4 BEYOND AGRICULTURE: OTHER ISSUES FOR
CANCÚN
§84 '… a development-friendly outcome
would make substantial progress on reducing tariffs, tackle tariff
peaks and escalation, address the issue of preference erosion,
and acknowledge the developmental value of less than full reciprocity.'
[Similar points made in §88]
The Government fully agrees with the importance of
reducing tariffs and tackling tariff peaks and escalation. We
also believe that it is important that countries which may suffer
from preference erosion should be given assistance to help them
through the transition, as explained in the response to §68.
The Government fully agrees with the importance of less than full
reciprocity. This is particularly important in the context of
the concerns of some developing countries over the potential impact
of tariff reductions, for example on revenue collection.
§86 '… the "appropriate studies
and capacity-building measures to assist least-developed countries
to participate effectively in the negotiations" which were
mandated in Doha, seem to have slipped off the agenda.'
The WTO's commitment to help the least developed
countries to participate in negotiations has not slipped off the
agenda. The UK, and many other developed countries, see increased
developing country participation as critical to achieving democratic
decision making in the WTO. A programme of work is ongoing (see
§92 for more details).
§86 '… tariff reduction calculations
must also take account and give credit for liberalisation which
developing countries have undertaken of their own accord …'
The Government recognises that this is a factor which
must be taken into careful consideration in the framing of the
modalities for conducting market access negotiations for non-agricultural
products.
The Negotiating Group on Market Access is currently
discussing cuts to bound rather than applied tariff rates. Cuts
to bound rates will, in most cases, have less impact on developing
countries that have undertaken market liberalisation above and
beyond their Uruguay commitments (for instance as a result of
an IMF structural adjustment programme) as there will be a wide
gap between bound and applied tariffs rates.
§86 '… tariff barriers must not simply
be replaced by strict rules of origin, Sanitary and Phyto-sanitary
Standards … and other non-tariff and technical barriers to
trade.'
The Government strongly agrees. Non-tariff barriers
are an integral part of the Doha mandate on non-agricultural market
access. The EU Council Conclusions in preparation for Cancún
reiterate that the European Community "seeks an ambitious
outcome both on tariffs and non-tariff barriers, whose potential
to impede trade remains very high". The UK Government fully
supports this aim. We will continue to work to ensure that rules
of origin, Sanitary and Phyto-sanitary and other standards are
properly focused and do not constitute unfair barriers to trade,
particularly for developing countries. In addition, all G8 members,
including the EU, are committed to ensuring that rules (particularly
rules of origin provisions and documentation requirements) do
not inadvertently preclude eligible developing countries from
taking advantage of preference programmes.
§87 '… we urge developed countries …
to respond positively to the calls from LDCs for "binding
commitments on duty-free and quota-free market access for all
products from LDCs on a secure, long-term and predictable basis
with realistic, flexible and simplified rules of origin …'
The UK Government will continue to press for all
developed and advanced developing countries to provide duty-free
and quota-free access to their markets for all imports from the
Least-Developed Countries, as the EU has already done under its
Everything But Arms initiative. The UK is also working actively,
both within the EU and in the G8 context, to improve and simplify
rules of origin.
§92 'We ask the Government to provide aid
for increased technical assistance [for the WTO competition discussions]
to enable their [developing countries] effective participation.'
Substantial technical assistance has and will continue
to be provided to developing countries to build up their exposure
to, and experience with, competition law as well as transparency
in government procurement, trade facilitation and investment policies.
The UK Government's technical assistance programme
for competition law stems from the specific commitments on competition
policy contained in the 2000 White Paper on International Development
as well as the WTO Doha Ministerial Declaration. The latter called
for more analysis so that developing countries can assess the
potential development impact of a WTO agreement on competition.
The UK's support has included backing an UNCTAD multi-year programme
of technical assistance (including a series of regional workshops),
work by Consumers International to develop a practical handbook
and toolkit to build consumer awareness. In the future we will
provide additional support to build more human and institutional
capacity in developing countries' fledgling competition authorities.
More generally, the UK has allocated £110 million
to trade related capacity building activities since 1998. This
is more than double the £45 million we pledged in the 2000
White Paper. A more detailed briefing sheet explaining our commitments
is available on DFID's website (http://www.dfid.gov.uk). A detailed
description of technical assistance programmes and projects provided
by the EC and its member states has recently been updated and
can be found in the following WTO document available on their
website: (WT/WGTCP/W/223/Rev.1 and G/C/W/442/Rev.1, 5 August
2003).
§96 'We are not persuaded that an agreement
on investment would be driver for development, or that the WTO
is the right place [for it]…we were pleased to hear Baroness
Amos acknowledge that the Singapore Issues are not a priority.
We trust this means that the government no longer supports the
launch of WTO negotiations on investment in this round.'
The UK Government accepts that a basic transparent,
legal and regulatory framework for investment will not, in itself,
substantially increase foreign direct investment flows to developing
countries. Contrary to §95 of the Committee's report we do,
however, believe in principle that, depending on the detail, a
framework WTO agreement on investment could have potential benefits
to developing countries. That is why we continue to support the
launch of WTO negotiations on investment in this round. All Government
Departments share a common position on the new issues. Both the
Secretary of State for Trade and Industry as well the International
Development Secretary have stated that the Singapore Issues are
not a development priority for the UK compared to agriculture,
TRIPS and public health, and special and differential treatment.
As the Committee knows, there are at present a variety
of options under discussion and no decision has yet been taken
on the scope of negotiations. Both the Trade and Industry Secretary
and the International Development Secretary have made an explicit
commitment not to sign up to anything which we believe would not
be in the interests of developing countries as a whole. On investment
in particular, our support for commencing negotiations does not
extend to specific proposals that prevent developing countries
from pursuing their national development priorities.
Any WTO investment agreement should recognise the
right for developing countries to follow national development
priorities. The UK Government supports the application of joint
ventures, technology transfers, and employment generation requirements
to foreign investors. Members would need to list these requirements
in its schedules as exceptions to the non-discrimination principle.
The EC has commented both in its submission to the
WTO (WT/WGTI/W/140) and during consultations in the WTO that it
believes the development provisions in a multilateral investment
agreement would not only be compatible with development objectives
and policies but also support them. In that paper, the EC acknowledges
that the right of WTO members to regulate in order to meet national
policy objectives should be explicitly recognised. The EC also
stressed that the development dimension should be incorporated
in the overall structure of such an agreement. The UK government
continues to subscribe fully to these stated aims. It will be
for developing countries themselves to decide whether or not the
development case is strong enough to persuade them to support
the launch of negotiations in Cancún.
§100/101 '…inclusion of the Singapore
Issues on the post-Cancún agenda is excessively hard bargaining.
We trust that the Government's move to disassociate itself from
supporting the Singapore Issues signals that the views of developing
countries have been heard and acted upon.'
The Government, together with the EC, has been engaged
with a range of developing countries in a variety of fora to discuss
the Singapore Issues. The evolution of the proposals clearly demonstrates
that the voices of developing countries are being heard in WTO
discussions. For example on competition, the proposals recognised
that significant flexibilities must be built in to any agreement
to allow developing countries to "progressively" adopt
competition policies which suit their level of development. There
is also clear recognition that extensive technical assistance
programmes are needed to help them develop competition laws and
appropriate institutions. This is crucial if countries are to
maintain their social, economic and development objectives. Equally,
on trade facilitation the Commission is committed to integrating
capacity building, technical assistance and SDT into any framework
agreement. The EC realises that additional negotiations increase
demands on developing country delegations and hence have agreed
to move forwards "each at his own pace and according to his
own abilities".
The Singapore Issues offer potential benefits to
developing countries, depending on the details of the proposed
framework agreements. These are yet to be fleshed out. For example,
trade facilitation helps development, and important for access
to markets in the modern commercial world. Trade facilitation
measures have demonstrably improved the flow of goods, and might
increase customs revenue, and result in higher levels of confiscation
of smuggled goods. On transparency in government procurement,
developing countries could potentially benefit with possible savings
of 10-15%. Similarly, a competition agreement would help foster
co-operation and dialogue among a diverse range of countries providing
them with a more coherent approach to competition problems, especially
tackling international hard-core cartels. The evidence shows that
such cartels are becoming more global in nature and are having
particularly damaging effects on developing countries, who may
not have competition laws, and hence are more open to such abuses.
For example, a research paper for the World Bank, which looked
at 16 'cartelised' products during the 1990's, estimated that
the total value of cartel-affected imports to developing countries
in 1997 was $81.1billion. This made up 6.7% of all imports and
was equal to 1.2% of their combined GDP. Estimates of price increases
resulting from these cartels were as high as 50%. Overcharges
from these were estimated as being in the region of $18-32billion.
As the Committee knows there are differing degrees
of support amongst developing countries for each of the four Singapore
Issues. Developing countries are not all unanimous that the issues
should be dropped from the Doha agenda. A substantial number see
the potential benefits of framework agreements but remain concerned
that the detailed design should reflect their development priorities.
§106 '…US opposition to agreement on
TRIPS and public health put Cancún and the whole "development
agenda" at risk. Now the US has moved on agriculture, the
USA should move on TRIPS and public health' §151 '…Given
the UK's support of the USA in Iraq, the Prime Minister must have
accumulated plenty of political capital with the USA. Now is the
time to spend it, persuading the USA on TRIPS and public health…'
The Government welcomes the recently agreed solution
to the negotiations on TRIPS and public health. We are particularly
pleased that WTO Members managed to agree to the 16 December 2002
compromise text. This is an important step in helping developing
countries tackle public health crises such as HIV/AIDS. It should
also build momentum in other areas of the Doha talks and help
to restore developing countries' trust in the WTO's commitment
to a true 'development' round.
§107 '…A satisfactory resolution on
TRIPS and public health prior to Cancún, not as part of
a new exchange of concessions, is hugely important…agreement
would go some way to restoring their [developing countries] faith
in the WTO process and the ability of developed countries to keep
their promises.'
The UK Government does not regard resolution of the
TRIPS and public health issue as part of a new exchange of concessions.
All WTO members, including the US, agreed that this needed to
be resolved quickly because of its importance in helping developing
countries access essential medicines. We do not view the solution
as a "down payment" for developing countries' concessions
in other areas of the negotiations.
§108 'Oxfam's proposals to establish a mechanism
for determining and extending transition periods for individual
developing countries on the basis of achievement of agreed development
milestones makes good sense.'
The UK Government believes that the WTO needs a more
sophisticated and effective system of special and differential
treatment that prioritises poorer countries most in the need for
longer transition periods. Trade reforms need to be suited to
the needs of individual countries if they are to be effective
in reducing poverty. This will require WTO members to reach a
consensus on a new framework for SDT. In the meantime, we continue
to support the principle of considering individual requests to
extend implementation periods where there is a genuine commitment
to reform and poverty reduction.
Specifically regarding Oxfam's proposals, the Government's
view is that trade reforms are part of a country's strategy to
reduce poverty. Sequencing of reforms and longer transition periods
against achievement of agreed development milestones could mean
that many countries would be unable to take advantage of new trading
opportunities, leaving them excluded and marginalized in the world
trading system. Thus Oxfam's proposal may not be the most effective
approach to assisting countries to achieve the Millennium Development
Goals.
§110 'Restrictions which apply to foreign
but not domestic firms must be first listed, and then progressively
removed as liberalisation proceeds'
The Government disagrees with the Committee's analysis
which gives the false impression that countries are being locked
into a "conveyor belt" of ever more liberalisation.
In fact, many countries are signatories of the GATS and have in
practice committed themselves to relatively minimal levels of
liberalisation. There is nothing which will force them to revise
this status quo as negotiations proceed. It is up to individual
WTO members to decide which sectors they wish to liberalise.
§119 'The Government is also supporting an
assessment of GATS by UNCTAD.'
This is inaccurate. The Government is working with
both the World Bank and UNCTAD to oversee work by a group of independent
experts, which aims to inform developing countries' assessments
of various GATS proposals. This should help them negotiate more
effectively through being better informed.
This approach is different from undertaking an overall
assessment of GATS. As each developing country has different needs
and economies, its position in the GATS negotiations will be unique.
Thus assessments are only useful if they look at the specifics
of the country concerned. An overall assessment would be broad
brush and less meaningful. Furthermore, developing countries clearly
require support in the area of impact assessment, but the assessments
must be undertaken by individual countries themselves and not
on their behalf by the WTO, donor countries or other international
organisations.
§120 'We urge the Government and the EU to
consider seriously developing country requests on Mode 4.'
The UK Government fully recognises the potential
benefits of a liberalising agreement on Mode 4 for both developed
and developing country economies. The current EU offer does go
some way towards meeting the requests of some of the major developing
country suppliers of Mode 4 related services, such as India.
Significantly more work needs to be done before we
can confidently claim to have adequate mechanisms for managing
freer trade in other areas of Mode-4 requested by developing countries,
such as free movement of lower-skilled workers. While the net
potential benefit for developed and developing country economies
of freer labour movement is widely accepted to be large and positive,
there are still likely to be a few unwelcome effects on a number
of developed country domestic interest groups. These must be understood
if they are to be properly mitigated.
§121 '…the UK and the EU must ensure
that the right to regulate includes the right to regulate for
development as well as to provide a welcoming business environment.
They must ensure that this right is supported by the IFIs. They
must not put undue pressure on developing countries to make liberalisation
commitments.'
The Government's view is that it is critical for
all developing country offers to open sectors be made together
with the introduction or strengthening of appropriate regulatory
measures covering development as well as the business environment.
The two should be considered as opposite sides of the same coin,
and not as separate issues.
Regarding the Committee's views on "undue pressure"
and the proposal that developing countries should receive credit
for so called "autonomous liberalisation" undertaking
at the behest of the IFIs (para 114), the Government agrees. It
is important to make an explicit distinction between a country
undertaking trade liberalisation policies as part of a Poverty
Reduction Strategy, whether in services or goods, as opposed to
choosing to bind those liberalising measures within the WTO rules-system.
The only way that an autonomous or IFI-linked liberalisation measure
can be "locked in" via GATS is if the member concerned
chooses to offer it up as a GATS commitment. There is no way that
GATS can automatically lock in any liberalisation measure, whether
IFI-linked or not.
§127 'Donor should commit themselves to
assisting commodity-dependent countries and farmers to increase
their productivity, to add more value and to diversity their activities.
And, to increase coherence further, serious consideration should
be given to linking the debt service schedules of commodity-dependent
LDCs to changes in commodity prices which are beyond their control'
We agree that commodity dependent countries need
to increase productivity and diversify their economies. This requires
countries themselves to create a more favourable domestic environment
for propoor investment and economic growth.
The Government also agrees that commodity prices
have an important impact on debt sustainability. This is why we
successfully pushed for a revision to the Heavily Indebted Poor
Countries (HIPC) Initiative so that a country's debt position
is reviewed again as countries exit the Initiative. This means
that additional relief is provided where external factors, such
as falls in commodity prices, have pushed a countries debts back
over the HIPC thresholds. The Government believes that, as countries
complete the HIPC process, debt relief should be provided on an
irrevocable basis, rather than being agreed annually. Reviewing
annual debt service levels would mean that the relief would no
longer be irrevocable.
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