India’s hopes for a special safeguard mechanism to protect farm products such as apples, poultry and dairy from import surges by raising duties beyond capped levels – as promised at the Nairobi Ministerial of the World Trade Organisation – may be harder to realise than imagined.
Members, including the EU, the US and Australia, as well as some farm produce exporting developing countries, have demanded further reduction in farm tariffs in exchange for a special safeguard mechanism (SSM).
India, as part of the G-33, demanded that the SSM mechanism be extended to developing countries as a stand-alone as several developed countries – Australia, the EU, Norway, Iceland and Japan – already have access to such protection under the special safeguards rule.
The G-33 argued that the poor farmers of developing countries, too, needed protection against import surges and should have the freedom to increase tariffs for designated products beyond their stipulated caps. It is important for India to have an SSM in place as the capped tariffs of some of its farm products, such as apples, poultry and dairy, are not high enough to protect domestic farmers throughout the year, especially when crop is bad.
For instance, last year Indian apple farmers from Himachal Pradesh and J&K had to face intense competition from apples from the US and Australia, as the capped import duty of 50% did not provide sufficient protection and demand for local apples fell.
The temporary imposition of port restrictions on apples by the government provided some relief to local farmers.
At the WTO meeting on SSMs this month, farm products exporting countries, which also included Brazil, Argentina and Chile, pointed out that allowing developing countries to raise import tariffs might limit trade opportunities, particularly exports from other developing countries.
In Nairobi, India had agreed to take on commitments to eliminate all its farm export subsidies by 2023 as it believed that the agreement was balanced out by the fact that a SSM for developing countries would be in place soon.