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.