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WTO Public Symposium

Fulfilling the Doha Development Agenda:

Key Issues for developing countries

18 June 2003

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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.

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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

anti-dumping

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WHY THE DDA MATTERS

 • World Bank estimates eliminating all barriers

to trade in goods would generate extra US$ 250bn –620bn 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.

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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 1990s).

  • Risks of failure : weakening of multilateral

rules based system and proliferation of bilateral and regional agreements that could leave poorer countries more exposed.

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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 $310bn every year on agricultural support –

roughly same as sub-Saharan Africa’s GDP. Subsidies to farmers (US$106bn EU, $95bn US and $59bn 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.

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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. 

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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.

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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.

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PROGRESS SO FAR

Least progress on the issues that matter most todeveloping 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.

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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).

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OBSTACLES 

• Breadth of the round and 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. 

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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.

 

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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.

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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.

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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.

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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.

 

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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.