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.