Developed countries – the US in particular – must complete the phase-out of bilateral quotas on textiles and clothing by the beginning of 2005, as stipulated in the Uruguay Round Agreement on Textiles and Clothing (ATC). This must not be followed by a cascade of anti-dumping and safeguard actions to shut out developing country exports.
A formula approach is needed to make substantial reductions in peak tariffs and tariffs on processed goods, which hinder developing country exports to developed countries and to other developing countries. Tariffs should be abolished in a range of selected sectors, including those of interest to developing countries. Target dates should be set for the elimination of “nuisance” tariffs, and to bring maximum tariffs down to 10 per cent or less in developed countries. There could be a target date for the abolition of all tariffs worldwide, albeit with longer transition periods for developing countries, and particularly for LDCs.
Market access negotiations are not enough: they need to be buttressed by improvements to the WTO rule base. This is the essential machinery that greases the wheels of multilateral market access on a day-to-day basis. WTO rules need repair and renovation to be kept in trim and to prevent the multilateral trading system from breaking down.
The Doha Ministerial Declaration commits WTO members to “clarify and improve” disciplines on anti-dumping measures (covered by the presently weak GATT Article VI). Disciplines on proliferating anti-dumping measures need to be strengthened, as they are the protectionist’s weapon of choice and have a chilling effect particularly on developing country exports. Pressure needs to be exerted particularly on the US, which is the main stumbling block to stronger Article VI disciplines.
Given political realities, particularly in the US Congress, reforms on anti-dumping should be modest, incremental and restricted to procedural disciplines so that national administrative measures comply with WTO obligations. This should apply particularly to sunset clauses, repeat actions, “lesser duty” provisions and de minimis dumping margins.
Stronger disciplines on and drastic reductions of fishing subsidies are required, as they lead to overfishing and depletion of stocks, not to mention the damage done to the environment.
Reasonable “clarifications and improvements” to the Dispute Settlement Understanding should be made.
Disciplines on regional trade agreements (RTAs) (covered by GATT Article XXIV and GATS Article V) need to be strengthened. This will prove difficult, as nearly all WTO members are involved in one or several RTAs. However, modest procedural reforms to improve transparency and surveillance may be possible. This would enhance the positive effects of RTAs, limit their negative effects, and better align them with a non-discriminatory multilateral trading system.
C: Developing country issues
The Preamble to the Doha Ministerial Declaration places “the needs and interests (of developing countries) at the heart of the Work Programme …. In this context, enhanced market access, balanced rules, and well-targeted, sustainably financed technical assistance and capacity-building programmes have important roles to play. … We are committed to addressing the marginalisation of least developed countries in international trade and to improving their effective participation in the multilateral trading system”.
Implementation issues and Special and Differential Treatment (SDT)
LDCs in particular face severe constraints in implementing Uruguay Round agreements. Over twenty implementation issues are outstanding, and key negotiating deadlines have been missed. Fresh implementation issues are bound to arise in the course of negotiations on market access, rules and new issues. Above all, the Uruguay Round folly of rushing developing countries into agreements with blithe disregard to implementation costs and effects must not be repeated.
Implementation issues – and indeed new commitments – should be dealt with expeditiously in order to fulfil commitments made to developing countries in the DDA. This is essential if confidence in the WTO process is to be restored and built up.
“Old-style” SDT -- non-reciprocity, dependence on uncertain developed country tariff preferences, and sweeping carve-outs from GATT rules and obligations – has outlived its relevance for developing countries with progressively outward-oriented trade policies. It needs to be reviewed and replaced by a more targeted approach.
“New-style” SDT should be used to address implementation issues. This should involve flexible transition periods and greater technical assistance on a targeted, needs-must basis. A “graduation” principle could be introduced. The central focus should be on LDCs and some low-income developing countries with acute implementation problems.
The WTO needs to set up an appropriate mechanism to assess individual countries’ implementation problems, appropriate transition periods and resource needs, as well as to monitor and review subsequent progress.
Developing countries have secured greater flexibility to override patents and issue compulsory licenses for essential medicines in public health emergencies (covered by TRIPS Articles 7&8). However, most developing countries lack domestic production capacity and face TRIPS restrictions preventing imports of generic medicines. WTO members must overcome US opposition and agree to amend TRIPS so that developing countries without production capacity can import generic medicines when faced with pandemics such as HIV/AIDS, tuberculosis and malaria. This should be subject to safeguards against abuse. Agreement should be reached ahead of or at Cancun.
The Doha Ministerial Declaration agrees to new negotiations to establish a system of notification and registration of geographical indications (GI) for wines and spirits, and to consider extending GI protection to other products. GIs – granting exclusive rights to names of products in regions where the products are originally made – can potentially restrict trade. WTO members should therefore make sure that GI registers are not too broad and too strict. This would result in cumbersome bureaucracy and trade restrictions.
All four Singapore issues – investment, competition, transparency in government procurement, and trade facilitation – are built in to the DDA in a two-step procedure: preparatory work was to commence at the beginning of the round; actual negotiations will only start after Cancun “on the basis of a decision to be taken, by explicit consensus, at that Session on the modalities of the negotiations”.
Negotiations on the Singapore issues should not be launched unless the present deadlock on agriculture, TRIPS and public health, implementation and SDT is overcome. These are critical issues that should be dealt with first.
The four Singapore issues should be unbundled and treated on their individual merits. This would prevent investment – the most politically sensitive issue – and competition from holding up progress on the other two issues; and would allow trade facilitation in particular to proceed faster.
WTO members should agree at Cancun, by “explicit consensus”, to launch negotiations on trade facilitation and transparency in government procurement, with a view to concluding light, incremental agreements by 2005. Investment and competition should be placed outside the Single Undertaking and proceed on a slower negotiating track. This cautious, differentiated approach would prevent the Singapore issues from overloading the DDA agenda; there would be less risk of distracting political attention and negotiating resources from the more important market access issues. The latter promise far greater welfare gains for developing countries in particular.
Modalities should be issue-specific, limited and well-defined on the scope of negotiations. Dispute settlement should be differentiated and not over-ambitious. It should apply to a GATS-style (positive listing) investment agreement and to hard-core cartels in a competition agreement. Specific commitments in competition, transparency in government procurement, and trade facilitation agreements could also follow a GATS-style positive listing approach, and be subject to dispute settlement, perhaps with longer transition periods for low-income developing countries and LDCs. However, the presumption should be to rely less on sanctions and more on stepped-up technical assistance, voluntary co-operation, transparency and information-sharing (through notification, surveillance and peer review).
Careful assessment of implementation costs and technical assistance requirements in developing countries should figure prominently in each set of negotiations.