to pay through higher food prices, this will be reflected in higher wage demands and poorer
prospects for the development of the non-agricultural sector in these economies.
Taking account of all the arguments put forward, there is a case to allow more gradual tariff
reduction commitments for food security products, but not to exempt these products entirely
from further tariff reductions. Where existing tariff bindings are low, however, exempting
particular food security products from further tariff reductions would be justified on second-
best grounds. As long as developed countries retain the right to impose high tariffs on imports
of developing country exports, it seems indefensible to argue that developing countries with
low tariffs on food security crops would be required to reduce them further. The negotiating
issue would then revolve around the appropriate minimum threshold for exemption.
Whether countries whose tariff bindings on food security products are already below the
minimum threshold should be allowed to increase them up to the threshold is more
contentious. This step introduces a qualitatively different dimension, in that it seeks to
withdraw market access commitments which developing countries entered into, and which
other countries would feel they paid for with concessions of their own. Developing countries
can argue, with some justice, that the concessions made by developed countries were, in
practice, very limited. Nonetheless, it does not make sense to use negotiating capital to push
this issue aggressively, given that the countries concerned have the right under existing WTO
rules to raise these tariffs anyway, provided compensation is paid.8 Many countries may be
able to find other products where lower tariff bindings could be offered in exchange, or where
minimum access commitments could be opened for those principal suppliers adversely
affected. A clause stating that developed countries would exercise restraint in seeking
compensation for loss of market access where tariffs on food security crops were raised would
also be worth pursuing in the negotiations.
The need for stabilisation - safeguards
One of the arguments for exempting developing countries from the requirement to lower
tariffs is that they are the only instrument open to countries to stabilise domestic markets in
reaction to changes in world market conditions. As noted earlier, in many developing
countries applied rates are often below bound rates. Developing countries with high bound
tariffs can make use of this differential to raise applied tariffs in response to particularly low
world market prices, as long as the applied tariff remains below or at the bound level. The
stabilisation argument for the renegotiation or retraction of tariff bindings is to also permit
this option for those countries with low bound tariffs on food security products.
An alternative approach is to give developing countries access to a safeguard instrument
which could, in practice, have the same effect. Safeguards are designed to protect against the
adverse consequences of domestic market disruption caused either by unduly low-priced
imports or import surges. The need to protect particularly vulnerable producers who have no
safety-net options against price volatility transmitted from the world market is persuasive.
There is a convincing case for making a special agricultural safeguard measure available to
developing countries in the case of food security products, both for its substantive effect in
protecting vulnerable producers against the worst effects of volatility in world market prices,
and because it would make it easier for developing countries with high bound tariffs on these
products to agree to significant tariff reduction commitments more generally. Such a special
safeguard should be available on a permanent basis. However, it may be difficult to get
agreement on such an instrument for all developing countries, especially if the safeguard
mechanism is to be a truly effective one. An effective safeguard exacerbates the adjustments
8 Compensation in this sense is not financial compensation, but means a reduction in tariffs or the
opening of tariff rate quotas in other products to provide additional market access of equal value to the
market access withdrawn in the case of the commodity whose bound tariff level has been increased.
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