MEMORANDUM SUBMITTED BY THE RT HON CLARE
SHORT MP, SECRETARY OF STATE FOR INTERNATIONAL DEVELOPMENT
You asked on 1 August for a memorandum updating
the evidence given by my Department during the Committee's inquiry
into the World Trade Organisation. There have been very few substantive
developments since I gave evidence to the Committee on 23 May.
However, I thought the Committee might find it useful for me to
update them with regard to the EU LDC market access initiative,
the Advisory Centre on WTO Law (ACWL), the EU Generalised System
of Preferences Review, progress in the ongoing agriculture and
services negotiations, and a recent roundtable organised by my
Department looking at competition policy.
MARKET ACCESS
FOR LEAST
DEVELOPED COUNTRIES
The Government continues to give the initiative
for tariff and quota free market access for essentially all LDC
goods a very high priority. The "essentially all" qualification
allows very sensitive sectors to be excluded. We are still awaiting
the EU proposal for taking the initiative forward. We are pressing
the Commission for a closed list with the minimum number of exceptions,
and will continue to do so. We also continue to call for duty
and quota free access for all goods from LDCs in the longer term,
as the Prime Minister outlined in his Mansion House speech last
year.
ADVISORY CENTRE
ON WTO LAW
(ACWL)
My Department has contributed a further £10,000
to support the costs of a legal adviser who is assisting the ACWL
Preparatory Committee. We hope that our ratification of legislation
establishing the Centre will be complete by the end of the year.
My Department will then immediately release the first tranche
of funding. I attach a copy of the recent publication, Establishing
the Advisory Centre on WTO Law[4]
EU GENERALISED SYSTEM
OF PREFERENCES
The GSP gives preferential access to developing
countries exporting into the EU. It is especially relevant for
developing countries who are not signatories to other more preferential
trade agreements with the EU. The GSP Mid-Term Review is underway
and Member States have been asked for suggestions for this review
to be submitted to the Commission by mid-September. The Commission
has indicated that it views this as an occasion for substantial
revision of the instrument. This is a key opportunity to increase
preferences in the GSP. There are a number of poor countries in
the GSP, such as India and Pakistan, who are not classified as
"least developed countries", for which improvements
in the GSP may help them meet their poverty reduction targets.
It is also important as you know that the GSP scheme offers trade
access at least as good as now to ACP countries who do not wish
to join Regional Economic Partnership Agreements (REPAs) in 2008.
AGRICULTURE AND
SERVICES NEGOTIATIONS
In this first phase negotiators are staking
out positions. It is clear that many negotiators regard the prospects
for liberalisation in agriculture and services as inextricably
linked. Most still believe that significant liberalisation will
only be possible in the context of a broader round of negotiations.
AGRICULTURE
A work plan for the first phase of negotiation
(to Spring 2001) was agreed in the first Agriculture Special Session.
At the second session in June, nine substantive proposals were
made by a range of countries, including the US, the Cairns Group,
Canada, a joint proposal from developing countries (Cuba, Dominican
Republic, Honduras, Pakistan, Haiti, Nicaragua, Kenya, Uganda,
Zimbabwe, Sri Lanka and El Salvador) and the EU. The developing
contries tabled two proposals, on special and differential treatment
and on the `green box'. The EU tabled three proposals, on the
`blue box', food quality designations and animal welfare, and
also signalled that further proposals were in preparation for
the autumn, as well as a comprehensive EU position paper to be
tabled in November.
SERVICES
Services negotiators have met more frequently.
There have been four Special Sessions. Negotiators also attend
the Services Council's for subsidiary bodies, one of which is
chaired by the UK, and have been conducting a largely procedural
review of MFN (most favoured nation) exceptions. An initial "road-map"
for the first stage of negotiations to Spring 2001 has been agreed;
ground-clearing work on classification of services and scheduling
of commitments is underway; work left over from the Uruguay Round
on a possible services emergency safeguard provision has been
reinvigorated; and a negotiating proposal from the Dominican Republic
on tourism services has been well-received. The US also tabled
a proposal in July for a framework for negotiations, which will
be discussed in the autumn.
However, progress on core issues has been slow.
Unlike on agriculture, services negotiators are required under
GATS to agree guidelines for the negotiations. Discussion looks
set to continue for many months. Some developing countries are
raising a number of concerns about procedure and susbtance. EU
ideas to develop checklists to assist negotiators—so called
"clusters" of sectors—were not welcomed by developing
countries. A stock-taking exercise in Spring 2001 will mark the
start of the next phase of negotiations and may result in a deadline
for the tabling of liberalisation offers.
COMPETITION ROUNDTABLE
As the Committee will be aware, we believe that
competition policy is vital to regulate the global economy. Developing
countries face real danger from international anti-competitive
practices by large firms. An international framework of rules
should help address these problems and help ensure that developing
countries have the domestic framework they need to enable efficient
and equitable economic development. Competition policy is also
a tool to tackle bribery and corruption.
On 24 July I chaired a roundtable meeting on
competition policy and law, highlighting the importance of competition
policy in pro-poor development. This event brought together a
range of participants from developed and developing countries,
including leading practitioners, government officials, academics,
representatives from the NGO community, and journalists. The roundtable
considered next steps to enable all countries to implement effective
competition policy and laws. A Note of Discussion will be available
in the autumn.
I hope this further information will be of use
in the Committee's deliberations.
Rt Hon Clare Short MP
Secretary of State for International Development
September 2000
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