TWN Info Service on WTO and Trade Issues (Dec09/05)
16 December 2009
Third World Network

South calls for early, but successful Doha conclusion
Published in SUNS #6826 dated 2 December 2009

Geneva, 1 Dec (Kanaga Raja) -- An informal group of more than 100 developing countries underscored the need for the successful conclusion of the Doha Round, as early as possible, in accordance with its development mandate to ensure confidence in the WTO and address the trade and trade-related needs of developing countries.

In a declaration issued on Monday, following their meeting just before the seventh Ministerial Conference got underway later in the day, the Ministers of the informal group of developing countries expressed disappointment that political commitments to seek an ambitious and balanced conclusion to the Round in 2010 are not yet translated into concrete flexible negotiating positions, and called on developed countries to show the required leadership to advance the negotiations.

Within this context, the group reiterated its objection to any re-interpretation or changes to, or deviations from, the existing agreed mandates and principles in the negotiations.

It furthermore opposed any form of selective re-sequencing of issues, or re-opening of stabilized parts of the draft modalities, and stressed that the negotiations must preserve and build on progress achieved in the last eight years, and that the negotiating process must remain multilateral and fully transparent, with a bottom-up approach.

The group remained deeply concerned about the far-reaching impact of the global economic and financial crisis, which originated in developed countries, on the economies of developing countries. It emphasized the utmost importance of resisting temptations of protectionism in different forms at this difficult juncture.

The group also underlined the need for a strong, open and fair, rules-based multilateral trading system to combat protectionism and help promote recovery, growth and development, and reiterated the importance it attached to the WTO as the main tool of this system.

Principles of multilateralism, inclusiveness, transparency, predictability, non-discrimination and equity must remain the way to ensure trade openness, integration and economic growth, and allow the effective participation of developing countries in the WTO and in world trade, it said.

The Ministers of the developing countries also reaffirmed their support and solidarity to accessions of all developing countries, and stressed that acceding countries should not be asked to undertake commitments that go beyond their level of development and current WTO rules.

"We consider that in a rules-based trading system, only commercial, technical and legal considerations should be the only deciding factors in every accession process.

"We are united in our commitment to advance the DDA (Doha Development Agenda) negotiations, and pledge to closely coordinate and cooperate to ensure that Development remains the core of any outcome. We are furthermore determined to maintain our solidarity in promoting and supporting South-South trade, economic cooperation, and investment flows," the Ministers concluded.

Meanwhile, in a separate communique issued on 30 November, the Ministers of the Cairns Group said that a fair and market-oriented agricultural trading system is essential to facilitate trade, fight protectionist policies and create a trade environment that sustains growth and development.

The WTO can play a pivotal role in delivering meaningful agricultural trade reform, which is long overdue, and is at the heart of the Doha Round.

"We must secure an ambitious and balanced outcome to the Doha Round in 2010 in line with the agreed mandate, based on the progress already made, including with regard to modalities," said the group.

It reiterated that this outcome must include a major package of reforms to agricultural trade, which continues to be highly distorted. Such a package must substantially increase market access opportunities, substantially reduce trade-distorting domestic support and eliminate export subsidies in 2013.

While welcoming the consultations on agriculture that have taken place over the past few months, the group however expressed disappointment with the limited progress in resolving or narrowing differences on the outstanding agriculture modalities.

It called on all members to engage substantively in a transparent and inclusive manner if they are to bridge the gaps and successfully conclude the Round in 2010. Political will and multilateral engagement are vital, and need to be urgently translated into concrete negotiating progress.

"We must work towards completing the agriculture modalities by early next year so that we can complete the Round in 2010. Ministers should come together in the early part of 2010 to assess the situation and take necessary decisions to ensure the Round is on track for conclusion," the group said.

In another separate statement issued on Monday, the Ministers of the G10, in the context of the current global financial and economic crisis, reiterated their commitment to a successful and rapid conclusion by 2010 in all the areas of the single undertaking, the first step for agriculture being achieved through an agreement on the modalities.

The G10 Ministers appreciated the progress made in the agriculture negotiations to date and encouraged the Chair of the negotiations to continue the good work in a transparent and inclusive process.

The G10 Ministers however expressed concern over the lack of substantial progress in many of the other areas of the DDA negotiations since December 2008. They stressed that more serious efforts have to be made by the Membership in order to reach a balanced outcome across the different areas of the single undertaking.

Recalling the common objective of finalizing the DDA in 2010, the G10 Ministers asked the other Ministers to consider a stock-taking exercise in early 2010.

The G10 Ministers acknowledged the growing awareness among the WTO membership of taking food security into account in the disciplines for trade in agriculture. They noted the importance of both open markets and increased agricultural production and productivity taking into account the diverse conditions in each country endorsed at the FAO World Summit on Food Security in Rome, which confirms the G10 approach on non-trade concerns.

The G10 Ministers said that while the G10 has always shown goodwill in trying to achieve a reasonable balance between liberalizing agricultural markets across the board and the need to accommodate Members' specific domestic situation and concerns, the steady increase in the level of ambition in the negotiations on agriculture has put G10 Members in difficult domestic political situations and left them with little room for manoeuvre.

The G10 Ministers reaffirmed their needs and priorities: opposition to the introduction of a tariff cap, achieving appropriate flexibilities in the number, self designation including the creation of new tariff quotas and treatment of sensitive products. Concerns remain regarding the disciplines for the special safeguard.

The G10 Ministers said that it is against this background that they concurred that an agreement can only be found by taking into account the main concerns of the G10 Members and by arriving at a balanced outcome in the three pillars of the agriculture negotiations.

They reasserted their willingness to continue working on the basis of the draft December 2008 modalities text, and emphasized that any selective re-opening of stabilized areas of the draft modalities text would lead to unraveling of the delicate balance after eight years of negotiations.

Meanwhile, at the plenary session of the Ministerial Conference on Monday afternoon that heard statements from the WTO Members, there appeared to be a difference of views between the United States on one hand, and India and Brazil, on the other, in relation to the Doha Round negotiations.

In his remarks at the opening plenary session of the Conference Monday afternoon, US Trade Representative Ron Kirk said that the creation of new trade flows and meaningful market opening, particularly in key emerging markets, is required to fulfill the development promise of Doha.

He noted that while developed countries will continue to have a significant role in the global economy, advanced developing countries are playing an ever-increasing role as well. In this respect, he cited IMF figures, where 58% of global economic growth between now and 2014 will be provided by China, India, Brazil, Argentina, South Africa and the ASEAN countries.

However, in its statement, India said that demands for additional market access in developing countries have to be based on the development mandate, and that the mandate cannot be twisted to meet mercantilist expectations.

Noting that the contribution of developing countries would be greater than that given by developed countries in any of the previous negotiating rounds, Brazil said that it is unreasonable to expect that concluding the Doha Round would involve additional unilateral concessions from developing countries.

In his statement at the plenary session, Kirk further said that the global economy needs the WTO Members to deliver a strong outcome in the Doha Round of negotiations - and that is one that opens markets and creates significant new trading opportunities in agriculture, industrial goods and in services, generating global economic growth and development.

He added that the US is committed to achieving such an outcome, and believed that success is possible in 2010.

"But substance will drive our progress, and success is not something that any one Member, or any small group of Members, can deliver or dictate."

There simply is no substitute for the hard work of negotiations in all formats among Members - ranging from large groups to direct bilateral engagement, said Kirk.

He said that on the part of the US, its negotiating team is ready to move into the endgame.

"We have made our specific interests well known: that meaningful market opening is required to complete the Round. And we are looking for concrete signs from other members that they are ready to join us in that commitment."

In her statement, outgoing EC Trade Commissioner Catherine Ashton said "we have seen 'low-intensity' protectionism, including from the G20 Members (grouping of leaders of 20 developed and developing countries). But overall, it has been contained."

Noting that unemployment is rising in many economies, and that the poorest countries are those that are most vulnerable, she said that Aid for Trade remains a central focus for the European Union.

But there is no more powerful trade instrument ready to be put at the service of global recovery than the Doha Development Round, she said, adding that her assessment is that "we are progressing too slowly to meet the 2010 objective and that is a cause for concern."

"Come 2010, we will need to work together to make sure we succeed in overcoming obstacles," she said.

Turning to the issue of climate change, she said that trade policy can make a significant contribution, through the liberalization of trade in relevant environmental goods and services.

In his statement at the plenary session, Indian Commerce and Industry Minister Anand Sharma said that for over a year, the global economy is reeling under the worst crisis of the last seven decades.

There is a glimmer of hope that the worst is over, but the pace of and path of recovery is far from certain, he said, adding that the IMF's assessment is that recovery will be subdued and slow. Many economists have cautioned that high debt levels could lead to a double dip recession in the US, which could then spread to other countries.

What is inescapable is that the ongoing crisis has triggered a sharp contraction of aggregate demand leading to fairly disastrous consequences for global production and global trade.

It is equally clear that it is developing countries which have borne a disproportionate impact of the crisis in terms of employment, livelihood and food scarcity, said Minister Sharma.

He highlighted several lessons from the crisis, namely, that in an increasingly globalized economy, good decisions and bad mistakes have spillover externalities.

He also said that the global economy today is hard-wired in a way that makes protectionist measures difficult to resort to. That is why, while protectionist tendencies have surfaced during the crisis, they have not swamped the global trading system.

Noting that protectionism is a global bad, he said that yet some persevere in working on ideas of "green protectionism". This is a dangerous trend, he further said, and will only create fresh tensions in global trade.

He also said that "beggar thy neighbour" policies are counterproductive.

While some progress has been witnessed, he said that it is clearly insufficient to bring the Doha Round to closure next year.

Noting that the major focus of the engagement in the last three months has been on the non-headline issues, he said that the reasons for the impasse are precisely the gaps on the headline issues.

Asking when they are going to be addressed, Minister Sharma said that "a process which does not enable a candid dialogue on such issues is not going to take us to closure in 2010."

Further asking how a process to break the impasse can be designed, he highlighted four principles for Members to accept in order to move forward quickly:

-- A major concern of developing countries is that the development objectives of the Round continue to be diluted or ignored. Putting development back firmly on the agenda would incentivise developing countries to bring more to the negotiations.

He said that major issues like duty-free, quota-free market access for the LDCs, Special Safeguard Mechanism, cotton, preference erosion, fisheries subsidies, Mode-4 access in services, the TRIPS-CBD relationship, need to be dealt with sympathetically as they have major bearing on the development outcome of the Round.

-- In the process of bridging the gaps, he said, "we cannot go back on the broad understandings of the past. Progress has to be based on the foundations already laid in the negotiations in the last eight years."

-- Demands for additional market access in developing countries have to be based on the development mandate. The mandate cannot be twisted to meet mercantilist expectations.

-- While "we have no problem of engaging in any format to move the negotiations forward, the multilateral process which guarantees transparency and inclusivity has to be the basic mode of negotiations," he said.

In his statement at the plenary, Brazilian Foreign Minister Celso Amorim said "We are still facing the effects of one of the most severe economic downturns in history. The crisis originated in the rich countries, but the poorest ones are paying the steepest price."

Although the WTO rules-based system helped prevent widespread protectionism, the defensive actions that followed the crisis can still build up into a considerable disruptive force.

He said that the Doha Round was launched with the objective of bringing the development dimension into the WTO. Over the last eight years, "we have built a negotiating package that potentially contains benefits for developing countries and for the membership as a whole."

He further said that the contribution of developing countries would be greater than that given by developed countries in any of the previous negotiating Rounds. It is unreasonable to expect that concluding the Round would involve additional unilateral concessions from developing countries.

Calling on Members to act collectively and urgently, the Brazilian Minister said that rather than concentrating on what went wrong, "we must focus on what is needed to finish negotiations."

"Such assessment must take place in the next few weeks and months if we are to live up to the commitment of finishing the Round in 2010," he added.

The alternative will be more protectionism, more fragmentation of international trade, more inequality, more social and political instability.

Noting that by mid-2010, Brazil will grant duty-free, quota-free access for products from the LDCs covering 80% of all tariff lines and that this will increase over four years to cover all tariff lines, Minister Amorim said that "We can only hope that the developed countries will follow suit." +