WTO Public Symposium Fulfilling the Doha Development Agenda

WTO Public Symposium Fulfilling the Doha Development Agenda: Key Issues for developing countries 18 June 2003 1

FULFILLING THE DOHA DEVELOPMENT AGENDA: WHY IT MATTERS • Global trading system failing to bring benefits it could to developing countries and to poor people. • Africa’s share of world trade halved between 1980 and 1999. • Share of 49 poorest countries fell from 0. 8% to 0. 4% over same period. 2

WHY THE DDA MATTERS • DDA sets out bold agenda, putting development at centre of multilateral trade negotiations. • First step toward creating a fairer set of rules to govern international trade. • Includes commitments to: • Reduce agricultural trade barriers • Improve non-agricultural market access • Make S&DT provisions more effective • Improve rules on TRIPS/ public health and antidumping 3

WHY THE DDA MATTERS • World Bank estimates eliminating all barriers to trade in goods would generate extra US$ 250 bn – 620 bn in global income. Up to half to developing countries. This could lift 300 million out of poverty by 2015. • But trade and trade liberalisation alone not enough. Need pro-poor policies, investment in health and education, greater access by poor to productive assets, stronger institutions, infrastructure and CB to develop supply side. 4

WHY THE DDA MATTERS • Boost to multilateralism and global economy. Annual growth in world trade barely 2% in 2002 (compared to 7% annual average in 1990 s). • Risks of failure : weakening of multilateral rules based system and proliferation of bilateral and regional agreements that could leave poorer countries more exposed. 5

KEY ISSUES FOR DEVELOPING COUNTRIES • • • AGRICULTURE Agricultural Market Access is the single biggest development issue in the DDA. Agriculture accounts for about 27% of GDP and export earnings in developing countries as a whole and 50% of employment. Agricultural markets are among the most heavily protected: For OECD countries the average bound tariff is 60% (12 times the rate for industrial products). OECD spend $310 bn every year on agricultural support – roughly same as sub-Saharan Africa’s GDP. Subsidies to farmers (US$106 bn EU, $95 bn US and $59 bn Japan in 2001) create unfair competition for poorer producers in domestic and third markets. Special Safeguard Mechanism important and ‘special products’ subject to minimal tariff reductions to protect food security. 6

KEY ISSUES FOR DEVELOPING COUNTRIES TRIPS/Public Health • Agreement at Doha on need to ensure flexibility in implementing TRIPs, so countries without manufacturing capacity can use compulsory licensing to get access to affordable drugs. • Critical to meet health needs of millions suffering from diseases like HIV/AIDS, malaria, TB. 7

KEY ISSUES FOR DEVELOPING COUNTRIES Special & Differential Treatment • Making S&DT provisions more effective, including through longer periods to implement WTO rules, lower tariff reductions (critical where government budgets heavily dependent on tariff income). NAMA • Increased market access for textiles, clothing and footwear. Estimated there are 27 million less jobs in developing countries because of quotas & tariffs. 8

KEY ISSUES FOR DEVELOPING COUNTRIES Services • Significant interest in Mode 4 (temporary movement of workers). • Estimated that an increase in developed country quotas for skilled and unskilled temporary labour equivalent to just 3% of their labour forces would create increase in global economic welfare 1. 5 times greater than gains from liberalisation of all remaining trade restrictions. Trade Related Capacity Building • Delivery on commitments. 9

PROGRESS SO FAR Least progress on the issues that matter most to developing countries: • Agriculture: Missed deadlines on modalities for new Agriculture agreement. Awaiting EU CAP reform. • TRIPS/public health: Every member except US able to sign up in December to compromise text. No agreement yet. • S&DT: Need agreement on substantial package of measures. • NAMA: another missed deadline. 10

OBSTACLES • Political will to take on powerful domestic interest groups in OECD (agricultural reform; TRIPS/public health; and in developing countries that stand to gain from increased South -South trade too. • More WTO members; more significant players with divergent interests (e. g. Cairns Group versus those defending ACP preferences). • Polarised positions on extent of liberalisation (agriculture and NAMA). • Lack of progress on key issues (e. g. reduction of trade distorting OECD agricultural subsidies) slowing down progress on other issues (NAMA, Services, Singapore issues). 11

OBSTACLES • Breadth of the round ambitious timetable. • Serious capacity constraints especially of poorer countries to participate meaningfully in the negotiations. Lack of analysis and input from capitals (e. g. on Service sectors). • Political events (e. g. US 2004 elections) could complicate achievement of DDA deadline. 12

WHAT NEEDS TO HAPPEN – BEFORE CANCUN • Cancun less than 100 days away. • Political leadership: difficult decisions to give new momentum to the DDA. • EU member states need to reach agreement on CAP reform (Fischler proposals on decoupling agricultural support from production). • Secure US support for TRIPS/public health December 16 text. Possibly with reassurances to pharmaceutical industry on recourse to DSU in clear cases of abuse; and by developing country manufacturers. 13

WHAT NEEDS TO HAPPEN – BEFORE CANCUN • S&DT: Willingness of advanced developing countries to prioritise needs of poorest WTO members. Progress reached on substantial package of measures. • World leaders and opinion leaders need to champion the DDA. • Engagement with business and civil society. • More vocal NGO support on issues of most importance to developing countries. Ministers won’t take tough political decisions if only hear critical voices. • Mini-ministerial/s help move negotiations forward. 14

SUCCESS AT CANCUN • • • Members to recommit to ambition of DDA. Shared ownership to make it work. Realistic expectations – important step. Learn from what worked at Doha and didn’t at Seattle. EU/US leadership that made difference at Doha. Greater convergence on key issues. • Preparation for Cancun – so ministers have a manageable set of issues. • Reach some agreements to create new momentum. 15

WORKING FOR A SUCCESSFUL DEVELOPMENT ROUND BEYOND CANCUN • Chairs of negotiations put forward proposals to seed process and build consensus. • Address concerns of potential losers from loss of preferential market access (ACP); research extent of problem; IFIs, multilateral and bilateral donors give support to ease transition/diversification. • Analytical and technical assistance to developing countries e. g. on Services negotiations; commitments in individual agricultural schedules. 16

WORKING FOR A SUCCESSFUL DEVELOPMENT ROUND BEYOND CANCUN • Design of proposed framework agreements on “new issues” to address needs of developing countries (cost/benefit e. g. on trade facilitation). • New approach to S&DT more tailored to helping individual countries at different stages of development adjust to specific rules and agreements. • Coordinated approach to Technical Assistance and Trade-related capacity building by donors through Integrated Framework. 17

WORKING FOR A SUCCESSFUL DEVELOPMENT ROUND BEYOND CANCUN • Address disconnect between Geneva-based trade negotiations and national economic development policies (PRSPs etc). Integration of trade and development needed to identify new opportunities, careful sequencing of reforms. • Complementary pro-poor policies so trade contributes to Millennium Development Goals. • Democracies need to ratify agreements reached. Greater involvement of civil society and private sector in dialogue on trade and development. 18