Post-Bali WTO Work Programme: Focus on Asian LDCs

Asian LDCs (least developed countries) and countries with development needs are a marginalised group faced with many formidable challenges. These, among other, include adverse impact of climate change causing frequent crop failure, food crisis, unemployment and low productive capacities along with lack of appropriate level of market access in goods and services,  constrained further by trade restrictive NTBs (non tariff barriers). Many of these arise from demand-side constraints and lack of supply-side structural transformation and large infrastructure funding gaps.
International trade can offer immense developmental opportunities for these countries but in order to avail these opportunities productive capacities need to be built, export competitiveness developed and effective participation in global trade and investment flows enhanced.
The slow progress over a decade of WTO Doha Round of multilateral trade negotiations, including non-implementation of WTO LDC work programme, decision for DFQF (duty free quota free) market access for LDCs, agreed and adopted in the first to the 9th WTO Ministerial Conferences, and operationlisation of GATS (general agreement on trade in services) LDC Modalities 2003 have denied the developmental opportunities for these countries.
The successful conclusion of the Bali Agenda, unbundled from the DDA (Doha Development Agenda) Single Undertaking Agenda, in the 9th Ministerial Conference of the WTO in December 2013, has brought new dynamism in the Doha Round. But the Bali decision on DFQFMA for LDCs has reversed all the previously adopted ministerial decisions on DFQF market access of all products from all LDCs, and introduced, instead, a new provision of less than 97 per cent DFQFMA for LDCs. Under the Bali decision on DFQFMA for LDCs, the US has gained the liberty of denying market access to Asian LDCs including Bangladesh even below 97 per cent of their products which could include all items of interest of Asian LDCs including RMG (readymade garments).
The Bali DFQF also deprived the LDCs the right to DFQFMA "in a manner that ensures stability, security and predictability" as per terms of the Hong Kong Ministerial Declaration. The existing duty free duty-free and quota-free schemes such as EU EBA and other operating GSPs (generalised system of preferences), escaping the Bali text, can not be accepted and understood as the DFQFMA for LDCs under the terms of the Hong Kong Ministerial Declaration.
POST-BALI WORK PROGRAMME ON THE REMAINING DDA ISSUES: The Bali Ministerial Declaration instructs the WTO Trade Negotiations Committee (TNC) to prepare within the next 12 months a clearly defined work programme on the remaining DDA issues, including unfinished business for the conclusion of the Doha Round, the implementation-related concerns and other systemic issues.
SINGLE UNDERTAKING: The concept of single undertaking has been used as an interpretative tool meant to promote coherence in the construction and implementation of the WTO multilateral agreements. The unbundling of DDA Single Undertaking came into effect in the form of Bali package under the 8th WMC decision:  
"DDA: 5. In this context, Ministers commit to advance negotiations, where progress can be achieved, including focusing on the elements of the Doha Declaration that allow Members to reach provisional or definitive agreements based on consensus earlier than the full conclusion of the single undertaking."
The Post Bali work programme should cover three specific chapters from the unbundled DDA Single Undertaking Agenda as follows:
CHAPTER 1: Bali decisions, consistent with the existing WTO legal texts and decisions agreed upon and adopted in the ministerial conferences, should be integrated into the WTO legal framework and implemented accordingly. These include export competition in agriculture, permanent solution to food security challenges in developing countries, binding provisions with respect to various development issues of interest to LDCs including market access in goods and services trade.
CHAPTER 2: Identify early harvest issues agreed earlier to form the rest of the unbundled DDA single undertaking agenda except issues mentioned in Chapter 3. The proposed issues are:
1.    GATS domestic regulations.
2.    Negotiations on market access in services trade to be conducted through request offer and puritanical mode.   
3.    Clarification under paragraph 2 of Article IX (WTO decision making Rules) and operationalise GATS LDC modalities 2003 as an obligation under GATS to promote LDC's services trade.
CHAPTER 3: Negotiations on rest of the agriculture and NAMA issues may include agricultural market access, issues on special and sensitive products, food aid and agricultural productivity for LDCs, tariff reduction under market access on non-agricultural goods by developed and developing countries.
The principle of less than full reciprocity with respect to developing and no reciprocity in the case of the LDCs should be maintained and their respective applicable policy space duly recognised.
POS- BALI AGENDA ON DFQFMA FOR LDCs: Single Undertaking is being resorted to as a pretext by some of the developed countries for not implementing the duty-free and quota-free access for LDCs although the unbundling of DDA Single Undertaking came into effect in line with the 8 WMC decision:  
"Ministers commit to advance negotiations, where progress can be achieved, including focusing on the elements of the Doha Declaration that allow Members to reach provisional or definitive agreements based on consensus earlier than the full conclusion of the single undertaking." This was further reinforced by the Chairman's concluding statement (General Council doc WT/MIN (11)/W/2) of the 8th WMC: "full implementation of Decision 36 of Annex F of the Hong Kong Ministerial Declaration of 2005 on measures in favour of LDCs"
IMPLEMENTATION OF DFQFMA FOR LDCS: Duty-free and quota-free market access for all goods originating from all LDCs under paragraph 36 of Annex F of the Hong Kong Ministerial Declaration should be operationalised prior to the next ministerial conference in a manner that ensures stability, security and predictability;
* Members shall notify duty-free and quota-free schemes for LDCs, including all existing unilateral DFQFMA including GSP Schemes extended to LDCs under the terms of paragraph 36 of Annex F of the Hong Kong Ministerial Declaration.  Monitoring mechanism should ensure implementation of DFQF commitments.
* Ministerial Decision of 7 December 2013 on "Preferential Rules of Origin for Least-Developed Countries" should be followed as an obligation.   
OPERATIONLISATION OF THE WAIVER CONCERNING PREFERENTIAL TREATMENT TO SERVICES AND SERVICE SUPPLIERS:  LDC GATS Services waiver 2011, which is only a best endeavour clause rather than an obligation as required under GATS article (iv) (3), terminates the GATS obligation towards LDCs in 15 years which is beyond the scope of GATS Agreement. The waiver has to be renewed annually thereby negating the predictability of any such waiver based services trade.  
The LDCs should call upon the WTO Council for Trade in Services to clarify under paragraph 2 of Article IX (WTO decision making Rules) and operationalise GATS LDC modalities-2003 as an obligation under GATS to promote LDC's services trade.
Mode 4 needs to be delinked with Mode 3 under services waiver for LDCs. Trade in Services Agreement should provide for market access to LDCs as prescribed in GATS agreement and GATS LDC modalities-2003
AGRICULTURE:  Many Asian LDCs are dependent on food imports and food aid therefore increasing productivity of agriculture sector remains central to the efforts of Asian LDCs and countries with special needs, especially in face of new challenges posed by climate change. Some of the countries like Cambodia and Viet Nam have been able to improve their productivity and increase exports of agricultural products through domestic reforms. However, high domestic support in developed countries, SPS (sanitary phyto-sanitary) issues and lack of domestic capacities limit market access to their agricultural products.
The coverage of DFQF market access for agricultural products should be 100 per cent including all notified "special and sensitive products" also.
The Post Bali work programme should effectively take account of the development needs of LDCs and countries with special needs under the three pillars of negotiations - Domestic Support, Market access and Export Competition.
Special and differential provisions in agriculture negotiations, particularly special products and special safeguard mechanisms should remain the key elements of interest in agriculture negotiations.
NON-AGRICULTURE MARKET ACCESS:  Asian LDCs and countries with special capacity development needs to strongly oppose conditionalities imposed on grant of tariff preferences, particularly those not related to trade such as ILO Labour standards. Both US and the EU have failed to comply with the WTO mandate on ILO core labour standards adopted in paragraph 4 and 8 of the Singapore and Doha Ministerial Declarations respectively.   
Paragraph 4 of the Singapore Ministerial Declaration says, "The International Labour Organization (ILO) is the competent body to set and deal with these standards" and "We reject the use of labour standards for protectionist purposes, and agree that the comparative advantage of countries, particularly low-wage developing countries, must in no way be put into question. In this regard, we note that the WTO and ILO Secretariats will continue their existing collaboration." The Doha Ministerial Declaration at Paragraph 8 recalls the commitment through the statement, "We reaffirm our declaration made at the Singapore Ministerial Conference regarding internationally recognized core labour standards. We take note of work under way in the International Labour Organization (ILO) on the social dimension of globalization."
SECTORAL INITIATIVE: The NAMA Sectoral initiative is being transformed from voluntary to a mandatory modality for fast-tracking the elimination of tariffs by developed countries. Sectoral initiative should be only a pluritarial agenda. Items notified under sectoral initiative should be automatically included in the list of products for DFQFMA for LDCs.
TRADE FACILITATION:  The TF agreement should also include broader measures relating to quality control procedures, including treatment of products with certificates issued by accredited certifying agencies, energy pipelines and power transmission grids to streamline free flow of goods across the borders.  
IMPLEMENTATION ISSUES: Despite the Doha Declaration attaching importance to the implementation-related issues and concerns raised by Members, progress has been tardy on most of the issues of significance to Asian LDCs and countries with special needs. Bali Ministerial Declaration contains no specific item on Implementation Issues.
The writer is Trade policy Advisor and Chairman FBCCI Standing Committee on WTO and RTAs.
mahmed019@hotmail.com