WTO deal means 'little' without strong policies

WTO deal means 'little' without strong policies

The Jakarta Post, Jakarta

Last week's last-gasp deal at the Hong Kong Ministerial Meeting,
which among other things sets a 2013 deadline for farm export
subsidies to be cut, would mean little for Indonesia without
strategic domestic policies to increase competitiveness, say
observers.

The World Trade Organization (WTO) meeting has agreed on
cutting agricultural subsidies within the next eight years, as
well as on accepting developing countries' demand to exempt
several of their agricultural products from a full-blown
liberalized market.

While the deal has been deemed a modest step forward, it has
at least avoided a collapse as occurred in Cancun, Mexico, in
2003, mostly blamed on sharp differences between developed and
developing countries on farm product export subsidies and import
tariffs.

Still, in order for Indonesia to benefit from the Hong Kong
deal, it has to set out a clear-cut agenda to address the
country's structural problems in the agricultural sector.

"The deal would not mean anything if we do not raise the
productivity and competitiveness of our farm products," economist
Bustanul Arifin said on Monday.

He added the country's agricultural sector still had to deal
with structural problems like low productivity and insufficient
resources.

"The government needs to prioritize the intensification of the
farming sector and increase the quality of agricultural
products," he emphasized.

"Next year will be a crucial year for the government to
prepare the agricultural sector (for the deal). If we don't do
much in 2006, we will likely fail," he said.

Meanwhile, Institute for Global Justice representative Ludfia
Hanim cautiously warned that there were a lot of details still to
be discussed.

"It gives developing and poor countries a bit of leeway but we
should not trade that off with the non-agricultural and services
deals," Hanim said.

In the pact, aside from cuts to exports subsidies, developing
countries are also entitled to self-designate a number of tariff
lines to be included in the special products (SP) category guided
by indicators based upon the criteria of food security, rural
livelihood and development.

The countries would also have the right to impose special
safeguard mechanisms (SSM) on certain products based on import
quantity and pricing mechanisms, with detailed arrangements to be
further defined.

Products that are included in the SP and SSM category will be
eligible for more flexible treatments.

The deadline on the detailed discussions is set for April 30,
2006, to be later broken down into schedules by July 31, the
ministerial draft says. A report by the chairman of the meeting's
agricultural committee stated that there were discussions that
members might have the right to designate at least 20 percent of
their agricultural tariff lines as special products.

"It (the deal) is a positive start that we can decide
ourselves on what to be protected. We will have at least 11
commodities included in the special products," said Delima
Azahari, one of Indonesia's agriculture sector negotiators.

Indonesia has previously fought for the exemption of four
special products: rice, corn, soy bean and sugar.