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Philippines' idea to raise import duties to protect farm products to aid India's cause in WTO.


Date: 07-12-2017
Subject: Philippines' idea to raise import duties to protect farm products to aid India's cause in WTO
NEW DELHI: In a move that will further India's cause to protect farm products such as apples and poultry from sudden import surges or price falls, the Philippines has proposed a tool that will allow developing countries to raise duties of certain products to deal with such volatile situations. 

Called special safeguard provisions, this trade remedy tool would be used to mitigate price volatility risks and balance distortions in agricultural trade. It is important for India as the capped tariffs of some agricultural products such as apples and chicken legs are not high enough to protect domestic farmers. 

The Philippines has made these recommendations in a series of proposals to the World Trade Organization (WTO) ahead of the crucial ministerial meeting in Buenos Aires next week. It has been leading the cause on special safeguards on behalf of the G-33 for a long time. 

"While the Philippines has spearheaded this idea, it is in India's favour," said an official aware of the development. 

Developed countries already have a special safeguard mechanism or SSM in place. 

India and other developing countries have been fighting to secure a similar provision on a priority basis and at the previous ministerial meet in Nairobi in 2015, all members agreed to work on a SSM for developing countries. This would enable them raise import duties on agriculture items in case imports rise steeply or there is a sharp fall in domestic prices. 

While the Nairobi decision indicates that "developing country members will have the right to have recourse to a SSM", there have been disagreements among members on various aspects of the SSM. 

"After quantitative restrictions were removed in 2001, it is the only instrument to control price surges," the official added. 

Price v/s volume safeguards 

The Philippines has also favoured a price based SSM for developing countries wherein they can raise duties as and when any import takes place at a price lower than set by the government. A volume based SSM would come into place only after the country has the cumulative imports for the full year which is a time consuming process. 

"In no circumstances may any product be, however, subject to the simultaneous application of price-based SSM and volume-based SSM," it said in one of the proposals. 

"The Philippines feels that price based SSM is more effective and easier to use...Price based mechanism is useful for India," the official said. 

Source: economictimes.indiatimes.com

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