Bridges Weekly Trade News Digest • Volume 5 • Number 32 • 25th September 2001

Developing Countries Advocate New Negotiating Areas At WTO

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Twelve developing countries from the Like Minded Group (LMG) circulated on 18 September a set of ‘non-trade related’ initiatives they are pushing to have included on the agenda for the Fourth Ministerial Conference in Doha, Qatar, currently scheduled for 9-13 November.

Clarifying items previously touched on in the leadup to the failed Seattle Ministerial Conference in 1999, the initiatives consist of four proposals that advocate the launching of negotiations for a Framework Agreement on Special and Differential Treatment (S&D) and the establishment of Working Groups on trade and technology transfer, trade and debt, and trade and finance. (A more detailed analysis of this report in context of overall implementation issues is forthcoming in the monthly BRIDGES Between Sustainable Development, available at http://www.ictsd.org; also see BRIDGES Weekly, 24 July 2001, http://www.ictsd.org/html/weekly/24-07-01/story1.htm).

According to the LMG proposal on S&D, the initiative seeks to build a long-term agenda for developing countries, building off their demands for fuller implementation and re-balancing of the WTO Agreements, which many see as flawed and favouring the interests of developed country Members. The inputs were timed to come out just in advance of an expected paper from General Council Chairman Stuart Harbinson dealing with possible topics for the Ministerial declaration (see related story, this issue), and were drafted by Cuba, the Dominican Republic, Honduras, India, Indonesia, Kenya, Malaysia, Pakistan, Sri Lanka, Tanzania, Uganda, and Zimbabwe.

The four proposals are assigned differing levels of priority. The paper on S&D calls for the establishment of negotiations towards a framework agreement at Doha; the Ministerial should also establish a Working/Negotiating Group on trade and technology transfer, and a Working Group on trade and debt, pointing to a pre-negotiations step for the latter. A Working Group on trade and finance is called for, though the proposal does not specify that this should be established at the Doha Ministerial.

Special and Differential Treatment

The Framework Agreement on S&D states that "the concept of Special and Differential Treatment is a fundamental building block of the multilateral trading system" and that "the WTO must demonstrate sensitivity to developmental objectives of [the] majority of its Membership and to sustain credibility."

"In the immediate/short term, all the existing [S&D] treatment provisions in various WTO agreements should be operationalised/implemented." It goes on to say that "many of the Implementation proposals submitted by developing countries, in the backdrop of uneven growth and development in the years following the establishment of the WTO, can be viewed as an initial endeavour for extension and elaboration of enhanced, effective and a binding [S&D] regime."

Inter alia, the proponents say that Members shall undertake an evaluation of the implications of any future agreement, with respect to implementation costs in terms of financial impacts, capacity building, and technical assistance. They also advocate that transition periods for the implementation of WTO Agreements must be linked to objective economic and social criteria.

Trade and technology transfer

Acknowledging the challenge for the international trading system to address the issue of the transfer of technology to developing countries to ensure that they become equal partners in the global efforts for world prosperity, the trade and technology transfer paper recommends the formation of a working/negotiating group that would primarily study how to strengthen provisions in WTO Agreements that seek to promote developing countries’ access to modern technology and explore changes to these provisions.

The proposal notes that developed countries have yet to fully implement areas of the WTO Agreements referring to technology transfer, in particular GATS Article IV.2, TRIPs Articles 7,8, and 66.2, the TBT Preamble, and SPS Article 9.1. Inter alia, it suggests that industrialised countries could implement tax incentives spurring companies to invest in technology transfer initiatives in developing countries.

Trade and debt

With respect to trade and debt, the proposed Working Group would study the implications of developing countries’ debt burdens and in particular, study the tying of specific debt levels with exceptions to implementing market access commitments in goods and services. As well, it looks to set specific debt levels which could also trigger special and differential treatment.

Trade and finance

The least specific of the proposals is that on trade and finance, which draws attention to such issues as institutional measures that need to be taken to facilitate greater and more effective developing country participation in WTO proceedings. Inter alia, the paper calls for the examination of the trade implications of exchange rate instability and the impact of balance of trade payments on a country-by-country basis.

One commentator notes that these proposals could potentially be seen as a means for enabling trade-offs for accepting developed country initiatives on non-trade items such as investment, environment, and competition policy, though many developing countries insist that implementation issues should not be linked to these ‘new round’ issues.

According to trade sources, developed countries are expected to come out with a proposal on implementation that builds on a previous Quad (Canada, the EC, Japan and the US) paper that failed to meet developing country expectations in areas such as subsides, textiles and anti- dumping (see BRIDGES Weekly, 18 September 2001, http://www.ictsd.org/weekly/01-09-18/wtoinbrief.htm#1).

At press time, industrialised countries had not yet responded to the LMG’s proposals. Presumably, their position will emerge as a text on implementation is expected by the next special session of the General Council on implementation on 3 October.

"Developing Countries Propose New Negotiating Areas For Doha" Inside US Trade, 21 September 2001; Internal ICTSD Files.