RP to maintain WTO stance despite standoff in talks

The standoff in the World Trade Organization (WTO) talks will be detrimental to developing countries but the Philippines is keeping its stance to push for the elimination of domestic and export subsidies of developed countries.

"We have to continue pressing for the protection of our bottomlines and that is the retention of protection for sensitive sectors, especially in agriculture where we want special safeguard mechanisms (SSMs) for products critical to our development. We also want to be able to have that flexibility to determine our SPs or special products that won’t have to be subjected to further tariff reductions and liberalization," said Agriculture Undersecretary Segfredo Serrano.

SPs refer to agricultural products that need tariff protection while SSMs refer to sensitive products that require more preferential treatment other than being shielded from tariff cuts. These could include imposing quantitative restrictions on products such as rice and corn.

Developing countries like the Philippines are pushing for greater flexibilities to assign their SPs and creating SSMs relevant to specific needs of developing countries because they are more susceptible to inflation adjustments and fluctuations in the foreign exchange rates and markets. Often times, developing countries are forced to price their export products at below production costs.

"Rich countries are spending all their energy on winning the blame game, and not enough on finding solutions to deliver a development round," said Shalimar Vitan, local policy advocacy coordinator of international agency Oxfam.

The 149-nation WTO failed to make any progress on a new global trade treaty that was hoped would lift millions of people out of poverty. The Doha round of trade talks, named for the Qatari capital where it was launched in 2001, intended to lift trade barriers and help developing economies accelerate economic growth.

Negotiations were originally meant to finish in 2004, but the end-date was later pushed back to December 2006. Vitan said after nearly five years of WTO negotiations, the current offers remain riddled with flaws because of unreasonable demands of the EU and the US.

Based on official simulations done by the Canadian government on behalf of the EU, US, Australia and a few other WTO members, the current offers would allow the US to increase its farm subsidies from the 2005 level of $19.7 billion to $22.7 billion, while the EU offer would allow it to increase its farm subsidies from $22.9 billion to $33.1 billion

"The EU and US producers will continue to over-produce and dump their cheap surpluses onto world markets while developing countries like the Philippines will have to cut their agricultural and industrial tariffs so harshly," Vitan said.

Oxfam calculations based on the EU proposal show that developingcountries will have to cut their tariffs of industrial goods by as much as 70-percent and the rich countries by as little as 25 percent only.

Local fisheries non-government organization Tambuyog Development Center executive director Arsenio Tanchuling said the average fishery tariff rate of 15 percent on Nov. 14, 2001 will be used as the starting point for tariff reductions. "A 70 percent reduction would mean an average tariff rate of only 4.5 percent, which would then be reduced up to zero percent," Tanchuling said.

Fisheries are included in the industrial tariff negotiations in NonAgricultural Market Access (NAMA) of the WTO. United Nations figures show that developing countries will actually lose as much as $63 billion in total revenue because they’ll have to cut their agricultural and industrial tariffs so harshly.