Examination of Witnesses (Questions 358
- 359)
WEDNESDAY 7 MAY 2003
MR CARLOS
FORTIN, MR
JOHN BURLEY
AND MS
MANUELA TORTORA
Chairman: We are the International Development
Select Committee of the House of Commons. We monitor and scrutinise
what DFID does, but we are particularly interested in the Doha
Round because someone decided to call it the development round.
We are interested in whether it is going to be a development round
and what it is going to do. We have a number of questions and
my colleague Bob Walter is going to start.
Q358 Mr Walter: These are really
questions about the development round.
Mr Fortin: May I interrupt for
a moment? May I introduce John Burley, who is a compatriot of
yours, who has just been appointed Director of our Services Infrastructure
for Development and Trade Efficiency Division. He is in charge
of a very important part of trade promotion and trade encouragement,
which is trade facilitation—the one which in practice makes
it possible to take advantage of the WTO results. May I also introduce
Ms Manuela Tortora, who was in charge of our Commercial Diplomacy
Programme and is now looking at the overall capacity-building
landscape, particularly in the field of trade.
Q359 Mr Walter: We have been conducting
this inquiry for some months and have met with representatives
in Washington, the US administration, in Brussels with the EU,
and obviously our own ministers at home, as well as quite a few
diplomatic and political representatives of countries in the developing
world. The thing that we have been frequently reminded of is that
developing countries are not a monolithic bloc, but there is some
commonality of interest between them. Are there groups of developing
countries with particular interests and concerns that you can
say, "They are in that box" and "They are in that
box"?
Mr Fortin: We can certainly comment
on that, as best we can. Let me start by asking Manuela to deal
with this issue, because she has been directly involved in our
support for developing countries negotiating in WTO. By the way,
it does not mean that we negotiate for them or participate in
negotiations with them; we try to present to them the range of
options, the pros and cons, and let them make up their own mind.
The first thing to be said is that there is no longer a bloc of
developing countries. In fact, in the UN—as you know, the
WTO is not part of the UN—there is a bloc called the Group
of 77, which is all the developing countries. There is no such
thing in WTO, although there is something similar but with a different
name, but reflecting the variety and heterogeneity of interests
and of positions. That means that in certain very important areas,
like agriculture for instance, the dividing line is not North-South.
It has other characteristics—much more complex and, in a
sense, much more challenging. Having said that, there are certainly
very important commonalities. In other words, there are things
that developing countries expect in general. I am from Chile myself,
and Chile is at the forefront of the countries that are trying
to move things forward. Quite far away from Third World radicals;
nevertheless, they do share many of the things that I am going
to say now. The first one is the idea that the round and the WTO
should involve a serious opening of markets to developing countries.
If trade is going to be a lever for development, it has to be
in the sense of being able to access markets of the developed
countries—as well as each other, for that matter. So market
access in the broadest sense is a fundamental element, and of
course agriculture is a very substantial component of that. It
is true that there are different views among developing countries
about the way to go about this, but they would all agree that
to have agriculture outside the disciplines of international trade
is simply an anachronism. It makes no sense whatsoever. So a movement
in that direction is needed. Another matter is what happens to
net food importing developing countries—what happens to
those countries not only in the economic sector but in other areas.
Some differentiation is needed, therefore, but the ultimate goal
is quite clear. Developing countries in fact have generally moved
forward in this direction very importantly. They have liberalised
very significantly. A second point is transition. In the long
run, and maybe in the medium term, opening up markets will attract
investment to take advantage of trading opportunities, and that
will lead to development; but, in the meantime, there are of course
transitional costs to be paid, and the idea of Special and Differential
Treatment tries to take this question on board. This is not automatic
or instantaneous. That process is in between. That applies mostly
to the least developed countries, but also to the others. All
of them, in one way or the other, depending on the level of development
and the issue, are asking for that. The third is rules: rules
that should be development-friendly. That applies both to rules
that exist and how we apply them—for instance, in antidumping
and to what extent that can be handled in a way that is development-friendly—and
also to the prospective rules, the new areas of competition law,
investment, et cetera. Can we make them such that they in effect
help and do not hinder development. There is a whole range of
issues on implementation. The last category would be interdependence—the
links between trade and the other areas of the world economy,
particularly technology, transport, finance and debt, which were
the ones which were specifically mentioned in Doha. That is a
very broad and very general approach, but I think it is the generally
accepted agenda for the development component of the Doha Round.
When you start going into the details, of course, the devil turns
up and things get much more complicated.
Ms Tortora: The landscape is exactly
as you described it. Perhaps I may add that it is clear that the
area where there is more fragmentation among the developing countries
is clearly agriculture. This is a kind of extreme in terms of
the universe of possibilities, while you have relatively more
convergent positions in the overall group of developing countries
on rules, as was said, tariffs on the non-agricultural products,
and services. This is where more convergency is appearing, and
also on some horizontal issues like Special and Differential Treatment,
for instance; implementation, and some others. Also, on the "Singapore
issues" and on TRIPS. There is a little more convergence
as compared to agriculture. Something which should also be mentioned
is that it is not only the fact of being an LDC or not that makes
you take certain positions on tariff issues—namely, because
you belong to the LDC group, then you have some preferential regimes
that make your position a more or less set or determined one.
It is not only that, but also the kinds of commitments that you
already have on your trade regime through bilateral, subregional,
or all sorts of regional deals, that are already made or in the
process of being made, which determine the range of fragmentation
or convergent positions within the developing countries. This
is a factor that is becoming more and more important in the formulation
of the positions at the WTO—the regional, bilateral and
subregional trade commitments that are already set. That includes
the acceding countries which already have in their terms of accession
a trade regime which is already committed to some kind of tariff
liberalisation—services liberalisation and so on. That also
determines to what extent they will belong to one category or
another, or to the Like-Minded Group or the LDC Group.
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