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TRADE: Resistance Persists Against Early Harvest in Doha Round

Ravi Kanth Devarakonda

GENEVA, Jun 4 2010 (IPS) - Although the issue of an early harvest for least developed countries (LDCs) has been raised time and again, there remains “a certain reluctance” to prioritise it in the World Trade Organisation’s Doha Round of trade talks, according to South African trade minister Dr Rob Davies.

The LDCs’ proposed early harvest includes an immediate resolution to the problem of the U.S.’s trade-distorting cotton subsidies; duty-free and quota-free market access for LDC exports; a waiver to accelerate services exports from poor countries; and the easing of the accession requirements for LDCs wishing to join the World Trade Organisation (WTO).

“Many observers feel that a sine qua non for completing a ‘successful’ round is that LDCs need to be convinced of getting some or greater preferential market access to the Organisation for Economic Cooperation and Development (OECD) countries,” Celine Carrere and Jaime de Melo wrote in a research article in 2009.

Apart from LDCs, South Africa, China, India, and Brazil again raised their long-pending demand for an early harvest at the informal trade ministerial summit in Paris on May 27 but failed to secure an immediate response, several trade ministers told IPS.

Davies explained the reason as follows: “The point about this is that some countries fear that if you allow an early harvest you agree that the Doha Round is dead. The counter-argument is that LDCs are not supposed to pay; they are supposed to receive concessions to be integrated into the global trading system.

“Whatever dynamic is being played out should not affect LDCs and this is the reason why we need an early harvest for such countries,” added Davies.

“The central question is what the Doha Round offers to LDCs. I raised the issue of an early harvest along with LDCs during the meeting because many LDCs need urgent resolution to their immediate trade concerns, such as duty-free and quota-free market access and the cotton subsidies issue, among others,” Davies told IPS.

Trade envoy Matern Yakobo Christian Lumbanga of Tanzania, an LDC, concurred with Davies: “We can’t continue waiting until the big players sort out their differences in the Doha negotiations. We want an immediate solution to our demands.

“LDCs will issue a statement to drive home the message that their specific concerns about the Doha agenda need to be tackled expeditiously and without subjecting them to other issues.”

The coordinator for LDCs at the WTO and Zambia’s trade envoy, Darlington Mwape, argued at the meeting that the delay in addressing the LDC concerns in the Doha Round amounts to a denial of “developmental goals.”

The Doha Round, launched in 2001 as a “development round”, is mandated to ensure that the LDCs improve their foothold in the global trading system.

Though trade ministers had agreed in the July 2004 framework agreement and the Hong Kong ministerial declaration of 2005 to provide an “ambitious and expeditious” solution to the reduction of cotton subsidies, there has been little or no progress until now.

The main stumbling block to addressing the cotton subsidy issue — which has severely affected Benin, Burkina Faso, Mali and Chad — is largely due to the opposition from the world’s largest cotton subsidiser, the U.S.. Washington has repeatedly maintained that it can only reduce cotton subsidies when there is full agreement on all issues in the Doha Round.

Duty-free and quota-free market access, which was mandated by trade ministers at the WTO ministerial meeting in Hong Kong in 2005, comprises zero duty market access for 97 percent of the tariff lines of the industrialised countries and a simplification of rules of origin for greater effective market access for LDCs.

When asked why the trade majors are reticent about an early harvest, New Zealand’s trade minister Tim Groser told IPS, “I am not going to comment on developed countries’ political circumstances. It is not an issue for New Zealand to complete free access for LDCs.”

While the emerging economies — China, India, and Brazil – and New Zealand, the European Union, Japan, Canada, and Norway, among others, provide duty-free and quota-free access to LDC exports, the U.S. has an uneven framework for granting such access.

“The United States should grant duty-free and quota-free access to LDCs to level the playing field and thereby to avoid giving less market access to LDCs than to other trade partners with whom they have FTAs (free trade agreements),” wrote Carrere and de Melo.

Their research article, titled “The Doha Round and Market Access for LDCs: Scenarios for the EU and US Markets”, was published through the Centre for Economic Policy Research, an independent, London-based organisation that coordinates a worldwide network of economists.

The authors pointed out that if the OECD countries are serious about development, they should grant duty-free and quota-free access to the LDCs without further delay.

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