Time to Limit the Doha Damage: Alan Beattie
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From: Carlos Pérez del Castillo, Former Ambassador for Uruguay to the WTO and Chairman of the General Council
I would like to make the following contribution to the interesting debate that is taking place on the subject hoping that it will prove useful:
A Proposal for movement in the Doha Round
From the results of the last WTO meetings, a number of conclusions can be drawn:
- In spite of the stalemate, frustration and disappointment, no government wants to take the responsibility of declaring the Doha Round dead.
- Judging from the remaining differences and the little movement in negotiating positions, there is no way an agreement closing the Doha Round can be reached in 2011.
- Everyone, genuinely, continues to advocate the values and merits of the multilateral trading system. However there is a need to produce some concrete results soon in the multilateral front, if we want to reassert the relevance and credibility of the WTO.
In the light of the above, I would like to suggest a proposal that, while contemplating the three points made above, would provide a solution that reflects certain progress in 2011 in the ten-year Doha Round, without members engaging in further negotiations or compromising their negotiating positions on key issues.
The essence of the proposal would be an agreement among members, on a negotiating package that would basically reflect and formalize in the WTO current trade realities. This would consist of:
a) With regards to Market Access for Agriculture and NAMA, agreement to the consolidation and binding in the WTO of the current level of applied tariffs (as distinct from bound tariffs) by members. For developed countries, whose levels of bound and applied tariffs are generally similar or close, this would require binding tariffs at the current applied rates. For developing countries, where there is a significant “water” (as described in the WTO jargon) between these two levels, the suggestion is for a binding of tariffs, at a level 20% above of the current applied rates, reflecting the agreed notion of special and differential treatment.
b) With regards to Domestic Support in agriculture, the proposal suggests the binding in the WTO of the real levels of domestic support and export subsidies applied by members in 2010 (or alternatively in an agreed representative recent period of time i.e. : 2009-10 or 2008-10 averages). Since commodity prices have been high during recent times, the levels of protection by members have significantly decreased with relation to the past. Governments would in fact be required to reflect in these bindings the level of actual disbursements incurred in the recent past. In essence, this result would reflect to a large extent the levels of reductions in these measures envisaged in the Doha Round and in particular would imply the elimination of export subsidies.
c) With regards to Services, the suggestion would be to agree to incorporate in this package, the initial offers presented by members. An objective evaluation of these offers would indicate that they consisted of binding in the GATS, the concessions that most members were already applying at the national level, but had not been consolidated in their WTO schedules. Once again, the agreement would entail another reflection of current trade realities in this sector.
d) In order to preserve the developmental nature of the Doha Round, the proposal suggests incorporating in this package the Special and Differential (S&D) measures already agreed for developing countries during the course of Doha Round negotiations. The Least Developed Countries would be exempted of making concessions in the measures envisaged in a) to c) above. Furthermore, they would receive the 97% access free of tariffs and quotas for products originating in these countries, as agreed in the decision adopted in the WTO Hong Kong Ministerial Declaration. The Cotton initiative would benefit from the concessions made in b) above, but they could be complemented by some additional developmental assistance measures.
This package should be further elaborated and adjusted by the General Council in the next six months and submitted for approval at a Ministerial Conference towards the end of 2011. It could be seen as the results of a first phase of negotiations in the Doha Round. The Conference could also decide then, to entrust to the General Council the elaboration of a work programme to deal with remaining negotiating issues of the Doha Round in a second phase, as well as, if need be, for adjusting, by consensus, the Doha negotiating mandate, in order to better contemplate the trade challenges of the XXI century (i).
In our view this is a simple, concrete and feasible package of results that, as mentioned above, would not require any further negotiations nor entail any significant cost to WTO members. The bulk of the proposal is to acknowledge and reflect current trade realities, by removing significant levels of “water” that we currently have in the WTO in various sectors. The binding of lower levels of protection by members in the WTO, could however be considered as significant progress in trade liberalization in the multilateral system. The cost of this package is relatively minor and should be acceptable to all, because it represents the current levels under which trade takes place. For example, bilateral and regional free trade negotiations are already conducted by members on the basis of applied tariffs and not WTO bound tariffs. A similar situation arises with regards to levels of domestic support or subsidies. It could be argued that the cost of this proposal (by removing the “water”) would be a reduction in the bargaining power of members for future negotiations.
While it is acknowledged that these results are modest and far from the expectations envisaged at the beginning of the Doha Round, we feel that this type of agreement would be a step in the right direction to dissipate growing tensions and uncertainties with regards to the multilateral trading system. It would also help in restoring momentum and confidence to the WTO.
Carlos Pérez del Castillo
Former Ambassador for Uruguay to the WTO and Chairman of the General Council
(i) In order to keep this proposal simple it is not considered advisable to reflect, at this stage, the author’s ideas with regards to possible elements for this second phase of trade negotiations.
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Doha - Not in Good Shape WTD - May 20, 2011
Big Sky, Montana - Saying that the World Trade Organization Doha Development Agenda is not in good shape, US Trade Representative Ron Kirk told his Asia-Pacific counterparts yesterday that the time has come to think about next steps for the ten year old negotiations (WTD, 5/17/11).
In my view, without abandoning our commitment to the success of the round, we need to begin a hard-nosed discussion of what can be done, the USTR told 21 trade ministers gathered here at the annual Asia-Pacific Economic Cooperation trade ministers meeting. We need to explore what next steps we can take to find a more productive path - and, if we find that path, to take it as quickly as possible.
Mr. Kirk said he sees three possible paths forward -keep doing what we have been doing, give up or start thinking of something different that will lead us in a better direction. He warned that the World Trade Organization should not be equated with the Doha round and suggested that the WTO will continue as a strong, trade-liberalizing institution.
APEC trade ministers are expected to include language on the DDA in their final statement. World Trade Organization Director General Pascal Lamy made a pointed argument for the round at yesterday initial ministerial session.
Mr. Kirk started his statement - later made public - by saying, First, there is no point in disguising the disappointment of the United States that we have, collectively, not progressed in a more meaningful fashion since our meeting in Yokohama.
That meeting, followed by discussions among some of us in Davos in January and bilateral contacts at the leaders level, led me - and I imagine many of us - to have a new sense of cautious optimism that we might be seeing things start to move in the DDA. That optimism has not been borne out.
This is not to say that there was not useful work done during the first months of this year. And I want to acknowledge that a number of my colleagues in this room were instrumental in contributing to discussions in Geneva that were constructive, honest, detailed and direct.
"But, in part because of those additional discussions in recent months, we now have a clearer picture of just how far apart we are on the core question of market access ambition - certainly in NAMA, but also with regard to services and agriculture.
So, from our perspective - and I will be surprised if there is much argument on this point this morning - we are not in good shape, the US trade ambassador commented. The question we have before us today is - what can and should we do? Should we give up? Declare failure? I don't think any of us want to do that. The United States does not, at any rate.
Should we restate our commitment to the round? Well, we certainly need to do that - but we all understand, after repeating that commitment for many years, that this rings increasingly hollow. We need to do something more. But what?
Value of WTO
"Above all, in my view, we need to reinforce our shared conviction - and I am confident it is shared - that the multilateral system represented by the WTO is immensely valuable to all of us - individually and collectively. Especially during the two and a half frightening years we've just endured in the global economy, we can agree that we would have been pretty lost without the ballast of the WTO and its system of agreed rules. It may not be an exaggeration to say that the WTO saved us from ourselves.
But what does this mean for what should be done about the puzzle of the Doha
round? Mr. Kirk continued - In my view, without abandoning our commitment to the success of the round, we need to begin a hard-nosed discussion of what can be done. We need to explore what next steps we can take to find a more productive path - and, if we find that path, to take it as quickly as possible.
This kind of discussion will be - needless to say - incredibly difficult. It will take time, and will require some deep reflection. While some of this discussion will undoubtedly take place in the context of preparing for our December ministerial conference in Geneva, we should be cautious about creating expectations unless we have a fair degree of confidence that they can be met.
TPP Instead?
Another official who talked to WTD yesterday was more direct. He said APEC ministers have come to realize - increasingly over the past two months of stalled negotiations in Geneva - that they should turn to a more rewarding approach to reducing trade and investment barriers. On top of everyone mind here, he said, is the TransPacific Partnership negotiations (see related report this issue).
The official suggested that efforts will be made between now and the December WTO ministerial to put together a package that members can swallow, but insisted it would be nowhere near the ambitious - and overreaching - single undertaking encompassed in the decade-old negotiations.
WTO members are not likely to press for continuing the negotiations beyond this year. He suggested that negotiating fatigue has a lot to do with that decision.
The APEC statement on Doha - which has undergone two drafts since it was presented to officials here earlier in the week - will contain a stark assessment of Doha, in contrast to previous APEC statements over the years. It will be a consensus statement, signed by all 21 ministers.
The official who talked to WTD on condition of anonymity prior to yesterday ministerial discussion suggested that the United States and other nations will make efforts outside the WTO to bring down barriers to trade and investment. What the United States, for instance, was unable to achieve in enhanced market access from China, India and Brazil in Doha could be achieved via separate strategic dialogues that continue with those countries. Multilateral negotiations are great when they work, he told WTD, but there are often different ways to skin a cat.
Doha was discussed at yesterday ministerial meeting, but except for the United States no other delegation was willing to offer their own assessments in public.
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Work on Plan B Begins WTD - May 23, 2011
Geneva - World Trade Organization trade ministers set to gather later this week in Paris - at the suggestion of Asia-Pacific Economic Cooperation - will start looking at what should become a trimmed set of trade liberalization commitments that their ministers can approve by the end of the year as an alternative to the moribund Doha Development Agenda (see related report this issue).
The parameters of a Plan B, however, is still unclear, trade envoys told WTD on Friday. But, they insist, a full-fledged Plan A - moving comprehensive negotiations on all aspects of the current mandate - is no longer a viable option.
Australia is hosting the informal ministerial meeting on May 26 together with its allied Friends of the Coalition, which includes Chile, Mexico, New Zealand, Korea, Colombia, Switzerland, Hong Kong and Turkey among others.
Canberra is looking to stitch together a mini-package with substantial value for consideration by WTO ministers at the time of the WTO biennial ministerial meeting in December in Geneva.
Australia - along with its Friends - will drive home the message that there is still room and momentum to finalize a Doha mini-package with some important elements. A Plan B, WTD was told, would be based on the 20 aspects of a final accord presented to ministers in Big Sky, Montana, by WTO chief Pascal Lamy. The list includes some major items such as market access in agriculture, industrial goods and services along with topics like trade-distorting domestic subsidies, export subsidies, disciplines for food aid and state trading enterprises. Included also are nontariff barriers in industrial goods; duty-free/quota free access for developing countries; LDC waivers in services and rules of origin; trade facilitation and trade rules, including disciplines for regional trading agreements and fisheries subsidies. Geographical Indications for wines and spirits remains on the list.
One Friends envoy suggested that the Director General should have a free hand to eliminate the issues which are not possible for agreement by December. Another envoy told WTD that possible elements could include export subsidies, waiver for least-developed countries for services, and transparency in regional trade agreements.
Agreements on market access for agriculture, industrial goods and services along with domestic supports will be difficult, WTD was told.
A majority of developing countries - including China, India, Brazil, South Africa and African/Caribbean/Pacific nations - want to see included duty-free/quota-free on top of any new agreement along with resolution of the cotton subsidies issue and trade facilitation.
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From: Guy de
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Trade: Restrictions increasing but global investment remains open, says OECD-UNCTAD-WTO report
Most G20 governments have put in place some restrictive trade measures over the past six months, but have on the whole honoured their pledge to keep international investment, according to the OECD, UNCTAD and WTO.
In their fifth report to the G20, the OECD and UNCTAD say that most new investment measures taken by G20 governments between 16 October 2010 and 28 April 2011 have reduced restrictions to international capital flows and improved clarity for investors. The WTO section of the report deals with trade issues.
Three countries introduced new restrictions on investment: Brazil, China and Russia.
“There are still many risks to the global economic recovery, so it’s encouraging that G20 countries have kept their markets open for foreign investment,” said OECD Secretary-General Angel Gurría. “But they must resist calls for trade protectionism if they want to keep the recovery on track.”
Many emergency measures taken in response to the crisis, such as the rescues of banks and non-financial companies, have now been phased out. The assets and liabilities resulting from these measures on governments’ accounts are being wound down, says the report.
At least six countries – Australia, Germany, Italy, Japan, the United Kingdom and the United States – still hold legacy assets and liabilities in several hundred financial firms, exceeding USD 1.5 trillion for the financial sector alone. But concerns that the implementation or unwinding of these measures might involve overt discrimination against foreign investors have not materialised.
Leaders of the G20, which comprises the world’s largest economies, committed to resist protectionism and promote global trade and investment at summits in 2008, 2009 and 2010. They mandated WTO, OECD and UNCTAD – the leading international organisations in the area of international trade and investment policies – to monitor policy developments and report publicly on countries’ adherence to their commitments.
The previous report was issued in November 2010.
The OECD/UNCTAD report on investment measures
The OECD/UNCTAD/WTO report on trade and investment measures
For further information or comment, journalists should contact Joachim Pohl, joachi...@oecd.org, of the OECD’s Investment Division (tel. +33 1 45 24 95 82).
Further information about the OECD’s work on investment policies can be found at www.oecd.org/daf/investment/g20
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