Topics handled by WTO committees and agreements
Issues covered by the WTO's committees and agreements

AGRICULTURE NEGOTIATIONS: BACKGROUNDER

Market access: special agricultural safeguards (SSGs)

Safeguards are contingency restrictions on imports taken temporarily to deal with special circumstances such as a sudden surge in imports. They normally come under the Safeguards Agreement, but the Agriculture Agreement has special provisions (Article 5) on safeguards.

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UPDATED 1 DECEMBER 2004

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This briefing document explains current agricultural issues raised before and in the current negotiations. It has been prepared by the Information and Media Relations Division of the WTO Secretariat to help public understanding about the agriculture negotiations. It is not an official record of the negotiations.

The special safeguards provisions for agriculture differ from normal safeguards (see “Understanding the WTO”). In agriculture, unlike with normal safeguards:

  • higher safeguards duties can be triggered automatically when import volumes rise above 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 domestic industry.
      

The special agricultural safeguard can only be used on products that were tariffied — which amount to less than 20% of all agricultural products (as defined by “tariff lines”). 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. In practice, the special agricultural safeguard has been used in relatively few cases.

Special safeguards: who has reserved the right?

39 WTO members currently have reserved the right to use a combined total of 6,156 special safeguards on agricultural products. The numbers in brackets show how many products are involved in each case, although the definition of what is a single product varies.

Australia (10)
Barbados (37)
Botswana (161)
Bulgaria (21)
Canada (150)
Colombia (56)
Costa Rica (87)
Czech Republic (236)
Ecuador (7)
El Salvador (84)
EU (539)
Guatemala (107)
Hungary (117)
Iceland (462)

Indonesia (13)
Israel (41)
Japan (121)
Korea (111)
Malaysia (72)
Mexico (293)
Morocco (374)
Namibia (166)
New Zealand (4)
Nicaragua (21)
Norway (581)
Panama (6)
Philippines (118)

Poland (144)
Romania (175)
Slovak Republic (114)
South Africa (166)
Swaziland (166)
Switzerland-Liechtenstein (961)
Chinese Taipei (84)
Thailand (52)
Tunisia (32)
United States (189)
Uruguay (2)
Venezuela (76)

For more details, see WTO Secretariat background paper “Special Agricultural Safeguard” G/AG/NG/S/9/Rev.1.

 

Phase 1  back to top

Proposals range from continuing with the provision in its current form, to its abolition, or its revision to prevent its use on products from developing countries. Some developing countries have proposed that only they would be allowed to use special safeguards — developed countries would not be allowed to do so.

Japan and Rep of Korea propose a new form of special safeguard that would apply to perishable and seasonal products. A number of countries object to this.

The right to use the special agricultural safeguard will lapse if there is no agreement in the negotiations to continue the “reform process” initiated in the Uruguay Round (see Articles 5.9 and 20 of the Agriculture Agreement).

Proposals containing positions on special safeguards
submitted in Phase 1
(see also proposals on developing countries and on non-trade concerns)

 

Phase 2  back to top

Among the ideas proposed in this phase are:

  • Retaining the present special safeguard and adding a new safeguard to deal with seasonal and perishable products. The proposal includes ideas for formulas. Critics say this would increase protectionism.
      
  • A countervailing mechanism for developing countries to use on subsidized imports from developed countries. The right would be automatic without any need to prove any damage. Some critics say this would undermine countries’ legitimate right to subsidize exports, including within the minimal (“de minimis” ceilings), and that it could obstruct trade. They prefer reducing large subsidies.
     
  • Preserving the special safeguard. Some countries taking this view are also willing to extend the right to use the safeguards to countries that did not “tariffy” or previously reserve the right.
     
  • Allowing developing countries to use special safeguards for all products. A number of developing countries who take this view also advocate scrapping the special safeguard in developed countries.
     

Within these views are different shades of opinion. Some countries see the safeguards as permanently necessary measures. Others describe them as a confidence-building means of encouraging countries to lower tariffs.

Phase 2 papers or “non-papers” from: Eight developing countries (Cuba, Dominican Rep, Honduras, Kenya, Nicaragua, Pakistan, Sri Lanka, Zimbabwe), five developing countries (Argentina, Bolivia, Paraguay, Philippines and Thailand), Japan, Namibia, Norway, and Switzerland

 

Preparations for ‘modalities’  back to top

Many developing countries want to be able to use special safeguards or something similar. Currently these safeguards are only available to countries that “tariffied” in the Uruguay Round, and on the products they tariffied. Many developing countries did not do this. 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 seasonal products. Others oppose this.

 

The revised first draft ‘modalities’  back to top

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-year reform period or two years later.

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

 

The draft frameworks  back to top

(see Cancún ‘framework’ proposals)

The US-EU draft proposes a special safeguard mechanism for developing countries for use with products that are sensitive to imports. The G-20 links this to “the impact of tariff cuts”. Kenya simply calls for a mechanism to be set up. The Pérez del Castillo and Derbez drafts also envisage a mechanism whose conditions and products are to be determined. The African Union/ACP/least-developed countries paper says these drafts do not offer enough on a special safeguard mechanism and propose basing work on the revised “modalities” draft.



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