1. TRADE AND DEVELOPMENT High Level Consultations on DDA Bangkok, Thailand Raúl Torres, Development Division

2. Elements in the module  Trade and Development –Why is trade important for development? –Challenges and how to meet them  Work Programme on Small Economies  Special and differential treatment –Historical evolution and current state of the negotiations

3. What do we know about trade?  Trade can be a powerful source of growth & development;  Trade can expand markets, facilitate competition and disseminate knowledge, raise productivity and facilitate assimilation and exposure to new technologies  No country has developed by turning its back on trade and long-term capital flows;  At the same time trade liberalization will not automatically lead to growth and development;

4. Trade and Development  What is development? –Economic or social? –Is development part of the scope of the WTO? –Is the WTO a developmental agency? –Who is a developing country?

5. Complex Nature of the Nexus between Trade and Development  The relationship between trade and development is complex and largely dependent on both internal and external factors;  The causal link between different influencing factors is not clear;  Complexity of the issue is compounded by peculiar features of developing countries economies;  Trade liberalization alone may not lead to growth and development.

6. Summary  A development friendly and conducive multilateral environment can lead to increased trading opportunities;  For these opportunities to be converted into actual gains trading partners may have to look beyond mercantilist gains;  Even more importantly, the global community would need to work together to help dc’s overcome supply-side constraints and capacity building

7. Summary (continued)  For trade to lead to development the dc’s would need to adopt matching domestic policies;  Institutional development and innovation would be one of the more important elements of such development strategies;  Multilateral trade rules should, therefore, provide flexibility and policy space to dc’s to pursue appropriate development priorities.

8. Maximizing Developmental Gains From the DDA  Trade liberalization in itself is not enough- need investments in social sector; greater access to productive assets; stronger institutions and infrastructure;  Ensure empowering and demand driven technical assistance, build capacity;  Making MTS stronger and inclusive  Or weakening of rule based multilateral trading system and proliferation of bilateral and regional agreements could leave smaller countries worse off.

9. Developmental Issues in the DDA

10. The DDA mandate  Paragraphs 1,2,3 and 6 –International trade can play a major role in the promotion of economic development and the alleviation of poverty. –The majority of WTO members are developing countries. We seek to place their needs and interests at the heart of the Work Programme adopted in this Declaration. –Enhanced market access, balanced rules, and well targeted, sustainably financed technical assistance and capacity-building programmes have important roles to play.

11. Small Economies

12. CTD – Dedicated Session  CTD – Dedicated Session on Small Economies –Para. 35 Doha MD mandate –HK MD Para. 41  Proposals in CTD –Decision on regional bodies for TBT,SPS and TRIPS  Monitoring proposals in other bodies

13. SVEs Doha Mandate  “We agree to a work programme, under the auspices of the General Council, to examine issues relating to the trade of small economies.  The objective of this work is to frame responses to the trade-related issues identified for the fuller integration of small, vulnerable economies into the multilateral trading system, and not to create a sub-category of WTO Members

14. Who are the SVE proponents?  Antigua and Barbuda, Barbados, Belize, Dominica, Fiji, Haiti, Jamaica, Mauritius Papua New Guinea, Solomon Islands, Sri Lanka, St. Kitts and Nevis, St. Vincent and the Grenadines, Trinidad and Tobago  Bolivia, Mongolia, Paraguay  Cuba, Dominican Republic, Guatemala, Honduras, Nicaragua, El Salvador

15. The two-track process  Proposals in the CTD-DS –Regional bodies for TBT, SPS + TRIPS WT/COMTD/SE/W/15-16 and 18 (Revs.1) –Recommendation adopted by CTD WT/COMTD/SE/5 –Approved by General Council in October 2006 –Other D’g countries can also use the same mechanism

16. Monitoring SE proposals in the negotiating bodies  Document WT/COMTD/SE/W/22/Rev.1 to serve as basis.  W/22/Rev.1 is a compilation prepared by the Secretariat  Includes proposals and latest draft modalities

17. SVE proposals in the negotiating bodies  Agriculture  NAMA  Rules (fisheries subsidies)  Services  Services Domestic regulation  Subsidies – decision in WT/L/691

18. Definition of SVE  In the Agriculture modalities draft: Country does not exceed –0.16% world goods trade –0.10% world NAMA trade –0.40% world agricultural trade  In the NAMA modalities draft –0.10% world NAMA trade

19. Special and Differential Treatment

20. Introduction  GATT established in 1947 ( 23 CPs)  No formal recognition of any difference between the CP’s.  Fundamental principle of GATT was that all rights and obligations should be applied uniformly.  Even though 11 out of the original 23 CP’s would today be classified as developing countries, they participated as equal partners

21. Evolution of S&D  GATT Review Session, 1954-55 –Article XVII  Introduction of Part IV – 1964 –Principle of non-reciprocity  Enabling clause – 1979 –GSP, RTAs and LDCs  Uruguay Round –Transition periods, TA, flexibilities

22. Concerns with S&D A fter a few years dc’s felt that in many cases most of the S&D provisions were: A fter a few years dc’s felt that in many cases most of the S&D provisions were:  non-binding  ‘best endeavour clauses’  apparently mandatory, yet de-facto non-binding  only a few provisions were mandatory and binding provisions

23. Doha Ministerial Declaration  Ministers at Doha, recognizing that problems existed with respect to S&D treatment set out a work programme in para 44 of the Declaration, which –reaffirmed that S&D is an integral part of the WTO –noted that there are concerns about the implementation of S&D provisions –directed that all S&D provisions should be reviewed to strengthen them and to make them more precise, effective and operational, and –linked this work to the Decision on Implementation related issues and concerns

24. S&D Work Programme  88 Agreement specific submitted by the African Group and the LDC’s.  Developed countries also made submissions and raised a number of systemic issues  In its report to the General Council, initially in July’02, and then in December’02, the CTD (SS) could only agree on 4 proposals. CTD sought guidance from GC.

25. Systemic issues  Objectives of S&D –integration or development?  Compliance with obligations –Transition periods or waiver?  Definition of developing country –Self-denomination or objective criteria?  Categorization –Same treatment for all or creation of separate categories?  Graduation –Is S&D permanent or temporary?

26. S&D Work Programme  The CTD recommended that the GC provide a clarification on how to give effect to the Doha mandate.  There was no consensus in the GC to provide this clarification  The GC only took note of the report and asked its Chairman to undertake consultations on how to take forward the mandated review of all S&D provisions.

27. Negotiations under the GC Chair  All proposals to be addressed in 3 categories  Category I 38 proposals on which there was greater possibility of agreement.  Category II 38 proposals made in areas currently under negotiation– for referral.  Category III 12 proposals with wide divergence of views.

28. What happened at Hong Kong  Annex F on measures in favor of LDCs was the most important achievement in HK –Waivers: positive consideration and a decision taken within 60 days, similar for waivers in favor of LDCs –DFQF: Duty free quota free access (97%) to markets of developed and d’g countries in a position to do so –No conditionalities on loans, grants and official development assistance that are inconsistent with WTO Agreements –TRIMS: Maintain 1 measure for 7 years, new measures for 5 years –TA to implement the agreement

29. Current Status  Agreement specific proposals –16 remain in CTD (8 Cat. I & 8 Cat. III) –6 are being discussed, other 10 positions still too far apart –Discussion on implementation of DFQF  Coverage and Rules of origin  Self declaration of developing Members –Cat. II proposals still in the negotiating bodies  Cross-cutting issues –Being discussed –Monitoring mechanism for S+D provisions

30. 88 Total no. of proposals submitted in the Special Session 38 Proposals referred to other bodies (Cat II) 50 Proposals in the Special Session (Cat I + Cat III) 16 8 are from Cat I and 8 are from Cat III. 11 are by the African Group & 5 by other dc 23 Proposals remaining in the Special Session 8 Remaining Category III proposals (6 African Group & 2 other dc's) 8 Remaining Category I Proposals (5 African Group & 3 other dc's) 27 Agreed to in principle as part of pkg of 28 proposals 5 LDC proposals agreed to in HK 18 Proposals remaining with the Sp. Session 2 Proposals on the ATC

31. Monitoring mechanism for S+D provisions   Proposal by the Chairman – –Regular review technical and high level – –Gives visibility to S&D issue – –2 Levels   CTD   General Council – –Scope   WTO Agreements   Proposals agreed in principle before Cancún   MC+GC Decisions