The economic survey questioned India’s unequivocal stance at the World Trade Organisation (WTO)-level negotiations on the need for developing countries to have an effective and easy-to-use ‘Special Safeguard Mechanism’ (SSM) to protect ‘poor and very vulnerable’ farmers from import surges and price dips.
The SSM is a tool, which, if given, will permit developing nations like India to temporarily hike tariffs to counter import surges or price falls of farm products. Differences between the developing and the developed world over the SSM issue had even led to the WTO talks breaking down in July 2008.
Though WTO members agree that developing countries should have an SSM, the differences are on allowing developing nations to hike tariffs above the commitments they (developing nations) made in the WTO’s 1986-94 Uruguay Round talks.
Pointing out that as per the Uruguay Round decisions, countries including India, could raise tariffs up to a “very high level” even without the SSM, the economic survey questioned: “Why then, for a long time, has India been asking for the right to impose SSM, which is in effect asking for even more freedom to determine agricultural policies? The answer is not very clear.”
The observations come even as the WTO members began work this week at the global body’s headquarters in Geneva to take forward negotiations on the Doha Development Agenda on the basis of the decisions arrived at during the December 15-19 Ministerial Conference (WTO’s highest decision-making body) in Nairobi.
The Nairobi Ministerial Declaration had incorporated the right of developing nations to have recourse to an SSM. The declaration also said SSM negotiations will be pursued in dedicated sessions of the Committee on Agriculture in Special Session.
During the Nairobi meeting, Commerce Minister Nirmala Sitharaman had said the SSM was important for developing nations to address import surges and price dips due to heavily subsidised imports of farm products from rich nations.
Pointing out that an instrument similar to the SSM was available to a select few WTO members (including rich nations) for over two decades, she said, therefore, the demand for SSM for developing nations was reasonable and pragmatic.
The survey said India’s real need for SSM arises in relation to few items including some milk and dairy products, some fruits, and raw hides.
On these items, the survey said, India’s tariff bindings (commitments at the WTO) are around 10-40 per cent which can be uncomfortably close to India’s current tariffs, limiting India’s options in the event of import surges.
“If that is the case, India should call for a discussion on SSM not as a generic issue of principle but as a pragmatic negotiating objective covering a small part of agricultural tariffs. Perhaps, in this instance, lofty theologizing about freedom and sovereignty needs to cede to mundane haggling over hides and hibiscuses,” the survey said.
