CONCLUSIONS AND RECOMMENDATIONS
INTRODUCTION
1. We disagree strongly with those who would
like to see Cancún fail; reflection and reform are desirable,
but failure at Cancún would be very bad news for developing
countries. (Paragraph 4)
A "DEVELOPMENT ROUND"?
2. The deadlines for resolving issues which
were supposed to be resolved at an early stage—TRIPS and
public health, SDT, Implementation—have been missed. Early
resolution of these issues was part of the mandate delivered at
Doha, and was supposed to be a key component of a development
round. […] The resolution of Implementation issues should
not, as paragraph 47 of the Doha Ministerial Declaration insisted,
be a bargaining chip in this so-called "Development Round."
Regrettably, it is. (Paragraph 36)
AGRICULTURE
3. Additionally, tariffs which developing
countries themselves maintain restrict South-South trade and regional
integration, and result in lost potential gains of between $140
and $390 billion per year. (Paragraph 44)
4. By making agriculture more responsive to market
signals and less trade-distorting, such an outcome would reduce
significantly North-South dumping of agricultural produce, and
pave the way for increased South-North and South-South export
of agricultural goods (Paragraph 47)
5. If there is to be a development-friendly outcome
on agriculture, both the USA and the EU must set binding deadlines
to reduce and in time eliminate the trade-distorting support they
provide to their farmers, and to eliminate all forms of export
subsidies. (Paragraph 50)
THE EU, CAP REFORM AND THE WTO
6. We share the disappointment felt by DFID,
and the Lords' Committee on European Union, that the Commission
has paid insufficient attention to the developmental impacts of
CAP and CAP reform proposals, and trust that the Government has
been doing its utmost to encourage its European partners to take
seriously the external impacts of domestic policies. (Paragraph
52)
7. We understand that the politics of CAP reform
are complex, and welcome the recent agreement. The agreement -
albeit a watered down version of the Commission's proposals—and
the notion of decoupling which is central to it, are important
steps towards the ending of subsidies. But Green Box subsidies,
although classified as "minimally trade-distorting",
will continue to distort production and trade. Rural development
payments may be less distorting than price support or direct payments,
but they still enable farmers to shelter from the winds of market
forces, at the expense of farmers in developing countries. (Paragraph
58)
8. At long last some progress has been made on
CAP reform. But the UK must continue to exert pressure on its
European partners—particularly France—to live up to
the letter and the spirit of their WTO commitments, to reduce
all agricultural support rather than only that which is defined
as production and trade-distorting. Fifteen or twenty-five members
of the European Union must not allow the fate of their Common
agricultural policy to be determined by President Chirac, and
sealed in horse-trading between France and Germany. In addition,
the UK must insist, when the EU finally does reduce the amount
of trade-distorting support it provides to agriculture, that the
reductions include products of export interest to developing countries.
The UK and the EU should, within the EU and the WTO respectively,
be pressing for discussions on capping the Green Box, as proposed
by a number of developing countries. (Paragraph 59)
THE LOSERS FROM AGRICULTURAL LIBERALISATION
9. The EU has certain moral, historical and
legal responsibilities to its ACP partners. The WTO requires that
if the EU expands it must compensate other WTO members for loss
of preferences. In much the same way, the WTO should require that
the EU consults adequately and compensates appropriately those
countries whose preferences are eroded. In the case of sugar,
preference losers should also be provided with assistance to either
become more efficient sugar producers or to diversify into other
areas of economic activity. (Paragraph 68)
10. The case of sugar illustrates a point which
we believe should be adopted as a general principle of trade liberalisation;
the poor should not pay for the poorest. In the case of sugar,
full liberalization if preferable, but if there is only partial
reform it should be managed so that market share is redistributed
to efficient producers in poor countries at the expense of inefficient
EU producers rather than solely at the expense of inefficient
ACP producers. If development as well as liberalisation is to
be a multilateral endeavour, sharing the short term costs of adjustment,
or "burden-sharing", must become a reality rather than
simply rhetoric. Poor and vulnerable countries should not bear
the burden of agricultural reform in the North. But whilst the
needs of preference-holders must not be neglected, such concerns
do not excuse the continued use of distorting agricultural policies
by the EU, the USA and other developed countries. (Paragraph 69)
11. WTO members must honour the commitments made
in the Marrakesh Decision, and restated at Doha, to help the NFIDCs
as well as the LDCs to maintain their food security whilst world
agricultural markets adjust. (Paragraph 70)
12. We urge the Government to continue in its
efforts both to promote rules and instruments such as strategic
or Special Products and the Special Safeguard Mechanism, and to
provide aid and other assistance, to enable developing countries
to safeguard their food security needs, and—particularly
whilst the North stalls on agricultural liberalisation—to
protect themselves from dumping. (Paragraph 71)
THE HARBINSON DRAFT
13. There should be a complete ban on the
use of export subsidies, and the abusive use of export credits
and food aid, from day one of an Agreement on Agriculture. (Paragraph
75)
14. We urge the UK Government, through the EU,
to do its utmost to ensure that developing countries are not forced
to open up their markets until developed countries eliminate the
practices which lead to dumping. There may be value in considering
a "balancing mechanism" which would allow developing
countries to protect their domestic markets in the event that
distortions caused by domestic and export subsidies are not eliminated.
And, if this is to be a genuine development round, it seems to
us that the implementation schedule for reducing tariffs should
be based not on politically negotiated and somewhat arbitrary
time-frames but on clear developmental indicators. (Paragraph
76)
15. Any agreement on agriculture must, at a minimum,
pass two developmental tests; will it stop dumping, and will it
allow developing countries to protect themselves from any continuation
of dumping? On both counts, despite making some progress, the
Harbinson draft fails, as will the CAP reform agreed recently.
A development-friendly outcome on agriculture must pass these
tests, must not make the poor pay for the poorest, and must: a)
reduce tariffs and tackle tariff peaks and escalation; b) extend
duty-free and quota-free access to all LDC exports into all developed
countries; c) ensure that tariff barriers are not replaced by
other protectionist barriers; d) include binding timetables to
reduce and in time eliminate domestic support and export subsidies
of all types; and, e) compensate and assist current preference
holders and ensure the food security of the NFIDCs and LDCs. (Paragraph
77)
BEYOND AGRICULTURE: OTHER ISSUES FOR CANCÚN
NON-AGRICULTURAL MARKET ACCESS: PROVIDING REAL MARKET
ACCESS?
16. Any attempt to define a development-friendly
outcome for non-agricultural market access on the basis of the
highly ambiguous Doha Ministerial Declaration is fraught with
difficulty. But at a minimum, we believe that a development-friendly
outcome would make substantial progress on reducing tariffs, tackle
tariff peaks and tariff escalation, address the issue of preference
erosion, and acknowledge the developmental value of less than
full reciprocity. (Paragraph 84)
17. The proposal includes longer implementation
periods and more flexibility for developing countries, and no
reduction commitments for LDCs. (Paragraph 85)
18. We urge developed countries to keep to their
Doha promises, and to respond positively to the calls from LDCs
for "binding commitments on duty-free and quota-free market
access for all products from LDCs on a secure, long-term and predictable
basis with realistic, flexible and simplified rules of origin
to match the industrial capacity of LDCs in order to raise their
market share in world trade." The USA's Africa Growth and
Opportunity Act and the EU's Everything But Arms agreement are
important steps in opening up markets. But more should be done,
and more should be done on a multilateral basis, to provide developing
countries - including non-LDCs such as Kenya and India where some
half a billion people live on less than a dollar a day—with
enhanced market access. (Paragraph 87)
19. The Government must, through the EU, actively
push the case for offering real market access to developing countries,
delivered and guaranteed on a multilateral basis, with special
attention paid to tariff peaks and escalation. The erosion of
preferences must be addressed and the principle of less than full
reciprocity, based on a country's developmental state, should
be adopted. (Paragraph 88)
THE SINGAPORE ISSUES: OVERLOADING THE AGENDA?
20. Tackling hardcore cartels and restrictive
business practices is important. But developing countries, including
the LDCs, lack the exposure to and experience with competition
law. This has hampered their participation in discussions. We
ask the Government to provide aid for increased technical assistance
to enable their effective participation. (Paragraph 92)
21. We have seen no evidence that multilateral
or bilateral investment agreements increase the flow of investment
to developing countries. […] In the absence of evidence to
the contrary, we fail to see how the Government can claim that
a new multilateral agreement on investment would increase the
flow of investment to developing and Least Developed countries,
and contribute to a genuine development round. However, we do
believe that the application of good governance and the rule of
law is important for all countries. (Paragraph 93)
22. We are not persuaded that an agreement on
investment would be a driver for development, or that the WTO
is the right place to conclude an investment agreement, especially
as part of a development round. In the absence of evidence to
suggest that multilateral rules will increase investment flows
to developing countries, and in the face of persuasive arguments
that an investment agreement at the WTO might not be developmentally-optimal,
we were pleased to hear Baroness Amos acknowledge that the Singapore
Issues are not a priority. We trust this means that the Government
no longer supports the launch of WTO negotiations on investment
in this round. (Paragraph 96)
23. The UK Government is committed to improving
the capacity of developing countries to negotiate effectively
in the Doha Round. In responding to suggestions that this valuable
commitment might be undermined by including the Singapore Issues
on the agenda, DFID states that the "significant benefits"
which the Issues offer for developing countries "should be
set against the costs of negotiating and implementing the proposed
agreements." In the absence of reliable estimates of either
the costs or the benefits, and in the face of opposition from
many developing countries who argue that pushing the Singapore
Issues will not lead to a genuine development round, we urge the
Government not only to stop promoting the inclusion of the package
of Singapore Issues on the WTO's negotiating agenda, but to persuade
its EU partners and the Commission to do so too. (Paragraph 98)
24. The chances of a genuine development round
being delivered, and of Cancún being a success, are not
improved by overloading an already crowded agenda. A genuine development
round needs to focus on issues which are - and are felt by the
majority of developing countries to be—development priorities.
(Paragraph 100)
25. Pushing for the inclusion of the Singapore
Issues on the post-Cancún agenda is excessively hard bargaining.
We trust that the Government's move to disassociate itself from
supporting the Singapore Issues signals that the views of developing
countries have been heard and acted upon. If there is no support
for the Singapore Issues, they surely must be dropped. (Paragraph
101)
TRIPS: ENABLING PUBLIC HEALTH NEEDS TO BE MET?
26. Back in November 2001, the declaration
on TRIPS and public health was seen as a major gain for developing
countries. Since then, as with so much of the promised "Doha
Development Agenda", deadlines have been missed and hopes
have been disappointed. All that was and still is needed for a
development-friendly outcome on TRIPS and public health is for
all WTO members to honour the letter and spirit of their Doha
commitments. In this case the blame for failure lies squarely
with the USA; it was the only country that would not agree to
a compromise agreement in December 2002. […] There does need
to be a balance between enabling legitimate public health needs
to be met, and securing the rights of ownership and maintaining
the incentives for innovation. Doha had that balance right. The
US Government, in its unwillingness to stand up to its powerful
pharmaceutical lobby, has the balance wrong, to the detriment
of the public health needs of developing countries. And US opposition
to agreement on TRIPS and public health puts Cancún and
the whole "development agenda" at risk. Now that the
EU has moved on agriculture, the USA should move on TRIPS and
public health. (Paragraph 106)
27. A satisfactory resolution on TRIPS and public
health prior to Cancún, not as part of a new exchange of
concessions, is hugely important. As well as enabling developing
countries to better meet their public health needs, agreement
would go some way to restoring their faith in the WTO process
and the ability of developed countries to keep to their promises.
(Paragraph 107)
28. Oxfam's proposal to establish a mechanism
for determining and extending transition periods for individual
developing countries on the basis of the achievement of agreed
development milestones makes good sense. This principle could,
if related carefully to the MDGs and to countries' MDG commitments,
play an important role across the multilateral trading system
and beyond. (Paragraph 108)
GATS: MAINTAINING THE RIGHT TO REGULATE?
29. The GATS Agreement differs from most
other WTO agreements in two ways. First, it is designed to work
through a bottom-up or positive-list approach. Countries choose
which sectors to liberalise, and to what extent to liberalise
them. Second, negotiations proceed through requests and offers.
Countries make requests to other countries to open up particular
sectors, and countries make offers to open up particular sectors
(Paragraph 111)
30. We are concerned about the ability of developing
countries to handle negotiations on GATS and urge the UK and its
developed country partners to seek to ensure that developing countries
can participate effectively. A rushed process, with developing
countries unable to follow negotiations, will not make for a development-friendly
outcome, and would be detrimental to the long-term health of the
multilateral trading system. (Paragraph 118)
31. Along with UNCTAD, the Government is to be
applauded for its commitment to assessing GATS and for its tentative
acknowledgement that there may be some lessons to be learnt from
how GATS operates in practice. There is perhaps some hope that
the "dialogue of the deaf" on GATS might be replaced
by a more useful conversation. NGOs have a responsibility in this
regard too; to portray GATS and its implications as fairly and
accurately as possible, and to shift the balance of their commentary
from outright condemnation to constructive advocacy. (Paragraph
119)
32. We urge the Government and the EU to consider
seriously developing country requests on Mode 4. (Paragraph 120)
33. If attention is paid to how GATS works in
practice, it could fulfil its promise of being the WTO's most
development-friendly agreement. It could provide a model for other
agreements. But for this to happen, WTO members need to ensure
that the development-friendly architecture of GATS is translated
into development-friendly outcomes. Otherwise GATS could join
the TRIPS Agreement in being regarded as little more than a burden
for many developing countries. The UK and the EU have a huge responsibility.
If GATS is to fulfil its promise, the UK and the EU must ensure
that the right to regulate includes the right to regulate for
development as well as to provide a welcoming business environment.
They must ensure that this right is supported by the IFIs. They
must not put undue pressure on developing countries to make liberalisation
commitments. They must seek to address capacity constraints. And
they must—in return for market access commitments for their
service providers—make progress on Mode 4. (Paragraph 121)
COMMODITIES: SUSTAINING LIVELIHOODS?
34. The WTO is not central to tackling the
commodity crisis, but a development-friendly agreement on agriculture
which reduced tariffs, tackled tariff escalation and provided
processed coffee and other goods from developing countries with
easier access to Northern markets, would enable countries to better
address the crisis. This illustrates the need for coherent and
coordinated policies at international and national levels. Donors
should commit themselves to assisting commodity-dependent countries
and farmers to increase their productivity, to add more value,
and to diversify their activities. And, to increase coherence
further, serious consideration should be given to linking the
debt service schedules of commodity-dependent LDCs to changes
in commodity prices which are beyond their control. (Paragraph
127)
PRIORITISING DEVELOPMENT
EFFECTIVE PARTICIPATION BY DEVELOPING COUNTRIES
35. We applaud the Government for the lead
it has taken in supporting the assessment of particular agreements
and the round as a whole. The Government must ensure that developing
countries are fully involved in designing and carrying out such
assessments. Without appropriate assessments and predictions of
impact, developing countries cannot participate effectively in
the multilateral trading system. Neither can they follow DFID's
example of predicting, pre-empting and protecting the vulnerable
from the effects of trade liberalisation. (Paragraph 130)
36. We urge the Government to press for regular
assessment of the current round in terms of its likely contribution
to meeting the MDGs. Richard Eglin at the WTO raised the possibility
of the WTO's Committee on Trade and Development being given the
role of monitoring the implementation of the current round's agreements.
We strongly encourage the Government to push at this partially
open door and ensure that such monitoring includes assessment
of developmental impact as well as progress with implementation.
With the involvement of organisations other than the WTO, this
would go some way towards bringing together trade and development
interests at both the international and the country level. (Paragraph
131)
37. The WTO's agenda should not be expanded against
the wishes of developing countries and careful consideration should
be given to the wisdom of imposing tight deadlines which prevent
their effective participation. If developed countries wish to
expand the WTO's agenda, this must be backed up by increased resources
for developing countries at the WTO, and realistic timetables
for negotiation. (Paragraph 132)
38. Patricia Hewitt has recently stated that
the Government "will not accept any proposal we believe will
damage the prospects of developing countries trading themselves
out of poverty." This sounds good, and is to be expected
in a "Development Round", 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.
(Paragraph 134)
DEVELOPMENT-FRIENDLY RULES
39. Even if there were greater consensus
on what constitutes the best trade policies for poverty reduction,
it is a big step from recommending these policies, to enacting
international agreements which prohibit governments from using
other policies. Each country, as Patricia Hewitt states, has "the
sovereignty to make their own choices." Sovereign states
may have the right to surrender or exchange policy space, but
such exchanges must only ever take place on a level playing field
where developing countries can participate effectively. The WTO
is not such a place. (Paragraph 141)
40. 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. Such treatment
of policy space is undemocratic. The Government, along with other
donors and developing countries themselves, needs to consider
carefully the limits of effective and legitimate conditionality.
(Paragraph 142)
41. SDT ought not to be primarily about opt-outs
or longer time periods to implement rules. Development-friendly
rules to which all countries can agree are preferable to opt-outs.
Longer transition periods or assistance with implementation do
not make bad rules good. If agreement cannot be reached on rules
in a particular issue area, it may be that the WTO is not the
appropriate forum for dealing with such issues. (Paragraph 145a)
42. When countries cannot implement new rules
to which they have agreed, "positive SDT" should be
employed to enable them to do so. Assistance should be based on
developmental status and resource needs. Transition periods should
be based on development milestones. (Paragraph 145b)
43. SDT must not be something which countries
have to offer concessions in other areas to gain. Still less should
developing countries have to make repeated concessions to gain
SDT for each and every agreement. To prevent this happening there
must be - as some developing countries have suggested—a
framework agreement which establishes the fundamental role of
SDT in a development-friendly WTO. (Paragraph 145c)
44. SDT should be mandatory, legally binding
and enforceable through the WTO. Any other arrangement would suggest
that SDT and the needs of developing countries are not central
to the WTO. (Paragraph 145d)
45. SDT should be more differentiated, with clear,
open and transparent mechanisms for effectively determining the
needs of developing countries, for monitoring the implementation,
impact and effectiveness of SDT, and for graduating countries
from SDT as they develop. In this way, SDT could fulfil its promise
of being "a tool for development, adjustment or integration
depending on the situation and capacities of individual countries".
(Paragraph 145e)
POLICY COHERENCE, POLITICAL COMMITMENT AND LEADERSHIP
46. 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. (Paragraph 149)
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