Bridges Weekly Trade News Digest • Volume 8 • Number 38 • 10th November 2004
Small Economies Seek Attention, Special Treatment
The Committee on Trade and Development (CTD) held the eighth Dedicated Session on Small Economies on 3 November as part of the 1-5 November WTO Geneva Week for Non-Resident Members. At the meeting, Members agreed that the work on small economies — characterised by the dual constraints of small economic size and vulnerability — would be included in the General Council’s report to the Sixth Ministerial Conference, scheduled for December 2005 in Hong Kong. Delegates reviewed work to date and exchanged views on the July Framework agreement on the way forward in the Doha Round (see BRIDGES Weekly, 3 August 2004). They also discussed the Work Programme for Small Economies, considering the constraints of the mandate from Paragraph 35 of the Doha Declaration, which states, "The objective of this work is to frame responses to the trade-related issues identified for the fuller integration of small, vulnerable economies into the multilateral trading system, and not to create a sub-category of WTO Members".
"The time is now"
On behalf of a group of small economies, Barbados interpreted Paragraph 1(h) of the July Package (see WT/L/579) as setting the timeframe of the Hong Kong Ministerial Conference for the submission by the General Council of recommendations for action. Barbados noted that the first two components of the group’s mandate, namely, the identification of issues or problems constraining the trade of small economies and the framing of responses or solutions to these constraints, have been completed. Barbados further said that the third component, the formulation of recommendations for action to address trade-related issues pertaining to small, vulnerable economies, was outstanding and must be completed before Hong Kong. The Solomon Islands’ permanent representative to the WTO, Robert Sisilo, said, "the time is now" for the concerns of small island countries to be meaningfully addressed, while Saint Lucia and the US stressed that there should be no duplication of work, especially in regard to special and differential treatment. They said that therefore only the non-negotiation issues and problems affecting small economies should be addressed by the dedicated session.
Paraguay expressed its support for the start of the trade facilitation negotiations (see related article, this issue), noting that these negotiations were crucial for landlocked countries. It also expressed concerns regarding a decision that certain aspects of issues from past Dedicated Sessions would be relegated to other negotiating bodies, such as the groups on agriculture and non-agricultural market access, saying that it preferred to see these issues dealt with in the Dedicated Session.
Background
While the meeting focused mainly on procedural issues and the need to create recommendations for action, discussions were informed by earlier proposals offered by two groups of small economies in previous meetings (see BRIDGES Weekly, 13 May 2004). The first group — including Barbados, Fiji, Mauritius, Papua New Guinea, Solomon Islands and Trinidad and Tobago — in their original 2002 communication (WT/COMTD/SE/W/3) made a number of proposals for a work programme for small economies, and in their May 2004 communication (WT/COMTD/SE/W/11), the group focused on the need to maintain trade and investment preferences and to ensure market access. A second group of countries, namely, Bolivia, Mongolia and Paraguay, have identified themselves as "landlocked developing countries" that are also small economies and presented a communication (WT/COMTD/SE/W/10) in April of this year.
Proposals have centred upon a range of issues including market access for small economies, the flexibilities necessary for small economies to participate effectively in and secure benefits from multilateral trade negotiations and measures to address the constraints, disadvantages and vulnerabilities of small economies.
The sub-category question
Underlying the discussion in the CTD dedicated session is the question of the status of small economies within WTO rules. The Doha Declaration expressly states that a sub-category is not to be created of small economies, but several WTO Members who are landlocked, small islands, and/or geographically isolated have argued that they have particular problems such as distance and transportation requirements and vulnerability that need to be specifically addressed by WTO rules. Trade sources suggest that some developed country Members, including the EC, have indicated their interest in addressing the particular problems of small developing economies, but realise that under current WTO rules this sub-category does not exist. At the meeting, the Chair suggested that the Doha mandate is "conflictual" in that it forbids the creation of a new sub-category while calling for action on the needs of small economies. According to some observers, this has led to difficulties with the Quad countries (Canada, the EC, Japan and the US), who have pointed to the difficulties in specifying who would benefit from provisions for small economies without engaging in constructive dialogue on how to define and reach the group of countries who need such provisions. One option small economies hope to use is a "characteristic-specific" approach to link the needs of small economies with action-oriented provisions in the WTO and thereby surmount the sub-category issue. The issue of differentiation amongst developing countries is a contentious issue within the CTD, with LDCs currently the only group granted special treatment beyond that provided to developing countries as a whole.
ICTSD Reporting; "WTO urged to help small island countries," SOLOMON ISLANDS BROADCASTING CORPORATION, 5 November 2004.