The WTO's Special Safeguard Mechanism: An Indian Perspective on the Present Paradox

Abstract

While liberalisation of trade and the progressive reduction of tariffs have led to significant welfare gains, these may be unfeasible for developing countries where a surge in imports could potentially be detrimental to realising the objective of food security through food self-sufficiency. Developing country members of the World Trade Organization (W.T.O.) have thus been proposing a ‘special safeguard mechanism’ (S.S.M.). This would permit them to impose measures in circumstances wherein there has been a surge or a decline in prices of agricultural imports, so as to negatively affect the livelihood and food security interests of these nations. These deliberations have gained momentum against the backdrop of the W.T.O.'s Agreement on Agriculture (A.o.A.), which came into force in the Uruguay Round negotiations. Consequently, the W.T.O.'s Sixth Ministerial Conference held in Hong Kong in 2005, endowed developing country members with the right to recourse to S.S.M.'s on account of import surges that could potentially expose its agricultural sector to increased shocks. Nonetheless, the lack of consensus as regards the precise modalities, particularly between the United States and India, resulted in a deadlock. Consequently, during the recent Nairobi Ministerial Conference in 2016, India vehemently opposed to proceeding with any further negotiations, and in particular, as regards the Agreement on Trade Facilitation (T.F.A.). India insisted that its internal mechanisms to support food security and public stockholding - being an issue of policy space should be left unhampered despite the present stipulations of the A.o.A., which pegs the same at 10% of the value of production. Accordingly, the mandate of S.S.Ms. assumed more significance in the Nairobi Ministerial Conference insofar as modalities on these would plausibly permit developing countries to increase tariffs on account of import surges on agricultural products – and thus safeguard their food security and livelihood concerns. S.S.Ms. negotiations have been particularly important for India in its endeavour to insulate its agricultural sector from import deluges that debilitate its livelihood and food security. Its success, however, depends on the ability of the W.T.O. Members to finally negotiate the modalities of this right, in the absence of which, it continues to remain a ‘lip service'. This paper, therefore, attempts to explore India's motivation in digging its heels on the S.S.M. issue, appreciating that the country's stand at the W.T.O. appears to be of vital importance to developing country Members with similar anxieties as regards the protection of livelihood and food security. It delineates parameters in these respects which could be workable keeping in mind the agricultural scenario in India.