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TWN Info Service on WTO Issues (July04/6)

14 July 2004

Third World Network

ACP MINISTERS END THEIR MEETING WITH DECLARATION AND CONCLUSIONS DOCUMENTS

Trade Ministers of the Africa, Carribean and Pacific (ACP) Group of countries held a meeting on 11 July in Grand Baie, Mauritius. 

They have adopted a Ministerial Declaration  that calls for 3 Singapore issues to be dropped from the work programme, and emphasised that key questions on trade facilitation must be clarified first before any agreement by explicit consensus to start negotiations on this issue.

The Declaration also rejected the Derbez text on Non-Agricultural Market Access, reiterated the ACP Group’s positions on agriculture and called for compensation to ACP countries for erosion of preferences, and ending cotton subsidies over three years and compensating producers.

Follwing the adoption of the Declaration, the Ministers also discussed a second document, “Conclusions of the 8th Meeting of the ACP Ministers of Trade.”   This document reaffirms that the three Singapore issues should be dropped, and indicated  “willingness to favourably consider Trade Facilitation provided certain conditions which are listed in para 46 of the ACP Declaration are addressed, and there is a satisfactory balance in the overall framework.”  They listed factors that would contribute to this required balance.

Below is a report by Tetteh Hormeku, who is the programme director of TWN Africa secretariat and the coordinator of the African Trade Network, on the ACP Ministers’ meeting in Mauritius. 

A version of this report was published in the SUNS (South-North Development Monitor) of 14 July, which is gratefully acknowledged.

With best wishes

Martin Khor

TWN

 

 

 

 

ACP MINISTERS MEETING ADOPOTS DECLARATION ON WTO AND CONCLUSIONS

TWN Report by Tetteh Hormeku, Grand Baie, Mauritius, 13 July 2004

Grand Baie, Mauritius, 13 July (Tetteh Hormeku) -- Trade Ministers of the ACP countries at their meeting here on 11 July have adopted a declaration that calls for 3 Singapore issues to be dropped from the work programme, rejected the Derbez text on Non-Agricultural Market Access, reiterated their positions on agriculture and have called for compensation to them for erosion of preferences, and ending cotton subsidies over three years and compensating producers.

The Trade Ministers of the African, Caribbean and Pacific (ACP) group of countries meeting in Grand Baie, Mauritius on July 11, adopted a declaration calling for the three contentious Singapore issues of investment, competition and government procurement to be dropped from the work programme. They also emphasised that key questions on trade facilitation must be clarified first before any agreement by explicit consensus to start negotiations on this issue.

In the ACP Ministerial Declaration on the WTO Doha Work Programme adopted at the end of the meeting, Ministers also expressed their disapproval of the decision by the Chair of the negotiating group on Non-Agricultural Market Access (NAMA) to use the Derbez text as a basis for the July package. They reiterated that they would be ready to “look at the framework positively only if it included the elements we have raised in the process of the negotiations.”

The Ministerial Declaration affirmed the outcomes of recent meetings involving members of the group. These were the Third LDC Trade Ministers meeting in Dakar in May, the African Union Trade Ministers Meeting in Kigali in June, and the Meeting of Ministerial Representatives of the G-90 in Georgetown in June.

On the Singapore issues, the Declaration said that the Ministers “continued to be concerned with the potential serious implications of, and the burdensome requirements of negotiating and implementing any future agreements on any of the Singapore issues.”

“.. having regard to the various developments concerning the Singapore Issues amongst WTO members in and outside Geneva, at and since the Fifth WTO Ministerial Conference, the ACP States call for the issues relating to Trade and Investment, Trade and Competition Policy, and Transparency in Government Procurement to be dropped from the Work Programme”.

On trade facilitation, the Ministers noted that there was an emerging convergence of view for a future development of a work programme, but however said that “before any agreement by explicit consensus on negotiating modalities, a number of issues should be clarified first”.

According to the declaration, “in considering any future work programme, the ACP States emphasise:

(a)  the need to clarify the issue of adopting a multilateral framework on Trade Facilitation, the provision of the necessary technical assistance and capacity building prior to the launch of any negotiations by explicit consensus;

(b)  the need inter alia, to address the resource and capacity constraints of developing countries, the costs of implementing the new rules and to determine how and by whom the costs will be met;

(c)  the need for clarity on the applicability of the Dispute Settlement Mechanism and whether any new rules will be binding.”

On Non-Agricultural Market Access (NAMA), the Ministers said that they “are concerned that the proposals contained in the Derbez Text and its annex on NAMA are contradiction with the principle of less than full reciprocity as enshrined in the Doha mandate and as such would further deepen the crisis of de-industrialisation and accentuate the unemployment and poverty crisis in our economies.

“In this regard, we welcome the recent initiative in favour of weak and vulnerable economies. It is therefore imperative that the agreed Framework provides policy space and flexibility to allow ACP States to undertake industrial policy and national development objectives.”

In this context, the Ministers stated their disapproval of the decision by the NAMA chair to use the Derbez text as the basis for the July package.  They said: “we express our disappointment on the approach adopted by the Chairperson of NAMA to transmit annex B of the Derbez Text to the Chair of the General Council for the preparation of the Framework without incorporating the concerns expressed through our various submissions during the process of the negotiations. We reiterate that we are prepared to look at the framework positively only if it included the elements we have raised in the process of the negotiations.”

In order for the current negotiations on NAMA to facilitate the development and industrialisation process of ACP states, the Ministers called for the negotiations to ensure, among other things, the provision and/or maintenance of market access for products of export interest to ACP states; and that the ACP states are allowed to choose their own rate and extent of future import liberalisation, so as not cause adverse effects on local industries. They also called for the negotiations to ensure that the “supply side capacity constraints on ACP states be addressed in order for them to take advantage of any increased market access opportunities”; that “the impact of the decline in government revenue on sustainable levels of development is addressed”; and that “the impact studies undertaken on previous tariff reduction on ACP states shall be taken into consideration”.

On tariff binding, the Ministers said that the issue should be approached in a way that “creates incentives for those countries who have not bound their tariffs to do so. In this regard, the binding of tariffs should be acknowledged as the main contribution to this round of negotiations”. They also called for ACP countries to be exempt from participation in sectoral tariff reductions.

Ministers also noted the critical importance of the preferences for ACP states and called for solutions to the question of preference erosion to be obtained within the WTO negotiations. In this respect, they noted that “a sectoral approach would be detrimental to ACP preferences in major export markets. A suitable carve-out shall be made in favour of ACP economies and products of export interest.” The Ministers also called for erosion of preferential margins due to MFN tariff reductions to be offset by the establishment of compensatory and other appropriate mechanisms.

Ministers called for non-tariff barriers, including technical barriers to trade, rules of origin and other conditions, as well as anti-competitive market structures, to be addressed in the negotiations in parallel with tariff reductions. In addition they called on member states to exercise due restraint in applying these measures to trades to ACP products, and to provide the necessary technical assistance for ACP states to meet these requirements.

Finally, the Ministers reiterated the proposal to exempt LDCs from further reduction commitments and for developed countries to provide bound duty-free and quota-free market access for all LDC products within the year 2004, with realistic, flexible and simplified rules of origin.

The ACP Ministerial Declaration also contained detailed positions of the ACP Ministers on Agriculture. Ministers urged WTO members to ensure that the framework for modalities should include a number of key principles, including:

·        “further reform of agriculture should aim to attain the objectives set out in the Doha mandate. Each Round of agriculture negotiations should take into account the need for appropriate policy space that would allow African countries to pursue agricultural policies that are supportive of their development goals, poverty reduction strategies, food security and livelihood concerns”;

·        “that the ‘Framework’, and associated Modalities to be agreed upon, should address themselves fully on all three pillars, in a balanced and equitable manner”;

·        that there is need for balance in the framework in the level of specificity and details in and among the pillars as well as S&D;

·        “that, in accordance with paragraph 13 of Doha mandate, binding, precise and effective S&D is an integral part of all elements of the negotiations on agriculture.”

In a reference to the Pascal Lamy proposals, the Ministers also stated that the “ACP states, as weak and vulnerable economies, welcome the recent EU initiative in favour of these economies and call on the EU to table its proposals in the WTO. We urge WTO Members to support this initiative in order to address the developmental, financial and trade needs of the ACP states”. They added that “LDCs shall be exempted from any reduction commitments”.

[The EU proposal, which is seen as an attempt to divide the developing countries at the WTO, and provide benefits to the ‘weak and vulnerable economies’ at the expense of other developing countries, has been opposed by several of the latter in ‘green room’ meetings in the week of 5 July. A number of civil society groups have also joined, in a letter to the G90 ministers, in cautioning them against falling into this EC trap.]

On market access, Ministers stated that long-standing trade preferences play a vital role for ACP states economic development in providing stable export earnings, and called on WTO members states this into account.

Ministers said that they remained “concerned with the use of the blended formula as is currently set out in the Derbez text”. The framework for modalities shall call for “substantial tariff reduction by developed countries, addressing in particular tariff peaks and tariff escalation.” In addressing these issues, the interest of preference receiving countries shall be taken into consideration, and that “developed countries shall provide bound duty- free and quota-free market access for all products originating from LDCs with realistic, flexible and simplified rules of origin.

In addition Ministers stated that NTBs, including SPS and TBT, deny market access for ACP agricultural products and called for these to be addressed in the parallel with tariff reductions. Tariff quota regimes should also be simplified and made more transparent to enable ACP states full benefit from them.

Developing countries, the Ministers said, “should be able to self-designate tariff lines as Special Products (SP) which shall not be subject to tariff reductions, and no new commitments regarding Tariff Rate Quota”; that “a special agricultural safeguard mechanism (SSM) shall be established for use by developing countries. Products designated as SP shall also have access to a SSM”; that “the use and duration of the special safeguard for developed countries remain to be negotiated”; that “no ceiling on level of maximum tariffs shall be applied to ACP states”; and that the ACP states shall be exempted from any reduction commitments”.

On domestic support, they said, that among others, “all forms of trade-distorting domestic support measures maintained by developed countries shall be substantially reduced” In particular, ‘amber box’ (trade distorting domestic support) measures by developed countries should be substantially reduced with a view of their phasing out; ‘blue box’ (purported to be non-trade distorting) measures provided by developed countries shall be substantially reduced with a view of their phasing out”; and developed countries should eliminate the 5% de minimis domestic support.

Ministers also stated that “the trade-distorting elements of Green Box support measures provided by developed countries shall be reviewed and tighter disciplines for elements of the Green Box should be developed through, inter alia, notification, surveillance and monitoring”; that “developed countries shall eliminate the 5% de minimis domestic support”, and that members should to establish a permanent mechanism as part of the overall modalities framework to prevent members form indiscriminately transferring subsidies between and within boxes.

Ministers called for the framework for modalities to take S&D into full consideration, especially with regard to the food security, rural development, security of livelihoods and other public policy objectives of ACP states. In this context, Ministers called for the scope of Article 6.2 of the Agreement on Agriculture to be maintained and expanded; for de minimis support provided by developing countries to be maintained with additional flexibilities; and for domestic support consistent with annex 2 of the Agreement on Agriculture to be enhanced. Finally ACP states should be exempt from any reduction commitments.

On export competition, the ministers stated that “a commitment to phase out all forms of export subsidization by a certain date should be an integral part of the Proposed Framework on Agriculture; the specific date will be negotiated”. Further, the time frame to be agreed upon shall fully take into account the interest of preference-receiving ACP states.

Ministers also underscored the importance for developing countries to continue benefiting from special and differential treatment of Article 9.4 of the Agreement on Agriculture; the stressed the need to ensure that State Trading Enterprises from developing countries are exempted from additional disciplines taking into account the role they play in promoting national development goals and objectives, and urged expeditious action on the Marrakech Decision on Measures in favour of least-developed and net-food importing developing countries.

The ACP Ministers also addressed the question of Cotton. Ministers noted that cotton continues to be a vital issue for the ACP countries and requires an urgent solution. They underscored that this issue “should be treated as a stand-alone issue, and not as part of the overall negotiations on agriculture”. They called for the July framework to “include a clear commitment to speedily and substantially address both the trade-related aspects of the initiative and their development-related counterparts on a ‘fast-track’ basis.”

In this regard, Ministers endorsed the proposals submitted by the sponsors of the cotton initiative, and called upon WTO members to urgently adopt the elements of those proposals, including: “the complete elimination of the export subsidies on cotton over a period of three years and the elimination of production-related domestic support over a period of four years with effect from 1st January, 2005”; and the establishment of a cotton sector support fund.

Other issues covered in the ACP Ministerial Declaration Development Issues, TRIPS and Public Health, Services, WTO Rules, Dispute Settlement, Coherence, Accession and Observer Status for the ACP Group.

 

LATEST NOTE:

Following the adoption of the ACP Ministerial Declaration, another document was issued, entitled:  “Conclusions of the 8th Meeting of ACP Ministers of Trade”  

The Conclusions included the following:

With regard to the ACP Ministerial Declaration, on the Singapore Issues, Ministers agreed that the three issues (competition, investment, transparency in government procurement) should be dropped from the Work Programme.  Ministers also indicated their willingness to favourably consider Trade Facilitation provided certain conditions which are listed in para 46 of the ACP Declaration are addressed, and there is a satisfactory balance in the overall framework.

The Ministers were of the view that issues pertaining to, inter alia, exemption from reduction commitments in agriculture and NAMA, binding commitment on preferences, a satisfactory solution to the question of cotton and commitments on S and D treatment on market access would contribute to creating required balance.  In this respect they mandated the ACP Geneva Ambassadores to negotiate along these lines whoile ensuring that the ACP States’ interests and concerns are addressed.

The Conclusions also stated that the Ministers exchanged views with the EU Trade Commissioner Mrs Danuta Hubner.  Ministers raised the issue of abolition of textiles quota and its possible adverse impact on ACP states.  They requested the EC to expidite positivbe consideration of the ACP request of 20 May to provide funding support for restructuriong and modernising the ACP states’; textiles and clothing industries, and to relax the rules of origin to allow cumulation with third countries’ fabrics for exports to rthe EU under the current preferetiual arrangement.

The Ministers also expressed their concern on the proposals on reform of the sugar regime and requestdev that the ACP be treated similarly to the outermost regions of the EU.  The EC proposals on this reform need to be in conformity with article 36(4) of the Cotonou Agreement to safeguard benefits from the Sugar Protocol.  Mrs Hubner indicated that the EC proposal would include the principle of a specific adjustment programme for the ACP.

 


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