[Kabar-indonesia] Where the WTO failed the developing countries [+Last chance for talks]

[JoyoNews at aol.com]

also: Australia says September meeting is last chance for global trade talks 

The Jakarta Post
Wednesday, August 2, 2006

Op-Ed

Where the WTO has failed the developing countries 

Jaime Escober, Quezon City

We should welcome the failure of the latest round of talks in the World Trade 
Organization. We are relieved the talks have ended without a deal as the 
proposed agreement would have caused damage to the economies of developing 
countries.

Both the Agreement on Agriculture and the negotiations on the Non-Agriculture 
Market Access (NAMA) have failed to correspond to the spirit and letter of 
the Doha Ministerial Declaration, particularly paragraph 16, which aims to "take 
fully into account the special needs and interests of developing and least 
developed countries, including less than full reciprocity in reduction 
commitments, in accordance with the relevant provisions ... for special and 
differential treatment of developing and least developed countries". 

The fisheries sector is lumped together with industrial products under NAMA. 
Here, the negotiations have focused almost solely on how to reduce and 
eliminate tariffs. The principles of less than full reciprocity and special and 
differential treatment have taken a back seat to the talks on a "harmonizing" 
tariff reduction formula that aims to reduce all tariffs to the same (zero) level, 
regardless of the different levels of development of the 149 member countries 
of the WTO. 

As an alternative, we have pushed for a "proportional" formula consisting of 
a higher coefficient for us and other developing countries and a lower one for 
the developed countries. The NAMA 11 group of developing countries wanted a 
"no less than 30" co-efficient for developing countries, while certain sectors 
in the Philippines wanted a co-efficient as high as 90 for them. 

These figures are estimate ranges of what co-efficient levels would allow 
developing countries to maintain average tariff levels that are at least not 
lower than the current levels after the initial application of the 
tariff-reduction formula. A proportionately higher co-efficient would have provided 
developing countries some room for domestic protection under which their industries 
could survive and develop further even under the WTO regime. This is only fair 
because the developed countries had themselves used tariffs as a protective 
barrier, without which they would not have attained their present status. 

However, we knew even before the collapse of the talks last week that the 
demand for a proportional formula would not pass. The developed countries led by 
the U.S. and EU insisted on a "Swiss formula" using a single, much lower 
(20-25) level of co-efficient. Philippine negotiators told us that a co-efficient 
of 20 would have adversely affected the Philippine fisheries sector; and any 
figure lower than 30 would have negative impacts on the local automotive and 
petrochemical sectors. 

The developed countries wanted more market access in developing countries 
like ours, which is why they wanted us to remove our tariffs. But they do not 
want to remove their huge subsides that cause trade distortions and make their 
products artificially cheaper than the exports of developing countries. In other 
words, these subsidies act as unfair trade barriers preventing developing 
countries from having more market access in the U.S. and EU. 

In fact, the collapse of the talks can be traced directly to the 
unwillingness of the U.S. to remove its farm subsidies without getting them back in the 
form of more market access in developing countries. The U.S. demand was "a 
dollar's worth of market access for every dollar of trade-distorting farm subsidies 
removed". But are not these subsidies unfair in the first place? 

According to the WTO World Trade Report (as of July 24, 2006), the total 
amount of subsidies worldwide has reached US$300 billion, of which $250 billion 
were subsidies of developed countries. The same report said that agricultural 
subsidies showed a downtrend, but that "industrial subsidies were more prevalent 
in mining, coal, steel, forestry, fisheries, shipbuilding and automotive 
industries". 

Fisheries subsidies, estimated worldwide at $14-20 billion yearly, are not 
only trade-distorting. They also cause boat overcapacity and massive 
overfishing. But up to now, fisheries subsides have not been tackled in any official 
negotiations in the WTO since the talks in NAMA are devoted only to market access. 
Many developed countries are also the leading fishery subsidizers, such as 
Japan, the U.S., Canada, EU and Russia. 

Paragraph 16 of the Doha Declaration also mentioned its aim to eliminate not 
only tariffs but also non-tariff barriers (NTBs). These are the various safety 
and sanitary measures on products and commodities adopted especially by 
developed countries. NTBs have the effect of preventing market access and thus have 
become a trade issue among developing countries. 

A good example is the EU requirement of a lead content not exceeding 0.03 
parts per million (ppm) in fishery products, which is sure to affect the tuna 
exporting industries in Southeast Asia, including the Philippines and Thailand. 
Under the standards set by the Codex Alimentarius Commission, the international 
body tasked to harmonize food safety standards, the allowable lead content in 
fishery products is from 0.02 ppm to 0.05 ppm. The Philippine government 
lobbied for a 0.05 ppm, but to no avail. 

At least the WTO has tackled farm NTBs in the AoA negotiations, but fishery 
NTBs are another totally neglected issue just like fishery subsidies. The 
existing WTO agreement on technical barriers to trade is simply too general to have 
any practical application. 

Even before the talks collapsed, the inability of the WTO to implement the 
Doha mandate and address the issues of developing countries, namely subsidies 
and NTBs, was already apparent. With the collapse of the talks, its 
powerlessness to impose subsidy disciplines on the most powerful country in the world has 
been exposed as never before. Maybe it is now time for the WTO to close shop. 

The issues of subsidy and NTBs are left hanging. The developed countries did 
not want to touch these issues because they are useful and beneficial to them. 
But they must be resolved in the interest of sustainable and fair trade -- no 
longer in the WTO but in other arenas of trade negotiations. Even on the 
issue of tariffs many developing countries -- particularly those who have adopted 
autonomous tariff liberalizations since the Uruguay Round in the late 1980s -- 
have been left with the short end of the stick. Thus, there is need to review 
the impacts of these tariff liberalizations and reverse course where 
appropriate or needed. 

The writer is an information officer at the Tambuyog Development Center, a 
non-governmental organization advocating sustainable fisheries and trade in the 
Philippines. He can be reached at info at tambuyog.org 

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Australia says September meeting is last chance for global trade talks 

CANBERRA, Aug. 2 (AP): An international meeting of top officials in Australia 
next month is the last hope of salvaging World Trade Organization talks on 
global trade liberalization, Australia's trade minister said Wednesday.

The United States and WTO Director-General Pascal Lamy have accepted 
invitations to attend the meeting of trade minister from the 18 farm exporting 
countries who comprise the Cairns Group, Trade Minister Mark Vaile said.

The European Union also has been invited to Cairns, in Queensland state, for 
the Sept. 20-22 conference, which marks the group's 20th anniversary, he said. 
The EU has yet to respond.

Vaile said the meeting would be the last chance of reviving the round of WTO 
talks that began in Doha, Qatar, in 2001 but were suspended indefinitely in 
Geneva last week because of an impasse between the EU and the United States over 
winding back market barriers.

"I don't think there's any doubt about that ... and it's only half a chance, 
anyway," Vaile told Australian Broadcasting Corp. radio.

"The Round is not dead, but it really is only hanging by a thread. The window 
is almost closed," he added.

Vaile said he hoped the United States and EU had changed their positions 
since the 149-nation WTO suspended talks, saying they faced public pressure not to 
let the talks fail.

The Cairns Group -- which accounts for more than a quarter of the world's 
agricultural exports -- comprises Argentina, Australia, Bolivia, Brazil, Canada, 
Chile, Colombia, Costa Rica, Guatemala, Indonesia, Malaysia, New Zealand, 
Pakistan,Paraguay, the Philippines, South Africa, Thailand and Uruguay. 

The United States will be represented by its chief trade negotiator, Susan 
Schwab, and Agriculture Secretary Mike Johanns, Vaile said. 

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Joyo Indonesia News Service
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