Transcript WHY TRADE - CUTS International

Development Dimension in
July Package : Concerns of
South Asia
Posh Raj Pandey
CUTS, New Delhi
17 September 2005
1
Why Development Dimension?
“Open and Liberal Trade Regime” offers enormous opportunities for
reducing poverty, narrowing inequality, overcoming economic injustice
and attaining overall economic development PROVIDED RIGHT
CONDITIONS PREVAIL
But reality is:
International trade regime is characterized by significant difference in
economic power of the major developed countries and relatively minor
share of developing countries ( growth in exports of India increased by
10 per cent but the share in global trade is 0.7 per cent, export growth
in low technology products and adverse terms of trade)
Major distortions in global markets are caused by protectionist policy of
developed countries that continue to disadvantage developing countries
( high subsidies in agriculture- support provided by Japan, US and EU
to farmers is 56 per cent, 18 per cent and 33 per cent respectively of
their agriculture production; high tariff faced by developing and least
developed countries- US imposes 1.2 per cent duties to the imports of
OECD countries where as it is 4.5 per cent for developing countries
and 13.6 per cent for LDCs)
2
Why Development Dimension?
(contd..)
Many WTO Agreements limit the policy space available to developing
countries-Agreement on subsidies prohibits export subsidies, TRIMS
prohibits local content requirement, technology transfer, local
employment conditions for foreign investor, TRIPS prohibits reverse
engineering - Present Developed and high income developing
countries used these policy instruments during initial stage of
development, Resulted in ‘Kicking away the ladder’ of development
Implementation of cost of WTO Agreement is enormous – more than
development budget of many LDCs
3
Historical Efforts to
incorporate Development in
GATT/ WTO
‘Less than reciprocity’ during initial period of GATT ‘- Infant Industry
Protection (GATT Article XVII), Balance of Payment Protection (Article
XVII (b) 1954-55
Incorporation of Trade and Development Section (Part IV) in 1965joint actions for favourable market access for products of export
interest of developing countries
Waiver of GSP during 1968-71
Decision on Differential and More Favourable Treatment, Reciprocity
and Full Participation of Developing countries during Tokyo Round
(Enabling Clause)
Uruguay Round : almost all agreements include Special and Differential
Treatment for Developing and Least Developed countries
 Less obligations
 Longer implementation period
 Best endeavour clause : Developing countries taking into account
of development, trade and financial needs of developing countries
in their activities
4
Historical Efforts to
incorporate Development in
GATT/ WTO (contd..)



Technical assistance to build capacity to implement GATT/ WTO
Agreements
Singapore Ministerial :
 ‘ We attach high priority to full and effective implementation of
WTO agreements…… Implementation thus far has been
generally satisfactory, although some Members have
expressed dissatisfaction with certain aspects…’
 Plan of Action for LDCs- Integrated Framework
Doha Development Agenda
 Declaration on Implement Related Issues: non-fulfillment of
commitments in reducing trade barriers and regulation and
process at national level of DC
 Declaration to make Special and Differential Treatment to make
PRECISE, EFFECTIVE and OPERATIONAL
 Inclusion of trade, debt and finance; trade and technology
transfer and technical assistance in WTO agenda
5
Development After Doha
Special and differential treatment : 88 proposals
 Category I: accepted with minor changes: 38 proposals
 Category II: to be discussed in relevant WTO bodies: 38 proposals
 Category III: Need major changes 12
 Consensus reached on 28 of Category I : still debate on which
issues to be addressed first : agreement specific or cross cutting
issues and issues of early harvesting
Implementation issues: disappointingly slow, only 3 issues resolved out
of 99 issues; all deadlines missed including DG to report TNC and GC
by May 2005 and GC to take decision by July 2005
Capacity building and Technical Assistance : no substantive progress
except pledging of Swiss Franc 30 Million to global Trust Fund and
continuation of Integrated Framework with US$1 million for each of the
LDCs
6
Development Dimension in
July Package
Reassertion of Special and Differential Treatment as integral part of Doha
Development Agenda
Agriculture




Flexibility to designate an appropriate number of products as Special
Products based on food security, livelihood security and rural development
needs
Special safeguard mechanism for use by developing countries only
Developing countries will have lower reduction coefficient and higher
implementation for phasing out export subsidies, lesser tariff reduction
commitments
LDCs are exempted from reduction commitments
NAMA


Less than full reciprocity in reduction commitments for developing countries
Longer implementation period and LDCS are exempted from reduction
commitments
7
Development Dimension in
July Package (contd..)
Services

Liberalization without prior exclusions of sectors and mode of
supply of interest of developing countries including mode 4
Trade Facilitation


Strongly worded technical assistance
Developing countries are not required to implement commitments in
the absence of technical assistance
8
Negotiating Position for South
Asian countries
Different for LDCs and Non-LDCs
LDCS
Enhanced Market Access
 Binding commitments on duty free and quota free market access
without a priori exclusion of products
 Preservation of existing preference and address preference erosion
 Moratorium on safeguard measures and antidumping action against
the export of LDCs
Services
 Full market access and national treatment to LDCS in the sectors
and mode of supplies of export interest to them including mode four
 Developing and applying domestic regulation discipline including
recognition of qualifications, simplification of administrative
practices and visa requirements and non application of economic
needs test
9
Negotiating Position for South
Asian countries (contd…)
Flexibility in Rules
 Complete exemption for LDCs from any reduction commitments
 Flexibility for LDCs to determine the level of binding commitments
of their tariff lines consistent with their trade development and
financial needs
Trade Facilitation
 Flexibility to make commitments consistent with their administrative
and institutional capabilities
Food Security
 SSM to respond import surge
 Full implementation of Marakesh Declaration and Ministerial
Decisions on Measures concerning Possible Negative Effect of the
Reform Programme on LDCs and NFIDCs
Technical Assistance
 Adequate and targeted technical assistance
10
Negotiating Position for South
Asian countries (contd…)
Non LDCs
Market Access and Food Security
 Provision of ceiling binding
 Continuation of subsidies to resource poor farmers
 SSM to respond import surge
Export subsidies
 Continuation of Article 9.4 of AoA
 Article 27 of Agreement on Subsidies and Countervailing
Measures be prevailed over Article 8 of AoA
Domestic support
 Flexibility to provide subsidies to key farm inputs
 AoA consistent subsidies to be exempted from countervailing
duties
11
Negotiating Position for South
Asian countries (contd…)
Services
 Full market access and national treatment in the sectors and
mode of supplies of export interest to developing countries
including mode four
 Developing and applying domestic regulation discipline
including recognition of qualifications, simplification of
administrative practices and visa requirements and non
application of economic needs test
Trade Facilitation
 Flexibility to make commitments consistent with their
administrative and institutional capabilities
12
Thank you for your kind attention
13