Bridges Weekly Trade News Digest • Volume 9 • Number 19 • 1st June 2005
Talks On Small Economies Move Towards Solutions
WTO Members on 25 May considered a new paper that proposes solutions to the problems faced by small economies as well as a process for these solutions to be adopted into ongoing negotiations. The paper (WT/COMTD/SE/W/13) was submitted to the meeting of the Committee on Trade and Development Dedicated Session — Small Economies (CTD-DS) by a group of 20 Members, many of which were the original proponents of a special work plan for small economies in the Doha Round. The sponsors of the paper had consulted extensively with other countries before putting it forward. Nonetheless, some Members raised concerns about the feasibility of giving concessions to small economies without creating a new category of developing countries, as well as the appropriate forum to consider such concessions.
The CTD-DS is mandated by Paragraph 35 of the Doha Declaration 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." During the CTD-DS’s February meeting, Members had agreed to move forward the body’s work plan by first examining the characteristics and problems faced by small economies, and then designing solutions to them (see BRIDGES Weekly, 23 February 2005). The current paper is intended to serve a "bridge" between the two phases.
The paper’s sponsors felt the need for such a bridge after the committee’s April gathering (see BRIDGES Weekly, 13 April 2005). Although that meeting saw discussions on the 17 characteristics and problems presented by the proponents (see WT/COMTD/SE/W/12), informal consultations soon thereafter revealed that while some Members wanted to continue discussions on these aspects of small economies, others wanted to move on to the next phase, arguing that agreeing on solutions was the most pressing need. Some of the latter delegations were concerned that negotiations on characteristics implied the creation of a new category of Members.
Possibility of characteristic-based concessions promoted…
The new paper summarises the trade-related problems arising from the characteristics of small economies. It argues that while these characteristics may not be unique to small economies, the combination and intensity with which small economies face problems deriving from them, coupled with their lack of resilience, is particularly challenging for these countries.
In addition, the countries behind the submission note that the creation of solutions and concessions based upon characteristics is not new. They cite characteristic-based concessions given to net food importing developing countries in the Uruguay Round, as well as in Paragraph 11 of Annex A of the July Package to "developing countries that allocate almost all de minimis support for subsistence and resource poor farmers." The creation of a new category of Members, they say, is thus unnecessary. The CTD-DS could instead simply build on precedent by extending the "characteristic approach" that it has been using thus far to create concessions in a similar manner.
The submission goes on to suggest twelve "elements of responses," many of which suggest solutions through concessions granted in particular WTO negotiating areas. For example, it proposes three measures relating to services negotiations, one of which calls for "special efforts" to be made to "facilitate the full range of services exports of small, vulnerable economies which can assist in compensating for their size and geographical disadvantages." The paper says that the CTD-DS should agree on proposed solutions and forward them to the General Council as per the procedure outlined by the General Council for the CTD-DS (see WT/L/447). The document’s proponents suggest that the General Council could then decide to "direct relevant subsidiary bodies to frame responses to the trade-related issues identified by the CTD with a view to making recommendations for action" as originally outlined in the framework, though they specify that this would not limit the ability of small economies to bring up the issues directly within negotiating bodies.
The proponents of the small economies work programme which presented the paper are Antigua and Barbuda, Barbados, Bolivia, Cuba, Dominica, Dominican Republic, El Salvador, Fiji, Grenada, Guatemala, Honduras, Jamaica, Mongolia, Nicaragua, Paraguay, Solomon Islands, St Kitts and Nevis, St Lucia, St Vincent and the Grenadines and Trinidad and Tobago.
…. But cynicism persists
After brief presentations from some of the proponents on examples of their trade-related problems, a number of Members responded to the proposal. The EU, New Zealand and Japan all expressed doubts as to whether the CTD-DS was the appropriate forum to work on proposals that might better be dealt with directly in the relevant negotiating bodies. The EU encouraged the proponents to table their proposals — which are expected to be forthcoming in coming months — directly in the negotiating bodies to save time in the run-up to the July target date for "first approximations" and the Hong Kong Ministerial Conference in December. They added that in some instances, special treatment could only be granted bilaterally as in the example of the request-offer process used in services negotiations.
The US also repeated views it had expressed during the two weeks of informal consultations that preceded the meeting, warning that the proponents may "miss the train" in other negotiating fora by seeking a process in the CTD-DS. It also said, along with China, that the paper appeared to be defining a new category of developing countries.
Brazil similarly suggested that the proponents take their proposals to the relevant negotiating bodies, possibly in conjunction with work in the CTD-DS, and repeated its opposition to further categorisation of developing countries.
ICTSD reporting.