Bridges Weekly Trade News Digest • Volume 10 • Number 15 • 3rd May 2006

Small Economies Seek New Rules, Better Response From Other Members

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The proponents of the Doha Round work programme on small and vulnerable economies (SVEs) want the committee overseeing their concerns to encourage other WTO bodies to respond to their needs. At a 26 April meeting of the WTO Committee on Trade and Development Dedicated Session (CTD-DS), they also indicated that they were in the process of submitting potential criteria for identifying SVEs.

The CTD-DS is mandated by 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." In pursuit of this mandate, the 22 countries have been following a two-track approach since October 2005 under which they have tabled several proposals for new rules to address the problems of SVEs in various Doha Round negotiating bodies, at the same time as work within the CTD-DS has continued (see BRIDGES Weekly, 19 October 2005).

During the recent meeting, the question of how to tailor rules for small and vulnerable economies without creating a new category of Members remained a main concern.

Track 1: negotiating groups considering proposals

Members reviewed the SVE proposals made in other WTO bodies based on a new submission from the proponents of the SVE work programme (WT/COMTD/SE/W/21) that compiled the key aspects of each of their proposals. Papers seeking to address SVE concerns have been submitted to the negotiating bodies on agriculture (TN/AG/GEN/11), non-agricultural market access (NAMA; TN/MA/W/66), rules (on fisheries subsidies; TN/RL/GEN/57/Rev.2), and services (Information note and JOB(06)/66), as well as the Committee on Subsidies and Countervailing Measures (G/SCM/W/535).

Several of the SVEs that co-sponsored these papers do not have permanent representation in Geneva. Their representatives, who were at the WTO for the ‘Geneva Week’ for non-resident missions, said that the compilation helped clarify the issues being addressed. Although all Members agreed that the negotiating groups, not the CTD-DS, were the place for detailed discussions on each of the proposals, some countries suggested they had broad, cross-cutting questions about them.

In particular, several delegations, including some of the relatively larger developing countries such as Brazil and China, suggested that it was not clear which WTO Members would qualify for the rules being sought for SVEs, and said that the methodology for determining countries’ eligibility for this treatment needed to be elaborated. They argued that in order to preserve the rules-based nature of the WTO, as well as to avoid creating a new category of Members, they would oppose limiting eligibility to a pre-specified list of countries. Any new rules should be accessible to all developing countries, they said.

The proponents of the papers responded that several of these issues would be addressed in new, text-based proposals that they would soon present to the NAMA, agriculture and services negotiating groups. They indicated that prior to doing so, they would be unable to discuss the details of the forthcoming texts in the formal CTD-DS session.

Sources report that in the corridors, however, delegates hinted that the NAMA and agriculture texts would use a single set of criteria to identify SVEs, which would include shares of agricultural, non-agricultural and total world trade, and could potentially also include measures of export concentration and dependency on a few export markets. All of the indicators, they pointed out, would be directly trade-related and based upon WTO statistics because in the past, problems such as uncompetitiveness and physical isolation had been challenged by other Members as being unrelated to trade.

Some observers suggested that it could be possible to get around the obligation to "not create a new sub-category of WTO Members" by making any new rules available to all developing country Members, with an informal understanding that only Members considering themselves to be SVEs would actually use them. Sources noted that while such an "honour" system possibly combined with indicative criteria could work, current discussions are far from being able to resolve this issue in precise detail.

Track 2: role of CTD-DS in "monitoring"

In their new submission, the proponents of the SVE work programme suggested that the CTD-DS’s monitoring of other negotiating groups should step up political pressure at the WTO for progress on proposals in favour of SVEs. In addition, they suggested, the CTD-DS could continue to address issues relating to SVEs not covered by the other negotiating groups.

Although the CTD-DS’s monitoring role was underlined by Paragraph 41 of the Hong Kong Declaration, which directed it "to monitor progress of the small economies’ proposals in the negotiating and other bodies" in pursuit of the overall mandate on SVEs, Members disagreed on how the group should undertake it.

Many delegates suggested that the sponsors of SVE proposals in other negotiating bodies should submit verbal and written reports to the CTD-DS. The SVE work programme proponents, however, suggested that the CTD-DS should act as the "political body" in the two-track approach by using its monitoring role to encourage and, as necessary, shame other negotiating groups into taking action on SVE proposals. In this scenario, CTD-DS Chair Faizel Ismail (South Africa) would meet with the chairs of the relevant negotiating bodies and provide them with the advice, support and encouragement necessary for progress. Ismail would then, as part of his regular reports to the General Council, discuss progress on the SVE proposals, and, as necessary, point out where movement was slow.

Members were unable to agree on the extent to which the CTD-DS chair should engage with the other negotiating group chairs, although Ismail suggested that he would informally discuss issues relating to the SVE proposals with them when preparing his report for the mid-May General Council meeting.

In a related development, delegates expressed approval for earlier SVE proposals seeking the explicit recognition of Members’ right to designate a regional — as opposed to national — body to provide technical support to assist them in fulfilling WTO obligations for sanitary and phytosanitary measures (SPS), technical barriers to trade (TBT) and intellectual property rights. They asked the SVEs to draft appropriate text to present to the General Council in July.

The SVEs circulated new proposals on NAMA and services on 4 May, while a new agriculture paper is expected next week. The next session of the CTD-DS will be held in mid-July.

ICTSD reporting.