.And here's an interesting quantitative conundrum after SSMs are applied:
One of the main concerns of developing countries which want the mechanism is to ensure that the safeguard will be simple and easy to invoke. They say that a cumbersome process to establish the conditions under which it could be used would make it meaningless as the damage would already be done to subsistence farmers vulnerable to a surge in imports.
Some of the proposals by exporters concerned that the safeguard would be too far-reaching apply too many conditions, Erwidodo told Reuters. "That makes the SSM difficult to operate," he said.
Many of the issues surrounding the safeguard are highly complicated, but the difference between countries like Indonesia and India with millions of subsistence farmers on the one hand, and exporters both rich, like the United States, and poor, like Costa Rica or Uruguay, come down to one thing. The G33 countries say they must be allowed to respond to a sudden flood of imports by raising tariffs sharply but temporarily, above any levels set in an eventual Doha agreement, so that their farmers are not driven out of business, destroying both their livelihoods and the country's food security.
Exporters agree a safeguard is reasonable, but fear it could be used to choke off normal growth in trade, and that a competitive increase in exports will be interpreted as a flood in imports. One question still to be settled is whether the safeguard would allow tariffs to rise above pre-Doha levels, in other words above levels set in 1994 in the previous trade negotiation, the Uruguay Round. Food importers say that may sometimes be necessary, while exporters say that by putting the clock back it would make a mockery of a negotiation to open world trade.
Another technical question concerns the "baseline" -- the starting point for calculating whether an increase in imports is a flood. Exporters worry that the use of the safeguard one year could result in zero imports, so that any imports the following year would by definition exceed any percentage threshold, triggering the safeguard yet again. Erwidodo said this could be addressed by using a moving average of three years' imports for the baseline, which would generally result in a rising figure each year.
