Finding a Way Forward in the Doha Development Round: Key issues for LDC trade: LDC Ministerial Meeting, Dakar, 4-5 May 2004 | Doha Development Round | United Nations Conference On Trade And Development

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World trade has the potential to act as a powerful motor to reduce poverty and enhance economic growth. However, global trade rules, which are rigged in favour of powerful commercial interests in rich countries, have contributed to the marginalisation of many least-developed countries (LDCs) from global markets.
    Finding a way forward in the Doha Development Round: key issues for LDC trade LDC Ministerial Meeting, Dakar, 4-5 May 2004   World trade has the potential to act as a powerful motor to reduce poverty and enhance economic growth. However, global trade rules, which are rigged in favour of  powerful commercial interests in rich countries, have contributed to the marginalisation of many least-developed countries (LDCs) from global markets. Low-income countries, with over 40% of the world’s population, account for less than 3% of world trade. While rich countries export goods and services worth around $6,000 per capita and developing countries around $330, the equivalent figure for low-income countries is less than $100. Sub-Saharan Africa, with its large number of LDCs, has been losing its market share over the last three decades. During the 1990s, this region lost another quarter of its world market; it now accounts for merely 1.3% of world trade. The failure of the Cancun Ministerial Conference was a missed opportunity for all WTO Members to move multilateral trade negotiations forward. The second revision of Ambassador Derbez’s draft Cancun Ministerial text – the last text to come out of Cancun – failed to address the requirements of LDC Members as laid out in the 2003 Dhaka Declaration. Paragraph 26 of the Derbez text on LDCs echoes several of the concerns raised by these countries but the language betrays a lack of real commitment to deal with them decisively. In the non-committal language of ‘best endeavour’ the Derbez text states, “we shall continue to expeditiously pursue the objective of duty-free and quota-free market access for products srcinating from LDCs”, and, “we urge Members to adopt and implement rules of srcin so as to facilitate exports from LDCs”. When it comes to the substance of the negotiating text in the annexes, these recommendations were not endorsed. It is widely expected that the current phase of negotiations in Geneva may come to a head in July of this year with key decisions being made on the scope and content of agreements covering agriculture and industrial tariffs. The May 2004 LDC trade ministers meeting in Dakar is therefore the last opportunity for LDCs to refine and communicate their collective position on these vital issues. The period between May and July will be a crucial window of opportunity for shaping these decisions. Related subjects which LDC ministers will also need to address include; US cotton subsidies, the implications of the abolition of textile and clothing quotas at the end of 2004, and reform of the European sugar regime. Dakar is also the opportunity for LDCs to develop a common view on the outcomes they seek from the UNCTAD XI conference in June.  If the Doha Development Round is to live up to its name, the proposals LDCs set out in Dakar should be fully incorporated into the current negotiations. LDCs have a crucial role to play in ensuring rich countries keep their Doha promises and in standing up for the interests of their citizens who constitute some of the poorest  people in the world. LDCs also have an interest in promoting multilateral trade negotiations rather than bilateral and regional agreements which could exclude LDCs or impose onerous concessions upon them. Oxfam believes there are some key challenges to making this a development round in negotiations on Agriculture, Non-agricultural Market Access, the Singapore Issues and TRIPs. Both in and outside of the WTO, the international community also has a responsibility to resolve the global crisis in primary commodities. These challenges are outlined below. Agriculture The outcome of the agriculture negotiations is of crucial importance for LDCs. 73% of LDCs’ workforce is employed in agriculture. Furthermore, agriculture represents close to 30 per cent of GDP of the LDCs and 34 per cent of their export revenues. The Uruguay Round Agreement on Agriculture was strongly biased against the interests of LDCs for the following reasons: - It legitimised the aggressive dumping practices of the developed world. - In conjunction with the liberalisation measures pushed by the international financial institutions, it promoted further trade liberalisation in poor countries. - It failed to resolve the commodity crisis. - It failed to provide effective and secure market access for LDCs into developed economies. As a result, LDCs have suffered from a growing dependence on food imports and limited export opportunities. This is why the ratio of food export to food imports in LDCs has fallen from 100% in 1970 to an all-time low of 20% in 1999. However, the current negotiating text (the Derbez text) fails to satisfy the following key demands made by LDCs at the 2003 Dhaka ministerial, and reiterated in the “consolidated African Union, ACP and LDC position on agriculture” released on September 13 th  at Cancun: - “Export subsidies that are provided by developed countries to products of export interest to LDCs shall be phased out on a fast-track basis. - Immediate bound duty-free and quota-free market access conditions to exports of LDCs, which will cover all agricultural products in their primary, semi-processed and processed forms. - Members shall immediately implement the Marrakesh decision on measures concerning possible negative effect of the reform programme on LDCs and  NFIDCs, including through the establishment of a revolving fund to ease short-term financing problems linked to import of basic foodstuffs. - With gradual erosion of preferences currently enjoyed by LDCs on account of lowering of tariffs, members shall establish compensatory and other appropriate  mechanisms to fully address the impact of erosion of preferences including measures that promote exports of LDCs.” In fact, in its current form, the proposed agreement on agriculture will allow dumping of agricultural produce to continue. There is no deadline set for the elimination of export subsidies and the draft modalities provide major loopholes when it comes to the reduction of export credits and the abuse of food aid. Moreover, the agreement leaves other forms of hidden export subsidies untouched and actually encourages a shift of subsidies from the amber and blue boxes to the green box, without adequately reducing the trade distorting effects of these subsidies. Furthermore, the agreement limits the flexibility of developing countries to effectively  protect their vulnerable agricultural sector against these practices. This is especially true for the developing countries that have high reduction commitments for tariffs, but also for LDCs.  Negotiations on agriculture were recently restarted in Geneva, Oxfam thinks that a new agreement on agriculture should at least contain the following elements:  Confirming an end date for all forms of export subsidies . The proposed two-track system based on the very vague concept of products of interest to developing countries should be abandoned. It violates the spirit and the letter of the Doha mandate and leads to a meaningless and divisive debate about what crops should be on a list of products of interest to developing countries,  Reducing trade-distorting domestic support with: - drastic reductions in AMS (amber box) with product-specific caps including very substantial reduction commitments on all commodities of particular interest to LDCs, including, among others, sugar, - opposing the proposed purple box which would replace the existing blue box (according to the September 13 th  Derbez text). This purple box includes no supply control commitments and would be a step back from the previous texts which envisioned a capping of the blue box, - tightening criteria of green box and exploring possibilities of capping to  prevent the reclassification of trade distorting subsidies in this box,  A more balanced market access formula , which ensures the reduction of tariff peaks and escalation still protecting many sectors in developed countries, and which truly provides for less-than-reciprocal market access commitments for developing countries,  Immediate, bound and effective quota and tariff-free market access  for LDCs to all developed countries’ markets, including simplified rules of srcin and phytosanitary standards,  The right for LDCs and developing countries to protect poor farmers against subsidized imports and import surges.  This entails: -  No pressure or obligation for LDCs to make further market access commitments,  - Access to a simple countervailing measure, in order to be able to use additional duties on subsidised imports, until trade-distorting support is effectively eliminated,  Operationalising the special safeguard so it can be used by LDCs in need .   In the context of EU sugar reform, call for a reform that would be development friendly for LDCs . Such a reform would include an expanded quota for LDC market access at guaranteed prices. Oxfam thinks that LDCs market access should be extended to a level that exceeds their current export  potential. The reform would imply maintaining the quota system in the EU and reducing European sugar production substantially. Cotton In the past year an unprecedented alliance of African countries has brought cotton to the world’s attention, with their demands that rich countries reduce export subsidies and pay compensation. Cotton has since been made one of the four key issues to resolve in order to restart the stalled trade talks. A recent WTO seminar in Cotonou, Benin, attempted to separate the ‘development’ aspects of the cotton initiative from the trade aspects, but failed to reach any conclusion on a support fund for LDC cotton  producers, as requested by the initiators of the cotton proposal. In any case, it is clear that without a resolution to the trade issues, development of the cotton sector in LDCs will be severely constrained. In an attempt to delay reforms, the US and the EU want cotton subsidies to be discussed as part of a broader negotiation on agriculture. But Oxfam believes that African countries are right to continue to resist this move because the completion of agricultural talks is nowhere in sight. Oxfam believes that cotton should be maintained as a specific issue on the WTO agenda with a clear commitment to ending all trade-distorting subsidies. This would send a very positive signal, showing that the WTO has the capacity to take into account the needs of its poorest members. Oxfam supports the LDC position in calling for: Agreement at the WTO to eliminate all export subsidies as well as trade-distorting domestic support for cotton , including some programs currently classified as green box, with a faster implementation period than for the rest of the agricultural package, and compensation for affected exporting countries for loss of revenue until such subsidies are entirely removed. Primary Commodities The collapse of agricultural world commodity prices is one of the biggest causes of  poverty in LDCs. Over the past 20 years, international prices of tropical agricultural  products have fallen by between 50 and 86 percent. Yet so far there has been little serious attempt to address the roots of the crisis. However, there are signs that commodity issues are finally making on to the multilateral agenda.
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