Initial Comments on the Draft Ministerial Declaration of 27 October 2001

Job (01)/140/Rev.1

General

It is quite disappointing to note that the revised Draft Ministerial Declaration of 27 October 2001 has not taken on board the comments, concerns and interests of a large number of developing countries, expressed by them during the various consultations held by the Chairman of the General Council on the Draft of 26 September 2001. In particular, the concerns and objections by the Least-Developed Countries (LDCs) and the Africa Group have been ignored. This is deplorable and these developing countries and the LDCs can rightly reject the present draft as a basis for further negotiations. If the process has to move forward in a spirit of compromise and with a view to ensuring the success of Doha Ministerial Conference, the following comments and concerns of developing countries and the LDCs should be adequately reflected in the draft to be presented to the Ministers at Doha.

Preamble – Paras 1 to 11

Para 1: While an equitable and rule-based multilateral trading system can contribute to economic growth, development and employment, it has not always been the case. Smaller countries, particularly the LDCs, have felt marginalized and have not been able to reap the expected and promised benefits from the system. The first para therefore should be less unambiguous on this issue and recognize both the opportunities and challenges faced by developing countries in the multilateral trading system.

Para 2. This para is too weak. It needs to be strengthened with a view to putting development rather than ?their needs? at the heart of the WTO?s work programme. This should include not only ?enhanced market access?, but meaningful market access, not only ?balanced rules? for the future but addressing existing imbalances and not just ?targeted technical assistance? and acknowledging the ?role of capacity-building programmes? but more such effectively designed programmes. Importantly the following points remain missing and should be included as integral to promoting a development orientated work programme: strengthening special and differential treatment, ensuring trade policy flexibility according to national development objectives, taking fully into account the interests of developing countries in the mandated reviews and built-in agenda, resolving onerous accession procedures and ensuring a fully inclusive and transparent decision making process.

Para 3. The tone of this para fails to acknowledge the situation of LDCs as especially alarming and requiring urgent action. Moreover, there needs to be a statement here that LDCs are one group who have clearly not gained from the process of liberalisation and thus all efforts must be made to rectify this imbalance. Much more needs to be done for LDCs, going beyond previous commitments which are identified in this para.

Para 4. Especially in the context of the current climate, there needs to be a statement of commitment on seeking multilateral solutions within a multilateral system, leaving no room for unilateral action of any kind.

Para 5. This para presents as somewhat odd and rather ambiguous, mainly due to the first sentence. If coherence with the Bretton Woods institutions is to be mentioned, it must be done in accordance with the WTO Agreement and Ministerial Declaration on the Contribution of the WTO to achieving Greater Coherence in Global Economic Policy Making, which specifically rules out any scope for imposing cross-conditionalities. Importantly, it also refers to ensuring policy consistency, improved technical and financial assistance, improving FDI flows, reduction of the debt burden and poverty eradication. There is a danger in solely naming the Bretton Woods institutions in the context of global economic policy coherence as the WTO-IMF-WB tunnel vision of liberalisation can be problematic for developing countries through limiting the necessary space for their development policies and options. It also bolsters their role above that of other agencies which could otherwise be of often more assistance and should have a more active role in global economic governance, i.e. UNCTAD.

Para 6. This para devotes too much space to reaffirming the right to undertake environmental measures. The third sentence should be deleted.

Para. 7: The reference to the right to regulate was initially linked to the issue of sustainable development in the draft of 26 September. These two issues have been rightfully separated. However, this reference to the right to regulate the supply of services, if it is necessary, should be located in the paragraph on services (? 15) and not in the preambular paragraphs.

Para 8. This para should be deleted in the first instance. Alternatively it should strongly and clearly state that the ILO is the appropriate organisation to work on labour issues. The para currently stands as somewhat ambiguous as it refers to the ILO?s work on the social dimension of globalisation and seeing it as forum for dialogue on various aspects of these issues.

Para 9. This para on accession fails to recognise the accession related problems LDCs face as an outstanding issue for some years now and makes no concrete commitment towards addressing the situation. Therefore, it should firstly recognise that the concessions and commitments made by LDCs should be consistent with their resources, development needs and institutional capacity – therefore not taken on obligations or commitments which go beyond what is applicable to LDCs, as stated in the rules on special and differential treatment. Ministers should commit to a time frame (ie fifth Ministerial) to complete current LDC accessions.

Para 10. This para is inadequate in that it does not acknowledge the existing problems of exclusion and lack of transparency in the decision making process for a significant portion of the current membership. The issue of an ?expanding membership? does not bear relationship to this problem. A firm decision should be taken to seriously address this re-occurring problem. The General Council should be instructed to develop a work programme and recommend measures which will guarantee full and effective participation by all members and transparency by the fifth Ministerial.

Para 11. Any reference to an ?expanded negotiating agenda? should be deleted.

Implementation-Related Issues and Concerns – Para 12

The para on implementation has undergone a fair amount of change, but unfortunately most of the changes seem to only dilute the as it is weak language which existed in the first draft. For instance instead of the determination to ?resolve? implementation issues (earlier draft) the members are now expressing their determination to only find ?appropriate solutions? to these problems. An appropriate solution may not necessarily be adequate to resolve the concern and therefore it is necessary that we stress for the early ?resolution? of all implementation concerns. Secondly, and again to the detriment of developing countries, all the remaining implementation concerns are being put under the rubric of further ?negotiations? and are also being made ?an integral part of Work Programme?. Both these changes are a matter of concern. As soon as members agree that there would be ?negotiations on outstanding implementation issues? developing countries will lose any possibility of being able to find solutions to these concerns without having to pay twice. Moreover the linkage which is being made of the pending implementation issues with the new work programme being established will make all the remaining tirets a part of the so called new round and the chances of developing countries being able to seek redressal of these concerns without any substantial reciprocity will vanish.

Satisfactory resolution of implementation-related issues and concerns is the top most priority of developing countries. Without making significant progress on these issues, the progress on other issues will remain limited. Unfortunately, the Draft Decision on Implementation-Related Issues and Concerns (Job (01)/139/Rev.1) still falls much short of developing country expectations. With regard to para 12 of the Draft Ministerial Declaration, following can be of major concern to developing countries:

  1. Implementation-related issues and concerns have been made part of the new work program and hence subject to the “trade-offs” inherent in such negotiations. This will amount to paying once again for rectifying the past mistakes and imbalances – an arrangement that is contrary to fairness and the concept of “mutuality of benefits” enshrined in the WTO Agreement. The resolution of implementation-related issues and concerns should remain on a separate track and should not be linked to any other negotiations already underway or to be launched at Doha.
  2. Implementation issues have been divided into two categories; i.e., those subject to a specific negotiating mandate in the Draft Declaration, and those to be addressed by relevant WTO bodies. This categorization assumes that all implementation issues are not of equal importance which is again contrary to the position of various groups of developing countries. All implementation issues should therefore be addressed under the existing Special Mechanism of the General Council, with the help of subsidiary bodies when needed, with a view to effectively resolving them latest by the end of 2002.
  3. A related concern is the references in this para to paras 39 and 40 of the Draft Declaration. There is no agreement on the proposed organization of the new work program and, in view of the desire of developing countries to keep the implementation issues under the Special Mechanism of the General Council, there should not be any reference to other paras here.


Agriculture
– Para 13

The para on agriculture remains practically unchanged from the previous draft. To that extent at least it has not been watered down as seems to be the case with most other paragraphs. Agriculture for most developing countries is a very critical sector and obviously therefore any endeavour to strengthen it, and by that premise open it, must only be undertaken provided we can ensure that at least the existing language is retained. Even though there are a number of shortcomings it may be best to highlight only the following issues. Firstly, it needs to be noted that there is no mention of the underlying basis for providing S&D provisions in agriculture, namely that the agriculture sector and agriculture practices in developing economies is very different to, and far more vulnerable from, that id developed countries. Thus if possible we can press for the ministers to at least ?recognize the vulnerability and crucial importance of the agriculture sector in developing countries. Secondly, the Marrakech decision continues not to be even mentioned let alone being strengthened. But finally, and perhaps very importantly, in spite of a number of developing countries having sent a strong and very specific note to the Chair, there is still no reference to the ?development box? an issue a number of us have been pressing for so long. This is particularly worrying since for as number of developing countries the provisions of such a box would have provided them with much needed flexibility, as a special and differential measure, to address their non trade concerns such as food security and rural development.

The second para also remains unchanged, which too has some important ramifications for most developing countries. Firstly, it links even the agriculture negotiations, otherwise a stand alone negotiations because of their in-built mandated nature, to all other possible negotiations, that is these negotiations will then become a part of the single undertaking. Secondly, it also through the footnote provides for a separate negotiating body, something which delegations with limited resources have been opposing, because this could give rise to a proliferation of similar negotiating bodies.

Services – Paragraph 15

The paragraph on services is in many ways an improvement on the text of the 26 September draft. It is more balanced in its presentation of the services negotiations so far. However, the following comments can be made. Firstly, the text only mentions the large number of proposals that have been submitted on a wide range of sectors and several horizontal issues, as well as on movement on natural persons. It does not indicate that there has undeniably been a weak contribution from developing countries in comparison to that of developed countries. The Declaration of the Group of 77 and China, dated 23 October 2001, correctly notes the substantial lag in the participation of developing countries in trade in services which is reflected in a lag in the contributions to the negotiating process in terms of submissions of proposals.

Secondly, though the paragraph adequately refers to the Guidelines and Procedures for the Negotiations, as well as to the Preamble of GATS and its articles IV and XIX, there is one issue that should be cited explicitly ? that of assessment. Assessment has yet to be dealt with in a satisfying manner in the context of the mandated negotiations. This is even more important given the reference that is made to specific deadlines for the submission of initial requests for specific commitments and initial offers. These deadlines cannot be determined independently from the achievement of progress in the assessment of trade in services.

As a submission by 10 developing countries (S/CSS/W/114) suggests negotiations should be adjusted in accordance to progress in assessment. Therefore, the deadlines that are decided for the initial requests and initial offers should be posterior to the deadline for an initial exercise of drawing conclusions on assessment based on the review of all relevant work and available studies. It is only this way that negotiations will continue in an informed manner.

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Market Access for Non Agricultural Products – Para 16

The revised draft still does not reflect the fact that not all members have accepted the need to begin negotiations on ?Industrial Tariffs?. In spite strong reservations expressed in this regard, including through a written submission made by 7 African countries, this para still appears as a clean text, without any brackets or an alternative para reflecting the concerns of these members. In fact two changes in the text will only exacerbate the concerns of these members. Firstly, the reference to ?high tariffs? has ostensibly been introduced at the behest of countries which have been maintaining tariff peaks, who may have wanted to counter the pressure to eliminate these peaks (which most developing countries have been pushing for) with a reference to ?high tariffs? which they will sate developing countries are maintaining. Moreover, this introduces a new terminology, that of ?high tariffs? which can have major long term ramifications for developing countries not just in any negotiations on non-agriculture products but for any tariff negotiations to be undertaken in the future, because by and large these higher tariffs are usually found in developing countries. The second amendment relating to the introduction of the phrase ?in particular on products of export interest to developing countries? is conspicuous by its placement before the reference to non-tariff barriers. This is like saying that while we commit ourselves to reduce the tariffs on products of export interest to developing countries, we are not prepared to pay special attention to removing the non tariff barriers on these very products!

Apart from strongly resisting such language, it would be important to support those developing countries which have repeatedly been stating that to begin to negotiate another round of industrial tariff reductions without first studying the effects of past tariff reductions on developing country economies would not be appropriate. Even during the Abuja OAU Ministerial conference it had been decided that any engagement on industrial tariffs would be conditional on the completion of a study process to analyse the effects of previous and future tariff reductions on local industries and national economies of developing countries. Moreover, the specific reference to include all products should also not be accepted as it would take away any flexibility for developing countries, specially the LDC?s amongst them, to protect some of their nascent industries.

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Trade-Related Aspects of Intellectual Property Rights – Paras 17 to 19

Para 17: This para refers to the separate Ministerial Declaration on Intellectual Property and Public Health. As repeatedly pointed out by developing countries, the issue of IPRs and public health includes the issue of access to medicines but is not limited to this issue alone. At stake is the ability of poor governments to adopt and implement effective policies to protect and promote public health in their countries. This para should therefore affirm the commitment to implement and interpret TRIPS in a way that is supportive of public health, with out implying that this is limited to access to existing medicines and R & D into new drugs only.

Para 18: This para provides a clear negotiating mandate for the establishment of a multilateral system of notification and registration of geographical indications for wines and spirits by the 5th Ministerial Conference while relegating the extension of such additional protection to products other than wines and spirits to the purview of the TRIPS Council without any clear negotiating mandate or the end date. Many developing countries, and some developed countries as well, have emphasized the need for parity between the two. Hence the second part of this para should direct the TRIPS Council to launch the negotiations for extension of additional protection of geographical indications for products other than wines and spirits and also specify that such negotiations should also be completed by the 5th Ministerial Conference.

Para 19: It is disappointing to see that many issues of interest to developing countries have not been included in this para which deals with issues, other than public health and protection of geographical indications, under the TRIPS agreement. These include: a) extension of transitional periods for developing countries and the LDCs; b) exclusion from the dispute settlement mechanism of the WTO of non-violation complaints related to TRIPS; and c) commitment to exercise due restraint in the initiation of disputes regarding the TRIPS agreement against developing countries. Moreover, the Ministers should direct the TRIPS Council to complete the reviews under article 27.3b (launched in 1999) and article 71.1, by end 2002.

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Relationship between Trade and Investment, & Interaction between Trade and Competition Policy ? Para 20 and 21

The approach in the two paragraphs on ?Trade and Investment? and on ?Trade and Competition Policy? is the same, in as much as the new draft completely does away with the option of continuing with the study process, an option which a very large number of developing countries had favoured. Instead the draft tries to cloak the launch of the negotiations under the fig leaf of a reference to ?the period until the Fifth Session of the Ministerial Conference? which shall be devoted to the ?clarification of elements of a possible multilateral framework?. What it really means is that in spite of the concerns expressed by a very large number of developing countries the option put up for approval is to launch negotiations in these two very sensitive areas. In effect therefore the concerns of developing countries, specially the least developed amongst them, have simply been ignored. Thus in spite of their being a serious division, or difference in position, amongst members, the view of the minority is reflected in the draft. This is particularly disconcerting when viewed in the context of what had been stated very clearly in the Singapore Ministerial declaration, namely that ?future negotiations, if any, regarding multilateral disciplines in these areas will take place only after an explicit consensus decision is taken among the WTO Members regarding such negotiations?. And since there is no consensus, there cannot be negotiations, unless the Singapore Ministerial decision is to be simply ignored both in letter and in spirit. To accept such an alternative as has been proposed would be tantamount to accepting issues which could have very serious implications for domestic policy spaces for developing countries. Moreover, it will also be assumed, especially in the future, that no matter what concerns developing countries have on an issue, they can always be pressurised to agree once the bigger trading partners have come to an agreement.

It may be argued, by the proponents, that both the draft para 20 and 21 make a reference to the future work looking at ?the question of participation?. Firstly it is not clear what this exactly means. However, assuming that this refers to the possibility of an ?opt-out? or a ?plurilateral approach? it becomes even more important to reject it, merely on this ground alone. Firstly, the WTO is a multilateral trade organization and should stick to its mandate as a multilateral organization which makes and supervises multilateral rules. There can be no justification for launching negotiations on agreements on a plurilateral basis. Moreover, once this approach is used to bring in investment and competition issues into the WTO, a precedent would have been set. In future the same opt-in-opt-out device can be used by developed countries to bring in other non-trade issues as well, such as labor standards and environment. The whole system would lose its multilateral character, and a way would be opened for the inclusion of issues supported by a few major trading partners. It also goes without saying that countries that are now opposed to (or not ready to have) negotiations are likely to face pressures from their developed-country partners in bilateral or regional arrangements, and from international financial institutions, to join or ?opt in? to the two agreements. Clearly therefore the proposals for negotiations put forward in these two areas has to be unequivocally rejected.

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Transparency in Government Procurement & Trade Facilitation – Para 22 and 23.

The next two paragraphs on ?Transparency in Government Procurement? and ?Trade Facilitation? agree to launch negotiations in these two areas. In these areas too it is clear that the concerns expressed by a number of developing countries have simply been overlooked. Many developing countries had made it clear they are not prepared to begin negotiations (e.g. the LDC Ministers in Zanzibar) and that they want the study process to continue (e.g. the Africa Ministers in Abuja). Moreover there is no consensus yet in the working group and there is a divergence of views on many issues, including for instance in the context of Government Procurement, on the scope, level of government and type of procurement, definition of transparency, linkage to DSU etc, making it imperative that the study process needs to continue. A number of developing countries are on record as having said that are yet to fully comprehend the implications of a framework on transparency in government procurement in the WTO, especially as to how it would affect social and economic development. The issues involved in both these areas are complex and divergent views continue to exist on a great number of issues. And yet the draft text simply puts forward a decision to launch negotiations.

What is further disturbing is the kind of changes which have been brought into the text from the previous draft text of 26 September. The earlier text had a specific mention that ?issues relating to compliance with any new obligations to be agreed? shall be addressed in the negotiations, taking into account the situation of developing and least-developed country participants. This has been replaced with the phrase ?matters related to the nature of commitments and their implementation? shall be addressed in the negotiations. This clearly shows the intention of the proponents or the drafters of the text that they are not prepared to make any compromise or concessions on the issue of compliance. Had this been not so then there would have been no reason to change the earlier language which had specifically pointed out the need for flexibility to developing countries on ?issues relating to compliance with any new obligations?. The second similar change which works against the interest of developing countries and which also is sought to be surreptitiously introduced is in the last sentence, where with reference to ensuring that appropriate arrangements will be made for the provision of technical assistance and support for capacity building the phrase ?both during the negotiations and as an element of the agreement to be negotiated? has been replaced with ?during the negotiations and after their conclusion?. Here again the intention of the proponents and the drafters of the text is very clear, namely that the need to provide technical assistance and support for capacity building will not be an element of the agreement to be negotiated.

WTO Rules – Para 24

This was perhaps one area where developing countries had what could be termed a ‘pro-active’ concern and yet unlike other paragraphs where the proponents proposals have only been further strengthened, ignoring the concerns of the members opposing the proposal, here the exact opposite has taken place, namely that the proposal has been further diluted to accommodate the concerns of the members who were opposing the clarification of implementation concerns in these areas through further work. This dilution has been brought about by introducing the following changes:

? While preserving the basic concepts and principles

? In the initial phase of the negotiations

? Participants will indicate the provisions they seek to clarify and improve

Each of these three amendments only dilutes the concerns which had been expressed by developing country members during the preparatory process as well as the debate on implementation. For instance a reference to the need to preserve the basic concepts and principles implies that the present skewed nature of the agreement cannot be changed. Similarly the mention of an open ended initial phase of the negotiations could well mean that we will remain in this phase for ad-infitum (as compared to other areas where there is reference to the fifth ministerial). Such a reference seems even more redundant and evidently only a delaying tactic when viewed in the context of the fact that developing countries have for the last three years been doing exactly this, that is indicating their specific problems with the application of these agreements. Finally, the amendment which introduces the thought that members will indicate the provisions they seek to clarify and improve, clearly implies that if members have concerns because of there being no provisions in that particular regard, then they can not hope to have them redressed. For instance there is no provision related to repeated anti-dumping actions. The present wording would debar the redressal of this concern because there would be no provision that you could seek to clarify in this regard. These are extremely important issues and have to be pointed out.

Dispute Settlement Understanding – Para 26

There are at least two issues of major concern to developing countries in this para. First, a different date; i.e., May 2003, has been specified for completion of negotiations in this area. (Similarly, para 40 also mentions that the negotiations on Dispute Settlement Understanding (DSU) will not be part of the single undertaking.) The logic and pros and cons of this different approach should be explained to developing countries, particularly when the same differential treatment has not been accorded to the implementation issues. Second, any mandate to negotiate improvements and clarifications to the DSU should spell out that this exercise will ensure that developing countries are facilitated, through clarification, improvement and strengthening of the special and differential treatment provisions therein, to access and benefit from the dispute settlement mechanism under the WTO; and that this will not lead to over-burdening the system, particularly against developing countries.

Trade and Environment – Para 27

The first question that can be asked regarding the paragraph on trade and environment is the relevance of having this paragraph included in the section on the work program. This issue is already referred to in the preambular paragraph 6 and in paragraph 44. These two references should be sufficient to cover the work of the CTE.

With regards to the text of the previous draft two important inclusions have been made in the current text. The first requests the CTE to devote particular attention to the relevant provisions of TRIPs. As in the first draft text, a few items of the CTE?s work program have been singled out. Though the reference to TRIPs may have been added in order to make developing countries well disposed towards the text this does not explain why some items of the CTE?s agenda should be prioritized over others.

The second inclusion is a request to the CTE to make recommendations with respect to future action, including the desirability of negotiations, at the Fifth Session of the Ministerial Conference. Developing countries are still strongly opposed to the expansion of the WTO?s environmental agenda therefore no allusion to negotiations should be made at this point in time.

Electronic Commerce ? Para 28

This issue is one which has benefited mainly the interests of developed countries who are the main suppliers. The last sentence calling for the moratorium on customs duties to continue until the fifth Ministerial has no basis and must be subject to negotiation. If the moratorium is to continue, clearly developing countries must be given concessions in return. Moreover, creation of an additional institutional body to consider this issue should be rejected as it will just add another burden to developing countries in an area which is of little importance. Therefore, work in this area should not be expanded with a view to establishing a new body and reference to continuation of the moratorium should be deleted or concessions must be provided to developing countries.

Trade, Debt and Finance – Para 30

A group of developing countries, supported by many others, have proposed the establishment of Working Groups to examine the relationship between trade and finance and trade and development, respectively. However, the proposed course of action in para 30 is vague as regards both the institutional arrangements as well as the content of this exercise. The Ministers should provide a clear mandate and framework to carry out this work otherwise much precious time will be wasted on such preparatory work post-Doha. This para should therefore either establish a Working Group under the General Council or direct the General Council itself to undertake the examination of the relationship between, trade, debt and finance with clear terms of reference that include preparing recommendations related to: a) the role and capacity of the multilateral trading system to contribute to a durable resolution to the problem of external indebtedness of developing and least-developed countries; b) better and non-reciprocal market access for heavily-indebted developing and least-developed countries to improve their foreign exchange earnings; c) appropriate flexibility for heavily-indebted developing and least-developed countries while liberalizing; d) safeguarding the multilateral trading system from the effects of financial and monetary instability; and e) ensuring that the coherence of international trade, financial and monetary policies and systems provides a stable and predictable environment to conduct international trade, free from widely fluctuating foreign exchange rates and disruptive, speculative financial flows. These recommendations should be submitted to the 5th Ministerial Conference.

Trade and Transfer of Technology – Para 31

Here again, the Ministers should agree to either establish a Working Group under the General Council or entrust the General Council itself to examine the issue of trade and transfer of technology with a view to submitting recommendations to the 5th Ministerial Conference related to: a) actions that should be taken under the existing agreements to ensure transfer of technology to developing and least-developed countries; b) mechanisms and elements that should be incorporated in all areas of negotiations to ensure that their results facilitate and not impede transfer of technology to developing and least-developed countries; and c) any additional steps that may be necessary to enhance the role of the WTO to increase the flows of technology to developing and least-developed countries.

Technical Co-operation and Capacity Building – Paras 32-34

Although this section seems to have more words than the previous draft, it remains disappointing as it fails to take on board the concerns which have been put forward by developing countries and LDCs with regard to improving technical co-operation and capacity building. Technical co-operation and capacity building should not just be based on ?mainstreaming trade? and implementing obligations and understanding rules. It needs to recognize the situation of developing countries and LDCs and identify their problems and the root causes in the context of national needs rather than promoting trade reform/liberalization per se as the starting point. This should provide the framework for designing effective technical co-operation to enable countries to fully participate and be integrated in the multilateral trading system. Therefore, there are various problems with the New Strategy for WTO Technical Co-operation: Technical Co-operation for Capacity Building, Growth and Integration which is referred to by way of endorsement in para 32.

There are many important elements missing from this section including the need to build institutional capacity across the national policy framework amongst the spectrum of stakeholders; the need to have a consultative/participatory process whereby beneficiaries themselves have input into the design of such programs, and hence a sense of ownership; the need to provide assistance in identifying problems with existing agreements where they act as barriers to economic development and framing solutions accordingly and to analyze implications of future agreements; addressing supply side constraints; enhancing participation in rule and decision making and agenda setting in the WTO; strengthening and diversification of LDC exports; and assistance should be timely and relate to the length of transition periods for capacity building before obligations become binding. In addition, mention of the importance of regular monitoring and evaluation to ensure effectiveness is missing. In para 33 there is mention of coherence amongst bilateral donors, international and regional organizations, however, it must be clear than any technical assistance must be coherent with national development objectives and priorities as well.

Least-Developed Countries paras 35-36

Again, although there are substantially more words added here than in the previous draft, there is still nothing of additional benefit offered to LDCs, with the exception of the vague reference to ?consider additional measures for progressive improvements in market access?. Although commitment is made to provide duty-free and quota free market access for LDC products, it remains an unbound commitment. Therefore, such market access must be bound and it must be accompanied by simplified Rules of Origin and addressing other NTBs which impede LDC exports. Importantly, there is no mention of the need for LDCs to have the necessary flexibility in implementation of obligations and policy space for development – something they have strongly been calling for in light of their marginalised position in the global trading environment. This includes not expecting reciprocity from LDCs for commitments made by developed countries. Nor should LDCs be required to make commitments inconsistent with their development needs. This principle was something which was recognized in the Punte Del Este declaration and therefore should be a principle easily incorporated again. The text on LDC accessions needs to be strengthened as outlined in para 9. There is no mention of the Decision on Measures in Favor of Least Developed Countries.

The work program referred to at the end of para 35 must be designed in an open and consultative manner with all Sub-Committee Members, incorporating input especially from the LDCs themselves, given this has not happened to date.

Special and Differential Treatment – Para 37

The dilution during the Uruguay Round of the concept of special and differential treatment for developing countries by couching them in best endeavor clauses in various WTO agreements, and since then the lack of implementation of even the few legally binding S&D treatment provisions therein, is of major concern to developing countries. Comprehensive, effective and binding S&D treatment is essential for integrating developing and least-developed countries into the multilateral trading system. A group of developing countries, supported by many others, have therefore proposed the negotiation of a framework agreement on special and differential treatment. Para 37 of the Draft Declaration, as presently drafted, only notes this proposal. This is regrettable and instead the Ministers should commit to entrust the General Council to elaborate a Framework Agreement on Special and Differential Treatment. This elaboration should be completed by the 5th Ministerial Conference and should include the following elements:

  1. review of the effectiveness of all existing S&D treatment provisions in favor of developing countries with a view to ensuring that individual S&D treatment provisions are strengthened and made more precise, effective and operational;
  2. recommendations to ensure that S&D treatment is mandatory and legally binding through the dispute settlement system of the WTO; and
  3. recommendations to ensure that flexibility in consonance with the trade and development needs of individual developing and least-developed countries is provided in the negotiation and application of rules, including new agreements when negotiated.

Organization and Management of the Work Programme – Paras 38 to 45

The proposed organization and management of the work program raises a number of concerns for developing countries. Moreover, their reaction to the first draft in this regard has been almost totally ignored. For the proposed organization and management of the work program to be acceptable to developing and least-developed countries, it should reflect the following:

  1. The over all conduct of the negotiations shall be supervised by the General Council. The proponents of the establishment of a Trade Negotiations Committee seem to forget that after the coming into force of the WTO, and with the establishment of the WTO institutional machinery including the General Council, the need for special negotiating committees is not there any more. The General Council can and should supervise all negotiations.
  2. The existing Councils, Committees, and Working Groups, under the over all supervision of the General Council, should conduct the negotiations and, as appropriate, other elements of the work program within their respective areas of competence. The creation of new bodies should be avoided at all costs keeping in mind the extremely limited human, technical and financial resources of developing and least-developed countries. The proliferation of negotiating bodies will marginalize the smaller countries even further and they would rightly refuse to accept the result of negotiations where they have not been allowed to effectively participate.
  3. The concept and application of single undertaking should be clearly explained to developing countries. They can not be expected to sign a blank cheque again. The experience during the Uruguay Round when the concept of single undertaking went through a major transformation from what was implied in the Punta del Este Declaration and what actually came out in the Marrakech Agreement, should not be repeated. It should therefore be clarified as to how the various parts of the work program (implementation issues, DSU, new issues, etc.) fit into the single undertaking. Developing countries will make their final decision regarding single undertaking only after these clarifications.
  4. Transparency, while important, is not equal effective participation. Of course, there should be complete transparency in the conduct of all the negotiations. However, further steps will be required to ensure effective participation of developing and least-developed countries including a balanced and manageable agenda, timing and frequency of meetings, and pace of negotiations.
  5. It is not enough to state that the negotiations will take into account the principle of S&D treatment for developing and least-developed countries. To ensure that this happens, the proposal for a Framework Agreement on S&D should be accepted and made part of the work program.
  6. Similarly, it is not enough to vaguely mention “benefits to all participants” or to ask the Committee on Trade and Development to “identify and debate developmental” aspects of the negotiations. Liberalization of trade, and trade negotiations for that matter, is not an end in itself. This is rather the means to achieve economic growth and development and to improve living standards for all. The General Council, in its over all supervision capacity, should therefore periodically review and assess the outcome of negotiations to ensure that the objectives of the Marrakech Agreement are being met, that equitable benefits are accruing to all members, and that developing and least-developed countries are getting a share in the benefits that is commensurate with their developmental needs.