Bridges Weekly Trade News Digest • Volume 9 • Number 12 • 13th April 2005
Examination Of Small Economies’ Problems Underway
At a 6 April meeting of the Committee on Trade and Development Dedicated Session (CTD-DS) WTO Members began examining the characteristics and problems of small economies. As per the process agreed at the previous meeting, according to which Members will first examine the characteristics and problems of small economies and then develop solutions to them, talks began on the first four of 17 characteristics/problems identified in an earlier submission (WT/COMTD/SE/W/12, see BRIDGES Weekly, 23 February 2005).
The CTD-DS, which is instructed by the Doha mandate to focus exclusively on trade-related issues pertaining to "small, vulnerable economies," discussed small economies’ physical isolation, geographical dispersal and distance from large markets; insignificant participation in the multilateral trading system; small, fragmented and highly imperfect markets; and, in general, very open economies.
Some Members, including several larger developing countries, said that these characteristics are not unique to small economies and are shared by other developing countries. Although the countries that tabled the list of problems (Antigua and Barbuda, Barbados, Bolivia, Dominican Republic, El Salvador, Fiji, Guatemala, Honduras, Mongolia, Nicaragua and Trinidad and Tobago) acknowledged that this was true, they argued that small economies are different in the extent to which these characteristics affect them, as well as in their capacity to respond.
The new chair of the CTD-DS, Ambassador Gomi Tharaka Senadhira of Sri Lanka, suggested that the characteristics/problems be categorised into three areas: areas where WTO solutions can be found; areas where WTO solutions may be available but perhaps only in combination with action from other organisations; and areas where solutions lie elsewhere. He proposed prioritising the first category, and said that the last could potentially be left out of negotiations in the committee.
Chair Senadhira’s proposed methodology came in response to suggestions from some Members that the committee focus on trade-related problems, where they say the WTO would be most useful. Some of the characteristics raised in the list, they argue, could be addressed at a national level through competitiveness, export diversification, or productivity policies, rather than in the WTO. Others problems, such as the geographical isolation of small economies, did not lend themselves to WTO solutions, they added.
The Members that put forward the list countered that the WTO could respond to all of the characteristic/problems identified. For example, geographical isolation causes small economies to lose competitiveness in commodity exports due higher transportation costs and longer shipping times. Measures taken in the WTO could mitigate some of the problems caused by physical isolation through trade facilitation and other measures. Furthermore, the proponents argued that dismissing from the start all problems assumed not to have a WTO solution would be putting the ‘cart before the horse,’ and would compromise the agreed process to look at characteristics and problems, and then possible solutions. Members failed to agree on the Chair’s proposal, and decided instead to work through the 17 characteristics/proposals.
Members characterised the meeting as a "useful exchange" and noted that although no concrete agreements were reached, the proponents of the list are trying to inject speed and direction into the negotiations. The latter would like Members to move on to possible solutions as early as possible, preferably at the next formal meeting of the CTD-DS, in order to have some concrete outcomes by July. These would in turn help Members have a package ready for the Hong Kong Ministerial Conference in December.
Informal gatherings are planned for early May in order to address the remaining items on the list. The next formal meeting is being planned for week of 10 May.
ICTSD Reporting.