Developing countries ready tariff deal without WTO / Indian proposals for WTO reforms on ministerial agenda
mani candan
Source: http://in.reuters.com/article/businessNews/idINIndia-44095320091119?sp=true
Developing countries ready tariff deal without WTO
Thu Nov 19, 2009 11:48pm IST
By Jonathan Lynn
GENEVA (Reuters) - As the World Trade Organisation's Doha round stumbles into its ninth year with no end in sight, a group of 22 developing countries are poised to clinch their own deal to cut tariffs and boost trade among themselves.
The deal to expand the General System of Trade Preferences (GSTP) could be announced during the WTO's own three-day ministerial conference starting Nov. 30, when trade ministers from most of its 153 members will be in Geneva.
The 22-member GSTP includes heavyweights such as Brazil, India and South Korea, as well as some of the poorest countries including North Korea and Zimbabwe. China and South Africa are not involved.
The GSTP is one of the few forums where both North and South Korea sit and negotiate together.
Trade officials and diplomats said the likely deal would involve countries cutting their actual, or "applied", tariffs by 20 percent or more, on 70 percent of goods.
This outline deal, or formula, known in trade jargon as "modalities", would then be implemented in the coming months in detailed work applying the tariff to individual products.
Countries could also negotiate deeper cuts with each other that would then be available to the whole group.
A study by the United Nations Conference on Trade and Development (UNCTAD), which is providing technical assistance to the GSTP talks, estimates that a 30 percent cut in tariffs by the 22 countries would boost their exports by $11.7 billion, while a 20 percent cut would increase them by $7.7 billion.
Trade among developing countries is still relatively small but they are keen to expand commercial links to take advantage of each other's growth and reduce dependence on rich nations.
The GSTP proposals, in which participants would have the leeway to exempt 30 percent of goods from any tariff cuts, are also much less demanding than proposals in the Doha round for all 153 WTO members, although these too offer special treatment for developing countries and the poorest states.
"One of the problems in South-South trade is the base from which you start is quite low, so you don't have the shipping lines," said one Latin American diplomat involved in the talks.
"If you start developing, when you reach a certain critical mass of trade then things start to flow," he said.
International trade rules allow special treatment for developing countries, for instance through preferential low tariffs providing a waiver to the normal WTO principle of non-discrimination which requires that all WTO members benefit from the same treatment.
Most such preferences are offered by rich trading powers like the United States or European Union, but developing countries also provide them.
The GSTP itself was agreed in 1988 after negotiations following a meeting in 1976. An attempt to expand it in the 1990s came to nothing.
The present round of negotiations, currently chaired by Argentina's ambassador to the WTO, Alberto Dumont, began in Sao Paulo in 2004.
The 22 GSTP member countries are WTO members Argentina, Brazil, Chile, Cuba, Egypt, India, Indonesia, Malaysia, Mexico, Morocco, Nigeria, Pakistan, Paraguay, South Korea, Sri Lanka, Thailand, Uruguay, Vietnam and Zimbabwe, and non-members Algeria, North Korea and Iran.
(Editing by Stephanie Nebehay and Louise Ireland)
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Indian proposals for WTO reforms on ministerial agenda
Rituparna Bhuyan
Posted online: Nov 21, 2009 at 0253 hrs
New DelhiAfter the Doha Round impasse exposed the internal contradictions in the World Trade Organisation’s (WTO) style of functioning, India has proposed a near-radical package for reforming the world body. The proposals include an institutionalised mechanism to give additional trade-related incentives to poor countries, more frequent meetings of various WTO committees, and a single window for sourcing information on non-tariff barriers (NTBs) imposed by countries.
Almost all member countries have in-principle supported India’s proposals that seek to make the organisation “more relevant, vibrant and user-friendly.” Members like China, US and the EU have formally endorsed India’s reform model.
The proposals are now part of the ministerial meeting agenda. The three-day ministerial, starting in Geneva on November 30, will be attended by over 150 trade ministers.
Analysts say the move would enhance India’s clout at the apex word trade body, where influences are now determined by the quantum of share that a nation has in word trade. With its meagre 1.4% share of the world trade, India is denied a say proportionate to its population and potential in WTO’s functioning.
The move will help India shed the deal-breaker image at the WTO. The country hosted an informal meeting of trade ministers to break the Doha deadlock here in September, which somewhat silenced those who saw a disruptive role for India at multilateral for a.
The ministerial in Geneva, coming after four years, will discuss a range of house keeping issues related to the WTO and the meltdown’s impact on global trade. Though there would be no negotiations on the Doha Round, the ministers will take a stock of the negotiations that resumed after New Delhi’s initiative this September.
Since then, chief negotiators of the countries have been meeting every month to take the negotiations forward. The reforms that India has proposed, titled ‘Strengthening the WTO’, have a five-point agenda. They seek to establish a more efficient information dissemination system at the WTO and better functioning of committees monitoring specific areas, like trade in industrial goods or farm products. The proposals also envisage an efficient mechanism that institutionalises additional trade-related incentives to poor countries.
If accepted, the proposal could lead to more frequent meetings of the various committees and better information dissemination on non-tariff barriers that impede global trade. It will also lead to a more stable and predictable regime offered by developed nations in terms of preferential market access to poor countries.
The proposals have been endorsed by Australia, Brazil, Canada, China, Hong Kong, European Union, Japan, Korea, Malaysia, Mauritius, Mexico, Norway, South Africa, Switzerland, Turkey, United States and Uruguay. The 54-nation Africa Group has also backed India’s proposals.
Manicandan
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