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LDC Ministers not prepared to negotiate on new issues

by Martin Khor

Geneva, 28 July 2001 - - Trade Ministers of the Least Developed Countries have indicated that they are not willing to accept the four “Singapore issues” (investment, competition, transparency in government procurement and trade facilitation) as subjects for negotiations for new rules, when the 4th ministerial meeting of the WTO takes place in Doha in November.

The decision was taken at the meeting of Trade Ministers of Least Developed Countries, held in Zanzibar on 22-24 July, as part of the LDCs’ preparations for negotiations in the process leading to Doha.

The Zanzibar meeting adopted two documents, the “Zanzibar Declaration”, and “LDCs’ Development Agenda at the 4th WTO Ministerial Conference: Negotiating Objectives and Proposals of the LDCS.”

In both documents, copies of which have now become available, the LDC Ministers indicated they are not prepared to accept a broad-based or comprehensive round that includes the new issues being proposed by the EU and other developed countries.

This message is contained in one of the points of the Zanzibar Declaration, in which the LDC Ministers called upon the 4th WTO Ministerial Conference to “ensure that, in view of the LDCs’ limited capacity to negotiate and undertake further commitments, the scope of the future WTO work programme is manageable and agreed by all members by consensus, and that any future negotiations are based on an agenda accommodating LDCs’ interests.”

This theme is further elaborated in the other document, the LDCs’ Development Agenda.

In the introductory section on “Context”, the document stresses that “the LDC Ministers also took the view that the scope of future multilateral trade negotiations will have to take into account the inability of LDCs to participate effectively in negotiations on a broad agenda and implement new obligations due to the well-known limited capacity of the LDCs.”

In Section D on “New Issues”, the LDC Ministers indicated that the four “Singapore issues” were not yet ripe for negotiations as the issues were complex and LDCs were not able to fully understand the implications for them.

For three of the issues (investment, transparency in government procurement and trade facilitation), the Ministers asserted that the study process in the Working Group has to continue. A similar message was also given for the other “new issue” of competition, when Ministers stated it is important to finalise the working group’s deliberations prior to any decision whether the issue should be negotiated.

On investment, the LDC Ministers sais the implications for development of a multilateral investment agreement of whatever type have not been fully discussed nor understood. On competition, they said that most LDCs do not have competition laws in place, lack capacity to enforce them, find the relation between competition and development to be complex and have difficulty for introducing anti-competitive policies in their dualistic economies.

LDCs had also not yet comprehended the implications of a framework on transparency in government procurement in the WTO, how it would affect development, and the issues are complex with divergent views existing. On trade facilitation, the Ministers said this area does not require new rule making.

The language on the new issues and on the inability to accept a broad agenda or new obligations, together with statements made by individual Ministers at the meeting (especially the opening statement of the host, the Trade Minister of Tanzania, which coordinates the LDC group in the WTO), indicate clearly that the LDCs are not in favour of a broad-based New Round with new issues.

The text on the section on New Issues in the document “LDCs’ Development Agenda” is as follows:

Trade and investment: In approaching the question of possible negotiations on trade and investment, an important point to note is that least developed countries are not demandeurs of a multilateral framework in this area. The implications for development of a multilateral investment agreement, of whatever type, have not been fully discussed nor understood. Hence the study process where work is going on in the working group has to continue. However in any future work in this area, it is necessary to ensure that the outcome will contribute to facilitating investment flows to LDCs while preserving their policy space and flexibility to pursue national development objectives geared to deriving maximum contribution of such flows to the achievement of these objectives.

Trade and competition policy: As the discussions in the working group[ on trade and competition policy have not yet been completed, it is important to finalise the working group’s deliberations prior to any decision whether to formally introduce this issues on any future negotiating agenda. This is particularly valid as most LDCs:

** do not have competition policy, laws and institutions in place and that in few cases these are underdeveloped; ** lack the capacity to enforce competition law and policy; the interrelationship between competition policy and economic development is a complex one; ** have difficulties as to the complexity of the modalities for introducing anti-competitive policies in “dualistic economies”, characteristic of most of them; ** need to justify the content and form of technical assistance to be provided to developing countries in order to introduce and implement competition law and policy becomes an imperative.

Trade and environment: LDCs attach importance to the ongoing discussions in the committee on trade and environment with a view to resolving the issues related to the interface between trade and environment policies. They are of the view that the mandate for the current work programme should be extended and emphasise that under no circumstances should environmental considerations be used for protectionist purposes against LDCs’ products.

Transparency in government procurement: LDCs have yet to fully comprehend the implications of a framework on transparency in government procurement in the WTO, especially as to how it would affect social and economic development. The issues involved are complex and divergent views continue to exist on a great number of issues, hence the study process in the working groups has to continue.

Trade facilitation: LDCS concur with the general assessment that trade facilitation measures are necessary and beneficial and they share the view that this area does not require new rule making. Existing rules and regulations both within and outside WTO are sufficient but may require improvement and a high degree of implementation. In the context of the LDCs, improved facilitation would require increased financial and technical assistance to narrow the technology and human resources gap that exist between them and developed trade partners. Hence the study process in the working group should continue. – SUNS4947

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