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    Post-Graduate Program in Management

    Term IV

    2013-14

    Course Project

    On

    Group 2

    Jayant Kharote (0151/49)

    Kamal Nayan Ganeriwala (0156/49)

    Dipak Daga (0113/49)

    Gagan Dixit (0117/49)

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    Preface

    Among restrictions on imports, safeguard measures are particularly

    controversial in that they are invoked in the absence of any unfair trade practice. Safeguards

    interfere substantially with the normal stream of trade, and their improper application

    undermines the objectives of the WTO. A safeguard is used when imports of a particular

    product, as a result of tariff concessions or other WTO obligations undertaken by the

    importing country, increase unexpectedly to a point that they cause or threaten to cause

    serious injury to domestic producers of like or directly competitive products. Safeguards

    give domestic producers a period of grace to become more competitive vis--vis imports.

    Special Safeguard Measures (SSM) is one of the new instruments that many developing

    countries with mainly defensive interests in agriculture are advocating in order to defend their

    triple concerns of food security, farmers' livelihoods and rural development. SSM wouldallow developing countries to raise tariffs beyond bound levels, in principle to stall inflows of

    cheap imports that could displace farmers.

    In this project, we will cover the following broad areas:

    a) Understand the implementation of special safeguards by developing countries(especially India)

    b) Explore issues under dispute with respect to special safeguards measures (SSM)c) Analyze the impact of SSM for developing countries ( India in particular )

    In the end, we shall analyse international standings on this issue and present our opinionon the dispute and Special safeguard mechanism.

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    Index

    1. Introduction to Safeguards...04

    2. Types of Safeguards.05

    3. Prevailing SSG and Special Products06

    4. Proposed SSM methodologies.08

    5. Statistics : India and Agricultural Safeguards...10

    6. Special Safeguard Measures (SSM) debacle12

    7. International opinions divide14

    8. Conclusion15

    9. References17

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    Introduction to Safeguards

    The Agreement on Safeguards (SG Agreement) sets forth the rules for application of

    safeguard measures pursuant to Article XIX of GATT 1994. Safeguard measures are definedas emergency" actions with respect to increased imports of particular products, where suchimports have caused or threaten to cause serious injury to the importing Member's domesticindustry (Article 2). Such measures, which in broad terms take the form of suspension ofconcessions or obligations, can consist of quantitative import restrictions or of duty increasesto higher than bound rates. They are one of three types of contingent trade protectionmeasures, along with anti-dumping and countervailing measures, available to WTO

    Members.

    Under GATT 1947, safeguards were regulated only by Article XIX, and it was theUruguay Round that created the SG Agreement, which adds clarity and introduces certainchanges. The SG Agreement was negotiated in large part because GATT Contracting Partieshad been increasingly applying a variety of so-called grey area measures (bilateralvoluntary export restraints, orderly marketing agreements, and similar measures) to limitimports of certain products. These measures were not imposed pursuant to Article XIX, andthus were not subject to multilateral discipline through the GATT, and the legality of suchmeasures under the GATT was doubtful. The Agreement now clearly prohibits suchmeasures, and has specific provisions for eliminating those that were in place at the time the

    WTO Agreement entered into force.

    The guiding principles of the Agreement with respect to safeguard measures are that suchmeasures must be temporary; that they may be imposed only when imports are found to causeor threaten serious injury to a competing domestic industry; that they (generally) be appliedon a non-selective (i.e. most-favoured-nation, or MFN) basis; that they be progressivelyliberalized while in effect; and that the Member imposing them (generally) must paycompensation to the Members whose trade is affected. Thus, safeguard measures, unlike anti-dumping and countervailing measures, do not require a finding of an unfair practice,

    (generally) must be applied on an MFN basis, and must be paid for by the Memberapplying them.

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    Special and differential treatment:

    Developing country Members receive special and differential treatment with respect to otherMembers' safeguard measures, in the form of a de minimis import volume exemption. Asusers of safeguards, developing country members receive special and differential treatmentwith respect to applying their own such measures, with regard to permitted duration ofextensions, and with respect to re-application of measures.

    De minimis import exemption: A safeguard measure shall not be applied to low volume fromdeveloping country Members. That is, where imports from a single developing country

    Member account for no more than 3 per cent of the total imports of the product concerned,and provided developing country Members below this threshold on an individual basis do notcollectively account for more than 9 per cent of those imports, such imports shall be excludedfrom the measure.

    Types of Safeguards

    Safeguards are contingency restrictions on imports taken temporarily to deal with

    special circumstances such as a surge in imports. They normally come under the Safeguards

    Agreement, but the present Agriculture Agreement has a special provision (Article 5), the

    Special Agricultural Safeguard (SSG). The Doha Round aims to create a third type, the

    Special Safeguard Mechanism or SSM.

    1.GATT Art.19 and the Uruguay Round Safeguards Agreement (all products):Temporary action to restrict imports of a product if the countrys domestic industry is

    injured or threatened with injury caused by a surge in imports (accompanied by a pricefall, but not a price fall on its own). The restriction can be quantitative (such as a quota) oran increase in tariffs above the bound rate. Requires test of injury, and negotiations for

    compensation. Can be used on agricultural products.

    http://www.wto.org/english/tratop_e/safeg_e/safeg_info_e.htm#tophttp://www.wto.org/english/tratop_e/safeg_e/safeg_info_e.htm#top
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    2. SSG Special (Agricultural) Safeguard(present Agriculture Agreement). Thesafeguard raises tariffs. It can be triggered by import surges or price falls, virtuallyautomatically, ie, without any need to test injury or to negotiate compensation.

    The SSG safeguard can only be used on products that were tariffied (eg, quantitative

    restrictions converted to equivalent tariffs, and then cut). They cannot be used on importswithin tariff quotas. They can only be used if the government reserved the right to do so inits lists or schedules of commitments on agriculture.

    Many developing countries chose not to tariffy. They preferred to set ceiling bindings(eg, 100% tariffs over a wide range of products) that were not cut. By making that choicethey opted not to have the right to use the SSG safeguard. In the Doha Round the debatehas been about whether to eliminate the SSG, or reduce and constrain it.

    3. SSM Special Safeguard Mechanism(new for developing countries only).

    Objective: to have something like the SSG, for developing countries, particularly thosewho do not have the SSG.

    Like the SSG, it could be triggered simply if the import surge or price fall is bigenough, without any need to test injury or to negotiate.

    But each developing country could use it on any product. There is no equivalent to theSSGs tariffication condition.

    It cannot be used on a product if one of the other types of safeguard is being used onthat product.

    GATT safeguard Special AgriculturalSafeguard SSG

    Special Safeguard

    Mechanism SSM(details still beingnegotiated)

    Which

    products?

    All, includingagricultural

    Agricultural, iftariffied

    Agricultural

    Which

    countries?

    All Developed anddeveloping, but only iftariffied

    Only developing

    Trigger Import surge with pricefall

    Import surge or pricefall

    Import surge or pricefall

    Remedy Quantity restriction,

    tariff increase

    Tariff increase Tariff increase

    Constraint /

    condition

    Show injury or threat ofinjury, negotiatecompensation

    Only productstariffied in Uruguay

    Round (where comfortneeded forliberalization)

    For import surge:

    limit on % ofproducts in a year

    ceiling on tariff at orabove pre-Doha rate

    minimum surge fortariff exceeding pre-Doha rate?

    Expiry of

    mechanism?

    Permanent Expires or reducedpost-Doha

    Different views

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    Prevailing SSG and Special Products

    Safeguards normally come under the Safeguards Agreement, but the Agriculture Agreement

    has special provisions (Article 5) on safeguards. The special safeguards provisions foragriculture differ from normal safeguards. In agriculture, unlike with normal safeguards:

    higher safeguards duties can be triggered automatically when import volumes riseabove a certain level, or if prices fall below a certain level; and

    it is not necessary to demonstrate that serious injury is being caused to the domesticindustry.

    The Special agricultural safeguard(SSG) can only be used on products that weretariffiedwhich amount to less than 20% of all agricultural products (as defined by tarifflines). But they cannot be used on imports within the tariff quotas, and they can only be used

    if the government reserved the right to do so in its schedule of commitments on agriculture.Many developing countries did not tariffy the products. They want to be able to use specialsafeguards or something similar. There is some sympathy for this call. One group of countries

    proposes simplifying the methods of charging duties to countervail export subsidies on

    imported products. Some countries are proposing a new safeguard for perishable and seasonalproducts. Others oppose this. On going modalities propose that

    Current special safeguards (SSG)under Article 5 of the Agriculture Agreement

    would be removed for developed countries, either at the end of the proposed 5-yearreform period or two years later.

    A new special safeguard mechanism (SSM)would be available as a safety-net fordeveloping countries (in addition to the concept of special products).

    In practice, the special agricultural safeguard has been used in relatively few cases.

    Special Products:

    As part of the Doha Round of negotiation by the WTO Members on agriculture it has been

    agreed, while final modalities and measures are yet to be decided, that developing countries

    would have a category of agricultural products as Special Products (SPs), which would be

    exempted from tariff cuts (new market access commitments as part of a Doha deal). The

    revised draft modalities of 6 December 2008 propose an SP entitlement of 12% of

    agricultural tariff lines. The average tariff cut on SPs is proposed as 11%, including 5% of

    total tariff lines at zero cuts.

    According to some experts, Indias SPs would fallbroadly in the categories of dairy

    and poultry products, vegetable and fruits, spices, cereals, oil seeds and edible oils and certainprocessed products. Incidentally, on many of these products India is the largest producer in

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    the worldthe important issue is that the productivity of these products produced in India is

    much lower than the world average. Secondly, being a vast country with extremely diverse

    agro-climatic zones, India requires designating a large number of agricultural products as SPs

    to protect the livelihood and food security concerns of small and marginal farmers and

    agricultural workers. It has been argued that India needs more than 350 agricultural tarifflines to be protected under SPs.

    Some Members have considered that special products should be fully exempt from any new

    market access commitments whatsoever and have automatic access to the SSM. Others have

    argued there should be some degree of market opening for these products, albeit reflecting

    more flexible treatment than for other products.

    Proposed SSM methodologies

    Under the normal safeguard (the WTO's existing Agreement on Safeguards), a country has

    to prove serious injury or threat of serious injury before it is allowed to take action (raise the

    tariff above the bound level). For agriculture, this is inappropriate; once damage is done, it is

    difficult to get farming going again, unlike industry. Hence there lies a need for a special

    safeguard where action can be taken before there is serious damage.

    The existing special agricultural safeguard (SSG) which was set up in the Uruguay Round,

    is mainly used by developed countries as its underlying condition is that it can be used onlyfor products that underwent a 'tariffication process' in that Round. The developing countries

    wanted the use of a special safeguard to be extended to them, through the SSM

    The SSM was seen by the developing countries as essential to protect their food

    security and farmers' livelihoods from import surges that in the past had already damaged the

    local agriculture sector as local products ranging from tomato and onion to rice and chicken

    lost out to cheaper imports. What was more galling was that many of the imports are

    artificially cheapened by the huge agricultural subsidies granted by developed countries.

    SSM are currently being proposed based on two broad methodologies as follows.

    Volume based SSM:

    The logic of the proposed volume-based special safeguard mechanism (SSM) in the Doha

    Agenda negotiations (WTO 2008) seems quite simple. When imports increase from baseline

    levels, a duty can be invoked to protect domestic producers against the threat posed by these

    imports. Such a measure seems appealing from the viewpoint of producers, who might find

    difficulty competing with imports which have, for some reason, suddenly become more

    competitive than domestic suppliers production.

    As designed, this policy seems potentially very important for poverty reduction becausemost of the poor in developing countries live in rural areas, and obtain the majority of their

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    income from farming (World Bank 2008). If all poor farmers in developing countries were

    net sellers of foodas are almost all commercial producers in the industrial countriesthen

    a measure that raised the costs of competing imports would surely help to reduce poverty

    amongst this group, as well as to address competitive challenges posed by increases in

    imports.

    Price based SSM:

    Price based SSM is applicable where the CIF import price of the shipmententering the customs territory of the developing country Member, expressed in terms of itsdomestic currency falls below a trigger price equal to 85 per cent of the average monthlyMFN-sourced price for that product for the most recent three-year period preceding the yearof importation for which data are available, provided that, where the developing countryMember's domestic currency has at the time of importation depreciated by at least 10 per centover the preceding 12 months against the international currency or currencies against which it

    is normally valued, the import price shall be computed using the average exchange rate of thedomestic currency against such international currency or currencies for the three-year periodreferred to above.

    The price-based SSM, according to G33, is an indispensable trade remedy instrument formost developing countries, and all the developing countries that opted to use their entitlementto the Special Safeguard Provisions (SSG), over the period 1995-2004, invoked the price-

    based SSG.

    The price-based measure is better suited to address the price sensitivities of domesticproducers to low-priced and/or subsidized exports (dumped into their markets) whichcontribute to the volatility in the world agricultural markets. Developing countries will also

    be more susceptible to external shocks as trade liberalization deepens.

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    Conclusion: There is no material disagreement with the view that SSM should have a

    quantity trigger. Nor is there disagreement with the view that it should at least be capable of

    addressing effectively what might be described as import surges. Divergenceremains over

    whether, or if so how, situations that are lesser than surge are to be dealt with. There is,

    however, agreement that any remedy should be of a temporary nature. There remains strong

    divergence however on whether, or if so how, a special safeguard should be price-based to

    deal specifically with price effects.

    Statistics: India and Agricultural Safeguards

    India is the largest producer in the world of milk, fruits, pulses, cashew nuts, coconuts,

    cotton, sugar, sugarcane, peanuts, jute, tea and an assortment of spices, the second largestproducer of rice and wheat, and fourth largest in coarse grains. Agriculture sector is providing

    a source of livelihood/employment to about 70 percent of the rural households and seven

    percent of the urban households. However, its contribution to Indias GDP of 25 % is steadily

    falling mainly because other sectors are growing faster than agriculture. Trade liberalisation

    is taking place since 1991 and it has been gradually extended to agriculture since 1994. The

    government has lifted a number of restrictions on imports and exports of agriculture goods,

    simplified trade measures and reduced public interventions in domestic markets. Earlier India

    maintained quantitative restrictions on agricultural imports (and on many other

    nonagricultural commodities) in the form of import prohibitions and there was also a policy

    of import licensing or canalised imports for roughly 43 percent of its agricultural tariff lines

    (606 out of a total of 1398). Following a dispute at the WTO, India has removed QRs on

    714 tariff lines (including non-agricultural products) from April 2000.

    India has an overall trade deficit since the nineties but has been a small net exporter of

    agricultural products since 1990. In 2005, its agricultural trade generated a small surplus of

    just under $4 billion. Agricultural trade flows in India appear relatively modest compared

    with those of other main players on the world agricultural markets. Agriculture accounts for

    9% of total exports and 5% of imports. This can be explained by the fact that although India

    is a leading world producer of agricultural products it is also a major consumer. India ishighly protective on agriculture because the agricultural sector is Indias utmost vulnerable

    sector. About 43% of Indiasgeographical area is used for agricultural activities. With over

    700 million people of Indias population depending on agriculture, there is a critical need for

    India to safeguard millions of small farmers. Therefore, India has refused attempts to weaken

    SSM regardless of immense pressure from developed countries, especially the US. Basically,

    Indias interests lie in reducing heavy agricultural subsidy in developed countries, while

    increasing agricultural tariff to protect the livelihoods of its poor farmers whose lives depend

    on agricultural products like wheat and rice.

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    Indias Tariff Structure for Selected products(2006)

    Product Average Bound (%) Average Applied (%)

    Animal products 105.0 33.0

    Dairy 65.0 35.0

    Fruit, vegetables 100.9 31.5Coffee, tea 133.1 56.3

    Cereals 119.4 37.3

    Fats and oils 168.9 52.5

    Sugar 124.7 48.4

    Beverages 127.5 68.9

    Cotton 110.0 17.0

    Source: Monitoring Agri-trade Policy (MAP) No.03-07, December (2007), page 9

    India: Effects of Tariffs and Non Tariff Measures on US Agricultural Exports was

    released by the US International Trade Commission (USITC), an independent, non-partisan

    fact finding federal agency, at the request of the Senate Committee on Finance. Indian WTO

    bound tariff rates on agricultural products, averaging 114 per cent, are among the highest in

    the world. The majority of rates are between 50 and 150 per cent, much higher than the

    average bound rates for other major developing countries such as Brazil and China, the

    report said. Noting that though average applied farm tariff rates have declined significantly

    from 113 per cent in 1991, prior to Indian economic liberalization, to about 34 per cent in

    2007, USITC said they are still remain among the highest globally.

    The Indian government has extensive flexibility to raise applied tariffs on most agriculture

    products, as there is a significant difference between the existing bound rates and applied

    tariffs. The government can even increase applied tariffs up to the ceiling binding if imports

    cause (or threaten to cause) market disruption. To illustrate, the bound rate on some edible

    oils is 300%, but the applied customs duty is 100%. Thus, the government has the flexibility

    to raise customs duty on some edible oils. However, in respect of certain products like olive

    oil, the bound rate and applied customs duty are the same -- 45% -- leaving almost no

    flexibility for raising customs duty, even if the need were to arise in the future. Thus, due to a

    considerable gap between bound and applied tariffs, the applied tariffs are subject to frequent

    adjustment, depending on domestic supply. For example as addressed in MAP (2007), the

    wheat tariff was cut down in 2006 as India needed imports to compensate for its poor harvest.

    As a result, the EU was able to export wheat to India at zero tariff in 2006 and the EUs

    wheat export to India accounted for one third of total EU exports that year. However, the

    EUs export volumes of dairy products are very low primarily due to high Indian domestic

    supply, resulting in high Indian tariffs.

    Keeping its agrarian crisis in view, India had made a strong pitch for according adequate

    tariff protection to certain products by designating them special products. The products

    within agriculture regarding which India is extra sensitive with respect to trade liberalisation -- due to their potential for huge employment-generation and livelihood concerns -- include

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    cereals, edible oils and oilseeds and dairy products. Other agricultural products produced by

    small farmers and, therefore, sensitive for India are spices, ginger, cane sugar, etc. These

    need to be protected against deep tariff reduction. As part of G33, India has strongly

    supported the need for developing countries to have a Special Safeguard Mechanism (SSM)

    which would allow them to impose additional tariffs when faced with cheap imports or whenthere is a surge in imports. However, developed countries and some developing countries

    have sought to impose extremely restrictive requirements for invoking SSM, which would

    render this instrument ineffective.

    SSM debacle

    The talks among ministers meeting in Geneva from 21 July 2008 broke down on 29 July overthe special safeguard mechanism (SSM). What exactly is the problem?

    SSM is an instrument to enable developing countries to increase their tariffs above the

    bound tariff rates commitments made in the Uruguay Round (or for new member like China,

    the tariffs can be raised beyond the levels committed to WTO at the accession) in the event of

    a fall in price of imported products or an increase in the volume of imports beyond certain

    levels. Since agriculture is considered as the backbone of almost all developing economies,

    the increase in tariffs is meant to protect the local agricultural sector not to be harmfully

    affected by lower import prices. However, by using SSM, the additional tariffs imposed by

    developing countries shall not go above the commitments which they have made in the 1986-

    94 Uruguay Round (the pre-Doha Round bound rates) as illustrated in the figure.

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    Most developing countries could not make use of the SSG because, having relied on

    unbound tariffs rather than non-tariff barriers prior to the Uruguay Round, they did not

    tariffy. Justifiably, import-sensitive developing countries have thus argued that they require

    access to a SSM that takes into account their development status and the particularvulnerability of small subsistence farmers to import volume surges or sharp drops in prices .

    The safeguard duties under the proposed SSM would be triggered by either an import

    quantity trigger or a price trigger. The trigger for invoking the SSM determines when the

    safeguard duty can be imposed. If the import quantity trigger is set too high, the SSM loses

    all efficacy because it can then only be used in the most exceptional circumstances. The same

    holds true if the price trigger is set too low.

    The main issues being discussed are: (a) the trigger: i.e. when the mechanism would be

    applicable; (b) the size of the remedy: i.e. how high overall duties can go above the MFN

    tariff; and (c) duration of the remedy and whether safeguard duties could be applied in

    consecutive years. In July 2008, discussion was essentially centred on the second part,

    namely, the circumstances in which the pre-Doha bound rates could be breached. Exporting

    countries wanted an initial trigger of 40% i.e imports had to be at least 140% of the previous

    period imports before the country would impose a safeguard duty. The G-33 (and India)

    argued that this was far too high a trigger, effectively denying them recourse to the SSM.

    Much of the special safeguard mechanism has already been agreed. The SSM would

    allow developing countries to raise tariffs temporarily to deal with import surges and price

    falls. The blockage in the July 2008 talks was only about import surges, and a particularinstance of that.

    Agreed already: that developing country will have an SSM; more or less how big the import

    increase would be to trigger the temporary tariff rise, and how high the rise should be in

    general.

    The blockage: the situation where the SSM raises tariffs above commitments countries made

    in the 198694 Uruguay Roundthe pre-Doha Round bound rates. In the case of new

    members, that means commitments made in their membership agreements.

    So, essentially, the blockage was about the SSM reaching into a disputed zone: above

    pre-Doha bound rates.

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    International opinion divide

    The blockage is often described as one between the US versus India and China. This is

    only partly true. All three are major trading countries with importing and exporting concerns.

    But they were also among the small group of seven delegations trying to reach an initialsettlementAustralia, Brazil, China, the EU, India, Japan, the USbefore taking the issue

    to larger groups and eventually the full membership. The blockage was within that group of

    seven. Other countries outside were also concerned, including other members of the G-33,

    and some exporting developing countries.

    Two philosophies:A number of countries have opposed breaching the pre-Doha

    Round commitments, while others insist it has to be allowed. In the 10 July draft agriculture

    text, the possibility of breaching these commitments is in square brackets (ie, indicating no

    agreement), except for least-developed countries. This reflects two different and unresolved

    views about what the SSM is for:

    The SSM as protection for poor and very vulnerable farmers: according to this view, theSSM should be freer and easier to use, with smaller triggers and bigger tariff increases.This is related to the argument that prices are depressed because of large subsidies in richcountries. Advocates: G-33 and its allies.

    The SSM as a time-bound means to help liberalization (used only within liberalization):according to this view, the SSMs use should be more restricted, and related to cutting

    tariffs from pre-Doha Round levels. That would mean no tariff increase above those

    levels, the SSM must not be triggered by normal fluctuations in price or normal tradeexpansion, and it should be limited to the period of liberalization. This is related to the

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    arguments that poor farmers need to export in order to escape poverty, and that the pre-Doha Round commitments were a negotiated compromise balance of rights andobligations, which should not be touched. Advocates: Latin American, Southeast Asianand other countries in the Cairns Group but not in the G-33; US. Developing countriesamong these say it is not a North-South issue but has an impact on South-South trade.

    Conclusion

    In conclusion, SSM is a contingency measure in the sense that it can be used only when

    imports are substantive or when import prices fall. However, in the views of manydeveloping countries, SSM is a defensive instrument to safeguard the livelihoods of their

    impoverished farmers because it helps developing countries not to be dependent on the

    uncertain and volatile global market for agricultural supply, and so as not to be too adversely

    affected by the effects of price fluctuations in the world market. After the detailed study, we

    suggest following approaches:

    India and china are pitching against US but almost all WTO nations have agreed that

    Developing nations should have a price trigger (percentage decreases in a productsimport price compared to its monthly average over the preceding three years) orquantity trigger (volume of imports of an article exceeds the average of the mostrecent 3 years for which data are available by 5, 10, or 25 %, depending on thearticle). Quantity trigger makes world prices more volatile while price trigger does notdo the same. Do we want to expose producers who are risk-averse is a big question.While quantity based SSM reduces mean quantity imported, it also reduces standarddeviation of the quantity imported which can be preferred in times of need. So InIndia's context, where food security is preferred, Quantity based Mechanism seemsa more viable option as agreed by majority WTO members.

    Livelihood conditions of farmers is highly dependent on initial import penetration

    e.g., 5% initial & 20% increase (1% increase in supply) vs. 50% initial and 20%increase (10% increase in supply). A much better trigger mechanism that

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    distinguishes between when developing countries do and do not need additionalimport protection to maintain food security and livelihood conditions of their poorfarmers should be devised. An available option is simply calculating the percentage

    increase in imports divided by the average consumption of the product over arecent period.

    Developed countries will not give up their SSGs (Special agricultural safeguards)unless they have access to the newly-devised safeguard for agriculture. Therefore thelatter needs to be considered for all products in all countries, with special rules for

    developing countries regarding some aspect of their use

    Dangers - There is a tendency to devise policy measures that are as bad as theproblems they cure. Therefore, one should make certain that the system devised does

    not end up as a new over-protectionist device as we move towards greater global

    trade liberalisation.

    General conclusion - Keep the agricultural safeguard simple and easy to use, but setup criteria to limit its use to situations of import surges or very low import prices andto products that have bound tariffs below a specified level. Develop a phase-down

    period, so that protection gradually returns to the original level. This period could belonger for developing countries. Triggersshould be defined and known in advance.

    The SSM issue was not of concern only to India and China as abovementioned,but is also to over 100 developing countries represented by various groups (G33,Africa, ACP, LDCs, SVEs). This is because they believe that opening up theirmarkets to international competition, removal of tariffs and withdrawal of governmentintervention in agriculture, have brought the countries from net food exporters to netfood importers and left them with payment of huge import bills. Furthermore, withcheap food imports and lack of efficient protection measures, developing countries

    may not be able to compete. Such incident would harm poor farmers the most andperhaps will lead to significant displacement of the agricultural population across thedeveloping world.

    References:

    1. http://commerce.nic.in/trade/international_trade_tig_agriculture_stateofplay_Doha_ro

    und.asp

    2. http://www.wto.org/english/tratop_e/agric_e/negs_bkgrnd11_ssg_e.htm

    3. http://commerce.nic.in/oct-nov05/main.htm

    4. http://planningcommission.nic.in/reports/wrkpapers/index.php?repts=tarrif

    5. http://commerce.nic.in/dec05/main.htm

    6. http://www.cccindia.co/corecentre/Database/Docs/DocFiles/agriculture_world.pdf

    7. http://ec.europa.eu/agriculture/trade-analysis/map/index_en.htm 8. http://www.apec.org.au/docs/08_SSG_DH.pdf

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