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TWN Info Service on WTO and Trade Issues (Dec11/10)
20 December 2011
Third World Network


Protectionism must be resisted, South needs policy space BRICS
Published in SUNS #7283 dated 16 December 2011

Geneva, 15 Dec (Kanaga Raja) -- While in full agreement that all forms of protectionism must be resisted, the trade ministers of Brazil, China, India, Russia and South Africa (BRICS), at the same time underscored the need for developing countries to retain and use, when necessary, any existing WTO-consistent policy space.

This message was highlighted by the BRICS in a Ministerial Declaration issued following their meeting on 14 December, just before the eighth WTO Ministerial Conference gets underway here on 15 December afternoon.

In their declaration, the BRICS Ministers also underlined that trade distorting subsidies granted by developed economies, particularly in agriculture, are one of the most harmful forms of protectionism. These subsidies generate food insecurity and deny the development potential of this key sector in countries that already face formidable challenges to participate in global trade flows, they added.

The BRICS Ministers also emphasized that negotiations on any component of the Doha Development Agenda (DDA) must be based on the mandates multilaterally agreed since the launching of the Round in 2001 and on the delicate balance of trade-offs achieved over the last 10 years, which are also reflected in the draft modalities texts of December 2008.

"We remain willing to conclude the Round on the basis of those draft modalities."

They also stressed that they will not encourage or support plurilateral approaches, or any other negotiating modality that may compromise or weaken the multilateral nature of the negotiations.

At a media briefing following their meeting, Brazil's Minister of External Relations Antonio Patriota said that the BRICS ministers (at their meeting) reaffirmed their commitment to the multilateral trading system. "We are strong supporters of multilateralism broadly speaking."

He noted that the BRICS countries represent not only 45% of the world population but also $12 trillion in GDP and their contribution to world trade has been extremely significant in the case of the economic downturn -- "an economic downturn of course for which we have not been responsible, but our economies have been not only engines of growth but also engines for the expansion of international trade."
"In this context, we consider it important to resist protectionist forces while underscoring the need for developing countries to retain and use when necessary any existing WTO-consistent policy space," he stressed.

He said that the ministers deplored very much the fact that "we have not been able to conclude the Doha Round", which has been "the longest running trade round in the WTO."

He added that the challenge now is to find a way forward while recognizing that "we do not as yet have a consensus on how to do that", but certainly among the BRICS countries, "we remain extremely committed to the December 2008 draft modalities texts and consider it fundamental that, as and when, we resume discussions on Doha, we build upon the progress already achieved, in particular the progress reflected in December 2008."

Asked to comment on the recent US interest in a plurilateral agreement in services that would not be extended on an MFN basis, Indian Commerce and Industry Minister Anand Sharma, who was also present at the briefing, referring to the BRICS ministers' meeting and the BRICS communique, said that the clear commitment is to multilateralism, and also the reaffirmation of the agenda of the present round of the WTO negotiations, i. e., the development agenda -- no dilution or deviation (from that).

In respect of the Doha impasse, he said, "we are very clear that we remain committed to take forward the WTO negotiations, that is, the development round, the only round which has been dedicated to the developmental issues", as a single undertaking and to secure the progress and the understanding that has already been achieved over the painstakingly long trade negotiations.

In response to a question, South African Trade and Industry Minister Rob Davies, also present at the media briefing, said that if one looks at any measure of development - such as GDP per capita or Human Development Index - it is clear that BRICS are all developing countries and that the obligations that attach to the BRICS therefore ought to be obligations that attach to developing countries and that includes enabling them to use the policy space which is available in terms of WTO rules.

Referring to trade protectionism, he said that within the WTO rules there are built-in flexibilities and policy space to support the needs and interests of developing countries, and that policy space was hard-won in the negotiations.

In a separate media release by the South African Department of Trade and Industry on 15 December, Minister Davies stressed that South Africa wants the developmental mandate to remain central on the table at the eighth WTO Ministerial Conference.

According to the media release, Davies said that both African countries and BRICS members share the view that development issues are fundamental. "There is consensus among developing nations in Africa, as well among Brazil, Russia, India and China, that the development agenda as agreed on during the 2001 Doha meeting, must not be compromised in favour of developed countries' interests," he said.

In their ministerial declaration issued on 14 December, the BRICS trade ministers said: "We recognize the huge growth potential both in trade flows among developing countries and in cooperation in investments in the coming decades. We believe that the BRICS countries should play a leading role in South-South cooperation."

"We are accordingly committed to further expanding economic, trade and investment ties among our countries. Deepened and enlarged economic cooperation of the BRICS countries may be conducive not only to serving our shared interests but also to helping promote growth in the global economy. We agree that steps to strengthening economic and trade cooperation among our countries should be taken in an incremental, proactive and pragmatic manner."

The BRICS countries congratulated Russia, the largest economy outside the multilateral trading system, on the successful conclusion of the accession process to the WTO and looked forward to the forthcoming Ministerial Conference to formally endorse Russia as a new member.

"This will be a crucial step in making the WTO even more representative and legitimate, further strengthening the multilateral trading system."

The BRICS ministers expressed satisfaction at the completion of the accession process of three other new WTO members: Montenegro, Samoa and Vanuatu. They also welcomed the approval of a new set of guidelines for the accession of the Least Developed Countries (LDCs) that "will contribute to our shared goal of reaching universality in WTO membership."

In this process of buttressing the multilateral trading system, the BRICS ministers underscored the pressing need to further develop its rules and structure to address in particular the concerns and interests of developing countries.

"The WTO must maintain its central role in monitoring the implementation of the multilateral trade disciplines and commitments, including in the key area of dispute settlement. It also serves as a forum for discussion of trade related matters that all members agree to be relevant and pertinent. The negotiating functions of the Organization must also be preserved and energised."

They attached great importance to the role of the WTO in keeping protectionist forces at bay.

"Under the present global economic conditions, international trade plays an even more critical role in stimulating economic growth and development. We are in full agreement that all forms of protectionism must be resisted. At the same time, we underscore the need for developing countries to retain and use, when necessary, any existing WTO-consistent policy space."

They added: "We also underline that trade distorting subsidies granted by developed economies, particularly in agriculture, are one of the most harmful forms of protectionism. These subsidies generate food insecurity and deny the development potential of this key sector in countries that already face formidable challenges to participate in global trade flows."

The BRICS ministers said that they are particularly concerned with the existing impasse in the Doha Development Round. "Despite these circumstances, we will remain fully engaged in negotiations with a view to concluding the single undertaking within the shortest possible timeframe."

"We emphasize that negotiations on any component of the DDA must be based on the mandates multilaterally agreed since the launching of the Round in 2001 and on the delicate balance of trade-offs achieved over the last 10 years, which are also reflected in the draft modalities texts of December 2008. We remain willing to conclude the Round on the basis of those draft modalities."

The BRICS ministers agreed that the DDA negotiating stalemate should not discourage members from seeking results in specific areas where they agree that progress is possible.

"We instruct our negotiators to engage effectively and constructively whenever such agreement exists. These efforts must not lose sight, however, of the centrality of development in the Doha mandate. Any early outcomes must deliver first on elements of interest to the poorest among the membership. Issues of interest to the developing and the least develop[ed] countries must be at the forefront, without linkages to other areas."

The ministers said: "The full implementation of the Hong Kong Ministerial Declaration regarding the duty-free-quota-free initiative, as well as topics like cotton and agriculture, must be given priority and constitute an integral part of any early agreements. These efforts must be wholly consistent with the existing mandates and observe the principles of transparency and inclusiveness."

"In this context, we will not encourage or support plurilateral approaches, or any other negotiating modality that may compromise or weaken the multilateral nature of the negotiations." +

 


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