Lanka protects agricultural, industrial interests at WTO

Sri Lanka secured special protection for its agricultural products as a developing country, at the 6th Ministerial Conference of the World Trade Organisation in Hong Kong giving it the freedom to protect important products like rice, potatoes, onions, chillies, milk and poultry, etc. from further tariff reduction.

Earlier, in the opening session of the conference, Trade, Commerce, Consumer Affairs and Marketing Development Minister Jeyaraj Fernandopulle, who led the Sri Lankan delegation, had expressed the importance of including special provisions to protect the agriculture of developing countries, in the final package on Agriculture.

Referring to the 'Mahinda Chinthanaya' of President Mahinda Rajapakse, Minister Fernandopulle reiterated at this international conference, that one of the prime objectives of the new government was to lift the vulnerable people out of poverty, adopting a path of pro-poor development.

He said that the village, the periphery had not benefited from the current waves of globalisation. As a leading member of the grouping known as G-33, consisting of developing countries particularly interested in agriculture, Sri Lanka was an active proponent throughout negotiations over the past several years, of a unique proposal known as Special Products.

This proposal, which was included in the Ministerial Text in Hong Kong, allows developing country members of the WTO to designate agricultural products which are critically important and contributing for 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.

Sri Lanka together with members of the G-33 actively advanced a proposal known as a Special Safeguard Mechanism, which would allow Sri Lanka to impose higher tariffs in order to protect its local producers in the event of an import surge of agricultural products.

Sri Lanka and several other delegations repeatedly requested that concerns raised by small, vulnerable economies such as Sri Lanka, be addressed. They called on the WTO to establish ways to provide flexibilities for these members in undertaking further commitments in liberalising their economies.

On negotiations in trade in services, Ministers agreed to provide appropriate flexibility for individual developing countries in making offers for further liberalization in both overall and individual service sectors. Sri Lanka has already made initial offers in areas of telecommunication, tourism, and financial services on the basis of existing level of liberalisation. Even if Sri Lanka makes any new or improved offers for further liberalisation of services, this can be done on the basis of prevailing level of liberalisation.

However, Sri Lanka has ensured that it is not required to make any new commitments in any area against our wishes as a result of the negotiations at the Ministerial Conference, particularly in areas such as health, education and water.

Member countries are now able to make new requests individually or as a group for further liberalisation. If such requests are made, Sri Lanka needs to enter into negotiations and can utilise flexibility available for developing countries in considering the requests. In addition, Sri Lanka could obtain technical assistance available for developing countries to fully engage in negotiations.

During the consultation process on issues relating to biodiversity, Sri Lanka actively engaged in the discussion on the relationship between the Agreement of Trade Related Aspects of Intellectual Property Rights (TRIPS Agreement) and the Convention on Biological Diversity with a view to commencing negotiations next year.

Sri Lanka made several interventions, supporting the position of India and other developing countries that the current level of consultations, which have been going on since 1998, should now be moved up to substantive negotiations. Minister Fernandopulle, who spoke for Sri Lanka, firmly highlighted the need for an immediate end to bio-piracy, currently a serious threat to Sri Lanka's rich biodiversity.

Though reservations were made by several developed countries, the Ministerial Text took a step forward by setting a deadline of July 2006 by which the General Council is expected to take appropriate action. On the sidelines of the main Ministerial Conference, Minister Fernandopulle held a series of important and constructive bilateral meetings with several counterparts.

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Fair market access for apparels

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 to the Ministerial Conference, Minister Fernandopulle stated that although the EU had extended duty free access to their markets through the GSP + scheme for Sri Lanka, that 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 LDs.

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 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.