Manfaat Paket Bali WTO Bagi Pertanian

 

Manfaat Paket Bali WTO Bagi Pertanian Indonesia

Konferensi para menteri anggota Organsasi Perdagangan Dunia (WTO) ke-9 telah berakhir pada hari Sabtu tanggal 7 Desember 2013.  Hasil konferensi di Bali ini dapat menurunkan rasa putus asa yang semakin menumpuk setelah bertahun-tahun konferensi WTO tidak menghasilkan kesepakatan yang berarti.  Sejak Putaran Doha (Doha Round) diluncurkan pada tahun 2001 di Doha-Qatar, negosiasi tidak pernah mengalami kemajuan.  Bali yang indah mempesona, hangat, sekaligus memiliki aura yang menenangkan hati, tampaknya mampu membuat para delegasi saling memberi dan menerima, yang pada akhirnya sampai pada kesepakatan.  Kesepakatan konferensi WTO di Bali, yang disebut Paket Bali, disambut gembira oleh negara-negara para peserta konferensi, yang memiliki berbagai latar belakang ideologi pembangunan ekonomi yang berbeda-beda.

 

Perdebatan Putaran Doha, atau disebut juga Agenda Pembangunan Doha, dimaksudkan untuk menciptakan aturan tunggal yang berlaku bagi 159 negara anggota WTO di berbagai bidang, seperti menurunkan pajak impor, mengurangi subsidi pertanian yang mendistorsi perdagangan, dan menciptakan prosedur standar kepabeanan.   Dengan disepakati dan diterapkannya aturan-aturan yang seragam tersebut, diharapkan pergerakan barang antar negara dapat lebih lancar dan perdagangan dunia semakin meningkat lebih cepat.  Dasar pemikiran Putaran Doha adalah, jika seluruh negara menjalankan aturan perdagangan yang sama maka semua negara akan dapat memperoleh keuntungan dari perdagangan, baik itu negara kaya maupun negara miskin.  Perdagangan yang semakin berkembang diharapkan akan menciptakan peluang-peluang usaha yang lebih banyak lagi dan membuka kesempatan kerja yang lebih besar. 

Dalam prakteknya, banyak negara yang merasa bahwa perdagangan yang lebih bebas ternyata tidak memberikan manfaat seperti yang diharapkan.  Perdagangan memang meningkat pesat, baik volume maupun nilainya, namun distribusi manfaat dari perdagangan itu dipandang belum adil.  Pada aspek keadilan inilah kritik keras disuarakan oleh banyak pihak di luar ruang-ruang konferensi WTO di berbagai tempat dan waktu.  Dalam sambutan pembukaan konferensi WTO di Bali, Presiden RI juga mengingatkan perlunya perdagangan yang memenuhi aspek keadilan bagi semua. 

Aspek keadilan telah menjadi hambatan utama bagi konferensi-konferensi WTO untuk mencapai kesepakatan di tahun-tahun sebelumnya, dan mungkin juga di tahun-tahun mendatang.  Tiadanya kemajuan yang berarti dalam konferensi-konferensi Putaran Doha WTO telah menyebabkan banyak negara membuat kesepakatan-kesepakatan perdagangan bilateral dan kesepakatan-kesepakatan perdagangaan regional dan antar kawasan, seperti Trans-Pacific Partnership antara Amerika Serikat dengan 11 negara kawasan Pasifik ataupun pasar bebas Amerika Serikat dengan Uni Eropa.  Itu sebabnya, kesepakatan yang berhasil dicapai pada konferensi WTO di Bali ini dipandang sebagai salah satu tonggak penting pagi kemajuan menuju Agenda Pembangunan Doha, sekaligus menyelamatkan relevansi WTO sebagai lembaga perdagangan multilateral.    

Paket Bali (Bali Package) terdiri dari 10 dokumen yang mencakup fasilitasi perdagangan, pertanian, dan berbagai isu pembangunan.  Paket Bali memberikan ruang dan fleksibilitas bagi negara-negara berkembang untuk mengatur kebijakan ketahanan pangannya.  Bagi Indonesia, Paket Bali tidak memberikan hambatan terhadap agenda-agenda ketahanan pangan dan pembangunan pertanian yang selama ini telah dijalankan.  Subsidi maksimal sebesar 10 persen dari total produksi pangan dalam rangka stok untuk ketahanan pangan, yang menjadi isu panas dalam konferensi WTO di Bali, juga belum pernah terlampaui oleh Indonesia.  Perbaikan prosedur kepabeanan yang ada dalam Paket Bali, juga telah menjadi program pemerintah selama ini.  Perbaikan prosedur kepabeanan di Indonesia tidak hanya dimaksudkan agar barang lebih mudah mengalir keluar-masuk, tetapi juga agar korupsi dan pungutan liar dapat dihilangkan dari kepabeanan.   

Posisi pemerintah Indonesia tetap tegas dalam menempatkan pertanian sebagai sektor strategis dalam pembangunan.  Pemerintah menyadari sektor pertanian masih menjadi sumber matapencaharian bagi mayoritas tenaga kerja di Indonesia, dan di sektor ini masih banyak petani yang taraf kehidupannya perlu ditingkatkan.  Indonesia juga telah mengalami dampak buruk dari lonjakan-lonjakan harga pangan.  Harga pangan yang naik tajam tidak saja menurunkan daya beli dan mendorong inflasi, tetapi juga menimbulkan berbagai masalah sosial dan politik.  Iklim yang semakin tidak mudah diramalkan menjadikan risiko produksi dan risiko harga meningkat, sehingga ketahanan pangan Indonesia menjadi rentan apabila sepenuhnya mengandalkan pada pasar internasional.  Indonesia tetap perlu memiliki stok pangan sebagai salah satu faktor penunjang penting ketahanan pangan.  Stok pangan nasional pada tingkat yang aman juga tetap diperlukan untuk program-program pengentasan kemiskinan dan dalam menghadapi bencana.  Berbagai aspek tersebut menjadi bagian yang tidak terpisahkan dalam perjuangan Indonesia di berbagai forum WTO.  Dalam konferensi WTO di Bali, Indonesia bersama-sama dengan negara berkembang lain tetap memperjuangkan subsidi pertanian.

Bagi Indonesia Paket Bali bukanlah akhir, tetapi awal dari upaya-upaya lebih keras untuk meningkatkan daya saing pertanian, ketahanan pangan nasional, dan kesejahteraan petani.  Subsidi dan topangan harga adalah kebijakan-kebijakan jangka pendek yang dapat dilakukan untuk meningkatkan produksi dan pendapatan petani.  Tetapi kebijakan-kebijakan ini sering tidak berkelanjutan hasilnya dan juga dapat menciptakan ketidakadilan baru, karena sifatnya yang poorly targeted.  Kebijakan yang bertumpu hanya pada harga sering mengalami hambatan dari sisi penyediaan anggaran dan ketepatan waktu, sehingga efektivitasnya redah.  Kebijakan harga dapat membenturkan kepentingan produsen dengan kepentingan konsumen, apabila anggaran yang dialokasikan tidak memadai.  

Kebijakan meningkatkan harga untuk membantu produsen dapat berarti naiknya harga di tingkat konsumen.  Sebaliknya, menurunkan harga di tingkat konsumen bisa berdampak menekan harga yang diterima petani. 

Keberlanjutan pertanian tergantung pada kebijakan-kebijakan yang mampu meningkatkan kesejahteraan petani secara berkelanjutan.  Perbaikan dan pembangunan sarana dan prasarana pertanian, jalan desa, kelembagaan pemasaran faktor produksi dan hasil produksi, akses terhadap sarana produksi, akses terhadap tanah dan kapital, dan penemuan benih/bibit unggul dan teknik budidaya pertanian yang lebih baik adalah tugas-tugas publik yang perlu terus ditingkatkan dari tahun ke tahun, untuk memastikan petani meningkat kesejahteraannya.  Tugas pemerintah, dari tingkat pusat sampai daerah, untuk memastikan bahwa produktivitas pertanian terus tumbuh dari tahun ke tahun.  Tanah-tanah pertanian juga perlu terus dikembangkan dan tidak hanya mengandalkan tanah-tanah di Jawa. Untuk itu diperlukan pemuliaan tanaman dan pengembangan teknologi budidaya yang sesuai dengan kondisi agro-ekologi setempat.

Kebijakan harga dan subsidi harga memang hasilnya dapat secara cepat dapat dilihat daripada kebijakan non-harga.  Itu sebabnya kebijakan harga dan subsidi harga adalah kebijakan yang paling banyak digunakan di berbagai negara.  Namun kebijakan harga dan subsidi harga memiliki banyak kelemahan dari aspek sosial ekonomi, karena sifatnya yang distortif.  

Sebaliknya kebijakan non-harga memerlukan kerja keras dan waktu yang lebih lama untuk memperlihatkan hasilnya.  Kebijakan non-harga, seperti kebijakan irigasi, kebijakan kelembagaan, maupun kebijakan teknologi memerlukan konsistensi dan persistensi dalam jangka panjang, sebelum hasilnya dapat dilihat dan dirasakan dengan nyata.  Pada aspek inilah tampaknya yang belum dimiliki Indonesia, yaitu konsistensi dan persistensi kebijakan pertanian dari waktu ke waktu, antar pemerintahan dan antar generasi.  Perjalanan Putaran Doha, dimana Paket Bali menjadi bagiannya, diperkirakan masih memerlukan waktu panjang dan masih tinggi risikonya untuk gagal.  Namun berbagai upaya peningkatan kesejahteraan petani perlu lebih keras lagi dilakukan.  Peningkatan kesejahteraan petani adalah suatu keharusan dan tidak perlu menunggu Putaran Doha selesai didiskusikan dan diterapkan.

Dapat dikatakan bahwa primadona KTM WTO di Bali adalah isu pertanian, khususnya proposal dari G-33 terkait pembentukan stok pangan bagi masyarakat miskin dan kelonggaran subsidi bagi petani miskin.  Di sini, negera maju duduk bersama membahas satu dari tiga isu utama perundingan sektor pertanian : domestic support di negara berkembang (dua isu lain adalah akses pasa dan subsidi ekspor produk pertanian).

Keberhasilan G-33 untuk mendapatkan peace clause dalam paket Bali sangat berarti. Semua negara anggota WTO menyadari bahwa perundingan isu pertanian harus mencakup ketiga isu di atas.  Kesepakatan Bali menyangkut usulan G-33 belum tuntas, tetapi memberi rung negara berkembang mengatasi dulu kondisi domestiknya.

Dengan peace clause, negara berkembang yang memberikan dukungan domestik melebihi yang disepakati di Putaran Uruguay 1986-1994- yakni 10 persen dari total out put pertanian – tidak akan ditintut ke panel sengketa WTO.  Solusi permanen atas proposal G-33 tentunya jauh lebih penting dari pada sekedar peace clause yang berlaku empat tahun.

Perundingan atas proposal G-30 diwarnai kekhawatiran mengenai potensi terjadinya distorsi pasar khusunya bila sengaja atau tidak sengaja stok pangan merembes ke pasar internasional dan mengganggu ketahanan pangan negara lain. Dilihat dari kepentingan Indonesiakesepakatan di atas akan membantu Indonesia untuk memastikan bahwa kebijakan subsidi negara lain, seperti Malaysia melalui Bernas dan India melalui Foof Corp, tidak mendistorsi pasar Indonesia untuk produk serupa yang dihasilkan petani Indonesia, atau mengganggu kebijakan ketahanan pangan dalam negeri Indonesia. Kebijakan di atas juga memberi ruang bagi Indonesia untuk subsidi dan tidak akan dianggap menyalahi perjanjian sepanjang tidak mengganggu pasar negara lain.

Sumber:

1. Paket Bali WTO dan Relevansinya Bagi Pertanian Indonesia
   Oleh Harianto, Staf Khusus Presiden RI Bidang Pangan dan Energi (http://www.setkab.go.id/artikel-11423-paket-bali-wto-dan-relevansinya-bagi-pertanian-indonesia.html)
2. Paket Bali dan Manfaatnya bagi RI oleh Iman Pambagyo (Kompas 10 Januari halaman 7).

Jepang Beri Donasi Fasilitas Standar Keamanan Pangan

Jepang Memberikan Donasi Pertama untuk Fasilitas Standar Keamanan Pangan, Kesehatan Hewan, dan Tanaman

Jepang memberikan dana sebesar 278.368 dolar AS (sekitar 296.000 franc Swiss) untuk mendukung proyek-proyek yang membantu negara-negara berkembang dalam menganalisis dan menerapkan standar internasional terkait keamanan pangan serta kesehatan hewan dan tanaman—yang dikenal sebagai langkah-langkah sanitari dan fitosanitari (Sanitary and Phytosanitary/SPS).

Donasi ini merupakan kontribusi pertama Jepang untuk Standards and Trade Development Facility (STDF), sebuah program yang dibentuk secara bersama oleh Organisasi Perdagangan Dunia (WTO), Organisasi Kesehatan Dunia (WHO), Bank Dunia, Organisasi Kesehatan Hewan Dunia (WOAH), dan Organisasi Pangan dan Pertanian (FAO).

Dengan donasi ini, Jepang bergabung dengan 12 donor lain yang sudah berkontribusi sebelumnya, yaitu Kanada, Denmark, Komisi Eropa, Finlandia, Jerman, Irlandia, Belanda, Norwegia, Swedia, Swiss, Inggris, dan Amerika Serikat.

Direktur Jenderal WTO, Pascal Lamy, menyambut baik kontribusi Jepang. “Donasi ini menunjukkan komitmen Jepang untuk membantu negara-negara berkembang dalam memenuhi standar internasional dan memanfaatkan peluang ekspor secara lebih maksimal bagi produk pertanian mereka.”

Duta Besar Jepang, Shinichi Kitajima, menyatakan: “Donasi ini mencerminkan komitmen jangka panjang kami dalam membantu negara-negara berkembang dan negara-negara kurang berkembang. Dengan membangun kapasitas dalam menerapkan standar sanitasi dan fitosanitasi internasional, mereka akan lebih siap untuk memanfaatkan sistem perdagangan multilateral guna mendukung pertumbuhan berkelanjutan dan pengurangan kemiskinan.”

Dalam perencanaan dan pelaksanaan bantuannya, STDF bekerja sama erat dengan berbagai inisiatif bantuan teknis lain yang melibatkan WTO, terutama Kerangka Terpadu untuk Negara-Negara Kurang Berkembang (Integrated Framework for Least-Developed Countries) dan Program Bantuan untuk Perdagangan (Aid for Trade).

Strategi Jangka Menengah STDF saat ini berlaku hingga tahun 2011, dengan target untuk mengelola dana operasional tahunan sebesar 5 juta dolar AS. Sejak didirikan pada tahun 2002, STDF telah mengembangkan portofolio sebanyak 36 proyek dan mendanai 33 hibah persiapan proyek lainnya.

The Hidden Cost of Japan’s Rice Protectionism: What They Don’t Want You to Know!

Japanese Rice Trade Policy Overview

By Steve Moody
Japanese Department, Brigham Young University

Claiming a need for self-sufficiency stable supply, Japan has a long history of heavy protectionism in the rice sector. Despite pressures from virtually every single trading partner Japan deals with, they have maintained a rigidly stubborn stance opposing foreign imports of rice. At the peak of such protectionist policies in 1985, Japan records that imports of rice from the US barely totaled .2% of total domestic consumption. In fact, until very recently, Japan has been closed to virtually all rice imports.

Japan’s aggressive protectionist stance began with strict quantitative limitations on imports shortly after World War II. These policies continued to be modified to further restrict trade until the mid 1980’s when, due to pressure from many trading partners—particularly the US—the country began to grudgingly open its borders to foreign rice. For example, in 1986 California rice producers filed a petition to the US government under section 301, claiming that Japan’s policies caused significant injury to their industry. At this time, Japan was providing a $2,200-per-metric-ton subsidy to Japanese domestic producers. This subsidy was as much as ten times the world price (Unites States House of Representatives, 1986). Following this complaint and many similar, the US began to put heavy pressure on Japan to open its market. Although slow to respond initially, due to this and other negotiations, Japan has begun to liberalize its market.

However, despite this gradual reduction of tariffs, subsidies, and other policies, current trade barriers in Japan are still very prevalent. Recently, Japan has relied most heavily on domestic subsidies, although quota and tariff policies are also in effect. The most recent information available indicates that the Japanese government directly subsidizes rice production by as much as $1.82 billion (206 billion yen) (Fukuda, Dyck, & Stout, 2003).

Japanese subsidies come via a number of different government programs. The most direct subsidy program, called the Japanese Rice Farming Income Stabilization Program, was implemented in 1998. The Income Stabilization Program allows for rice farmers to claim payments equal to the difference of domestic rice prices and a predetermined standard, should the market price fall. In 1999, such payments totaled $815 million (92.7 billion yen). On a per-hectare basis, Japan subsidizes an incredible $9,600 more than the United States. The Office of the Unites States Trade Representative (USTR) reports that, “. . . because of high tariffs and other barriers to trade, Japan's rice producers are very insulated from the open market” (2003). Such programs enable inefficient Japanese rice producers to continue to produce rice and charge a much higher price to the domestic consumers than the world price, greatly reducing the net social welfare. This effect will be discussed in greater detail in the following section.

With total direct subsidies, as well as more indirect programs designed to enhance rice farmer competitiveness and drive up domestic process, taxpayers spent an estimated $2.8 billion in support of just the rice industry in 1999 alone (Fukuda et al., 2003). On a per-hectare of production basis, Japan’s subsidy is enormous, over 12 times that of the US and EU subsidies combined. A more detailed breakdown of subsidy programs is shown in Table 1.

Table 1 – Japanese Subsidy Details for Rice Production in 1999

Subsidy Program : Million US$ (Billion ¥)

Rice Farming Income Stabilization Program : 815 (92.7)
Insurance premium payments : 231 (24.2)
Interest payments : 315 (35.8)
Extension services : 40 (4.6)
Investments in farm capital : 432 (49.1)

Total : 1.82 (206.4)

Per-Hectare Expenditure

Country : US$ (¥ )

Japan : 9,706 (1,016,000)
United States : 117 (12,000)
European Union : 676 (70,800)

Sources: Fukuda et al., 2003; USTR, 2003

Beyond subsidy programs, Japan also has a myriad of border policies in relation to the rice industry. Japan currently has a tariff of 150 yen per kilogram imposed on all rice as it crosses the border. Additionally, rice imports are subject to a quota of 682,000 tons, above which imports are taxed with a tariff of 341 yen per kilogram. Statistics show that this tariff rate effectively prohibits all imports above the quota (Fukuda, et al., 2003). Without exception, every policy has been designed to protect a comparatively disadvantaged domestic industry. Figure 1 illustrates the nominal rate of protection in the Japanese rice sector due to high tariff levels.

Domestic Welfare Effects

The Japanese have a culture deeply rooted in traditional behavioral models. Japanese feel an intense sense of obligation to keep things stable and are thus very resistant to change. These attitudes are manifest in their policies (Yoshimura & Anderson, 1997).

However, in this case it is clear that resisting change—refusing to allow more foreign rice into the domestic economy—is not benefiting the Japanese economy at all. While admittedly producers receive some benefit from protection, with prices continuing to climb, the welfare loss to consumers is tremendous. The result is the country as a whole loses. Even several Japanese economists and politicians have finally admitted the poor stance of their policies and have suggested that heavy rice protection is no longer the answer (United States Senate, 1986).

The purpose of Japan’s protectionist policies is to drive domestic prices up and provide producers with higher incomes. However, this welfare gain is immediately lost by the fact the consumers must pay higher prices. Thus the policies do not increase welfare, but simply divert income from producers to consumers.

Additionally, due to the fact that rice is a main stable in the Japanese diet, empirical research indicates that consumer demand for rice is inelastic—as prices increase, demand is not likely to change very much (Fukuda et al., 2003). Therefore raising the domestic price of rice imposes a severe burden on consumers.

In 2000 consumers spent over 1% of their income ($638 per individual) to cover the merely the difference between domestic and world rice process. This problem directly affects an individual when he goes shopping at the local market. Current data shows that Japanese consumers pay roughly $2.63 per kilogram compared to the US price of $.20 per kilogram (Ministry of Agriculture and Forestry [MAFF], 2001).

Other welfare losses are shouldered by the government, which then taxes consumers and imposes further welfare losses. One example of such expenditures is storage costs. As indicated previously, the government has agreed to pay the difference to producers when the domestic price falls below a predetermined standard. It accomplishes this buy buying surplus rice stocks at the predetermined price. The government has then chosen to store the rice rather than export it, and this then requires increased taxes to provide for the storage facilities.

Figure 2 illustrates a few of these effects. Note that when consumption exceeds production, storage volumes and the associated expenses increase. Also interesting to note is the import level of nearly zero until 1993. The lack of imports can be taken as evidence of the welfare loss experienced by consumers.

International Welfare Effects

The negative effects of Japan’s rice protection are not limited to the domestic market alone. Virtually every economy involved in rice trading has felt adverse effects from the Japanese policies. As a specific case study, this report will look the welfare effects felt by Burma, a small rice-exporting country in Southeast Asia.

Burma entered the rice market in the late 1920’s, producing just under half of the quantity of Japanese production at the time. Like Japan, traditionally Burma has not been lacked protectionist tendencies. Until recent decades, privately-owned firms were not allowed to export rice at all. However, the Burmese government realized the effects and in an effort to encourage expansion of its relatively small rice industry has begun to move toward more liberal policies (Siok-Hwa & Lumpur, 1968).

However, this move toward trade liberalization has been complicated by the aggressive protectionist policies still in place in developed countries such as Japan (Kazmin, 2004). Being geographically close and also a large consumer of rice, Japan is a natural export target for Burmese producers. However, high tariffs and vast array of protectionist policies have severely limited Burma’s ability to trade. As shown in Table 2, over the past several years, Burma’s export volume of rice has significantly increased. A major portion of this increase has been going to Japan. At this same time, Japan has been gradually reducing trade barriers. This trend suggests that Japan’s limitations on imports have played an influential role in limiting past exports of Burmese rice and thus imposing a welfare loss on the country’s producers (United States Department of Agriculture [USDA], 2002).

Table 2 – Burmese Rice Export Volume (thousands of metric tons)

1997 : 15

1998 : 94

1999 : 57

2000 : 159

2001 : 250

2002 : 750

Source: USDA 2002

From a theoretical standpoint, the trade pattern between Burma and Japan suggest that Burma has a comparative advantage in the rice industry. Burma tends to export and Japan tends to import. When the specific data is considered, it becomes clear that Burma does indeed have a comparative advantage over Japan in rice production. Japan is one of the highest cost rice producers in the world, requiring as much as $12,000 to produce one hectare of rice. Burma, on the other hand, enjoys some of the lowest production costs, around $500 per hectare (Yap, 1991).

As a normative argument, the trends suggest that global welfare is better off by allowing Burma to specialize in rice production and export. On the other hand, Japan should use its resources to specialize in another sector where it can produce efficiently, for in rice, it is rather inefficient. This pattern is occurring, but the ridiculous degree of protectionism demonstrated by the Japanese government limits the extent. The result is a set of policies that does not allow the world to enjoy an optimal level of efficiency.

Burma, although a more efficient producer of rice, is unable to produce at its free-trade equilibrium. Additionally, Burmese producers must pay significant costs to get their rice across the Japanese border. These distortions yield a negative net welfare effect on the Japanese, Burmese, and world economies.

Econometric studies have indicated that Japan has the ability to influence market prices in rice, but Burma behaves more like a price-taker (Barker, Herdt, & Rose, 1985). Thus Burma is subject in part to the whims of the Japanese government. Qualitatively, the isolation of the Japanese economy in the rice sector decreases the demand that Burmese producers face. With lower demand than free trade would otherwise allow, Burmese producers are unable to produce as much and are stuck with higher production costs. Rice demand in the small Burmese economy is saturated and if Burmese producers wish to expand production, they must try and sell in foreign markets. The Japanese market exhibits severely inflated prices due to tariffs and other restrictions and thus the growth of the otherwise competitive Burmese rice industry is greatly hindered by the Japanese restrictions which are destroying the possibility of trade between the two economies (Coyle, 1981).

A comparison of the costs of rice production, as well as other indicators in the two economies make it is obvious that Burma is the more efficient producer of the rice and Japanese resources would be better spent elsewhere. It can also be seen that Japanese protectionism is causing unnecessary costs on everyone else participating in the market (Yap, 1981).

Benefits of Trade Liberalization

Clearly, the best course of action, when considering world welfare, is to eliminate all trade barriers. Senator Pete Wilson gave his opinion to the US Congress that Japanese protectionism harms international rice trade. Total liberalization would benefit all involved, not just the United States. He stated that “the elimination of Japan’s unfair import ban would also benefit rice growers in Burma, Thailand, Pakistan, and other developing countries” (United States House of Representatives, 1986).

Burma, as well as other small, developing countries, are typically the recipients of the greatest injury from trade barriers. The rice industry in Burma is still small and is struggling to get a firm hold in international markets. However, Japan’s policies drive up domestic prices of the otherwise low-priced Burmese rice. Because Burma’s costs of producing rice are so much lower than Japan’s, Burma has a comparative advantage in its production. Trade barriers distort this advantage.

Burmese producers are faced with high costs when selling their stocks to Japanese consumers. These costs come primarily from the enormous tariffs that must be paid as the rice crosses the border. The result: Burmese producers are not able to sell as much rice as they would otherwise. Japanese consumers also lose out by being forced to pay much higher prices than they would with international free trade.

In the event that the trade between the two countries was to be completely liberalized, the benefits would be abundant. Burmese producers would have a much larger consumer base to sell to and the elimination of trade barriers would allow them to produce more rice much more efficiently than the Japanese. Japanese consumers would likewise benefit from the increased supply and subsequent decline in prices.

WTO Meetings in Cancun

The issue of Japan’s rice protectionism proved to be a major obstacle up during the World Trade Organization negations in Cancun. In fact, it was one of the primary contributors to destroying negotiations completely. Japan, along with several other Asian countries, pressed very hard for exceptions allowing them to impose even more barriers on trade than the current policies. They surrounded this stance in an argument saying it is necessary for the survival of the domestic rice industry (Reuters, 2003). This is a sensible argument when view the situation from the perspective of the Japanese rice producers. As demonstrated earlier, the Japanese rice producers are not efficient at all and produce rice at a very high cost. In order for them to survive against low-cost producers—such as Burma—they must protect the industry.

Unfortunately, Japanese producers represent only a small fraction of the world population. Their stance fails to take into account the other welfare effects imposed on other players in the world economy. The other countries were fighting to get Japan to open its borders to rice. They argued that doing so will not only improve the industries abroad, but will also allow rice production to move to producers who are the most efficient. In the long run, this is better for everyone involved.

Japan’s stubborn stance seemed to be more political than economic. When one takes a good look at the statistic presented in the report, it should be quite clear that trade liberalization is the best policy. However, rice farmers provide votes and Japanese politicians depend on these votes for their survival. Although they did make a few minor compromises, Japan continued to refuse to reduce its trade restrictions. This was a major factor in the breakdown of negotiations (Azuma, 2001).

Conclusion

Thus it is easy to see that rice trade in Japan—and the Orient in general—is a very sensitive topic to all involved. The powerful countries, such as Japan, seem to be the highest-cost producers and are experiencing a comparative disadvantage. The low-cost producers, such as Burma, are the ones who should be producing the bulk of product. The interesting thing is that if Japan was to really act in its own self-interest, considering the welfare imposed on the country as a whole, it would open its borders to trade. Such a move would, in the long run, increase Japan’s domestic welfare, and the welfare of all of its trade partners. Japanese consumers would enjoy the price reductions and use the extra money to build up other sectors in the struggling economy. However, the politicians are bowing to the wishes of a powerful special interest groups—rice farmers—and are refusing to liberalize. There remains some hope, however, as Japan’s borders are more open now than they have been in the past. But unfortunately for the Asian rice consumer, it will likely be a long road until free trade will become the rule, not the exception.

References:

• Azuma, Yasushi. (2001, September). WTO Failure Relief for Japan. Japan Today.
• Barker, Randolph, Herdt, Robert W., & Rose, Beth. (1985). The Rice Economy of Asia. Washington D.C.
• Coyle, William T. (1981). Japan’s Rice Policy. Foreign Agricultural Economic Report, Number 164. Washington D.C.: United States Department of Agriculture
• Foreign Agricultural Service. (2002). Burma: Rice Situation Update. www.fas.usda.gov
• Fukuda, Hisao, Dyck, John & Stout, Jim. (2003). Rice Sector Policies in Japan. Electronic Outlook Report from the Economic Research Service. United States Department of Agriculture. www.erc.usda.gov
• Harvey, David. (2002). Japanese Farm Policy. www.staff.ncl.ac.uk/david.harvey
• Hayami, Yujiro & Yoshihisa, Godo. (1995). Economics and Politics of Rice Policy in Japan: A Perspective on the Uruguay Round. Working Paper Series, Number 5341. Cambridge: National Bureau of Economic Research, Inc.
• Kazmin, Amy. (2004, February). Burma’s Rice Policy Chaos Sows Economic Seeds of Doubt. Financial Times. www.burmalibrary.org
• Nagai, Shinya & Takahashi, Kunio. (1996). 1194-95 Annual Abstracts of Official Reports and Statistics of the Japanese Government. White Papers of Japan. Tokyo.
• Office of the United States Trade Representative. (2003). Farm Policies in the U.S., EU, and Japan. Trade Facts. www.ustrade-wto.gov
• Rae, Allan & Josling, Timothy. (2001). Processed Food Trade and Developing Countries: Protection and Trade Reform. NZ Trade Consortium Working Paper Series, Number 15. Wellington: The NZ Institute of Economic Research, Inc
• Reuters. (2001, September). WTO on a Sticky Wicket Against Japan’s Rice Bowlers. The Age. theage.com.au
• Siok-Hwa, Cheng & Lumpur, Kuala. (1968). The Rice Industry of Burma 1852~1940. Singapore: University of Malaya Press.
• United States Department of Agriculture. (2001, February). 2001/02 Global Wheat and Course Grain Trade Diverge. Grain: World Markets and Trade. www.fas.usda.gov
• United States House of Representatives, Committee on Agriculture. (1986). Review of Japan’s Policy Concerning the Importation of Rice (Serial No. 99-49). Washington D.C.: U.S. Government Printing Office
• United States Senate, Committee on Agriculture, Nutrition, and Forestry. (1986). U.S.-Japan Rice Trade (Serial Number 99-1051). Washington D.C.: U.S. Government Printing Office
• Yap, C.L. (1991). A Comparison of the Cost of Producing Rice in Selected Countries. Food and Agriculture Organization of the United Nations, FAO Economic Social Development Paper, Number 101.
• Yoshimura, Noboru & Anderson, Philip. (1997). Inside the Kaisha. Boston: Harvard Business School Press.

Source : Japan-101 Information resource

#JapanRicePolicy 

#TradeProtectionism 

#RiceMarket 

#AgriculturalEconomics 

#GlobalTrade

Pascal Lamy Calonkan Diri Dirjen WTO

Pimpinan General Council Bruce Gosper telah menyampaikan kepada anggota WTO pada tanggal 4 November 2008 bahwa Direktur Jenderal Pascal Lamy telah mengumumkan akan mencalonkan diri sebagai Direktur Jenderal lagi untuk masa jabatan kedua menjelang jabatannya berakhir 2009.

Duta Besar Gosper mengatakan bahwa dia telah menerima surat dari Lamy yang menyatakan keputusannya untuk mencalonkan diri sebagai Direktur Jenderal untuk masa jabatan berikutnya. Duta Besar Australia yang memimpin seleksi ini, telah mengingatkan para anggota WTO tentang prosedur seleksi (Procedures for the appointment of Directors-General) dalam Rapat General Council 14 Oktober 2008.

Untuk itu disyaratkan pejabat lama mencalonkan diri untuk masa jabatan kedua pada akhir bulan November 2008. Setelah itu dilakukan pemilihan terbuka sampai akhir Desember 2008 untuk penambahan kandidat yang dinominasi.

Apabila tedapat kandidat baru, mereka diberikan waktu 3 bulan sampai dengan akhir Maret 2009 mengkampanyekan dirinya kepada para anggota WTO, kemudian dilanjutkan 2 bulan proses seleksi yang berakhir pada akhir Mei 2009.

Adapun persyaratan untuk seleksi Direktur Jenderal WTO adalah sebagai berikut.


PROCEDURES FOR THE APPOINTMENT OF DIRECTORS-GENERAL

Adopted by the General Council on 10 December 2002


The General Council, acting pursuant to Articles IV.2, VI.2 and IX.1 of the WTO Agreement, agrees to the following procedures for the appointment of the Director-General.

Conduct of the appointment process

1. The appointment process shall be guided by the best interests of the Organization, respect for the dignity of the candidates and the Members nominating them, and by full transparency and inclusiveness at all stages, building on the best practices established over the past years with regard to internal transparency and participation of all Members.
2. The overriding objective of Members in this process shall be to reach decisions by consensus.
3. The process leading up to the decision by the General Council to appoint a Director-General shall be conducted by the Chair of the General Council in consultation with Members and in accordance with the procedures set out herein.
Facilitators

4. The Chair of the General Council shall be assisted in this process by the Chairs of the Dispute Settlement Body and the Trade Policy Review Body acting as facilitators.
5. The Chair and the facilitators shall act impartially and objectively, and conduct their work in a transparent manner.
6. The Chair and the facilitators shall aim to encourage and facilitate the building of consensus among Members, and assist them in moving from the initial field of candidates to a final decision on appointment.
Time-frames for the process

7. The appointment process shall start nine months prior to the expiry of the term of an incumbent Director-General with a notification from the Chair to the General Council. The process shall conclude with a meeting of the General Council convened not later than three months prior to the expiry of an incumbent's term, at which a decision to appoint a new Director-General shall be taken.
8. Members shall have one month after the start of the appointment process to nominate candidates. Nominations shall be submitted by Members only, and in respect of their own nationals. The candidates nominated shall then have three months to make themselves known to Members and to engage in discussions on the pertinent issues facing the Organization. The remaining two months prior to the conclusion of this process shall be devoted to selecting and appointing one of the candidates.
Qualifications of candidates

9. In broad terms, candidates should have extensive experience in international relations, encompassing economic, trade and/or political experience; a firm commitment to the work and objectives of the WTO; proven leadership and managerial ability; and demonstrated communications skills.
Nomination procedure

10. Nominations and supporting information shall be addressed to the Chair of the General Council and received not later than one month after the start of the process. These documents will be distributed to Members as they are received. Immediately after the close of the nomination period, the Chair shall communicate to Members a consolidated list of the candidatures received.
11. Nominations shall be accompanied by the curriculum vitae of the candidate and any additional supporting information.
12. Where a serving Director-General decides to seek reappointment, he or she shall so notify the Chair of the General Council before the start of the process, and shall thereby be considered to be a candidate. The Chair shall inform Members of the candidature of the incumbent Director-General, in order that they may take this into consideration in submitting their nominations.
Representativeness of candidates

13. In order to ensure that the best possible candidate is selected to head the WTO at any given time, candidatures representing the diversity of Members across all regions shall be invited in the nominations process. Where Members are faced in the final selection with equally meritorious candidates, they shall take into consideration as one of the factors the desirability of reflecting the diversity of the WTO's membership in successive appointments to the post of Director-General.
Meeting with the candidates

14. As early as possible after the close of the one-month nomination period, candidates shall be invited to meet with Members at a formal General Council meeting. Candidates will be invited to make a brief presentation, including their vision for the WTO, to be followed by a question-and-answer period.
Consultation process

15. In the final two months of the process, the General Council shall proceed, through a process of consultations, to narrow the field of candidates and ultimately to arrive at its choice for appointment.
16. In arriving at its choice, the General Council shall aim to reach a decision by consensus.
17. The Chair, with the assistance of the facilitators, shall consult all Members, including non-resident Members, in order to assess their preferences and the breadth of support for each candidate. The ultimate aim of the consultation process shall be to identify the candidate around whom consensus can be built. In order to do this, it may be necessary to conduct successive consultations to identify the candidate or candidates least likely to attract such a consensus.
18. The outcome of the consultations shall be reported to the membership at each stage. It is understood that the candidate or candidates least likely to attract consensus shall withdraw. The number of candidates expected to withdraw at each stage shall be determined according to the initial number of candidates, and made known in advance. This process shall be repeated in successive stages on the basis of a revised slate of candidates each time, with the aim of establishing consensus around one candidate.
19. At the end of the final stage of the consultative process, the Chair, with the support of the facilitators, shall submit the name of the candidate most likely to attract consensus and recommend his or her appointment by the General Council.
Recourse to voting as a last resort

20. If, after having carried out all the procedures set out above, it has not been possible for the General Council to take a decision by consensus by the deadline provided for the appointment, Members should consider the possibility of recourse to a vote as a last resort by a procedure to be determined at that time. Recourse to a vote for the appointment of a Director-General shall be understood to be an exceptional departure from the customary practice of decision-making by consensus, and shall not establish any precedent for such recourse in respect of any future decisions in the WTO.
Term of office

21. The Director-General shall be appointed for a term of office of four years, and shall be eligible for reappointment for a further term not exceeding four years. There shall be no expectation of automaticity in the reappointment.
22. In order to ensure continuity at the senior management level, the terms of office of the Director-General and of the Deputy Directors-General shall be staggered, such that the terms of the Deputies expire subsequent to the expiry of the Director-General's term.
23. In the event of a vacancy in the post of Director-General, the General Council shall designate one of the existing Deputy Directors-General to serve as Acting Director-General until the appointment of a new Director-General. The Chair of the General Council shall initiate, as soon as possible, a process for appointment of a new Director-General, in keeping with the procedures set out herein, and may establish expedited deadlines as necessary in consultation with Members.
Remuneration package

24. The remuneration package for Directors-General shall be established by the Committee on Budget, Finance and Administration and subject to the approval of the General Council. It shall not be negotiable with a Director-General-designate.
Contract of appointment

25. The contract of appointment, including the remuneration package, shall be signed jointly by the Director-General-designate and by the Chair of the General Council acting in the name of the WTO.

Sources : WTO : News Items, November 4, 2008

DG Pascal Lamy Ready to Call Ministers Back to Geneva

WTO Director-General Pascal Lamy, in a statement at UNCTAD on 16 September 2008, said that “depending on progress made by the negotiators, I am ready to call Ministers to Geneva to try and close the issues which remain open”. “The reasons why we must conclude the Round are becoming more critical by the day as the economic and financial outlook continues to deteriorate”. This is what he said:

55th Session of UNCTAD's Trade and Development Board
Evolution of the International Trading System and of International Trade from a Development Perspective

Mr Chairman,
Ladies and Gentlemen

I would have preferred to speak at today's Session on the “Evolution of the International Trading System” about the agreement reached to establish agriculture and industrial modalities towards a final deal of the Doha negotiations, but I cannot.

Instead I will tell you just how much we stand to lose if we do not carry on with the very hard and arduous work of concluding the Doha Round. I am convinced that a deal is still possible. I still believe that with yet another push we could still reach our target. This belief is not obstinacy. It is based on a hard look at what is on the table and what remains to be done.

While we have not yet been able to come up with modalities, I must say that during the period in which Ministers were present in Geneva in July, they managed to fill many of the gaps existing on thorny issues which had remained intractable for years.

Although we are not quite there in terms of an agreement, we have moved a long way. I believe it is in all members' interests, big and small, to reach an agreement, and to do so sooner rather than later. As many of you know, I have always been and continue to be a strong believer in the multilateral trading system.

I consider a freer and fairer trading system an important contribution for least-developed and developing countries to pursue their development objectives, and especially the attainment of the Millennium Development Goals.

Recognition by developing countries themselves of the importance that trade can play in their economic development has been demonstrated by a rise in the number of developing countries that are now members of the WTO, with the most recent addition being Cape Verde, but also by the far reaching reforms that these countries have taken to reach out to new markets and diversify their economies.

Many have been able to realize huge benefits from increased commodity exports. But, as this year's Trade and Development Board report points out, it is exactly now that many of those same countries could use their trade surpluses to start focusing their investments on efforts to diversify their economies and to “create the incentives for a sustained industrialization based on new investment in new productive capacities”. Such efforts would do much to reduce their dependency on only a few commodities.

As the UNCTAD XII conference in Ghana noted, the current upswing in commodity prices has changed trade patterns. But this is not the only factor which is evolving. Trade patterns have changed, with many developing countries becoming important players on the international stage. Added to this is that the world has seen an expansion in South-South trade, particularly in Asian developing countries which are estimated to account for more than two-thirds of all intra-developing country trade. Thus making it increasingly evident that one developing country's trade policies can create opportunities for more trade with other partners.

We have come a long way from arguing whether trade has a role to play in development. We now know that it does have a role to play. Our concern now is to ensure that trade works for development. This includes ensuring that we level the playing field through the results of the Doha Round.

But levelling the playing field will not be enough. As UNCTAD's report for this meeting clearly shows, trade opening needs to be accompanied by measures which facilitate trade. This is where the Aid for Trade agenda kicks in. In addition to freer and fairer trade rules, we also need an integrated agenda for boosting the productive capacities of developing countries so that they can translate these new trade opportunities into increased trade flows.

Aid for Trade as one of the types of development aid is nothing new. What is new, and I dare say essential, is that both trade and Aid for Trade be considered as two sides of the same coin. We have come a long way since we put it squarely on the WTO map at the Hong Kong Ministerial in December 2005. And there is more to come, focusing now on country and regional delivery as well as on the development of evaluation indicators to assess the effectiveness and impact of the aid. The recent meeting in Accra on Aid Effectiveness and the Symposium on Evaluation aimed at identifying indicators for monitoring Aid for Trade, which the WTO is hosting this week, are clear examples of where the current focus is.

And here I would like to commend UNCTAD and in particular Dr Supachai for the support they have lent to Aid for Trade, which could not work if it was not a collective effort whether within developing countries, or between donors and recipients, as well as within the family of international organizations.

The same is true for the Enhanced Integrated Framework for Least Developed Countries, in which we are partners with UNCTAD and the ITC alongside the World Bank, the IMF and UNDP and which I hope to be fully operational soon.

But allow me to get back to the issue of the Doha Round and the attempt in July to reach agreement in modalities on agriculture and industry.

In the WTO we work under the principle of the “single undertaking”, meaning that nothing is agreed until everything is agreed. The Doha Round will not close until agreement has been found not just on agriculture and industry but on all topics on the agenda, including services, trade facilitation, environmental goods and services or special and differential treatment to name but a few.

It would also be fair to say that even after agriculture and industry modalities are established, there would remain important work to translate these into detailed country-specific schedules of commitments.

WTO members entered the July Mini-Ministerial looking at agricultural subsidies, agricultural tariffs, industrial tariffs and ready to provide signals on the opening of a number of their services.

In a short space of time, they accomplished what some never thought they would. They found convergence on the issue of agriculture subsidies, even if the specific extra reduction for cotton subsidies remained to be addressed. They went a long way on the issue of agricultural tariffs. The same can be said about industrial tariffs, even if a few issues remained for further clarification. And they had a promise before them of attractive services offers, based on the Services Signalling Conference that was held.

In agriculture, various elements of the Doha Package have been designed to address both the developed and the developing world's many sensitivities. In July, much progress was achieved on sensitive products for developed and developing countries, and on special products reserved exclusively for the developing world — these are all products that would take either a lower tariff reduction than the norm or no reduction at all, to make trade opening more gradual. Progress was also made in reducing the scope of the existing special safeguard mechanism leading to its disappearance for developed countries. The same can be said of in-quota tariffs and tariff quota administration. Enormous progress was made on the export competition pillar. Good progress was also made on the issue of preference erosion and tropical products. Convergence was also on the table on the thorny issue of bananas, settlement of which is long overdue.

In industry, in addition to the core formula and flexibilities and sectorals, good progress was also made on treatment of Least Developed Countries as well as on the issue of preference erosion. In both agriculture and industry, special and differential treatment for small and vulnerable economies was also recognised and translated into specific parameters for the first time.

But where the negotiations collapsed was on the details of the Special Safeguard Mechanism for agriculture for the developing world. Some members could not agree on the circumstances in which this Safeguard could be used - the extent of volume surge, or price decline of imported products that would have to occur for it to be triggered. And nor could they agree on the extent of the remedy that it would provide when set in motion - the magnitude of the extra duty that would be imposed on imported goods to protect the domestic market. Efforts were made until the very last minute of the meeting to find a compromise over the Special Safeguard Mechanism, but it eventually became clear that we would require more work to build convergence.

As a result of the failure to progress beyond the SSM issue, negotiators never made it to other critical issues, including cotton. The Cotton-4, Benin, Burkina Faso, Chad and Mali — not to mention the rest of Africa — walked away, and understandably so, in extreme disappointment.

So where do we go from here? Since the July meeting, I have been consulting widely among members to get a sense of how they see the way forward and I have to say that a vast majority of developing countries have insisted that all efforts be made to safeguard what is already on the table and for those members that could not reach consensus in July to redouble their efforts in the coming weeks to resolve their differences. I have also been encouraged by the expressions of political commitment to a successful conclusion of the DDA made by leaders across the globe.

There is now far too much on the table, particularly for developing countries, to give up on these negotiations. And while I believe there is scope for renewed engagement over the coming weeks, it is clear that we are coping with a fragile situation. The good news is that a number of negotiators are back into the machine room. But we know that if this is necessary to reignite the process, building consensus and involving all members takes time and we do not have much of that.

In the weeks to come, and depending on progress made by the negotiators, I am ready to call Ministers to Geneva to try and close the issues which remain open so that the scheduling process in both areas can commence.

Quoting Michael Korda, the British novelist, I would like to offer a piece of advice to negotiators: “Never walk away from failure. On the contrary, study it carefully — and imaginatively — for its hidden assets”.

A failure of the Doha Agenda would have serious implications on the ongoing efforts by all developing countries to address their challenges and in particular to meet the UN Millennium Development Goals. The reasons why we must conclude the Round are visible to all of us and are becoming more critical by the day as the economic and financial outlook continues to deteriorate.

One of the most pressing crises facing us today, and which is extremely relevant to growth and poverty reduction, is that of the current food crisis. Whilst the WTO cannot provide an immediate solution, it can through the Doha Round provide medium to long term solutions to better connect demand and offer. A comprehensive WTO deal can help soften the impact of high prices by tackling the current systemic distortions in international agricultural trade that have stifled food production and investment in agriculture for years in many developing countries

And although Aid for Trade is not part of the negotiating agenda, a failure to conclude the Round successfully risks having an impact on the scale of resources that donors have undertaken to provide as part of their support to facilitate developing countries' capacity to fully exploit the potential benefits of further trade opening under a successful DDA.

The next weeks will be difficult but I remain convinced that all members, developed and developing alike, share the desire for a deal. But for us to have a deal, members need to work together towards striking a balance that will be favourable not only for each of them individually but for all members, particularly the most vulnerable. In addition, individual governments need to be clear on how these new trade opportunities will be used to address their own development challenges. While we all agree that trade will not be the panacea for all the challenges of development, trade can, when coupled with supportive economic and social policies, go a long way in helping countries to better address their development challenges.

I believe this is the platform that UNCTAD and the WTO now share. I am thankful to you all, starting with Dr Supachai, for your efforts in translating this vision into the reality of your people.

I thank you for your attention.

Source : WTO NEWS: SPEECHES — DG PASCAL LAMY, 16 September 2008

New WTO Deal Promises Safer Global Food

WTO members have reached an apparent consensus on two sets of procedures aimed at strengthening their work on sanitary and phytosanitary measures (SPS, ie, food safety and animal and plant health). One is on recognizing that regions (within a country or spanning borders) are free from diseases or pests, the other is on improving the information they share with each other, a crucially important part of member governments’ work in the WTO. Both were approved conditionally in the WTO SPS Committee’s 2–3 April 2008 meeting, and will be adopted if no one objects within the next few weeks. They encourage WTO members also to notify when they adopt international standards. (If the “regionalization” guidelines are not adopted, their transparency provisions will be inserted into this text.)

Meanwhile, information is increasingly being made available through on-line technology. Members were briefed on further enhancements to the WTO’s SPS Information Management System, a searchable database for all notifications, specific trade concerns raised in the committee and other information, the FAO’s International Portal on Food Safety, Animal and Plant Health and a similar “portal” of the International Plant Protection Convention.

Specific trade concerns (STCs)

Code numbers, eg, “STC229”, identify particular issues and can be used to search the WTO’s SPS Information Management System.

Specific trade concerns: resolved

Canada’s restrictions on enoki mushrooms (STC229): Chinese Taipei said Canada has allowed imports to resume following consultations and Canadian officials’ visits to production sites.

Japan’s import suspension on Chinese heat-processed straw and forage for feed (STC222): China said Japan’s ban has been lifted following consultations and site visits.

Specific trade concerns: new

The EU’s proposed maximum residue levels for ethephon in pineapple: Ecuador, Also discussed were a number of concerns members raised about specific measures other governments have introduced, including some related to issues that have been raised several times before such as avian influenza (“bird flu”), foot and mouth disease, and BSE (“mad cow disease”).

And the meeting heard a warning that standards set by private bodies could undermine the science-based and democratically agreed standards of multilateral organizations and cause difficulties for developing countries.

The caution came from Dr Bernard Vallat, director-general of the World Organization for Animal Health (OIE) in the latest of a series of discussions about standards set by the private sector, in particular supermarket chains and bodies representing them.

This was the first time the head of the OIE has attended a WTO SPS Committee meeting. The multilateral standard-setting organizations he had in mind are in particular, the OIE and the SPS Committee’s two other “sisters” — Codex Alimentarius, which deals with food safety, and the International Plant Protection Convention.

The week began with a workshop on SPS capacity evaluation tools organized under the jointly-run Standards and Trade Development Facility.

The SPS Committee comprises all WTO members and is responsible for overseeing the implementation of the WTO SPS Agreement.

Regionalization

The key concept here is recognition that an exporting region (part of a country or a border-straddling zone) is disease-free or pest-free (or has a lower incidence). When importing countries recognize different situations in different regions, their restrictions on products from areas with disease do not apply to whole countries. It is often raised as a specific trade concern as well as being discussed as a subject in its own right.

The text that members conditionally adopted comes from the work of a small group of countries, coordinated by New Zealand and is a compromise after about one year of work within the group and five years of discussion in the SPS Committee. It has been circulated in document G/SPS/W/218, as non-binding guidelines for implementing regionalization. These include various recommended steps to be taken by an importing and an exporting country discussion a region’s status.

In an informal meeting on 1 April, some countries involved in the group signalled their disappointment that the guidelines are not stronger in trying to avoid “undue delays” in recognizing a region’s status. But others urged them to accept the compromise so that what has been agreed so far can be implemented; the guidelines can be revised in the future on the basis of experience, they said.

The committee formally agreed that if no member objects by 15 May, the guidelines will be adopted. (Officially, the committee has adopted the guidelines “ad referendum")

Transparency

Also adopted provided no one objects — this time by 30 May — are revised recommendations on how governments provide information on new or proposed measures they take on food safety and animal and plant health.

Sharing and commenting on this information is one of the SPS Committee’s most important tasks — members use the committee to ensure that SPS measures comply with the WTO agreement, meaning they are based on science or international standards and are not protectionism in disguise.

The new recommendations will be a third revision of the present set, G/SPS/7/Rev.2. They include new procedures and forms for notifications, details of new on-line databases where the notifications and other relevant information is compiled, and supported by Costa Rica, said the EU’s proposed new maximum residue level of 0.5mg/kg for this plant growth regulator is too low, not based on science and stricter than the international standard of Codex Alimentarius. The EU replied that its own producers would also have to meet the proposed new limit and are also concerned, and invited the two countries to provide scientific evidence to show that the proposed new limit is too strict.

Malaysia’s charges for on-site inspection missions: Brazil — supported by the EU, Australia and New Zealand — complained that Malaysia’s new charge of $30,000 per establishment is exorbitant, particularly since the results are only valid for a year, requiring annual inspections for approvals to be extended. Malaysia said that the costs of inspecting on SPS and Halal grounds has risen considerably, but that the new costs are not in place yet. The comments will be transmitted to Kuala Lumpur, Malaysia said.

US regulatory process, including need for economic analysis: Brazil questioned whether SPS regulations should also require economic analysis and whether this would delay or disrupt approval for imports. The US replied that the requirement applies to all new regulations so that the government can assess the economic impact, but that SPS measures are only based on science and risk assessment.

Specific trade concerns: unresolved

Among the issues that have been raised before and remain unresolved.
India’s restrictions on animal products (STC185): This is an on-going concern related to avian influenza raised by the EU, supported by Australia and the US. The EU said although some restrictions have been relaxed, others remain, even though they are not based on science or the standards of the World Organization for Animal Health (OIE). For example India should not restrict imports of heat treated products, where any virus would have been destroyed, and pigmeat, the EU said. India said the measures are necessary because of the huge risks to livestock and humans on small farms. (The EU had a similar concern over Egypt’s restrictions on heat-treated products)

Private sector standards

Following OIE Director-General Bernard Vallat’s comments on private sector standards, members agreed to consider setting up a small group to work on this issue — they will discuss this in June.

Uruguay and Egypt led a group of developing countries highly critical of private sector standards on the grounds that the standards are arbitrary and can be difficult for developing countries to meet. They said the SPS Agreement obliges governments to ensure non-governmental bodies also respect the agreement. Others said that like it or not, the private sector will continue to set these standards for a variety of issues, ranging from sustainability and organic production to animal welfare. The World Bank, an observer, said research shows that meeting private standards does not always penalize developing countries and in some cases helps them to export.

However members generally agreed with Dr Vallat that the SPS Committee’s focus should be on health and safety issues.

Private sector entities setting up their own standards include supermarket chains and “GLOBALGAP”, previously the Euro-Retailer Produce Working Group’s EurepGap — GAP is “good agricultural practices”.

When first raised in 2005, this issue took the SPS Committee into comparatively new territory — the committee generally deals with standards set by international standards-setting bodies and those imposed by governments. Private sector standards were first raised in June 2005 by St Vincent and the Grenadines, because of private standards for bananas. St Vincent and the Grenadines complained that private standards are often more rigid than international standards, causing small farmers to suffer.

Since then the issue has been raised regularly in the SPS Committee, and a workshop on private and commercial standards was organized by the WTO and UNCTAD on Monday 25 June 2007.

Sources : 

2008 WTO NEWS ITEMS on 2 and 3 April 2008