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World Trade Organization (WTO) Negotiations: Interests and Challenges for Bangladesh
World Trade Organization (WTO) Negotiations: Interests and Challenges for Bangladesh
Lecture by
Professor Mustafizur RahmanExecutive Director, CPD
9 April 2010
Faculty of Business StudiesBangladesh University of Professionals (BUP)
CPD-PMR: WTO Negotiations : Interests and Challenges for Bangladesh
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ContentsContents
I. Introduction
II. The Evolution of the Multilateral Trading System:
From GATT to WTO
III. Overview of WTO Principles and Rule-based Regime
IV. Doha Development Agenda of the WTO
V. Ongoing Negotiations: Issues and Concerns for the
LDCs
VI. Lessons from Seventh WTO Ministerial Conference (on
30 November – 2 December, 2009)
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I. IntroductionI. IntroductionI. IntroductionI. Introduction
• Trade issues are becoming increasingly important for low income countries, particularly LDCs such as Bangladesh
• This is because LDCs are getting integrated into the global economy at an unprecedented pace
• In Bangladesh’s case the policy of trade liberalisation was initiated in early 1980s, gained momentum in early 1990s and has continued thereafter
• Three distinct periods can be identified: phasing, pacing, sequencing
• Main features of Bangladesh’s Trade Policy: Reduction of tariffs; Removal of NTBs; Reduction of anti-export bias
• As a result, the degree of openness of Bangladesh and LDCs (export plus import as a share of GDP) is on the rise. This would mean that Bangladesh and other LDCs are becoming increasingly integrated into the global economy through export and import of goods, services, capital and labour (through both factor movement and product movement)
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Since the 1990s Bangladesh economy has become increasingly integrated with the global economy. In 1991, less than a quarter of Bangladesh economy was connected directly with the global economy; in
contrast in 2007 the comparable figure was more than half, about 56%.
This would mean that developments in the global economy will have important implications for the Bangladesh economy; both in terms of opportunities that originate from it and the challenges that Bangladesh will need to address.
Growing Importance of Trade Related Issues for Low Income Countries such as Bangladesh
I. IntroductionI. IntroductionI. IntroductionI. Introduction
Items FY 1981 FY1991 FY 2001 FY2008 FY2009
1. Export (X) (mln USD) 725 1718 6467 14088 15565
2. Import (M) (mln USD) 1954 3472 9335 20217 22507
3. Remittance (R) (mln USD) 379 764 1882 7915 9689
4. ODA Disbursed (mln USD) 1146 1733 1369 1873 1627
5. FDI (net) (mln USD) 0 24 550 650 941
Total (1-5) (mln USD) 4204.0 7710.5 19603.4 44743.8 50329
GDP (Current Price) (mln USD) 19811.6 30974.8 47306.0 78996.9 89548
Degree of Openness (Export + Import as % of GDP) 13.5 16.8 33.4 43.4 42.5
Extent of Globalisation (%) 21.2 24.9 41.4 56.6 56.2
X as % of M 37.1 49.5 69.3 69.7 69.2
(X+R) as % of M 56.5 71.5 89.4 108.8 112.2
ODA as % of GDP 5.8 5.6 2.9 2.4 1.8
ODA As % of Export 158.1 100.9 21.2 13.3 10.5
Source: CPD-IRBD Database
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I. IntroductionI. IntroductionI. IntroductionI. Introduction
• The importance of WTO is that it seeks to bring discipline to movements of goods and services by dismantling barriers to movements of goods and services and also promote investment and capital flows that relate to trade
• Global movements of goods and services are constrained by: tariff barriers
non-tariff barriers
• The primary objective of WTO and its predecessor, the GATT, is to Do away with NTBs
Convert NTBs into tariffs
Reduce Tariffs (Nominal tariff, tariff peaks, tariff dispersion)
Bring discipline to trade-related investment measures
Bring discipline to trade-related intellectual property rights
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I. IntroductionI. IntroductionI. IntroductionI. Introduction
• A rule-based trading system is helpful for developing countries and LDCs
• However, there are many concerns of LDCs in the context of the current
negotiations
• LDC share in the global trade is less than 1 per cent of global trade. These
countries face many difficulties in integrating with the global economy
• At the same time there are many opportunities for LDCs originating in
the global economy. These need to be realised. LDCs require support for
this
• LDCs look forward to strengthened global integration. WTO as an
institution will need to play an important role in this
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II. The Evolution of the Multilateral Trading System: II. The Evolution of the Multilateral Trading System: From GATT to WTOFrom GATT to WTO
WTO's predecessor, the GATT, was established on a provisional basis towards the end of the Second World War along with other new multilateral institutions dedicated to international economic cooperation - notably the two "Bretton Woods" institutions: the World Bank (WB) and the International Monetary Fund (IMF)
The original 23 GATT countries were amongst over 50 countries which agreed to a draft Charter for an International Trade Organization (ITO) - a new specialized agency of the United Nations to deal with trade related issues. However, when the United States government announced, in 1950, that it would not seek Congressional ratification of the Havana Charter, the ITO was effectively dead
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GATT evolved following the demise of ITO Despite its provisional nature, the GATT remained the only multilateral
instrument governing international trade from 1948 until the establishment of the WTO in 1995
In all, eight GATT Rounds were held. The last GATT round was the Uruguay Round which was the most Comprehensive Round. The GATT UR for the first time discussed, issues related to trade in Agriculture and the Services sector
The WTO was established, after about fifty years of ITO, at the end of the GATT-UR which was the eighth Round; WTO started to function in January 1995
• The first Round of the WTO could only be initiated in 2001, at the Fourth Ministerial Meeting in Doha. This came to be known as the Doha Development Round (DDR). The Doha Round was expected to be concluded by December, 2005. Since many issues remain unresolved, the negotiations in the context of DDR is still continuing
II. The Evolution of the Multilateral Trading System: II. The Evolution of the Multilateral Trading System: From GATT to WTOFrom GATT to WTO
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Name Dates Objectives No of Participating Countries
Geneva 1947 Adoption of GATT 23
Annecy, France 1949 Tariff reduction 13
Torquay, England 1951 Tariff reduction 38
Geneva 1956 Tariff reduction 26
Geneva ("Dillon ") 1960-62 Tariff reduction 26
Geneva ("Kennedy ") 1962-67 Tariff reductionGATT negotiation rules
62
Tokyo 1973-79 Overall reduction of tariffs to an average level of 35% and 5-8% among developed nationsNon-tariff barrier codes - Government procurement - Customs valuation - Subsidies and countervailing measures - Antidumping - Standards - Import licensing
102
Uruguay Round 1986-94 Broadening of GATT Limit agricultural subsidies Include services trade Include intellectual propertyEstablishment of the WTO (World Trade Organization)
GATT Trade Rounds
II. The Evolution of the Multilateral Trading System: II. The Evolution of the Multilateral Trading System: From GATT to WTOFrom GATT to WTO
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Ministerial Conferences: 1995-2009
III. Overview of WTO Principles and Rule-based Regime III. Overview of WTO Principles and Rule-based Regime
Geneva1998
Creation of WTO1995
Seattle1999
Singapore1996
Doha2001
Cancun 2003
Hong Kong 2005
Geneva 2009
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III. Overview of WTO Principles and Rule-based Regime III. Overview of WTO Principles and Rule-based Regime
The rule-based regime in WTO is premised on two basic principles, often expressed as four main elements. These two basic principles are non-discrimination and market efficiency (or open, secure access)The four main elements are:
• Most favoured nation, commonly referred to as MFN, means simply that members of the GATT extend the same treatment to imports from all the other members, i.e., all members are treated equally as well as the "most favoured" among them. This is non-discrimination at the border- favour one, favour all
• National treatment means that imported goods, once they have met all the requirements of whatever border regime is in place and have entered into the internal (domestic) market in a member's economy, will be treated no less favourably than domestic goods are treated in the domestic market. This is non-discrimination in the internal (domestic) market
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Taken together, these two elements ensure non-discrimination Elimination of QRs and NTBs and reliance on tariffs as the sole
instrument of border protection: Tariffication The general goal of transparency which is achieved through
publication of trade laws and regulations. Transparency is
expected to improve market efficiency as it is necessary for
participants in the market to know the rules if they are to compete
effectively. These four elements: (a) MFN, (b) National Treatment, (c)
Reliance on Tariffs and (d) Transparency, are the four most
powerful Swords of the GATT
III. Overview of WTO Principles and Rule-based Regime III. Overview of WTO Principles and Rule-based Regime
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Provisions of the GATT/WTO
SWORDS SHIELDS• Most favoured nation •Grandfather pre-existing preferences• National treatment •Regional trade agreements
•Reliance on tariffs •Waivers "in exceptional circumstances"
•Transparency • Government procurement• Domestic production subsidies
•Customs valuation rules • Security exception•No unreasonable customsfees or formalities
• Critical shortages of food and essentials
•Freedom of transit • Balance of payments•Restrictions on subsidies, noexport subsidies
• Safeguards, antidumping and subsidy/countervail
•Rules for state trading andmonopolies
• S&D for Developing and Least Developed Countries
III. Overview of WTO Principles and Rule-based Regime III. Overview of WTO Principles and Rule-based Regime
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Rationale for S&D Treatment for LDCs and Developing Countries Marginalisation of weaker economies in the context of globalisation Infant industry argument Lack of technical capacity Lack of financial resources Weak capacity to participate in WTO-system Weak capacity to take advantage of the opportunities emanating
from WTO system Modalities of S&D Treatment in the WTO Special and Differential (S & D) Status Waivers from undertaking obligations and Aid for Trade Package Staggered Implementation Schedule Technical Support: Trade and Aid Nexus Special Market Access Provisions (in the WTO and under GSPs)
III. Overview of WTO Principles and Rule-based Regime III. Overview of WTO Principles and Rule-based Regime
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Decision Making in the WTO Single Undertaking: Nothing is Agreed unless Everything is Agreed Decision Making Process
- Ministerial Conference - General Council - Agreement-Specific Committees
In WTO, Countries Get Not What They Deserve, But What They Negotiate
Decision MakingThe WTO continues the GATT practice of taking decisions by consensus but if a decision cannot be reached by consensus, it is to be arrived at through majority vote (unless otherwise provided in the particular agreement under reference). In the Ministerial Conference and the General Council, each member has one vote
III. Overview of WTO Principles and Rule-based Regime III. Overview of WTO Principles and Rule-based Regime
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How the WTO Works?
III. Overview of WTO Principles and Rule-based Regime III. Overview of WTO Principles and Rule-based Regime
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IV. Doha Development Agenda of the WTOIV. Doha Development Agenda of the WTOIV. Doha Development Agenda of the WTOIV. Doha Development Agenda of the WTO
• Agriculture• Non-agricultural Market Access (NAMA)• Services (GATS)• Rules and Trade Facilitation• “Development” Provisions Built-in Agenda; Continuing Agenda; New
Agenda
• Launched at the 4th WTO Ministerial Conference in Doha in November 2001(also known as Doha Development Round)
• Currently Doha Round of negotiations are continuing in Geneva
Five Clusters of Negotiating Issues
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Market Access Negotiations
Major objectives:
Tariffication of NTBs
Elimination of Non-Tariff Barriers
Gradual Reduction of Tariffs
IV. Doha Development Agenda of the WTOIV. Doha Development Agenda of the WTOIV. Doha Development Agenda of the WTOIV. Doha Development Agenda of the WTO
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A.Market Access
B.Domestic Support
C.Export Competition
TariffsReductions
Market Access Tariff Quotas
Special Safeguards
Amber Box Reduction Commitments
Blue BoxProduction Limiting
Green BoxNon Trade Distorting
S & D BoxExceptions for Dev’g
Quantitative Reductions Value Reductions
Special and Differential Treatment, Peace Clause, Commitment to Reforms
Other Rules
Pillars of the Agreement on Agriculture (AoA)
IV. Doha Development Agenda of the WTOIV. Doha Development Agenda of the WTOIV. Doha Development Agenda of the WTOIV. Doha Development Agenda of the WTO
CPD-PMR: WTO Negotiations : Interests and Challenges for Bangladesh
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Reduction Commitments 36% average 20% average None
15% minimum 10% minimum None
Reduction Commitments 20% 13.3% No reduction
Time-period 6 years:1995-2000 10 years:1995-2004
Market Access Developed Developing
Least Developed
Time-period 6 years:1995-2000 10 years:1995-2004 ----
Domestic Support Developed Developing
Least DevelopedTime-period 6 years:1995-2000 10 years:1995-2004 ---De Minimis 5% 10% 10%
Export Competition Developed Developing
Least DevelopedReduction 36% value 21% volume No reduction
24% value 14% volume No reduction
Specific Exemption Article 6.2 exemption for certain investment, input and diversification subsidies
Specific Exemption Article 9.4 Transport and Marketing subsidies
UR Commitments
IV. Doha Development Agenda of the WTO IV. Doha Development Agenda of the WTO : : AgricultureAgricultureIV. Doha Development Agenda of the WTO IV. Doha Development Agenda of the WTO : : AgricultureAgriculture
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The current negotiations on NAMA aim at: reducing tariffs, including reduction or elimination
of tariff peaks, high tariffs and tariff escalation
eliminating (or accelerated reduction of) tariffs in particular sectors (the so-called sectoral)
reducing non-tariff barriers and
provision of special and differential treatment and less than full reciprocity in reduction commitments by the developing countries and LDCs
NAMA
IV. Doha Development Agenda of the WTOIV. Doha Development Agenda of the WTOIV. Doha Development Agenda of the WTOIV. Doha Development Agenda of the WTO
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• It was agreed that: the product coverage would be comprehensive, and
without a priori exclusions, tariff reduction was to commence from bound rates, that all non ad-valorem duties will be converted to ad-
valorem equivalents and credit shall be given for autonomous liberalisation by
developing countries provided that the tariff lines are bound on an MFN basis
Special market access for LDCs
NAMA
IV. Doha Development Agenda of the WTOIV. Doha Development Agenda of the WTOIV. Doha Development Agenda of the WTOIV. Doha Development Agenda of the WTO
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• Expansion of services trade
• Progressive liberalization through successive
rounds of negotiations
• Transparency of rules and regulations
• Increasing participation of developing countries
• Negotiations to take place on offer and request
list
Objectives of GATS
IV. Doha Development Agenda of the WTOIV. Doha Development Agenda of the WTOIV. Doha Development Agenda of the WTOIV. Doha Development Agenda of the WTO
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GATS: Four Modes of Supply
• Mode 1: Cross-border supply (e.g. international telephony)
• Mode 2: Consumption abroad (e.g. international tourism)
• Mode 3: Commercial presence (e.g. establishment of
foreign bank)
• Mode 4: Movement of natural persons (e.g. doctor working
abroad)
IV. Doha Development Agenda of the WTOIV. Doha Development Agenda of the WTOIV. Doha Development Agenda of the WTOIV. Doha Development Agenda of the WTO
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GATS: Sectoral Coverage
• Business Services
• Communication
• Construction
• Distribution
• Education
• Environmental Services
• Health-Related Services
• Financial Services
• Tourism
• Recreation, Culture & Sport
• Transport
• Other Services
IV. Doha Development Agenda of the WTOIV. Doha Development Agenda of the WTOIV. Doha Development Agenda of the WTOIV. Doha Development Agenda of the WTO
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S&D Treatment of Developing Countries and LDCs• LDCs and developing countries have been given some
flexibilities in fulfilling the obligations under the WTO longer time frame for implementation of obligations preferential market access waiver from various WTO obligations and technical and financial assistance
• But, most of the S&D provisions are: non-binding and in the form of ‘best endeavour clauses’ apparently mandatory, yet de-facto non-binding only a few provisions are mandatory and binding provisions
• The Doha declaration obligates the WTO to make S&D provisions ‘precise, effective and operational’
IV. Doha Development Agenda of the WTOIV. Doha Development Agenda of the WTOIV. Doha Development Agenda of the WTOIV. Doha Development Agenda of the WTO
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S& D Treatment• The following kinds of S&D provisions can be
found in the UR Agreements
provisions aimed at increasing trade opportunities (12)
provisions which call upon WTO Members to safeguard the interest of LDCs (49)
provisions offering flexibility of commitments (30)
transitional time periods (18)
provisions related to technical assistance (14)
provisions in favour of least developed countries (22)
IV. Doha Development Agenda of the WTOIV. Doha Development Agenda of the WTOIV. Doha Development Agenda of the WTOIV. Doha Development Agenda of the WTO
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• The Doha “Development” Round (DDR), was launched at the end of the Fourth WTO Ministerial Conference held in Doha on 9-13 November 2001. The Doha Ministerial agreed on time schedules for negotiations and for reaching modalities for framework, and then translating those modalities into a single undertaking by 1 January 2005
• The Doha work programme suffered a major setback when the Fifth Cancun Ministerial Conference of the WTO, held during 10-14 September 2003, failed to hammer out a Ministerial Declaration
Run up to the Hong Kong Ministerial
IV. Doha Development Agenda of the WTOIV. Doha Development Agenda of the WTOIV. Doha Development Agenda of the WTOIV. Doha Development Agenda of the WTO
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Outcome of the Hong Kong Ministerial
Agriculture• Agriculture negotiations are related to three pillars: domestic support,
market access and export subsidies • Major task was to identify modalities to reduce the $240 billion subsidy
agriculture given to OECD countries (amber, blue and green box subsidies; domestic support; export subsidy; export credit subsidy)
• As agreed under paragraph 45 of the July Framework agreement, LDCs, including Bangladesh, are exempted from any tariff reduction commitment
• A general formula for reduction of tariffs could not be reached • On the issue of domestic support: it was agreed that export credit subsidy
will be phased out; it was agreed that there would be three bands for subsidy reduction; in the overall cut in trade-distorting domestic support, there would be higher linear cuts in higher bands. However, the level of cuts would be decided later
IV. Doha Development Agenda of the WTOIV. Doha Development Agenda of the WTOIV. Doha Development Agenda of the WTOIV. Doha Development Agenda of the WTO
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Outcome of the Hong Kong Ministerial
Cotton
• The HK Declaration provided a consensus on cotton issue. It
was agreed that all forms of export subsidies for cotton would be
eliminated by developed countries by 2006. At the closing
session members agreed that trade distorting domestic subsidies
for cotton production be reduced more ambitiously than under
whatever general formula is agreed, and that it should be
implemented over a shorter period of time than is generally
applicable. The members committed to give priority in the
negotiations to reach such an outcome
IV. Doha Development Agenda of the WTOIV. Doha Development Agenda of the WTOIV. Doha Development Agenda of the WTOIV. Doha Development Agenda of the WTO
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Outcome of the Hong Kong MinisterialFood Aid• On the issue of Food Aid, it was agreed that disciplines on in-
kind food aid, monetization and re-exports would be made in a manner that leaves no loophole for continuing export subsidisation. The disciplines on export credits, export credit guarantees or insurance programmes, exporting state trading enterprises and food aid was to be completed by 30 April 2006 as part of the modalities
• The issue of discipline in food aid remains essentially unsettled although the text mentions that the level of food aid and interests of the net food importing countries will be safeguarded. This is expected to take care of food aid receiving countries. Bangladesh and other net food importing countries will need to carefully follow the negotiations on this issue since desubsidisation and withdrawal of support in developed country agricultural sector is likely to push up the global food price
IV. Doha Development Agenda of the WTOIV. Doha Development Agenda of the WTOIV. Doha Development Agenda of the WTOIV. Doha Development Agenda of the WTO
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Outcome of the Hong Kong Ministerial
NAMA• As regards negotiations on NAMA (non-agricultural market access), the ambition level
has been lowered significantly in Hong Kong. It was agreed that a non-linear Swiss-type formula (higher the tariff, higher will be the cut), with multiple coefficients, would be used for the purpose of tariff cuts. Developing countries appear to have withstood their position in terms of undertaking lower commitments in NAMA
• Although LDCs are not expected to take any reduction commitments under NAMA, any reduction in the MFN tariffs on industrial goods by the developed and developing countries is expected to lead to significant preference erosion preference erosion for Bangladesh and other LDCs. Besides, LDCs are also expected to bind a substantial number of industrial tariffs
• In some of the developed countries, under S&D provisions, LDCs will get duty-free access for all their industrial goods. However, in some others the share of goods getting DF-QF market access would be only 97 percent, and it is apprehended that many industrial goods of export interest to LDCs would be included in the ‘exclusion list’. Accordingly, items such as Bangladesh’s apparels will have to enter markets of some developed countries, most notably that of the USA, (and to some extent Japan) with MFN duties
IV. Doha Development Agenda of the WTOIV. Doha Development Agenda of the WTOIV. Doha Development Agenda of the WTOIV. Doha Development Agenda of the WTO
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Outcome of the Hong Kong MinisterialServices• Not much progress could be achieved in services. However, Article 3
of Annex C is an important decision which states that “members shall pursue full and effective implementation of the Modalities for the Special Treatment for Least Developed Country Members in the Negotiations on trade in Services (LDC Modalities) adopted by the Special Session of the Council for Trade in Services, with a view to have beneficial and meaningful integration of LDCs into multilateral trading system”
• Further, Article 9 (a) of Annex C is important for Bangladesh. It states that members shall develop appropriate mechanisms for the full and effective implementation of the LDC Modalities, including, expeditiously developing appropriate mechanisms for according special priority including to sectors and modes of supply of interests to LDCs in accordance with Article IV:3 of the GATS and paragraph 7 of the LDC Modalities
• However, no specific decision on Mode 4 was taken
IV. Doha Development Agenda of the WTOIV. Doha Development Agenda of the WTOIV. Doha Development Agenda of the WTOIV. Doha Development Agenda of the WTO
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Outcome of the Hong Kong MinisterialAid for Trade• It is an emerging concept. A governance structure is yet to be put in place to mobilise and
disburse the committed resources. The Director General of the WTO is to constitute a
Task Force to design the governance structure which will provide its recommendations
by July 2006 (Article 7 of main text). Once again, Bangladesh needs to take adequate
preparations to take advantage of these aid flows
Major concerns in this regard are the followings:• It is not clear whether these resources are additional or being diverted from other
commitments• More importantly, whether there is a double or triple counting on account of resource
commitments to MDGs and PRSP• What is also not clear is whether disbursement of these funds will fall under the IMF and
the World Bank conditionalities• These resources are for all developing countries, and it is not clear how this will be
targeted to LDCs
IV. Doha Development Agenda of the WTOIV. Doha Development Agenda of the WTOIV. Doha Development Agenda of the WTOIV. Doha Development Agenda of the WTO
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Outcome of the Hong Kong Ministerial
TRIMS
One of the areas where S&DT was accorded to LDCs in Hong
Kong relates to Trade-Related Investment Measures (TRIMS).
The transition period has been extended by seven years from 2006,
i.e. till 2013. The LDC proposal was to extend it up to 2021. More
importantly, LDCs will be able to not only continue with old
TRIMS (subject to notification) but also introduce new ones. One
needs to explore to what extent Bangladesh can use this provision
to support its strategic trade policy funding by withstanding the
pressures from the World Bank and the IMF
IV. Doha Development Agenda of the WTOIV. Doha Development Agenda of the WTOIV. Doha Development Agenda of the WTOIV. Doha Development Agenda of the WTO
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• LDCs as a group received a limited market access deal. Some progress has been achieved in the areas of export subsidy in cotton, and in a few cases of special and differential treatment. Some promises have been made on “Aid for Trade”
• Bangladesh’s ambitions from the Ministerial remain largely frustrated as it did not get meaningful market access, and with no significant progress in other areas including Mode - 4
• Bangladesh did not anticipate adequately that certain textile importing developing countries would play such an open and active role against Bangladesh. The role of Pakistan, and partly, Sri Lanka was to the detriment of Bangladesh’s interests. Our South Asian solidarity was of no help to Bangladesh
Outcome of the Hong Kong MinisterialIV. Doha Development Agenda of the WTOIV. Doha Development Agenda of the WTOIV. Doha Development Agenda of the WTOIV. Doha Development Agenda of the WTO
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V. Ongoing Negotiations: Issues and Concerns for the LDCsV. Ongoing Negotiations: Issues and Concerns for the LDCsV. Ongoing Negotiations: Issues and Concerns for the LDCsV. Ongoing Negotiations: Issues and Concerns for the LDCs
Agriculture•Negotiations are taking place as regards tariff reduction for agri-products:
-Two ranges of coefficients for developed and developing countries
-SSM for sensitive products
•LDCs are considering only the defensive interests such as “no reduction commitments”
•LDCs are reticent on offensive interests such as market access, issue of preference erosion, and implications of food price increase.
•Bangladesh and other LDCs must identify their offensive interests for the negotiations
•Duty-free and quota-free access to the developed and developing country markets is not yet given in a binding manner, i.e. a definitive “shall” is
still missing in the agriculture related text
•Bangladesh and other LDCs need to pursue this
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NAMA• Bangladesh has both “offensive” and “defensive” interests• Bindings of Tariffs: As an LDC Bangladesh will not be required
to undertake any tariff reduction commitment on NAMA. But it may be required to take commitments to bound the non-bound industrial products.
• Bangladesh’s offensive interest lies in ensuring that items of her export interest does not get into the Sectoral.
• Preference Erosion: By all counts preference erosion is becoming an increasingly important issue of concern for Bangladesh and other LDCs
• The Swiss formula will be the modality for tariff reduction. The coefficients are [7-9] for developed countries and [19-23] for developing countries
• Some studies show that Bangladesh will lose about US$ 300 million due to preference erosion
V. Ongoing Negotiations: Issues and Concerns for the LDCsV. Ongoing Negotiations: Issues and Concerns for the LDCsV. Ongoing Negotiations: Issues and Concerns for the LDCsV. Ongoing Negotiations: Issues and Concerns for the LDCs
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NAMA• To offset this, the LDCs are renewing the demand for global zero-tariff
access for all products from the developed countries. • Essentially, for Bangladesh, this would mean getting zero-tariff access in
the US market as other major markets are covered by GSP schemes. • This could provide a short-term trade-off for tariff preference erosion.
For example, tariff on Bangladesh’s products in US market at present amounted to about US$ 300 million.
• CPD Modelling exercise (Bhattacharya et al. 2004) indicates that a zero-tariff access in the USA would have increased Bangladesh’s export of apparels to the US market by about $1.0 billion (or by 50%)
• Zero tariff access to the Canadian market, provided since 2001, has helped Bangladesh to increase her apparel export from $97.91 mln in FY2002 to FY2007, a growth of about over 5 years!
• Negotiations are continuing as to the HK decision on DF-QF
- design of 97% list; phase-in of 3% list; commercially meaningful market access
V. Ongoing Negotiations: Issues and Concerns for the LDCsV. Ongoing Negotiations: Issues and Concerns for the LDCsV. Ongoing Negotiations: Issues and Concerns for the LDCsV. Ongoing Negotiations: Issues and Concerns for the LDCs
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GATS: Mode 4 (Temporary Movement of Natural Persons)
•Raihan and Mahmood (2004) estimated that an increase of 2 lakhs of Unskilled workers would bring additional US$ 3.5
billion Skilled workers would bring US$ 381 million Professionals would be US$ 11.57 billion
•Bangladesh must negotiate for Mode 4•Bangladesh has not submitted “request” and “offer
proposal” for negotiation•LDC Modalities: An Amendment or a waiver (signalling conference)
V. Ongoing Negotiations: Issues and Concerns for the LDCsV. Ongoing Negotiations: Issues and Concerns for the LDCsV. Ongoing Negotiations: Issues and Concerns for the LDCsV. Ongoing Negotiations: Issues and Concerns for the LDCs
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GATS: Mode 4 (Temporary Movement of Natural Persons)
Bangladesh and other LDCs should submit requests on mode 4 as early as possible
Bangladesh could consider offering market opening in some areas, which are already open under autonomous liberalisation. The offers can be
tailored to protect national interest It is not only developed countries, which are
indifferent to the legitimate demand of the LDCs; it is also LDCs, which are not serious about their mandate and role in the WTO negotiations process.
V. Ongoing Negotiations: Issues and Concerns for the LDCsV. Ongoing Negotiations: Issues and Concerns for the LDCsV. Ongoing Negotiations: Issues and Concerns for the LDCsV. Ongoing Negotiations: Issues and Concerns for the LDCs
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S&D Treatment of Developing Countries and LDCs• LDCs have not been active in coming up with appropriate
S&D proposals to be considered in the negotiation committee
• Most of the proposals suffer from lack of clarity of language
• Countries should consider redrafting the proposals to reflect their needs, with the help of experts, as well as WTO Secretariat
V. Ongoing Negotiations: Issues and Concerns for the LDCsV. Ongoing Negotiations: Issues and Concerns for the LDCsV. Ongoing Negotiations: Issues and Concerns for the LDCsV. Ongoing Negotiations: Issues and Concerns for the LDCs
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Negotiations on Rules• Bangladesh has both defensive and offensive interests in this area
in view of anti-dumping cases against her by India (which has been favourably resolved) and Brazil (on jute, now under consideration)
• LDCs should articulate proposals to the effect that anti-dumping duties (ADD) are not imposed on items of their export interest, particularly on apparels in view of the difficulties emanating from MFA phase-out
• Problems of LDCs as regards their underdeveloped domestic industries should be forcefully articulated. The implications of various anti-dumping measures need to be understood by LDCs through appropriate homework
• LDCs should argue for greater assistance in establishing sustainable fisheries and be allowed capacity enhancing subsidies
V. Ongoing Negotiations: Issues and Concerns for the LDCsV. Ongoing Negotiations: Issues and Concerns for the LDCsV. Ongoing Negotiations: Issues and Concerns for the LDCsV. Ongoing Negotiations: Issues and Concerns for the LDCs
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Trade Facilitation
• The proposals of Trade Facilitation are tied with
Technical Assistance
• It is unlikely to move forward. Even if they do, TF
will not give rise to new trade opportunities,
though perhaps these will improve the
competitiveness of Bangladesh export in the
global market.
V. Ongoing Negotiations: Issues and Concerns for the LDCsV. Ongoing Negotiations: Issues and Concerns for the LDCsV. Ongoing Negotiations: Issues and Concerns for the LDCsV. Ongoing Negotiations: Issues and Concerns for the LDCs
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• Not much movement at the Conference; however, political commitment to complete the Doha Round in 2010 and have the eighth Ministerial by 2011
• LDCs must strive for commercially meaningful (meaningfully enhanced) implementation of DF-QF initiative
• Work should continue to address Bangladesh’s interests in the context of Disproportionately Affected Countries (DACs)
• GATS Mode-4 and a Waiver for LDCs
• Compete globally, act locally – build trade-related supply-side capacities
• Aid for Trade (AfT): A major thrust is required in support of LDCs such as Bangladesh
• LDCs should maintain their solidarity and should not lose sight of their common interests
• Important – building negotiating skills to advance Bangladesh’s trade interests
VI. Lessons from Seventh WTO Ministerial Conference (on 30 VI. Lessons from Seventh WTO Ministerial Conference (on 30 November – 2 December, 2009)November – 2 December, 2009)
VI. Lessons from Seventh WTO Ministerial Conference (on 30 VI. Lessons from Seventh WTO Ministerial Conference (on 30 November – 2 December, 2009)November – 2 December, 2009)
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Thank You Thank You for for Your Your
AttentionAttention
CPD-PMR: WTO Negotiations : Interests and Challenges for Bangladesh