Select Committee on International Development Seventh Report


SUMMARY


Summary

International trade has the potential to help lift hundreds of millions of people out of poverty. At Doha in November 2001, the member states of the World Trade Organization (WTO) committed themselves to a "Development Round". In Cancún this September, the world will be able to judge the seriousness of that commitment. Much is at stake: the development prospects of half the globe, international security, multilateralism, and trans-atlantic relations. So far, the signs have not been good.

A development round would have three elements: development-friendly agreements on a range of trade issues; effective participation by developing countries; and flexibility and policy space for developing countries within the WTO's rules. Our findings concern the key components of what we believe should constitute a genuine development round.

Development-friendly agreements on specific issues

Agriculture: There must be substantial reductions in trade-distorting domestic support, export subsidies and tariffs, so that developing countries can trade their way out of poverty. As a minimum, any agreement must end dumping. In the interim, developing countries must be permitted to protect themselves from dumping. The WTO's Harbinson draft fails on both counts. The recently agreed reform of the Common Agricultural Policy is a welcome but only small step in the right direction by the EU. The Government must keep up the pressure for major reform of the Common Agricultural Policy.

Non-agricultural market access: The Government must push the case for offering real market access to developing countries, delivered and guaranteed on a multilateral basis, with tariff peaks reduced, tariff escalation tackled, and preference erosion addressed. These goals are relevant to agriculture too.

Singapore Issues: The Government should unequivocally drop its support for opening negotiations on the Singapore Issues. These issues would overload an already full agenda. They are not wanted by most developing countries. And it is questionable whether the WTO is the right forum for agreements on investment and competition. The Singapore Issues are not developmental priorities.

Trade-related Intellectual Property Rights (TRIPS) and Public Health: The US Government must stand up to the pharmaceutical lobby and take its developmental responsibilities seriously.

General Agreement on Trade in Services (GATS): The UK must do more to ensure that GATS will be a development-friendly agreement in practice, and to guarantee that the right to regulate will include the right to regulate for pro-poor development and poverty reduction.

Effective participation by developing countries: The Government should continue supporting assessments, providing technical assistance, and building the capacities of developing countries. We are pleased to hear that the Government "will not accept any proposal that it believes will damage the prospects of developing countries". But effective participation requires that the views of developing countries are listened to.

Development-friendly rules: The Government should work to deliver a framework agreement on Special and Differential Treatment which will put developing countries' needs for flexibility and policy space at the heart of a development-friendly WTO.

If political commitment and leadership are forthcoming a genuine development round can still be secured. Without this commitment, the round will collapse. The opportunity to provide leadership should be grasped, the responsibility accepted. The promises made at Doha must not turn out to have been empty, for all our sakes.





 
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Prepared 14 July 2003