Transcript c_bellmann - International Centre for Trade and Sustainable

Identifying Special Products in
Developing countries:
Preliminary Findings of ICTSD’s Country
Studies
Christophe Bellmann
Programmes Director - ICTSD
Special Products (SP) (para. 41)
….. Developing countries will have the
flexibility to designate an appropritate
number of products as Special Products,
based on criteria of food security, livelihood
security and rural development needs.
…….These products will be eligible for more
flexible treatment.
……..The criteria and treatment of these
products will be further specified during the
negotiation phase and will recognise the
fundamental importance of SP to developing
countries …….
The Rationale for Special Products
• Food security: combination of domestic production, importation and
public stockholding. However some degree of self-sufficiency for
basic foodstuffs remains a major objective for DC. Availability of
foreign exchange is also a constraint on the import capacity of
some DC.
• Livelihood security: Agriculture accounts for 70 % of the
employment in low-income countries and 30 % in middle-income
countries. Alternative avenues of employment are lacking.
• Rural Development: In DC, agriculture constitutes a big slice of the
GDP. Since in the rural areas agriculture is the dominant economic
activity, rural development can be sustained only by a vibrant and
growing agricultural activity.
• Importance of looking at the three criteria together as opposed to
individually
The Rationale for Special Products
(cont.)
• As tariffs are removed, the livelihood of communities
employed in import-competing sector might be affected
by lower prices and increased international
competition.
• While this benefits urban consumers it might affect
large rural populations who rely on agriculture but
cannot compete with low prices on world market.
• Developing countries have limited access to domestic
resources to cushion farmers against adverse effects of
imports; they essentially rely on border measures
(tariffs)
Undernourished as a percentage of
total
population (average 2000-2002)
Korea, Rep
Turkey
Mauritius
IIndonesia
Nigeria
Jamaica
Guyana
Suriname
El Salvador
China
Trinidad and Tobago
Peru
Côte d'Ivoire
Benin
Venezuela
Countries
Uganda
Pakistan
India
Sri Lanka
Philippines
Honduras
Senegal
Guatemala
Dominican Rep
Panama
Nicaragua
Mongolia
Botswana
Kenya
Madagascar
Congo
Zimbabwe
Tanzania
Mozambique
Haiti
Zambia
0
10
20
30
40
Share of undernourishment
Source: Based on the Millennium Development Indicators Database (UNSD)
50
60
Source: FAO, WTO Agreement on Agriculture: The Implementation Experience, FAO, Rome, 2003.
Agricultural Employment in G33
Countries
Number of countries
16
14
e.g. Honduras,
Peru, Jamaica,
Guyana
e.g. Sri Lanka,
Turkey,
Philippines
Nigeria
12
10
8
6
e.g. Haiti, India,
Côte d’Ivoire,
Indonesia
e.g. Cuba,
Venezuela,
Barbados
e.g. Kenya,
Senegal,
Zambia, China
e.g. Mozambique,
Tanzania, Uganda
4
2
0
<15
15-30
30-45
45-60
60-75
Share of agricultural working force
Source: Earth Trends database (World Resources Institute)
>75
Share of Agriculture in GDP in
G33 in Countries
16
Number of countries
14
e.g. Peru,
mauritius,
Jamaica
12
e.g. Senegal,
Honduras,
Philippines,
Suriname
10
8
e.g. Indonesia,
Kenya, China,
Belize
e.g. Nigeria,
Benin, Guyana
6
4
2
e.g. Tanzania
0
<10
10-20
20-30
30-40
Share of agriculture in GDP
Source: Earth Trends database (World Resources Institute)
>40
LDCs and NFIDCs Agricultural
Trade Evolution
30
US $ billion
25
20
15
10
Imports
Exports
5
0
90
9
1
Source: FAO
91
9
1
92
9
1
93
9
1
94
9
1
95
9
1
96
9
1
97
9
1
98
9
1
99
9
1
00
0
2
01
0
2
02
0
2
03
0
2
Bound Tariff Structures in G33 Countries
SUBGROUP
MEMBERS
MEAN
TARIFF
COEFFICIENT
OF VARIATION
% OF TARIFFS
> 60%
% OF TARIFFS
> 120%
1
Côte d'Ivoire,
Mongolia, Suriname
Low
(15-20%)
Low
(0.0-0.3)
0%
0%
2
Core: Cuba, Dominican
Republic, Honduras,
Indonesia, Nicaragua,
Peru, Philippines.
Outliers: Panama,
Venezuela, Sri Lanka
Moderate
(30-45%)
Low
(0.2-0.3)
Less than 6%
0%
3
Botswana, Korea,
Turkey
Moderately High
(40-70%)
Very High
(0.8-2.2)
20-40%
Less than 20%
4
Core: Antigua &
Barbuda, Barbados,
Belize, Grenada,
Guyana, Jamaica,
Kenya, Pakistan, Saint
Kitts & Nevis, Trinidad &
Tobago.
Outliers: Saint Lucia,
Saint Vincent& the
Grenadines
High
(100-110%)
Low
(0.0-0.3)
Close to 100%
Less than 20%
5
Core: Nigeria,
Zimbabwe. Outlier:
Mauritius
Very High
(120-150%)
Very Low
(0.0-0.1)
Close to 100%
Close to 100%
Low
(15%)
High
(116%)
High
(0.8)
Moderate
(0.5)
2%
0%
56%
18%
China
6
India
Effect of a 40% Reduction of Bound
Tariffs on G33 Applied Tariff
SUBGROUP A
SUBGROUP B
SUBGROUP C
SUBGROUP D
No effect
Minor effect (<7 products)
Moderate effect (7- 20 prod)
Substantial effect (> 20)
Antigua & Barbuda
Belize
Barbados
China
Saint Lucia
Dominican Republic
Botswana
Côte d'Ivoire
Saint Vincent & the Grenadines
Grenada
Cuba
Korea
Guyana
Honduras
Nigeria
Indonesia
India
Suriname
Jamaica
Panama
Turkey
Kenya
Peru
Mauritius
Philippines
Mongolia
Sri Lanka
Nicaragua
Venezuela
Pakistan
Saint Kitts & Nevis
Trinidad & Tobago
Zimbabwe
Examples of Tariff Structure:
Subgroup A
ANTIGUA & BARBUDA
250
200
%
150
100
50
HS chapter
Bound
Applied
Source: The G-33: An Analysis of bound and Applied Tariffs on Agricultural Products Mario Jales, ICTSD
51
35
24
22
21
20
20
20
18
16
15
12
12
11
10
09
08
07
07
07
05
04
02
01
01
0
Examples of Tariff Structure:
Subgroup B
KENYA
120
100
%
80
60
40
20
HS chapter
Bound
Applied
Source: The G-33: An Analysis of bound and Applied Tariffs on Agricultural Products Mario Jales, ICTSD
51
35
24
22
21
20
19
18
16
15
13
12
11
10
09
08
08
07
07
05
04
02
02
01
0
Examples of Tariff Structure:
Subgroup C
HONDURAS
60
50
%
40
30
20
10
HS chapte r
Bound
Applied
Price Bands
Source: The G-33: An Analysis of bound and Applied Tariffs on Agricultural Products Mario Jales, ICTSD
51
38
24
23
22
21
20
20
18
16
15
15
12
12
11
10
09
08
08
07
07
07
06
04
04
02
02
01
0
Examples of Tariff Structure:
Subgroup D
CHINA
80
70
60
%
50
40
30
20
10
HS chapter
Bound
Applied
Source: The G-33: An Analysis of bound and Applied Tariffs on Agricultural Products Mario Jales, ICTSD
51
41
33
23
22
20
20
19
17
15
14
12
12
12
11
10
09
08
08
07
07
07
05
04
02
02
01
01
0
Examples of Tariff Structure:
Subgroup D
COTE D’IVOIRE
70
60
50
%
40
30
20
10
HS chapter
B ound
Applied
Sources: WTO (2004) and WITS (2002).
Source: The G-33: An Analysis of bound and Applied Tariffs on Agricultural Products Mario Jales, ICTSD
51
41
33
23
22
22
21
20
20
18
17
16
15
15
14
12
12
11
11
09
09
09
08
08
07
07
07
05
04
04
02
02
01
0
Country studies background
• Field research component of a DFID funded
project on SP-SSM
• To take advantage of the strategic window of
opportunity in July Framework to address food
security, livelihood security and rural
development needs in current agricultural
negotiations
• Objective of country studies:
– Providing some empirical-based and “scientific”
justification for the selection of SPs
– Test possible indicators of food/livelihood securtiy and
rural development which could subsequently be used
by other countries in the preparation of their list
Countries Selection
• Formally associated with G 33
• Non LDCs
• Focus on Net Food-Importing Developing
Countries (NFIDC), Low-Income FoodDeficit Countries (LIFDC), Small Island
Developing States (SIDS)
• Geographical balance
• Focus on subgroups B and C
• Countries with proven domestic research
capacity
• Commitment of national government to
actively support and participate in the project
Countries Selection (cont.)
Selected Countries:
–Barbados,
Caribbean (SIDS)
–Honduras, Central America (LIFDC)
–Kenya, Africa (LIFDC)
–Pakistan, Asia
(NFIDC)
–Peru, South America (NFIDC)
–Sri Lanka, Asia (LIFDC)
• Methodology:
• Developing an analytical framework for the
operationalisation of food/livelihood securtiy and rural
development
• Test it in the field and refine the methodology
• A two track process
– Guidelines
– Stakeholder consultation
Conceptual
Conceptual Framework
Framework for
for the
the Identification
Identification
of
of Special
Special Products
Products
National sustainable development
strategy
Non-trade policy makers
(Min. Ag, Env.)
Trade policy makers
(Min. trade, foreign affairs,
Geneva negotiators
Non-State Actors
(Farmer groups, NGOs,
academia, etc…)
Identify beneficiaries, develop relevant
indictors for SP and apply them to potential
products
Assess the potential direct and indirect impact of
trade liberalisation on products identified
Internal
discussion
ICTSD country
studies
Establish a national list of
SP to be defended in the
negotiations
Review the list in the light of the evolution of
multilateral negotiations and the flexibilities
provided in a revised agreement (tariff cut
formula, sensitive products, SPs)
Advancement of national sustainable development
strategy
Multilateral
negotiations
Step 1: Identification of intended
beneficiaries
Focus on rural poor, small &
subsitance farmers but also
small comercial farmers
Purpose of indicators
Rural Poverty



Geographical
distribution of poverty
Production capacity
targeting subsistence and
small farmers





Assess economic and social
importance of particular
products for specific regions
Possible indicators
Number of households/persons below national
poverty line or with income insufficient to cover
basic needs
Measures of household expenditure
World Bank poverty line of US$ 1 per person
per day
Identify rural area that are isolated or poorly
endowed (scarcity of fertile land and water
resources, lack of infrastructure)
Based on provinces/district
Based on agro-ecological conditions
Size of production units (number of hectares for
cultivation or heads for livestock)
Productivity (Kg/tonnes of produce per ha or
per head of livestock)
Step 2: Identification of products:
Livelihood secutrity & rural
development indicators
Purpose of
indicators
Possible indicators
Contribution of a
paricular product to
the economy
• Contribution of the product to national / regional agricultural GDP
• Extension of land dedicated to a particular crop at national and regional
level
• Number of heads of livestock in the country or region
• Share of per capita income derived from a particular sector in a specific
region or at the national level
• Environmental impact and agroecological sustainability
• Analysis of links with the rest of the economy and potential for value
addition (degree to which product can be locall processed; share of
domestic ag. internediate inputs used in non-ag sectors; value of good
and services used as inputs in the sector)
Contribution of a
particular product to
employment
•Total number of labour engaged in the sector at the national and regional
level
• Share of ag population engaged in the production of a specific product at
the national and regional level
• Labour requirement: nb. of workers per day/year to cultivate one ha of
land (crop/livestock and technology specific)
Step 3: Identification of products
(cont.): Food Security indicators
Purpose of
indicators
Food
Security
Possible indicators
• Product
identified in national food securtiy baskets or
strategies
• Share of the product in national/regional consumption
• Contribution to the caloric intake of the population
(complemented by contribution to protein and fat
requirements)
• Share of income spent on a particular product at nat/reg.
Level
• Rate of selfsufficiency and import penetration
• Import revenue (i.e. tariffs) as a contribution to financing
of food security programmes
Used
Estimating SP
DataData
Used
forforEstimating
SPIndicators
Indicators
Type of data
Reporting focus
Data source
Agricultural GDP (Rs/Year)
Province
Central Bank
Total net revenue (Rs/unit/Yr)
Crop / livestock
Dep. Agriculture
Crop extent (ha)
District
Dep. Census &
Statistics
Labour use (md/unit/year)
Crop / livestock
Dep. Agriculture
Agriculture population
District
Material cost of production (Rs/unit/year)
Crop / livestock
Dep. Census &
Statistics
Production of crops & livestock (MT/year)
District
Dep. Census &
Statistics DCS
National requirement of product (MT/year)
Crop / livestock
Food Balance
Sheet
Nutrient conversion factors of products
Calories / 100 gm; protein
& fat gm / 100 gm
Dep. Census &
Statistics DCS
Calories, Protein & Fat requirement
District & National
Food Balance
Sheet
Total imports of products (Mt/Year)
National
Custom Returns
Livestock (number)
ICTSD Country Studies Findings in a
Nutshell
Countries selected
Barbados, Honduras, Pakistan,
Kenya, Peru, Sri Lanka
Most common products:
Wheat, rice, maize, sugar, chicken and
bovine meat, milk and diary products,
tomatoes, onions, potatoes
Average number of product category identified:
13.6
Study with the highest No. of products:
19
Study with the lowest No. of products:
6
Average % of total tariff lines
12.5%
Study with highest % of tariff lines
20%
Study the lowest % of tariff lines
3%
Supplementary elements for the
analysis
• Substitutes
• Unfair competition
• Vulnerability to import
displacement
• Current level of protection
Implications for negotiating modalities
on SP
• Selection:
– Countries should be allowed to self-designate their SP within an
agreed limit (eg. 15 –20 % of tariff lines).
– There might be a reference to an illustrative, non-exhaustive
and non-prescriptive list of indicators, but a set of multilaterally
agreed indicators including thresholds would not be practicle
and not desirable from a sust. dev. perspective
• Treatment:
– regardless of the size of the lists, there is a case for tariff
reduction exemption for at least a sub-set of SPs (e.g. 7-8
% of tarif lines).
– For remaining products calibrated treatment could be
based on the tiered formula (e.g. 0% reduction if product
falls in the lowest tier, 5% if it falls in the 2nd tier and 10%
if it falls in 3rd or 4th tier)