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THE ROAD TO DEVELOPMENT PASSES THROUGH TRADE AND SO THE WTO

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GENEVA, Mar 1 2005 (IPS) - Only the WTO can improve global rules for the conduct of trade, which is so necessary to complement development and poverty-reduction strategies, writes Supachai Panitchpakdi, Secretary-General of the World Trade Organisation. The WTO\’s Doha Development Agenda is a single undertaking which we will not be able to conclude unless we make progress across the board, the author writes in this analysis. We cannot afford to wait for results in agriculture before making further advances in tariffs on industrial products, services, rules, and the other areas. With respect to agriculture, while far-reaching commitments were agreed on domestic support, export competition, and market access, there remain a number of gaps to be filled and thorny issues to be resolved. On export competition, despite the important commitment to eliminating export subsidies, we still need to fix an end date. With respect to domestic support,the actual level of commitments still needs to be carefully negotiated. On market access, we still need to negotiate the actual percentage of reductions. We also need to establish which products can be designated \”sensitive\” and \”special\” and agree on disciplines to ensure that flexibility in this area is not used to circumvent market access commitments. The road ahead could still be a rough one. The DDA is still behind schedule and every new delay weakens its credibility and value. We need to approach our work over the coming months with a sense of urgency and determination.

There is a global consensus on the importance of trade for development and the fact that only the World Trade Organization (WTO), realising the November 2001 Doha Development Agenda (DDA), can push through the development-friendly reforms that are urgently needed, such as the elimination of agricultural export subsidies, substantial reductions in trade-distorting domestic support, and substantial improvements in market access, including the reduction of tariff peaks and tariff escalation. Only the WTO can improve global rules for the conduct of trade, which is so necessary to complement development and poverty-reduction strategies.

Over the last few weeks, a number of trade ministers have confirmed to me that there is a high degree of political commitment to the process leading up to the Hong Kong Ministerial Conference in December and that we need to achieve significant results before it begins if the Doha Round of world trade negotiations is to conclude in 2006.

My consultations indicate that there is a high level of convergence regarding the need for a substantial breakthrough in Hong Kong in five key areas: modalities in agriculture; modalities in tariffs on industrial products; market opening offers in services; rules and trade facilitation; and a proper reflection of the dimension of development. But there are a number of potentially intractable problems ahead, and we should not underestimate them.

The DDA is a single undertaking which we will not be able to conclude unless we make progress across the board. A breakthrough in agriculture will unlock the DDA, but we need to have progress in the other areas of the negotiations. We cannot afford to wait for results in agriculture before making further advances in tariffs on industrial products, services, rules, and the other areas.

The following are some of the key negotiating areas where I believe we will need more focused attention:

With respect to agriculture, while far-reaching commitments were agreed for all three pillars of the negotiations –domestic support, export competition, and market access– there remain a number of gaps to be filled and thorny issues to be resolved. On export competition, despite the important commitment to eliminating export subsidies, we still need to fix an end date. With respect to domestic support, while it is accepted that countries with higher subsidy levels will reduce much more than those with minimal subsidies, the actual level of commitments to be assumed still needs to be carefully negotiated. On market access, while it was agreed that reductions would be made according to a tiered formula, we still need to negotiate the actual percentage of reductions to be made by developed and developing countries. We also need to establish which products can be designated as “sensitive” and “special” and agree on disciplines to ensure that flexibility in this area is not used to circumvent market access commitments.

Progress is also being made on the cotton issue, particularly with respect to the development-related matters. The trade-related aspects are currently being addressed as part of the work on agriculture modalities. I am hopeful that we will find an acceptable way to give specific treatment to the cotton issue.

With respect to tariffs on industrial products, the framework is only a half way point on the way towards a final agreement on modalities. We need to make more progress here, particularly as some countries have indicated that agricultural reform will be conditional upon market opening for their industrial goods. Much work remains to be done and many difficult decisions need to be taken.

With respect to services, while progress has generally been made in the negotiations, the number of initial offers remains quite low. This is very worrying. The services negotiations are a key element of the overall negotiations, and a mediocre result in services could prevent members from finding the balance necessary to conclude the round with high levels of ambition in other areas. If members do not act now to redress the situation, there will not be a successful outcome in services for Hong Kong.

On development issues, we must work hard to ensure that the Doha Development Agenda lives up to its name. As regards special and differential treatment, we still face the challenge of fulfilling the Doha mandate. We are, however, seeing a new approach in the discussions. I tend to subscribe to the view that it may be more productive if we identify and discuss the underlying issues that the proposals are seeking to address.

The road ahead could still be a rough one. The DDA is still behind schedule and every new delay weakens its credibility and value. We need to approach our work over the coming months with a sense of urgency and determination. (END/COPYRIGHT IPS)

 
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