Examination of Witnesses (Questions 377-379)
Thursday 8 May 2003
MR CHARLES
GORE AND
MR RICHARD
KOZUL-WRIGHT
Q377 Chairman: Following the Doha
Round, because someone decided to call it a development round,
we wanted to see just how much of a development round it really
is. This inquiry has taken us to Washington, New York, and now
here. We have been taking a lot of evidence in the UK, including
quite a lot of what might be described as southern voices—the
Prime Minister of Ethiopia, parliamentarians from South Africa,
and others. Perhaps it would be helpful for us to start by asking,
given the work you have done on LDCs, does Doha have the potential
of being a development round or is this just a spin? Is the title
"development round" just a piece of spin? Does it actually
describe the fact that the very last thing that it will be is
a development round, and it will just be the major players telling
developing countries what they have to do?
Mr Gore: Thank you for that introduction.
I should clarify that we do not just look at the least developed
countries. Richard, in particular, is looking at the global economy
as a whole. One of the things we could perhaps stress to you is
that what is happening in the least developed countries depends
also on what is happening to the more advanced developing countries.
Whether the poorest countries will be able to get on and advance
on the ladder of development depends partially on what happens
within the more advanced developing countries and whether they
can also deepen their industrialisation processes and move up
the ladder. In your introduction you focussed on the LDCs and,
as I work on the LDCs, I think this is extremely important—but
I do not think that we should limit the discussion to that, particularly
because of this interrelationship, which is sometimes ignored,
between the poorest countries and the more advanced countries.
To get to your question, whether it will be a development round
and whether this is spin, I suppose the outcome is still unclear,
but the initial signs are not good, I think. The progress which
is being made suggests that the most likely outcome at the moment
is that it was just spin—but this is in the making.
Q378 Chairman: What for you, concerned
about LDCs, would be benchmarks or mileposts for demonstrating
that it was a development round? By what policies should one judge
Doha? What would we need to see, to take it that this was a development
round?
Mr Gore: From the LDC perspective?
Q379 Chairman: Yes, from the LDC
position.
Mr Gore: The issue here is that
the LDCs have been getting various preferences of various kinds.
The problem is what do these mean in practice. To take a concrete
example, the EBA initiative, this was quite important as a symbolic
gesture, to try to build up support for free market access for
LDCs, but the problem is that they have not been able to utilise
their trade preferences because of a lack of supply capacities
in various ways, and because of various things like the rules
of origin. So they have quite a lot of exemptions which favour
them. The issues which I think would be important from them would
be a real implementation of the integrated framework, which has
the potential to improve the supply capacities, but essentially
is not being utilised, and there are all kinds of blockages in
that. The other thing which I would stress is the agricultural
issues and the problems of agricultural subsidies; the issue of
dumping of cheap cotton, subsidised cotton; the subsidised food,
and the effects which this has on the domestic agricultural sectors
in the LDCs—so that, as they urbanise, they are being increasingly
supplied from outside rather than from the domestic hinterland.
I suppose the agricultural dossier is extremely important. What
I would stress, however, is that if one sets up a system which
provides affirmative action for these LDCs, but at the same time
it means that the more advanced developing countries face some
kind of glass ceiling—so you are providing the preferences
and you are providing special treatment and affirmative action
for the poorest, but the more advanced developing countries face
some kind of glass ceiling which does not allow them to deepen
their industrialisation—then the LDCs are just going to
get stuck. What we see is that, as these more advanced developing
countries are unable to expand their exports faster than their
imports, they start running into financial crises. The financial
crises are then leading to increasing this oversupply of the commodities
on the world markets, and this puts downward pressure on the poorest
countries. The problem is to see this thing as a whole. I have
said the agricultural dossier and the integrated framework for
least developed countries themselves, but if you do not look at
it holistically and if you do not think of how the more advanced
developing countries can serve as a market—for example,
if South Africa takes off, what will this do for the other countries
in the region? If, for example, the Tunisias and the Egypts can
have greater linkages with sub-Saharan Africa, and if there is
a kind of process in which their development supports development
in the poorer countries, then this is the kind of dynamic development
process. But if the South Africas get stuck, if the Egypts and
Tunisias get stuck, this will have very negative impacts on the
poorest countries. You can give as much affirmative action to
them as you like, but it will not work.
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