ISLAMABAD, Jan 22: Pakistan has floated a proposal at the World Trade Organisation (WTO) in a bid to minimise the differences among the member countries over the selection of special farm products — not to be considered for tariff reduction — under the agreement on agriculture.

The issue of special products was a serious stumbling block in the market access negotiations for agriculture. Many countries including United States and the G-33 had also tabled their proposals on SPs but those proposals did not help a lot to narrow the differences among the 149 WTO member countries.

In an attempt to bridge the gap between the G-33 stance and that of the United States, Pakistan has suggested that special products be ranked according to a scoring system that was based on the data and percentage of any product under a specific indicator.

The selection criterion for SPs must be based on the indicators like food security, rural development and livelihood security. It has been proposed that minimum thresholds may be developed for each indicator and the products selected thereafter. The thresholds should be flexible enough to reflect a country's peculiar needs and should leave adequate policy space.

Based on this criterion, the national agricultural production from the standpoint of food security, livelihood and rural development, it appears that the five most significant crops for Pakistan are wheat, rice, citrus, apple and edible oils to be designated as SPs. It is possible that the crops like milk, raw cotton, sugar, poultry products and onion with strong export potential may be excluded from the list of special products.

Since Pakistan's bound tariffs are rather high on these products (100 per cent or more), the current applied rates of current customs duty on these products are not likely to be affected if the G20 formula cuts (maximum cut in tariff) of 40 per cent is applied.

In fact, even after the application of cuts in duty there would be enough gaps between the applied rates and the new bound rates--duty can not be raised beyond the agreed level-- in case Pakistan feels the need to raise those rates.

This selection system would yield only those products which would really merit for designation as special products due to various factors and data. Moreover in the treatment aspect, lower the number of SPs higher would be the deviation. This would discourage the designation of higher number of lines as SPs.

Moreover, the member countries might agree upon a benchmark score so that any product scoring above benchmark is automatically qualified for designation as special product. There should be a periodical review after some years to be agreed where the ranking index is reviewed based on the latest data and inclusion/exclusion of certain products, if any, is notified.

The 2005 Hong Kong Ministerial Declaration provided flexibility for developing countries to self-designate some sensitive farm products based on food security, livelihood and rural development criteria.

Subsequently, the Group of 33 developing countries, which is spearheading the campaign on special products and the special safeguard mechanism, mooted a proposal that some 20 per cent of farm tariff lines of developing countries be designated as special products with a five per cent trigger in import volume or price increases to merit the imposition of the special safeguard mechanism.

In sharp distinction to the G-33 demand, the United States floated a proposal saying only five farm products should be afforded special product status and that the use of the special safeguard mechanism takes place only when imports rise by 30 per cent or more - in either volume or prices.

A senior official in the commerce ministry told Dawn that this would be the third attempt of Pakistan to salvage the Doha Development Round from total collapse by presenting this proposal. Previous landmark initiatives of Pakistan like accepting Trade Facilitation out of four Singapore issues and NAMA proposal of two coefficients.

He said that Pakistan's proposal calls for a rigorous assessment of how each farm product would be qualified for the special treatment and what options would be accorded for reducing tariffs on those products.

Pakistan is a member of the Group of 20 developing-countries, the G-33 and the Cairns Group of agricultural exporters. The Pakistan proposal is currently being discussed within Cairns Group.

The proposal has been appreciated widely amongst the WTO membership and related stakeholders. Some members categorise it as the first constructive proposal on ground on SPs, the official claimed.