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RI to press ahead with proposal in upcoming WTO summit

Indonesia will defend the interests of developing nations by demanding a special safeguard mechanism and subsidy scheme on certain agricultural products during the upcoming WTO ministerial conference in Nairobi, Kenya, despite possible resistance from developed countries, a senior official has said

Khoirul Amin (The Jakarta Post)
Thu, November 26, 2015

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RI to press ahead with proposal in upcoming WTO summit

I

ndonesia will defend the interests of developing nations by demanding a special safeguard mechanism and subsidy scheme on certain agricultural products during the upcoming WTO ministerial conference in Nairobi, Kenya, despite possible resistance from developed countries, a senior official has said.

The trade minister'€™s special staff member for global trade policy enhancement, Iman Pambagyo, said on Wednesday that Indonesia would field a proposal arranged with other developing nations that were grouped into the G33.

'€œI'€™m not sure that the proposal will be agreed [to by all WTO members] in Nairobi, but at least there will be an effort to include the proposal as a subject for discussion, post-Nairobi,'€ he said after a forum held by the Trade Ministry.

Iman said that the WTO'€™s 10th ministerial conference in Nairobi, which will take place next month, would likely provide no chance for discussion of the proposal, let alone to start negotiations on it, as developed countries still insisted on sticking to the status quo for the long-stalled Doha Development Agenda (DDA).

Negotiations related to subsidies or special safeguards for agricultural products have often sparked major debates between developing and developed nations, in which developed nations demanded the reduction of trade barriers although they still insisted on providing subsidies to their own agriculture sectors.

US domestic agricultural subsidies have surged from an average of US$33,437 per farmer in 2008 to $57,000 this year, according to Iman, who is a former Indonesian ambassador to the WTO.

That figure is far higher than the subsidies given by China and India to their respective subsistence farmers, which only amount to $192 and between $120 and $200 per farmer, respectively.

The G33 proposal is aimed at addressing at least three key issues, namely public stock holding, special safeguard mechanisms (SSM) and special agricultural products.

The public stock holding issue is about seeking possibilities for developing nations to buy agricultural products from their farmers without the payments being considered subsidies.

The SSM, meanwhile, is meant to provide an easier mechanism for developing countries to implement safeguard measures for certain agricultural products. Safeguard measures are currently allowed under the WTO system if a surge in imports of certain products harm local producers.

The mechanism to apply one, however, is considered to be so difficult and complicated that often only developed nations are able to use the facility.

Yose Rizal Damuri, the head of the department of economics at the Centre for Strategic and International Studies (CSIS), said that while the WTO had been an international organization that reached its goal of promoting free trade, the negotiation process in the organization remained slow.

'€œI think there will be no great prospects in Nairobi [in regards to the DDA],'€ he said.

Yose argued that the emergence of new trade negotiations or trade pacts was partly driven by the inability of the WTO to help its member countries solve new issues, such as the global value chain.

He said that the US-led Trans-Pacific Partnership (TPP) had become an example of how developed countries tried to find a solution for the global value chain issue without using the WTO.


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