WTO Falters Again On Market Access Deadline

Published: The Financial Express, June 02, 2003
By Pradeep S Mehta

Dhaka: It seems that WTO members have reconciled to the bitter truth that no further progress can be made on the Doha Development Agenda before the forthcoming Cancun Ministerial Conference. Even the easier deal on market access on non-agricultrual goods could not be met. These contain mainly tariff issues on industrial goods.

As per the mandated deadlines, members were to reach a ‘common understanding’ on a possible outline for negotiating modalities by 31 March, 2003 and an agreement on those modalities by 31 May, 2003. Since the first deadline was met, hopes were raised of meeting the 31st May deadline. But members used the 26-28 May meeting of the Negotiating Group on Non-agricultural Market Access to express their first reactions to the Chair’s draft paper submitted on 16th May 2003.

The missed deadlines on non-agricultural market access joins many others, including on TRIPs and Public Health, Special & Differential Treatment (S&DT) for developing countries and most notably modalities for negotiations on agriculture. So there is nothing for the WTO members if they failed to meet this deadline. In fact, it would have been surprising had this deadline been met. Negotiations on dispute settlement understanding, which are scheduled to finish this week, will also most likely miss the bus.

However, unlike other contentious issues of the Doha Work Programme, no member has as yet rejected the draft modalities paper on non-agricultural market access as a basis for negotiation. Many, in fact, see it as a good beginning. Amongst the major countries, Japan has objected strongly to the Chair’s draft paper on modalities, saying it would prefer the use of an average percentage cut as opposed to the across-the-board tariff reductions, which could allow members to keep sensitive sectors safe from deep tariff cuts.

The formula suggested by the paper inter alia is an attempt to meet the Doha Declaration’s mandate of ‘less than full reciprocity’ for developing countries. According to the formula, the higher a country’s average tariff rate, the less will it be required to reduce its tariffs. Since developing countries on average maintain higher duties than developed countries, the formula would lead them to make proportionally bigger cuts than developing countries.

Not all members are happy with this arrangement. Some developed countries want to see the modalities cut more into high tariffs as the proposed formula reward those who keep higher tariff rates. Some developing countries, primarily those with lower average tariffs such as China and Malaysia, are not fully pleased with the draft either. Others, mainly the African Group, are worried about how the modalities might affect their preferential market access arrangements.

The non-agricultural market access was the last among the important deadlines of Doha Round of trade negotiations. It is really unfortunate that almost two of the three-year timeframe of the Doha Round did not result in any significant productive outcome. If at all any patchwork is done at Cancun, it is most unlikely that we would be able to wind up the Doha Round by end-2004, i.e., in a little over a one-year time period after Cancun.

It is really a high time for the international community to take stock of the progress made since the inception of the WTO in 1995 and more particularly after the first Ministerial Conference, which was held at Singapore in 1996. A close examination of the issues since Singapore shows poor progress on issues, which are of interest to developing countries such as agriculture, S&DT, TRIPs and Public Health, etc. On the contrary, much progress has been made on environment and the four “Singapore issues”, which are all of developed countries’ interests.

At Singapore, three separate Working Groups were set up on Competition, Investment, and Transperency on Government Procurement to exa- mine their relationship with trade and also to conduct studies. On the Singapore issue of Trade Facilitation the Council for Trade in Goods was directed to undertake exploratory and analytical work on the simplification of trade procedures in order to assess the scope for WTO rules in this area.

After little over four years at the fourth WTO Ministerial Conference held at Doha in 2001, these issues have been included into the Doha Work Programme. It is a different matter how one interprets the language. The EU and Japan, the main demandeurs of these issues, are very much convinced that they are part of the agenda and at Cancun ministerial decision on modalities of negotiations will be taken. However, whether they can succeed to obtain ‘explicit consensus’ is quite doubtful.

As regards environment, the issue is already being negotiated under the current Doha Round. Though the agenda is limited, the EU, again the main demandeur, is making all efforts to expand the existing mandate and to establish a link between trade and environment.

Quite clearly, one does not see a very bright future as far as the Doha Round is concerned. Indeed, though one does not expect a declaration at Cancun, the trade community will have very little to report there for ministers to speak about. The only possible draft decision expected is on the Singapore issues, but that too is unclear as many countries are not in favour of overloading the existing agenda.

As I write this on the eve of the LDCs ministerial meeting, the mood appears to be against the Singapore issues. Other than that, on the issue of non-agricultural goods, their insistence will be for zero tariff and zero quota on all goods. A big civil society forum has also come out with a parallel declaration to support their governments, and they are not pulling any punches. Some feel that there might be a deal at Cancun, in particular on the TRIPs and public health issue; otherwise the whole Doha round will be imperilled.

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