There seems to be an anxiety over the protracted delays in concluding the Doha round of negotiation as it has been reflected in almost of the statements made by the head of the delegations. The chairman of the session, Chilean Finance Minister Andes Velasco, told that a stock-taking exercise will take place in the first quarter of next year for concluding the round in 2010. Gaps remain on substance and there was wide acknowledgment of the need for leadership and engagement on the remaining specific issues over the coming weeks.
Conclusion of the round has been an arduous task for WTO as there are several gaps on understanding, and conflict of interest among the developed and developing countries. The least developed countries seem to be more vulnerable and hard hit by the process of liberalization and are pressing for their demand as has been articulated in the Dar Es Salaam declaration in October.
It is a huge task for the member countries to conclude the Doha round successfully but this is crucial in order to maintain the credibility of the World Trade Organization.
Agriculture is one of the important issues on multilateral trade negotiation and is focused on substantial reduction or elimination of production and export subsidies. Developing countries basically produce agriculture and non-timber forest products that have export potential but these are becoming non-competitive in the wake of high subsidy given by the developed countries to such products produced within their national boundaries. In contrary, developing economies do not have the capacity to provide subsidy in production and export due to their weak financial capacity and, as a result, suffer because of cheap imports from the developed countries.
Non-agriculture market access is another contentious issue. The tariff-cut mechanism proposed during the negotiation; the so-called Swiss Formula put forward by the developed countries, envisages cutting tariff on industrial products vertically to a minimum on the basis of coefficient without taking care of the tariff profile of the member countries. This would result in drastic reduction of tariff. Meanwhile, the developing countries are in favor of taking a cautious approach in tariff reduction with a view to protect their infant industries and are hence pleading for a gradual reduction of tariff on manufactured articles.
The duty-free, quota-free market access for all products originating in LDCs in line with the Hong Kong Ministerial Declaration is another important issue. The 97 percent tariff lines as agreed during the Hong Kong meeting was to be made effective by 2008 but the products for such concession remain still unidentified. The Dar Es Salaam declaration has urged for its implementation by early 2010. It is equally important to adopt simplified and practical rules of origin for ensuring a better market access to the products from LDCs. The specific issues on elimination of subsidy in cotton and waiver of most favored nations (MFN) treatment on services are important demands of the least developed, small and vulnerable economies that require leniency from the developed partners.
Some of the LDCs are facing problems of declining export due to tariff liberalization in some specific products, particularly in US and EU markets. And those countries are expecting a longer implementation period for these products and hence the issue of preference erosion has emanated during the past negotiations. There is conflict of interest between the developing countries and LDCs in the issues of preference erosion as the tariff liberalization period will have a bearing on sustaining the export of the latter. This would require a balancing approach to favor the affected countries in line with the principles and objectives of WTO.
Effective implementation of the special and differential treatment provisions contained in various WTO agreements is very much important as crosscutting measures to allow LDCs participate effectively in the world trading system. This basically entails not compelling to take commitments beyond the capacity of the country, longer timeframe to implement the commitments, non-imposition of provisional measures on their products, mandatory acceptance of price undertakings and technical assistance for capacity-building to enable them to use anti-dumping and countervailing measures whenever such conditions arise.
Capacity-building of LDCs remains central in harnessing benefits from the Doha round of negotiations. There is a need for wider application of the capacity-building measures for industrialization and diversification of LDCs’ economies and meet their implementation obligations, particularly in fulfilling Sanitary and Phyto-sanitary (SPS) and Technical Barriers to Trade (TBT) requirements, building productive capacity through enhancing the efficiency of the factor of production, development of trade-related physical, legal and institutional infrastructures and strengthening the human resources capacity at the national level. In view of these, the development partners are required to provide additional and predictable resources encompassing the technical assistance to the investment projects on a sector-wide approach. It has been widely accepted that trade will be an effective engine of growth if the right policies are pursued and other areas of economy aligned to trade and export orientation. This would require realigning the ODA flow, donor harmonization and policy coherence to achieve the goal of export-led growth.
The arguments and alternatives on concluding the Doha round of negotiations are on the table. The past negotiations and the seventh ministerial meeting in Geneva have set the tone for taking those arguments to convergence. It is a baffling task for the member countries to tie up all the loose ends and conclude the round successfully but this is crucial in order to maintain the credibility of the multilateral trading system.
(Writer is Secretary, Ministry of Commerce and Supplies.)
puruojha@gmail.com
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