The media has begun to draw attention to the next World Trade Organisation (WTO) Ministerial - to be held at Bali, Indonesia from December 03 to 06. This is the ninth Ministerial since the establishment of the WTO on January 01, 1995. This meeting is significant, as the WTO is at a crossroads. The Doha Round of trade negotiations was launched in November 2001 and was supposed to be completed in three years. It is still nowhere near completion.
No doubt, Bangladesh will field a large delegation. A newspaper, on Friday (November 01), reported that an 18-member official delegation would go from Bangladesh. "The prime focus", according to the same report, "would be to pursue the WTO Members, particularly those from the developed nations, to grant duty-free and quota-free market access (DFQF) of products originating from LDCs, including Bangladesh." One wonders if there is adequate awareness of the processes leading to the Ministerial, and what really happens there.
Preparations begin in the WTO, in Geneva, at least 10/12 months before the Ministerial. Now, barely a month remains before Bali, and the structure of the agreements to be adopted at Bali is already in place, and is known to the key players. The last bits are left to tackle at Bali - after all, the Ministerial must have something to do!
STATE OF NEGOTIATIONS PRIOR TO BALI: Perhaps a glimpse into the shape of the Bali outcome will be useful. This shape is discernible from the agreements already arrived at, or in advanced stages, and are ripe for harvesting at Bali. These are, by subject:
AGRICULTURE: There are three areas which are promising, and one with no hope of succeeding:
a. Export Competition - subsidy that countries (particularly, the developed ones) give to agricultural exports would be limited, with a monitoring mechanism. The countries most like to be affected have not agreed as yet.
b. Tariff Rate Quotas (TRQ) - some countries specify quantities that may be imported at different tariffs, particularly for agricultural commodities. There has been some progress in managing these, but more needs to be done.
c. Food Security - selected developing countries (G33) have made proposals, and there seems to be convergence on several issues, such as protection for traditional staple crops, transparency, and safeguards.
d. Cotton - C4 countries - cotton-producing West African countries (Benin, Mali, Burkina Faso & Chad) have made proposals on: i. trade (market access, domestic support, and export competition),; ii. Development; and, iii. Implementation and monitoring. The country that continues to provide the greatest subsidy to cotton growers is the US, and there is no prospect of a substantive agreement here.
TRADE FACILITATION: Some specific articles of the GATT Agreement have been included in the negotiations (Articles V: Freedom of Transit; Article VIII: Fees & Formalities for Export and Import; and, Article X: Publication & Administration of Trade Regulation. It seems that the WTO Members are moving towards an agreement, in which all these areas are lumped together in one accord:
a. Customs Cooperation, etc. - members are seeking a binding, multilateral set of rules on certain areas of customs cooperation, such as verification of export declarations.
b. Freedom of Transit (Article V of GATT) - Detailed procedures have been agreed upon, although some areas are still in brackets. Many of these procedures will affect Bangladesh, in giving transit. We need to be fully aware of the implications of these procedures, as our flexibility will be dramatically reduced.
c. Flexibilities for Developing Countries & LDCs - an innovative approach for the draft is for the developing economies and the least developed countries (LDCs) to identify their implementation in three categories: (a) those that will be implemented immediately; (b) those that will be implemented within a fixed number of years; and (c) those that will be implemented subject to technical and other capacity building assistance from developed countries. Till today, there is no commitment from the developed countries to provide such funds.
LDC ISSUES: Bangladesh remains classified as an LDC; and, so long as we have this status, we will benefit from the special privileges for an LDC. Hence, what provisions the WTO makes for the LDCs, is of utmost importance to us. Placed below is an analysis of the issues for the LDCs at Bali:
a. Duty Free Quota Free (DFQF): The Hong Kong Ministerial (2005) took a major decision on DFQF, where the developed countries were asked to provide DF market access to the LDCs at least up to 97% of their tariff lines. Almost all developed countries had complied, excepting the US. The developing countries were also to offer DF market access for the LDCs when they were able to do so; many are providing at limited levels. The detailed analysis of individual countries offering us DFQF is available with the WTO Secretariat.
We do not have any certainty of what may be expected from Bali. What we do know, however, is that there has not been any significant forward movement from the US in implementing the 2005 agreement. In the meantime, there seems to be lack of consensus among the LDCs on this subject. The utmost we can expect, from Bali, is an understanding on Developed & Developing Countries being urged to improve their DFQF facilities and for monitoring by the WTO and by the Committee on Trade & Development, and reporting to the General Council.
b. Rules of Origin: For the first time, we may have a multilaterally-agreed Rules of Origin. They cover three methods: i. ad valorem percentage calculation; ii. change in the HS classification; and, iii. specific manufacturing or process operation. There are provisions for Transparency and Documentary Requirements. This is a positive move, and our exporters must understand the provisions.
c. Services: A decision has been adopted to promote the expeditious and effective operationalization of the facilities for the LDCs. Members are to hold a Signaling Conference in July 2014, when they will indicate the sectors and modes of supply where they will give specific preference to the LDCs. This will be a positive outcome for us from Bali.
CONCLUSION: The WTO Ministerials at Seattle (1999), Doha (2001), Cancun (2003) and Hong Kong (2005) generated a great deal of public interest. During each period, major changes in multilateral trade rules were expected. Thereafter, the MInisterials have not generated so much interest, as no major development was on the cards. Bali is no exception.
Work on the substantive elements of Bali began months back, and have been completed by end-October. There are very few items left for Bali - only, marginal changes in the text. If was wanted to achieve anything, our effort should have been at Geneva, with support from Dhaka. Not having done the basic homework, and not having undertaken the difficult negotiations in Geneva, it is impractical to expect any positive outcome in Bali! No matter what the size of the delegation, or who is in it, the structures for the outcome are already in place and little can be done in Bali.
(Dr. Toufiq Ali, a former Ambassador to the WTO and currently Chief
Executive of the Bangladesh International Arbitration Centre (BIAC), can be reached at [email protected])
© 2024 - All Rights with The Financial Express
