strategy

Promoting interests of developing countries in world trade agreements

Description:
The Agreement Establishing the World Trade Organization states, "there is need for positive efforts designed to ensure that developing countries, and especially the least developed among them, secure a share in the growth in international trade commensurate with the needs of their economic development."
Context:
Developing countries have articulated concerns about the World Trade Organization (WTO). Such concerns relate to trade in agriculture and services, including financial services, intellectual property rights, labour standards and the environment.

The Uruguay Round agreements have not provided the expected benefits for developing countries. The "positive agenda" put forward by developing countries at the WTO meeting in Seattle was not even taken into account. The failure at Seattle was a result of substantive disagreement among developed countries. The rules of the multilateral trading system included best endeavour provisions in favour of developing countries which would need to be made effective and legally binding. A truly equitable trading system, to ensure full participation of developing countries was advocated.

Prior to the Seattle conference, the WTO has been dominated by the three major trading blocs: the western hemisphere block organized around the NAFTA treaties, the European Economic Community (EEC) and the Asian industrialized nations. The Seattle talks were the first which included developing countries. The complex tensions inside the WTO was reflected in the structure of the "green room" discussions dominated by the more powerful WTO members and the general meeting where the entire body -- recently expanded by the addition of developing nations -- would attempt to ratify the "green room" decisions by consensus.

The WTO Agreement on Agriculture states, "Having agreed that in implementing their commitments on market access, developed country members would take fully into account the particular needs and conditions of developing country members by providing for a greater improvement of opportunities and terms of access for agricultural products of particular interest to these members, including the fullest liberalization of trade in tropical agricultural products as agreed at the Mid-Term Review, and for products of particular importance to the diversification of production from the growing of illicit narcotic crops.

Implementation:
An independent study prepared by the French Institute of Research (INRA - Institut National pour la Recherche Agricole) in 2003 shows that the EU is one of the world's most open market to imports of farm products from third countries and especially from developing countries. Taking into account trade preferences given to developing countries, the average customs duty actually applied by the EU to farm imports is 10.5%, a figure three times lower than frequently mentioned data. As a result of this low level of protection, the EU is by far the world's number one importer of agricultural products, and the main importer of farm products from developing countries as well as from least developed countries.
Claim:
1. About two-thirds of exports from the least developed countries are to the industrialized countries, so free access could confer significant benefits. In particular, not only could export volumes and earnings increase but increased investment may be attracted into the least developed countries (as multinationals seek to avail of their preferential access).

2. Developing countries are better off in a rules-based trading system with limits to the powers of stronger countries and transnational corporations.

3. Developing countries must focus on reducing the constraints to agricultural trade in the WTO negotiations. Export subsidies should be outlawed, domestic producer subsidies reduced, access under tariff quotas increased, tariff escalation on processed agricultural products removed, and the level and dispersion of bound tariffs on agricultural imports reduced.

4. UNCTAD should define its functions and work programme in partnership with the WTO, FAO, IMF and the World Bank. These should include: providing a forum for developing countries on trade and related issues; maintaining trade-related databases and providing information; undertaking high-quality analyses; providing technical assistance in norms and standards and in dispute settlements; advocating better market access in industrial countries; and helping to build coalitions for seeking common developing country positions in multilateral trade negotiations.

Subjects:
Promotion
Trade
Agreements
Type Classification:
E: Emanations of other strategies