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TWN Info Service on WTO and Trade Issues (Nov07/25) 28 Nov 2007
The
WTO Director General has stated that there will not be a breakthrough
in the At
the General Council meeting on Aid For Trade, developing countries stressed
that the aid should not be a substitute for development content in
the The following report was published on 23 Nov in the SUNS. Any reproduction of this article requires the permission of SUNS (sunstwn@bluewin.ch). With
best wishes No
Doha breakthrough before year-end, says Lamy The
Director-General of the World Trade Organization, Pascal Lamy, said
on Wednesday that he did not expect a breakthrough in the Lamy, however, was of the view that it was possible to conclude the negotiations next year. Lamy's remark, on the conclusion of the Doha Round, came in response to questions at a media briefing following a General Council session that debated the issue of Aid for Trade. The Council session concluded a two-day first global review of the Aid for Trade initiative, launched at the Hong Kong Ministerial Conference in 2005, and aimed at expanding the trade capacity of developing countries. According to a trade diplomat who attended the Council session, the general message from the developing countries was that Aid for Trade should complement the Doha Round and not be a substitute for it. Also, money provided by the donors for Aid for Trade should be new additional funds. (It is now becoming obvious that no major breakthroughs can be achieved by December. The Chairs of the agriculture and non-agricultural market access negotiations were to have issued their revised draft modalities texts sometime mid-November but some media reports are saying that these are now expected in February. (Media reports are quoting trade diplomats and officials as saying that an initial deal might be likely January or February 2008 with a final deal being inked in 2009. Even US Trade Representative Susan Schwab has been quoted in the media as saying that a Doha Round deal could be achieved before President George W Bush leaves office in January 2009. (Recently, on 15 November, after a G20 meeting and the larger groupings of developing countries, both Brazilian Foreign Minister Celso Amorim and Indian Commerce Minister Kamal Nath, adverted to the US administration not having any Trade Promotion Authority, and asked the US to provide a road-map on the TPA issue. (According
to trade observers, though Susan Schwab has been trying to assure them
that the US Congress will agree to a Asked
at the media briefing whether there was no hope for a breakthrough in
the "It is cooking, it is moving," he said, adding "I think those of you who follow both agriculture and NAMA negotiations know that. It is on the front burner. No doubt about this but it takes a bit of time." "And the conventional wisdom and the sort of view we have established is that rather than producing half baked compromise proposals - the final baking which might be bumpy - members prefer a good long, sometimes slow, cooking which will take us into next year, both for the production of compromise papers... for their adoption." Asked as to whether a deal can be concluded next year, Lamy was of the view that it was possible, adding that whether modalities on agriculture and NAMA take place in the beginning of next year before completing the rest of the agenda is something we have in mind. Lamy told the media that this was the first time that international organizations have gotten together in the WTO to send a strong message that they stand together in moving forward on Aid for Trade. According to the Director-General, the WTO is a core business about creating trade opportunities through market opening and equitable disciplines, and that Aid for Trade "is about generating trade flows and making through various capacity improvements, trade feed into growth and growth into poverty alleviation for developing countries." Lamy also maintained that the Aid for Trade initiative is separate from the Doha Round. "It's a distant separate agenda from the Round... There is no ex-ante conditionality of any sort between the Round and Aid for Trade..." Lamy spoke of enhancing donors' contribution and mobilizing more resources for Aid for Trade. In this respect, he mentioned a figure of $20 billion for 2002-2005 and that commitments that have been confirmed by donors have taken the figure to the tune of $30 billion by 2010. (A document by the OECD on Aid for Trade that was distributed at the global review said that between 2002 and 2005, donors committed on average $21 billion per year on aid-for-trade categories more closely related with aid for trade. This included $11.2 billion to build economic infrastructure, $8.9 billion to promote productive capacities, and $0.6 billion for increasing the understanding and implementation of trade policy and regulations. The document also said that if the recent annual growth rate of aid for trade - 6.8% - continues, this would deliver an additional $8 billion by 2010, with total aid-for-trade commitments reaching $30 billion. According to the document, next year's report will also contain data on disbursements.) As to whether this would suffice to match the commitments taken by the G8 in Gleneagles, Lamy said "probably not. But for the moment... we are on track in terms of commitments." He also mentioned the huge involvement of recipient countries who now have taken new steps to clarify their priorities, stabilize them and discuss a number of these priorities at the regional level. Among the priorities that have come up repeatedly are infrastructure, transport, energy, telecoms, customs facilitation, trade finance, and sanitary and phyto-sanitary standards, he said, adding that "we now need to dig together with other international organizations." "When
the Lamy also spoke of the issues of monitoring and evaluation of aid flows and that it is also the benchmark against which progress can be measured. He noted that most of the technical work has been outsourced to the OECD. Lamy also said that what he had heard over the two-day session was that developing countries also want to own the numbers. Most of the numbers that are produced until now are produced by donors and they are, as expected, influenced by the constituencies to which donors report. "This is something we need to improve." he said, adding that "We cannot in looking at these numbers - whether they are financial flows, whether they are performance indicators, whether they are results indicators - rely on methodologies which are only donor driven. And there is progress to be made in this direction. That is one of the things we need to factor in our number crunching." Lamy
also noted that the formula of regional Aid for Trade reviews which
worked well due to the heavy involvement of regional development banks
in Africa, Asia and Asked as to whether the planned increase of $30 billion will not be diverted from other sectors, Lamy said that there were no assurances of that but that it can be tracked by the debt numbers and the proportion of Aid for Trade in overall development assistance. He noted that in 2002-2005 baseline period, Aid for Trade was a decreasing proportion of overall development assistance. "We do not have yet indicators of performance or results that could link a certain volume of Aid for Trade to a certain volume of trade," he said. Asked to comment over the fact that food aid has been used as a way of subsidizing agricultural exports by the developed countries, Lamy said that the question of whether development assistance is tied or untied is still open. On food aid, that is an area where new disciplines will appear as a result of the Round. "This is an area where we will have binding rules that clearly go in the direction of cash, more than kind... The paper that Falconer (chair of the agriculture negotiations) circulated last week is much more disciplined than it used to be." Meanwhile,
It said that ownership is critical to coherence. Aid for Trade can only work as an integral component of national development strategies. In such strategies, the focus is typically on poverty reduction and employment generation. This implies, for instance, that creation of export enclaves in developing countries without strong linkages with the domestic economy cannot be a sustainable outcome. "We must continue to remind ourselves that the main focus has to be on development and not on exports per se. This is the internal dimension of coherence." Aid
for Trade is not an end in itself, said "Egregious measures like trade distorting subsidies in agriculture, tariff peaks and tariff escalation which invariably target developing country products, restrictions on the movement of natural persons and creative Non-Tariff Barriers designed to block market access for developing countries have to be urgently and effectively addressed to ensure a level playing field for developing countries." On
the issue of the additionality of resources, It expressed hope that "the actual disbursement figures do not disappoint us and we are able to meet the total Aid for Trade target of $30 billion by 2010." The
overall aid environment at the moment is not very encouraging, said
"It
is disheartening to note IMF figures showing that official grants to
sub-Saharan "It
is in this somewhat sombre background that we look forward to receiving
OECD figures in next year's Review which will also incorporate actual
disbursement figures to give us a fair assessment of the path we are
actually treading on," said In a statement also on 21 November, Lesotho, on behalf of the LDCs, said that it is now generally accepted that Aid for Trade is about allowing developing countries, in particular LDCs, to address the challenges of, and to take advantage of more liberal trading environments. Although the development of LDCs should not be completely reliant on aid disbursements, with proper planning, implementation, monitoring and evaluation, aid can play an important role in creating the necessary conditions to attract private sector investment, hence, the need for additionality of Aid for Trade, said the statement. There is a need for both national and regional Aid for Trade strategies and implementation plans, as well as a need for an effective monitoring and evaluation mechanism, which this global review is a part of. The international and regional development banks have a major role to play in both defining Aid for Trade strategies and in financing subsequent projects and programmes. The LDCs stressed that for them, there should not be any conditionality attached to access the Aid for Trade. +
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