RI can make WTO meeting a success, a failure

RI can make WTO meeting a success, a failure

This is the second article by Riyadi Suparno of The
Jakarta Post
on the recent visit to the World Trade Organization
in Geneva. The visit was sponsored by the Swiss
government.

The issue of Indonesia's subsistent farmers could take center
stage at the upcoming World Trade Organization (WTO) ministerial
meeting in Hong Kong later this year, risking perhaps the success
of the talks.

Indonesia, like most developing countries, particularly those
that import a significant volume of staple food, requires the
flexibility to protect its small-scale farmers in the event that
imports increase or international prices fluctuate.

According to Indonesian trade negotiators at the WTO
headquarters in Geneva, Indonesia's goals for the next
ministerial meeting are the acknowledgement of the rights of
developing countries to decide which agricultural products are
protected and the introduction of a special safeguard mechanism.

For example, the country wants the freedom to protect its rice
and sugar farmers in case of falling international prices and
surges in importation.

M.I. Derry Aman, second secretary of Indonesia's permanent
mission to the United Nations and other international
organizations in Geneva, explained that Indonesia currently has
enough room to raise tariffs to protect farm products in case of
swings in international prices.

Indonesia's applied tariffs for agriculture produce currently
stand at an average of 7 percent, but its bound tariffs -- the
tariffs it commits at the World Trade Organization -- stand at an
average of 30 percent.

This means that in the event of global price swings and
increased imports, Indonesia could increase the applied tariffs
until the bound level of 30 percent.

"If we have no flexibility to maneuver, it would be difficult
for us to protect our subsistent farmers," Derry said.

Indonesia's position, however, has come up against strong
resistance and not just from developed countries. Developing
countries like Thailand, also a major exporter of agricultural
products, have expressed firm objections.

To strengthen its position, Indonesia has been active, and is
currently in a position of leadership, in the Group of 33
developing countries committed to protecting the rights of their
farmers.

This group of developing countries are focusing on three main
agricultural issues: food security, rural livelihood security and
rural development at the WTO negotiations. They aim to make these
issues an integral part of the negotiations and outcomes of the
Hong Kong meeting.

Nevertheless, if Indonesia and the Group of 33 remain
unswayable in their demands, their refusal to compromise would
become a stumbling block for the meeting.
The outgoing director general of the World Trade Organization,
Supachai Panitchpakdi, has called on Indonesia and the Group of
33 to consider a softer approach for the sake of the talks.

In particular, Supachai has asked developing countries to
consider the needs of not only their farm producers but also
their farm consumers.

The process of liberalization in the agriculture sector has
helped bring down the prices of staple foods across the world. In
addition, further cutting tariffs on farm products would surely
bring down their prices for the benefit of consumers, Supachai
said.

"When we offer concessions, it's not a payment. When we reduce
our tariffs, it's not a giveaway. You are doing good to your own
consumers, who are the bulk of your population, you are doing
them a favor because they will pay less," he told visiting
journalists from Indonesia, Malaysia and Vietnam recently.

Cutting tariffs may also be of benefit for farm producers in
that low tariffs would force farmers to work harder and
eventually become competitive, boosting their production.

"We need to get our Indonesian friends to understand that we
are not in the business of destroying anybody's economy, not at
all. This is the kind of exercise in expanding the piece of cake
so that everyone have a bigger slice," Supachai said.

Agriculture will surely be the thorniest issue at the upcoming
ministerial meeting in Hong Kong, with other topics to be market
access for non-agriculture produce, services and development
issues.

The highlight of the talks in the agriculture sector,
nevertheless, will be the phasing out of developed countries'
provision of subsidies for their farmers.

In spite of the low-profile nature of Indonesia and the Group
of 33, they could pose a threat to the Hong Kong meeting in that
any decision at the meeting requires a consensus.

This farm trade issue will eventually be decided by trade
negotiators coming to Hong Kong, including those from Indonesia,
whether or not they side with subsistent farmers or the hungry
consumers.