Examination of Witnesses (Questions 166-179)
MR KARL
FRIEDRICH FALKENBERG
AND MR
MAURO PETRICCIONE
THURSDAY 20 MARCH 2003
Chairman
166. Thank you very much for seeing us. As you
probably appreciate, we are the committee that monitors and scrutinises
our UK Department for International Development. So we come to
all of these issues very much with a development focus. Therefore,
we are obviously quite interested in the Doha Round and whether
it is going to be a development round. Perhaps I could start by
asking, first looking backwards historically, what assessment
has been made in the Commission of the development impact of the
Uruguay Round, and what is the EU doing to assess the likely impact
of the post-Doha agenda? There is a lot of talk about this being
a development round, but is there any evidence to show that improving
trade in the past has enhanced development? How will one judge
whether or not the Doha Round has been a development round?
(Mr Falkenberg) Before going on to that,
perhaps I should very quickly say who I am. I am in DG-Trade,
looking after mainly bilateral trade issues, negotiating with
the African countries, with the Mercosur countries. Sectorally,
I am following agricultural negotiations in the Doha context.
(Mr Petriccione) I am Mauro Petriccione and I replace
Hervé Jouanjean. My unit is in charge of WTO co-ordination,
for the co-ordination of all the DDA activities and inter alia,
in particular, the co-ordination of trade and development issues
and trade-related technical assistance. On your question and,
first, the impact of the Uruguay Round—I do not have the
figures with me but we can certainly send them to you—there
has been a considerable impact in terms of more trade accruing
to developing countries and more trade benefits. However, it has
to be seen in the light of two things. One is that trade in itself—more
trade and more resources for trade—does not produce more
development. Trade is a source of benefit, a source of resource
that can be used for development, but it does not automatically
produce development. The second is that the distribution of these
benefits has been extremely uneven. A number of developing countries
have benefited greatly from the Uruguay Round; a number have benefited
much less. There is evidence that some developing countries have
regressed. That is the case notably for Africa. The problem we
are facing in the new round is how do we tackle the unevenness
of benefits. The main issue there is capacity to trade. We hear
about capacity-building, but capacity-building can mean many things.
It means capacity to negotiate new rules; it means capacity to
implement. At the end of the day, it means capacity to trade.
In trade liberalisation negotiations we do not create trade; we
do not create money flows. We create opportunities. The question
is can WTO members benefit from those opportunities. If you look
at developing countries, the answer is some can, quickly and immediately;
some less; some simply cannot, because they lack the capacity
to produce and trade. So you have to look at these issues in that
light. In terms of assessment of the likely impact of the new
round, the main effort that the Union is making is through its
sustainability impact assessments—which again have to be
looked at in terms of what they can do. We are trying to assess
the impact of our agenda. Assuming that whatever we are asking
for, whatever we are proposing, will be agreed, what would be
the likely impact? What flanking policies will be necessary to
accompany the results of this liberalisation? It is a moving target.
Clearly our agenda will not be accepted in its entirety. One of
the problems we are having is that we are the only ones doing
it. No other WTO member is doing this kind of assessment. Some
are doing environmental impact assessment. That is much more limited.
(Mr Falkenberg) Perhaps I could quickly add in on
the aspect of Africa. First of all, what is very important—and
Mauro has touched upon it—is to understand that there is
not a group of developing countries. That is a fiction.
There is a very disparate group of countries at various levels
of development, with very different factor endowments, with very
different potentials. Africa is the weakest in this group. What
we have seen in Africa on trade policy is that, despite the best
market access opportunities, over the last four decades, they
have lost market share in the EU every year. Their share is declining,
despite the very, very large opening of our market. We are beginning
to look much closer at the flip side of trade. Before you can
trade you have to produce. To produce you have to attract investment.
To attract investment you have to have in your country a sufficiently
large market to attract the investor. Look at China—attracting
the largest share of FDI in the world, not because it is particularly
transparent or predictable, at least not until they joined the
WTO, but simply because there are 1.3 billion potential consumers
and investors are blinded by that and go in there. They are attracted
like flies by size. If you do not have the size, you have to go
for opening. You have to go for transparency and stability, so
that your investment becomes calculable; so that they can find
out the risks, the profits, et cetera. In Africa we do not have
either. We do not have large markets and we do not have transparent,
predictable trade and investment regimes, tax regimes—not
to speak of the political instability that comes on top of all
that. That is where we think we have to focus. One of the ways
in which we are doing this in the WTO is by bringing issues like
investment into a rule-based system; trying not to have discretionary
powers for developing countries—discretion is not particularly
helpful for development. It is the contrary: discretion is often
the beginning of corruption. What we need for developing countries
if we want to bring investors in are clear, transparent, binding,
simple rules. Creating larger markets, regionalisation in Africa—things
that we are pursuing with our economic partnership agreements
in Africa—is the second aspect.
Hugh Bayley
167. The Americans' Africa Growth and Opportunity
Act includes targets for increasing exports. Do you think that
Everything But Arms should be similarly proactive? Should we be
setting targets for increased exports from developing countries
to us?
(Mr Falkenberg) If for the first time you are providing
preferential market access to some African countries for some
products—ie if you are being relatively restrictive and
a newcomer—it is relatively easy to try to set targets.
If you are growing your trade from zero, you can say, "I
want to achieve a specific number of contracts. I want to achieve
2%, 3%, over time". Europe has been the largest trading partner
of Africa over the last 50 years. We take the lion's share of
African exports. We do not do this selectively by saying, "We
like country X but not country Y" or "We open our trade
to product X but not product Y" or "We require the countries
in Africa to purchase our textiles if they want to sell us clothing".
So AGOA is a huge PR exercise with very little content. I think
that there is really no lesson, other than perhaps on the PR side,
that we could usefully draw from it.
(Mr Petriccione) In a way, in the case of the US it
is still the US trade regime which governs trade flows from countries
like the African countries, and therefore you can still manoeuvre
that. In our case, since we have opened our trade regime practically
entirely, what governs the trade flows is the capacity of the
Africans to export. We will absorb as much as they can export.
The problem is that they are not competitive enough; they do not
have enough capacity. Therefore, objectively you can open the
market as much as you like but if there is little to be traded,
there is little to be traded. In the US there are still trade
opportunities for the Africans, but because the US have kept their
market closed. They are now opening it. They opened it up a little
bit and it is easier to set targets, in the sense that you know
that there is trade potential which has been blocked by trade
measures and, the moment you remove those trade measures, of course
some trade will develop. The moment the Americans really open
up their market to the Africans, they will soon be unable to set
targets because the Africans will reach the ceiling. In our case
they have reached a ceiling on what they can actually export to
us.
168. Everything But Arms, of course, deals with
the least developed countries only, so that Ghana, for instance,
is not a beneficiary, whereas the American Act, PR or not, is
a pan-African Act. President Chirac's recent proposal was for
benefits for Africa as a whole. Is it feasible to extend the scope
of Everything But Arms to all developing countries, or African
countries?
(Mr Falkenberg) We are not thinking about all developing
countries for the moment with EBA. The first thing on EBA is that,
since we took the decision to offer it to the least developed
countries—the African but also the non-African least developed
countries, on the Indian subcontinent for example—we have
been trying to convince the Americans, the Australians, the Canadians,
the Japanese, to do likewise and to offer a similarly open regime
to the least developed countries. So far, the only one that has
followed us is New Zealand. It is the only other country in the
world that decided to open up their market for all products—no
tariffs, no quotas. The AGOA is not following the least developed/developing
country divide but is selective in Africa also. AGOA does not
cover all of Africa, so there is selection there. What do we intend
to do? We have started EPA negotiation—economic partnership
agreements. In these partnership agreements we are trying to build
regional markets in Africa—West Africa, ECOWAS, the central
African integration system. We are trying to find out how one
can work with COMESA, which for the moment ranges from Egypt all
the way down to what used to be called "front states".
We are trying to build on existing regional systems, build markets
there and then develop free trade relations with these respective
regions. Our objective in these negotiations is to extend EBA
to everyone. The objective in these EPA negotiations is to offer,
regardless of the development state of the partner, to regions
that accept to integrate, to open up between themselves, no tariffs
and no quotas on all products—right across the board, as
is EBA.
(Mr Petriccione) You ought also to appreciate how
much more opening there is available. You also have to look not
just at EBA but also at the preferences accorded under Cotonou
and the preferences accorded to everybody under GSP. One of the
problems we are having is that we have gone so far vis-a"-vis
developing countries in terms of market opening that there is
a limited margin. When you hear criticism of EBA, saying "The
impact has been marginal"—of course it has been marginal
because our market was 98% open to least developed countries,
so we had 2% to open. In those situations the impact can only
be marginal; but there is a difference in a margin between 98
and 100 and a margin between zero and two. We are having a similar
problem with all other developing countries, in the sense that
we have not entirely opened our market to developing countries
other than the least developed countries but we are almost there.
So there is scope for improving things, but it is much more limited
than the theoretical argument goes.
169. Can I move on to the EU-ACP sugar regime?
What assessment has been made of the impact on developing countries
as a whole and on individual developing countries of reforming
the regime? How does the sugar regime impact on market access
for processed agricultural products?
(Mr Falkenberg) It is a difficult set of questions.
Let me start with the impact on those countries that benefit from
the sugar protocol. There is ample evidence that countries like
Mauritius, Fiji, Jamaica—to take one in each of the A, C
and P—benefit tremendously from this protocol. They would
not be producing sugar without the preferential regime that the
Community is offering, and the solution is quite simply a comparison
of price and production cost. The estimation of production costs
in the three countries that I have just mentioned lies around
500 a tonne. At the moment in the Community we are
offering a price of above
700 a tonne. A country like Brazil can produce probably
at a level of
200 to
250 a tonne. The immediate result of the Oxfam campaign
is that Brazil takes all the market; Mauritius, Fiji, Jamaica,
Zambia—all of the 17 countries that benefit from our sugar
protocol—do not sell a gramme of sugar, do not produce sugar
any more and, for them, sugar is above 60% of their GDP. So you
basically close down those countries altogether. On the other
side, for Brazil to be able to supply all this, you create a huge
mono-culture sugar plantation in the whole of southern Brazil,
with all the risks that we know exist in situations of large mono-cultures.
That is the simple analysis of what are the benefits. If you want
a figure, we have calculated that the transfer that we pay to
a country like Mauritius per year, through the fact that we accept
purchasing sugar at the European price from Mauritius, is roughly
180 million per year. This is
180 million that goes additionally to Mauritius.
I am talking about Mauritius because it is a good example of a
country that has tried to use this transfer to diversify its economy
into other areas. They have gone into tourism and into textiles.
They have really made efforts to build, on this transfer, a more
diversified, modern economy. Others have been less successful
in that. What is the outcome on processed sugar—or on products
containing sugar? That is how I took your question—is that
right? Was that the question?
170. Yes, exactly.
(Mr Falkenberg) Our sugar regime is one which is an
extremely closed regime where, from the production quotas inside
the Community to import levels, to access to refining, et cetera,
everything is closed. It is a perfect closed system, if you like.
Therefore, any sugar content in any processed produce is levied.
For sweets or for whatever you have, we levy an additional sugar
levy to make sure that we are not undercutting the outlets for
our own sugar producers in our market, through the importation
of processed goods. So it is an extremely closed system. That
said, the system has come under very clear pressure for reform.
It will be reformed. The fact that we decided to include sugar
in the EBA and open up to sugar exporters of least developed countries—Mozambique
is one, Sudan is another—that are beginning to export sugar
for the first time to the Community, potentially they could export
much more sugar. You have a closed system with, suddenly, additional
imports coming in—your system explodes. We all know that
the system will not survive in the way in which it is. We have
a little time. The EBA effect for sugar will become really important
from 2006 onwards. It is in 2006 that we will effectively reduce
the tariffs in relation to least developed countries. For sugar
we have delayed this until the year 2006. In 2006, however, the
tariffs will effectively come down. We expect larger quantities
of least developed country sugar to come into the Community and
by then, therefore, we have to have a different sugar regime.
Our present regime cannot survive with additional quantities coming
in. The same reasoning goes for what we have decided vis-a"-vis
the Balkan countries, where also, as an assistance to reconstructing
the Balkans, we have opened our sugar market to them. The problem
from that angle is that we are beginning to see that there is
a lot of fraud taking place—sugar that is not really produced
in the Balkans, but simply transits through the Balkans because
there is a great deal of interest in bypassing the otherwise very
high tariff protection around the European market. They are two
very good factual reasons to say today that we can be absolutely
sure that, at the latest by 2006, the sugar regime as we know
it presently will no longer be there. The challenge for the small
sugar-producing developing countries is what kind of regime can
we set up that will still allow them to survive. That is the big
question. If you ask me how to do that, I have to say today that
I honestly do not know. We are working on it; we are looking at
different systems that might be there but, basically, we are coming
round to understand that we have to send signals to these countries
that they may still have another five, possibly 10, years, but
they either become competitive or they move into other production
lines. It is a hard message but basically you cannot continue
to produce against the markets.
Mr Colman
171. Phytosanitary standards and technical barriers
to trade—we heard from Pascal Lamy yesterday that a survey
of developing countries said that this was much more important
as a barrier to trade than are tariffs and quotas. Given your
deep commitment to openness within developing countries, do you
see a situation where DG-Trade, in a sense, is watching over the
other DGs to make sure that they do not slip in directives to
block the access, say, of agricultural produce? I remember the
one on whitefly—a directive last autumn related to stopping
flowers from Kenya coming in. Do you have a sort of watching brief?
Do all new directives, new phytosanitary standards, new barriers,
have to be cleared through you to ensure that this is not so?
(Mr Falkenberg) They have to, and it is part of my
portfolio; but Pascal Lamy will be the first to tell you that
what we have done here is to build Chinese walls between the different
departments, to make sure that there are no trade considerations
that dictate the level of health protection that we think is necessary.
The health standards are set by our friends in SANCO. They determine
what is a risk and what level of food quality is required for
our market. We make sure that this is done in a transparent and
non-discriminatory manner, so that we do not distinguish between
different origins. If a product is considered to constitute a
risk to humans or a risk to animal life in Europe, then it is
regardless of where it comes from. It is not the fact that it
comes from a developing country that we will have more—
172. But do you have a say on that before it
goes forward?
(Mr Falkenberg) We look into this. Basically, these
decisions are made by an independent scientific committee. The
risk analysis is not made by officials but by scientists in an
independent committee. We are looking at these things; we follow
these issues. We try to push our colleagues to making sure that
the system has to be transparent and that, particularly with regard
to developing countries, we have to be proactive, to tell them
about risks that we have identified, levels of sanitary safety.
173. Is there any reason why the exports could
not be cleared on phytosanitary standards within the developing
country, prior to being loaded onto the aircraft rather than,
if you like, every single box being opened on arrival within the
EU?
(Mr Petriccione) They are not capable.
(Mr Falkenberg) That is the point.
(Mr Petriccione) It is not just a question of the
standards. The question for developing countries is not a question
of how the standards are written and applied. We have control
over the way the standards are written and the way the standards
are applied, in a fair, transparent and correct manner. That is
not the problem. The problem is that our standards are too high;
but that is a question of societal values in this part of the
world.
174. Why not clear them in the developing country
rather than when they arrive here?
(Mr Petriccione) Because, in order to clear them,
you have to have an efficient system of controls. Frankly, in
these countries it is extremely difficult. Even in China, we had
extremely serious problems with the Chinese and, at the end of
the day, the Chinese had to admit that they are just not capable
of knowing what goes on within China, in terms of control of residue
in food products, for instance. We had similar problems in Vietnam.
We have solved them in some cases through technical assistance.
There have been a number of countries where we have been able
to improve their ability to improve the quality of their laboratories
and of their testing—to the extent possible. Everywhere
that it is possible, we rely on inspections in the country; but
it is a minority of cases.
(Mr Falkenberg) We do not do it generally. Even the
US—we test the US products and the US test our products.
We have tried mutual recognition agreements that would allow us
to test on the shipping and not on arrival. Even between the most
developed entities—Europe and the US—it does not work,
because the regulators do not trust each other. An FDA regulator
in the US will tell you that only he has the capacity to make
sure that a product is safe, and that the Europeans cannot be
trusted for this. That goes all around the world, between every
regulator.
(Mr Petriccione) Put yourselves in the shoes of the
agency regulating the imports of a product that has a particular
health risk and you have a health crisis caused inter alia
by imports. The first thing this agency will be accused of is
having relinquished its authority to control the safety of products
by relying on some foreign agencies, whose ability to do the job
is untested. In some cases that is an unfair judgment, but it
will be made nonetheless. In many cases it is actually the reality.
Alistair Burt
175. You have been very clear and very firm
throughout, in terms of the importance you attach to adhering
to rules and the difficulties that discretion can bring. I am
therefore interested in pursuing two questions on Special and
Differential Treatment, the recognition of the principle of which
is most important in relation to this round. First, do you see
Special and Differential Treatment as giving countries more time
in which to harmonise and liberalise, or more discretion as to
what their policy choices should be? Secondly, bearing in mind
what you have said about discretion, how would you deal with the
difficult issue of country classification and their progress up
the ladder of development, to make sure that they do not just
get stuck in one particular place at the bottom of the development
ladder and become dependent on the special treatment which they
get?
(Mr Petriccione) Special treatment in terms of time,
yes, certainly. The question is that we had some pretty bad experiences
in the past and we must avoid a repetition. In the past, transition
appeared to have been granted—as a lump sum, if you like.
You get five years, you get 10 years, to adapt. In many cases
it has not worked. It has not worked on the TRIMS agreement; it
has not worked in intellectual property. What we need to do this
time is to make sure that a transitional period is coupled with
implementation plans. You cannot just ask a developing country,
especially a particularly poor developing country, "You have
five years to fix your domestic regime on X. See you in five years
and we will see what has happened". There has to be a plan
which leads them through the process of implementation in a gradual
way. Some countries are able to do it autonomously; others are
not—possibly because of domestic political pressure. It
is always easier, in political terms, to postpone painful decisions.
The principle of a different timetable for the implementation
of new rules is clearly there to stay. The question is how to
make it work better than it has in the past. The other aspect
is basically an opt-out from the rules—you can call it flexibility
or many other things—but, at the end of the day, it has
meant opting out of certain rules and obligations. There have
been 50 years of GATT which demonstrated that it does not work.
If certain rules are only good for developed countries, there
is an argument that maybe they should not be in the WTO rule book
in the first place. If the rules are also useful to developing
countries, then the question is not letting them opt out; it is
a question of enabling them to implement them. If you look, for
instance, at the kind of competition agenda that we have put forward—and
we have put forward a competition agenda basically because competition
laws are an important element of domestic governance, including
in developing countries—we have tried to whittle down our
agenda to a point which is doable by developing countries. Clearly
most developing countries will be able to go way beyond the kind
of agenda we are proposing when they implement a domestic competition
regime, and many have. We have tried to reduce it to a minimum,
however, which could be useful and doable by all developing countries.
Even that will require transitional periods; even that will require
technical assistance. Then opting out of it defeats the purpose
of having the rules in the first place. Even the World Bank is
coming round to this view. A recent study has come out from the
World Bank, showing that opt-out from rules is not a valid alternative
to designing rules in a way that is useful to developing countries.
176. Equally there are studies and strong views
put forward by NGOs and those who represent developing countries
that there is mixed proof about the ability of liberalising trade
beneficially to affect real development in the poorest countries.
You are adamant that these arguments really no longer hold water
and that you would resist them very firmly?
(Mr Petriccione) No, the question is back to what
I said at the very beginning. You have to look at things in context.
In our agenda you have a trade liberalisation element and you
have a rule-making element. The trade liberalisation element is
useful to developing countries but, because of their economic
situation, it can be used by them in a very uneven manner. The
WTO cannot solve that problem. We can give more market access
to developing countries, but more market access for all means
less preference for some—so there is that problem—but
the WTO cannot invent their ability to exploit these market access
opportunities. That is the reason for the link that we are making
with development assistance in this round. Development assistance
has to be reoriented towards giving these countries the capacity
to benefit from these opportunities. Otherwise, market access
becomes an empty gesture. The rule-making agenda is a different
story. The rule-making agenda is moving away from border measures
which affect trade into measures which affect trade in an indirect
way, because they concern the domestic regulation of the economy.
That has to remain at the national level. The WTO cannot substitute
itself for domestic regulation of the economy, but what it can
do is give it an underpinning in terms of basic principles of
transparency, non-discrimination, procedural fairness, equity.
At that level, there is really very little argument that a developing
country is better off opting out of non-discrimination obligations.
There is very little argument that a developing country is better
off opting out of transparency. Those who are more strongly arguing
for that among the developing countries, frankly, are not the
poorest and are those who do have discriminatory regimes and have
been exploiting those discriminatory regimes in a way which is
doubtful from a development point of view. The exception to this
reasoning is Africa. The problem with Africa is not really that
they do not understand the benefits of investment rules or competition
rules. Their main point is something like, "Yes, we understand
all of this. It would be wonderful in an ideal world. But our
priorities are much more basic than this. Our economies are in
such a bad state that this is far too sophisticated". They
have a point there, but you have to look at it in context again.
You can argue, for instance, that it does not make sense for an
African country to have a competition authority at a national
level. When you start telling them that a competition authority
at the regional level helps a country to integrate in a regional
market and to become more attractive to investment, you get a
completely different response in terms of interest from African
countries.
(Mr Falkenberg) I slightly disagree with Mauro. I
think that for Africa rules are, if anything, even more important
than for other parts of the world. I have been looking, in the
EBA and the EPA context, at the African reality. The main problem
is the absence of rules which are basically good governance rules.
These principles are nothing but guidelines for good governance.
That is an essential component for development. Only through that
will you keep your domestic investors at home and not see capital
flee; your own people not trusting your economy and putting whatever
profit they make out of the country; and you will not be attracting
foreign investment into your country. Setting rules is therefore
very important for development. The NGOs that criticise it, in
my view, make the big mistake of criticising the WTO for not producing
the results in countries that have never, or very little, implemented
the WTO in the first place because, for the last 40 years, they
have been hiding behind the two letters "S" and "D"—Special
and Differential Treatment. That is the fundamental mistake that
most of the NGOs that I know have made. You cannot hold the reality
today against a set of rules that has not been applied in those
countries where it has not produced effects. One needs to go back
to basics and start convincing them now. We need to come with
assistance; we need to come with simple rules; we need to help
them build the administrative capacity. It is easier regionally
than trying to do that in every single national government. We
need to build a rule based system. Even more time is not positive.
The time spent in not implementing rules is time lost. It may
be necessary to do that, to build up the capacity first. We have
to understand, however, that S and D is basically not generosity
to these countries; S and D is something that does not allow them
to become as attractive as other regions in the world are. Therefore,
S and D should immediately come with very precise help, assistance,
technology transfer for administrations et cetera—so that
these countries are put in a position to catch up with good governance
rules that are applied in other parts of the world. Foreign direct
investment is a competitive resource: it goes where the conditions
are right.
(Mr Petriccione) You could even call it a necessary
evil.
(Mr Falkenberg) I have to apologise. I thought that
this meeting was a little earlier and I have another meeting starting
now. I will leave you in the hands of Mauro.
Chairman: Thank you. (Mr Falkenberg
then left the meeting.)
Tony Worthington
177. There seems a clash in two of the things
that your colleague was saying. You may wish to disown the clash.
Earlier on, he was saying that certain policies work for some
developing countries but not for others, depending on their stage
of development, but that they have taken refuge in the special
and differentiated rules. From what he was saying, I would have
thought that he was against the idea of a development box, which
has been put forward by the developing countries. However, the
other part of what he was saying would suggest that different
countries have different needs and we should reflect that in what
we require of them. I find that there is a difference there.
(Mr Petriccione) No, there is not really a difference.
Incidentally, I apologise because I did not answer one of the
questions, which was on differentiation among developing countries.
That is really the issue. First of all, we have been referring
most often to Africa. Africa is the most difficult case we have.
Things are slightly easier with other developing countries—slightly,
not much—in the sense that we can see a strategy vis-a"-vis
most developing countries. We find it very difficult to see a
strategy vis-a"-vis Africa. Most other developing countries
have opportunities they can catch; Africa, much more rarely. The
problem we are facing is that developing countries, mostly for
political reasons, argue the need for across-the-board solutions
for all developing countries. That has been the preferred way
of acting with GATT and the WTO in the Uruguay Round. What it
has produced is very uneven growth and very uneven development.
I read a study once, dating from the 1960s, which predicted that
in 40 years' time Gabon would be a developed country whereas Korea
seemed to be a basket case. You have to look at the reality now
to see how misguided one can be. It is difficult to devise a strategy
which is differentiated according to the different needs of different
countries. It is more difficult to devise such a strategy in a
way which is negotiable in practice in an organisation with almost
150 members. It may prove impossible in the face of the determined
opposition of those who should be the beneficiary of that strategy.
If you talk to developing countries in the abstract, they will
tell you clearly, "Yes, of course we have our individual
needs and we would like them to be catered for". However,
when we talk to them in Geneva, in political terms they fear that
this will be a strategy of developed countries to divide developing
countries. There is an enormous amount of mistrust towards the
issue of differentiation and graduation. No, we are not against
a development box. The question is what do you put in that box.
If you put things which are the same for all developing countries,
you will have much less willingness from developed countries to
make serious concessions—because making a concession to
Ghana or making one to China is not the same thing. Within that,
you will have what we have had in the past. You will have China
taking the lion's share of these advantages and you will not really
help the neediest developing countries. So we are not against
but we do not see it as a real solution, as long as we proceed
in the traditional way—which is S and D as an opt-out option
and S and D as something which applies indiscriminately to all
developing countries.
178. Can I push you a little on that, because
it is not clear to me? You seem to be saying, "We're not
against but we can't, for the life of us, see how it can be made
to work".
(Mr Petriccione) It is not quite as bad as that, but
it goes in that direction, yes.
179. It is, because there is nothing coming
through about what would be in this development box.
(Mr Petriccione) The development box is not our proposal.
In a way, we are already jumping the gun considerably with our
development agenda. We are putting forward proposals which are
our proposals on behalf of developing countries. Very often, the
reaction we get is, "No, thank you very much. We are capable
of defending our own interests". It is not necessarily true,
but there is a limit to how "propositive" we can be.
In our agricultural proposal, for instance, we have proposed a
food security box; we have proposed minimum access for developing
countries; we have proposed a multilateralisation of EBA. There
are things that we think are doable, therefore, and would produce
some results if they are put in place.
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