Sri Lanka promotes Special Safeguard Mechanism
The much talked about World Trade Organisation(WTO) Ministerial meetings
held in Hong Kong from December 13-18 concluded without much fanfare.
The Sri Lanka delegation was led by Minister of Trade, Commerce and
Consumer Affairs Jeyaraj Fernandopulle.
At the conference Sri Lanka together with members of the G-33 actively
promoted a proposal known as a Special Safeguard Mechanism which permits Sri
Lanka to impose higher tariffs to protect its local producers in the event
of an import surge of agricultural products. As a leading member of the G-33
consisting of developing countries Sri Lanka was an active proponent of a
unique proposal known as special products.
This proposal which was included in the WTO ministerial text in Hong Kong
allows developing members of the WTO to designate agricultural products
which are critically important and contributing to food security, livelihood
and rural development of the country as special products protecting them
from further tariff reduction.
Such a measure would prevent local producers from being threatened by
cheaper imports. In addition Sri Lanka secured special protection for its
agricultural products as a developing country giving it freedom to protect
products such as rice, potatoes, onions, chillies, milk and poultry from
further tariff reduction.
Minister Fernandopulle speaking at the opening session referred to the
Mahinda Chinthana of Mahinda Rajapakse and reiterated that one of the
objectives of President Rajapakse was to lift the vulnerable people out of
poverty adopting a path of pro-poor development. He said that at present the
village the periphery had not benefited from the current waves of
globalisation. During the World Trade Organisation Ministerial Conference in
Hong Kong, Sri Lanka also took up the issue of fair market access for its
exports including apparel.
In his speech Minister Fernandopulle stated that although the EU had
extended duty free access to their markets through the GSP + scheme for Sri
Lanka, the other developed countries had not granted similar concessions,
even after the tsunami disaster.
Sri Lanka, together with Pakistan jointly proposed to the other members,
that a special package of duty free, quota free access to be granted to
Least Developed Country members (LDCs), should also be extended to other
developing country members whose economies are dependent on a few products,
particularly those that would be adversely affected by such expanded
concessions to LDCs.
The draft decision on duty-free treatment for the LDCs has been modified
to accommodate the concerns of Pakistan and Sri Lanka in a manner that would
preserve our competitiveness in our main markets. The original draft
decision required all developed countries to provide duty-free quota-free
treatment to LDCs for all products. This would have reduced Sri Lanka's
competitiveness in the US, in particular for apparel products.
The proposal submitted by Pakistan and Sri Lanka resulted in lowering the
product coverage for duty- free quota- free treatment to 97%. This would
allow developed countries to exclude approximately 157 tariff lines, which
is sufficient to cover the apparel sector.
More specifically, our trading interest in the US market for apparel
products could be protected, as the text permits the US to exclude both
products such as garments and our LDC competitors receiving duty free quota
free access.
Apart from seeking improved market access in the formal WTO process, Sri
Lanka held informal consultations with a group of 14 Least Developed
Countries to seek preferential market access in the US. Sri Lanka was added
to this group of 14 LDCs because of the blows it had suffered to its economy
as a result of the tsunami.
The group, now known as the "Fourteen-Plus-One Group" will actively
pursue its interests with the U.S. authorities in seeking duty-free market
access.In relation to trade in industrial products (also known as
non-agricultural products), as per an initiative of Sri Lanka, flexibilities
were accorded to countries who have bound less than 35% of their total
industrial products, allowing them to maintain their current bound levels.
This is an important flexibility for Sri Lanka, as otherwise, all members
have been required to reduce their tariffs on such products according to a
negotiated formula, leading to drastic reductions in their tariffs.
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