Select Committee on International Development Fifth Special Report


Prioritising development

Paragraph 130 'The Government must ensure that developing countries are fully involved in designing and carrying out such assessments [of particular agreements and the round as a whole].'

The Government commissions and designs studies to assess the impact of different proposals on poverty reduction and developing countries. Due to time and capacity constraints, we generally have not involved developing countries in the design. They are, however, involved in the assessments and we do actively share the findings of the studies. Furthermore, it is worth noting that developing countries are a diverse grouping. We aim to have good links with the key representative groups in Geneva: the Chairs of the WTO's LDC, Africa and ACP groups as well as individual developing countries to understand their views and concerns.

Paragraph 131 'We urge the Government to press for regular assessment of the current round in terms of its likely contribution to meeting the MDGs…such monitoring [should] include assessment of development impact as well as progress with implementation.'

DFID has commissioned a study of the overall poverty impact of the Doha Development Agenda and its likely effects on the Millennium Development Goals. This should be available in early 2004. We envisage that the study will be periodically updated as the Doha round of negotiations proceeds.

In addition DFID has commissioned numerous studies on the impact of particular trade policies and agreements on poverty. The following are the main sectors and policies that have been covered or are in the process of being looked at: agriculture, the dairy trade, tariff peaks, special products in agriculture, the EU's sugar regime, fiscal implications of trade liberalisation, implementation of the Marrakesh decision for net food importing developing countries, trade liberalisation and livelihood security, effects of EU domestic and export subsidies on developing countries' agricultural sectors, impact on developing countries from lowering their own tariff barriers, impact of G8 preferential access schemes on least developed countries, GATS and the temporary movement of people.

Paragraph 134 '… Patricia Hewitt…stated… "[the Government] will not accept any proposal we believe will damage the prospects of developing countries…". This is good…but it doesn't go far enough. The UK will have its own views on what makes for development-friendly trade rules, but the Government cannot determine developing countries' interests. It must listen to the views of developing countries.'

The Government agrees that it cannot determine developing countries' interests. Only developing countries themselves can judge what they deem to be fair and development friendly trade rules. That is why it is critically important that developing countries participate fully and effectively in the WTO negotiations, and the Government is funding a variety of initiatives to that end.

We also agree that developing countries' views must be listened to. The views of developing countries are taken very seriously and help to shape UK trade policies and our input to European Commission positions in the WTO. We have ongoing dialogues with a variety of developing countries and are engaged in active debate with their negotiators in Geneva and Brussels, as well as with embassies in London and especially in the run up to Cancun with trade ministries in capitals.

Paragraph 142 'Aid decisions do and will take account of how well policy space is used, but the right to pursue nationally-determined policies is not something to be granted to developing countries on the condition that they use it in a certain way…The Government…needs to consider carefully the limits of effective and legitimate conditionality.'

We do not support so called "cross conditionality" whereby donors provide development assistance to countries on the basis that they implement their WTO agreements. The UK provides development assistance to support a country's efforts to implement a nationally owned poverty reduction strategy. Most donor governments and multilateral agencies take a similar view. When working with others we do try to ensure that this position is maintained and particularly in our collaborative work with the European Commission and other EU member states.

With regard to policy space, the Government agrees that developing countries need to be given sufficient flexibilities within WTO agreements to ensure that they have the ability to set their own policies and sequence reforms appropriately. It is vital that the WTO works more closely with the development agencies to provide for a coherent approach between a country's nationally owned development strategy and the commitments it makes in multilateral trade negotiations. To make sure that trade reforms are suitably customised for each country requires flexible global trade rules at the multilateral level, and therefore an effective framework for SDT.

Paragraph 145a-e '… We are not in a position to endorse one or other of the [SDT] options, but we can state some general principles which ought to be followed [see a-e]…'

We agree. The current system of differentiation can accord many more powerful and rapidly developing economies undue protection, while weaker members actually require greater flexibilities. It is obvious there are substantial differences in development needs between countries such as Singapore, as opposed to Ghana. The Government believes that the WTO systems must be made more flexible and sophisticated to respond to widely differing needs.

To that end we would like to see WTO members begin a constructive debate aimed at proposing a more effective delivery mechanism for applying trade rules for development. An initial step might be to consider the merits of establishing an expert working group which would look at some of the issues identified by the Committee, and report to the General Council.

Paragraph 149 'Greater transparency about how various interests are balanced in the practice of joined-up Government would be very welcome, to us and to the public whose interests we represent and balance'

As the Committee has acknowledged trade policy is generally speaking an area in which there is meeting of minds between Government Departments. Officials and Ministers meet regularly to engage in substantive discussions of policies and to reach agreement on any difference of opinions they may have. Serious disagreement is, however, genuinely very rare as the Government wholeheartedly believes in the Doha Development Agenda, and the urgent need to make trade work for the poor.

Jointly prepared by the
Department for International Development
Department for Trade and Industry, Department for Environment
Food and Rural Affairs
Foreign and Commonwealth Office
HM Treasury

5 September 2003


 
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