Rich nations need to provide duty-, quota-free access to LDC products: MCCI

FE Team | Published: November 13, 2007 00:00:00 | Updated: February 01, 2018 00:00:00

FE Report
The developed countries need to make commitment to provide duty-free and quota free access to all products of the least developed countries (LDCs) within a time frame. Unless it is done, there is every possibility that most important export items of the LDCs will be put outside the scope of duty-free and quota-free access.
This view was expressed by the Metropolitan Chamber of Commerce & Industry (MCCI) in an editorial comment in the latest issue of its 'Chamber News'.
The Doha Round of negotiations, the MCCI pointed out, was put on hold in July 2006 when negotiations among the major players (the so-called G-6 countries -- Australia, Brazil, EC, India, Japan, and the U.S.) broke down following disagreements over farm subsidies and industrial tariffs. "The negotiations were resumed in February this year. Although progress was slow in the first four months after resumption, negotiations intensified in May and onward in order to reach consensus on at least agriculture and non-agriculture market access (NAMA). It is now clear that if no consensus can be reached in the areas of agriculture and NAMA, initiatives would not be taken in other areas of negotiations."
Against this backdrop, the texts on the modalities of agriculture were proposed by the Chairs of these negotiating groups in July 2007, the chamber noted.
"The WTO Members have been continuing discussions on these two texts since September 2007. It was expected that the chairs of these groups would circulate the revised drafts by the end of September. It is now expected that the revised texts would be circulated in second half of November 2007. It is also reported that the Chair of the Special Session on the Council on Trade in service is also preparing a text, which may be circulated at any time," the MCCI stated.
It stated that the LDCs "are deeply concerned over the operationalisation of the decision taken by the Hong Kong Ministerial Conference for providing duty-free and quota-free access to all products of the LDCs. There was an expectation at the Hong Kong Ministerial that commitment would be undertaken by the developed countries to provide duty-free and quota-free access to all products of the LDCs. However, amidst the strong opposition of two developed countries, commitment was made partially with the provision for coverage of at least 97% of the products of the LDCs."
The chamber further stated: "It was expected that the modalities of NAMA and Agriculture would address this issue and work out a detailed outline for operationalisation of the decision for extending the duty-free and quota-free access to the LDCs and for simplification of rules of origin. However, both the texts are non-committal for such concessions. It has been also observed that the Chair of negotiating Group on Agriculture deviated from his earlier proposition on providing duty-free and quota-free access by the end of the implementation."
Pointing out that since duty-free and quota-free access has direct linkage with the rules of origin, the chamber said simplified and development friendly rules of origin are important for the LDCs. "However, both the texts lack any provision on the rules of origin."
"Another major concern for the LDCs is the preference erosion. Many LDCs including Bangladesh have been enjoying duty-free access in developed country markets for a long time, which contributed to their exports and industrial development. Tariff cuts both in agriculture and NAMA are likely to erode these preferences and adversely affect their exports. The texts proposed by the Chair's of the negotiating groups on agriculture and NAMA propose for longer time frame for a small number of products, but this alone cannot limit the preference erosion. Besides, the LDCs face increased cost for enjoying the preferences, like compliance with rules of origin requirement, sanitary and phyto-sanitary measures (SPS), and technical barriers to trade (TBT) measures", the chamber said.
The MCCI observed, "it is important to start negotiations on non-tariff barriers (NTBs), which pose serious constraints to the LDCs' export growth. The negotiations on NTBs did not receive any priority since the launch of the Doha Round. There is no deadline given for submission of proposals, let alone elimination of the NTBs. It may be mentioned that most of the NTBs are in the nature of SPS, TBT, and anti-dumping and countervailing measures."
"The position of the major developed countries has been that NTBs be considered within the framework of the respective agreements. As they are opposed to any substantive amendment to these agreements, the identified NTBs are likely to continue and multiply in the coming years."
"A lot of research will be needed to identify the prevailing NTBs in different countries and prepare and submit negotiating proposals at the WTO. Since the private sector industry and business are likely to have the most up-to-date information about the presence of the NTBs in different countries, the governments of the LDCs, particularly our Government, should initiate dialogues with the private sector to identify NTBs and help make the appropriate proposals for negotiations," the MCCI suggested.
"We have observed with hope that groups of NAMA-11, G-20, LDCs, African group and ACP group have collectively submitted their proposals recently, which, among others, include the issues of the LDCs. Such a unity makes the demands of the LDCs stronger. Special efforts should be made to ensure that such unity continues till finalisation of the modalities. It is widely expected that with the appointment of a new Ambassador at the Bangladesh Permanent Mission in Geneva, it will be possible for Bangladesh to play a crucial role in the unity process", the chamber noted.