WTO Ministerial 09: some concerns of the LDCs
Monday, 7 September 2009
Manzur Ahmed
The general council of the World Trade Organisation (WTO) decided in May that its seventh ministerial conference will be held at its headquarters in Geneva from November 30-December 2.
The theme of this year's meeting is: "The WTO, the Multilateral Trading System and the Current Global Economic Environment."
Meanwhile, an informal meeting of the trade ministers of some WTO member countries held in New Delhi on September 3-4, has set the ball rolling for serious negotiations in Geneva later in the month for concluding the on-going Doha Round of trade talks.
The global crisis and LDCs: The current global economic crisis has its origin in the advanced industrial economies of the West. While LDCs bear no responsibility for creating the crisis, they are suffering its worst effects, and they also lack the means for countering the immediate and longer-time effects. Their economies have been devastated. Small businesses, firms, mines, jobs, revenues and livelihoods have been swept away; the poverty eradication and social development programmes have suffered. The crisis has also highlighted the continued dependence of the LDCs on the export of a narrow basket of commodities.
LDCs' response to the global economic crisis requires a combination of: (a) urgent actions and extra resources to address the financing gaps and to implement measures to counter the immediate effects of the crisis; (b) the adoption of pro-active policies in the areas of trade, finance, and production to re-position their economies and put them on the path of sustainable development.
The current financial crisis will no doubt have profound, and possibly prolonged, effects on the LDCs, whose recent good economic performance has been heavily dependent on external factors.
There is a real danger that the progress which has been made in reducing poverty in LDCs may be undermined. It is therefore critical and urgent that we consider ways in which we can mitigate the effects of this worsening global economic environment on developing countries, LDCs in particular.
Has trade liberalisation helped poor countries? Analyses by Joseph Stiglitz and Paul Samuelson show that across-the-board trade liberalisation is in fact harmful to the economies of poor countries.
World Bank economists have admitted that during periods of trade liberalisation ". . . job destruction rates can be expected to proceed at a much faster pace than job creation. Globalisation could therefore, be associated with higher unemployment rates".
Some of the major concerns about the current Doha round are that the reduction in tariffs is biased in favour of developed countries, as developing countries with higher tariffs would have to reduce their tariffs more. Further liberalisation and reduction of tariffs in industrial goods and agriculture, will result in closure of local industries, an increase in job losses and unemployment.
The developing countries should not make any commitment to complete the Doha Round till the issues that have prevented the developing countries from benefiting from the Uruguay Round trade liberalisation are resolved to the satisfaction of the developing countries.
All DDA agenda related to LDCs, including duty- and quota-free market access in goods and services (mode 1, 3 and 4) under Paragraph 36 of HKMD and GATS modalities exclusively for LDCs, should be immediately operationalised.
Bangladesh RMG, for example, is exported to the US on MFN tariffs causing serious price erosion because of unfair competition from duty-free suppliers and exports from giants like China, India and others. This has eroded the welfare gains of Bangladesh business and workers, specially under the spell of GFC.
The phasing out of non-reciprocal preference while lingering the transitional period of MFN tariff reduction schedule by two years is not compatible with WTO commitments.
LDCs should strongly support the Indian proposal: "It is proposed that a Steering Group be established under the General Council to comprehensively examine all WTO-related instruments allowing Members to grant preferential access to LDCs. Following such examination, Members may consider/propose a single instrument that would address all forms of preferential market access for LDCs, with a view to providing greater clarity and predictability, and to contribute to the further integration of LDCs in the multilateral trading system. Moreover, given the importance of this exercise, it is also proposed that direction from Ministers at the Seventh Ministerial Conference be sought for initiating the process."
Services negotiations: "GATS LDC Modalities" should be acted upon and member countries should be called upon to adopt measures accordingly. The members countries should be called upon to publish and notify domestic regulations to ensure transparency, predictability and rational treatment on facilitating movement of skilled and unskilled persons. The immigration and visa procedures should be simplified.
Proposals on agriculture: Bangladesh private sector strongly urges the WTO MEMBER countries to implement sub-paragraphs 3 (i) and (ii) of the "Decision on Measures concerning the possible negative effects of the reform programme on least-developed and net food-importing developing countries".
l In order to ensure that an increasing proportion of agricultural products, including foodstuffs, are made available to the least developed countries in fully grant form and/or on appropriate concessional terms, developed and developing countries should be required to provide subsidised price support mechanism in favour of the agricultural products imported by the LDCs. Such transactions shall also be exempt from any restrictions in providing Export Financing Support.
l Technical and financial assistance to least-developed and net food-importing developing countries to improve their agricultural productivity and infrastructure should be ensured by according full consideration to the requests made by the respective LDCs.
TRIPS: The developed countries should be called upon to notify annually the implementation of Article 66.2 of the TRIPS Agreement by reporting on the actual transfer of technology to LDCs.
"Extension of the Transition Period under Article 66.1 of the TRIPS Agreement for LDC Members for Certain Obligations with Respect to Pharmaceutical Products until 1 January 2016 with respect to paragraph 7 of the Doha Declaration on the TRIPS Agreement and Public Health" should be further extended to facilitate the capacity building and growth of Pharmaceutical Products Industries in LDCs.
The waiver adopted by the General Council on 8 July 2002, in respect of the obligations of LDCs under Article 70.9 of the TRIPS Agreement until 1 January 2016 should also be extended until the required level of capacity-building is reached.
Article 27.3 (b) of the TRIPS Agreement should be revised to prohibit patents on plants, animals, micro-organisms, essentially biological processes for the production of plants or animals, and non-biological and microbiological processes for the production of plants or animals.
WTO and WIPO should undertake jointly with the concerned LDCs to carry out respective priority needs assessments for technical and financial cooperation to implement the TRIPS Agreement. The priority needs, among others, should include:
l Financial and logistical assistance to complement ongoing intellectual property reform programmes, such as funds to hire intellectual property policy analysts;
l Setting up a "National Intellectual Property Policy Forum" through which representatives from government, the private sector, and civil society would produce a draft national policy framework;
l To develop a national strategy on intellectual property;
l Taking up specific activities and timelines for updating the intellectual property legal framework and administration infrastructure;
l Harnessing effectively technology transfer and compulsory licensing measures;
l Strengthening enforcement and regulation, and
l Intellectual property to be used as a tool for socio-economic development, through the establishment of a national scientific and technological creative base.
Subsidies and dumping: Subsidies are one of the major challenges facing LDCs in key markets. The competitiveness of the LDCs is eroded by the fact that their pricing cannot match those offered by their highly subsidised rivals in developed and developing countries. Bangladesh should strongly support the ACP proposal for special and differential rules, disciplines, and standards on subsidies for the LDCs with a view to promoting research and development, growth in disadvantaged regions and environmental restructuring etc.
All exports from the LDCs should be exempted from antidumping, countervailing and safeguard measures by the developed and non-LDC developing countries. the Safeguard measures should not be applicable against LDCs.
LDCs are the foremost victims of dumped and subsidised exports yet initiating an anti-dumping investigation and imposing anti-dumping duty under normal ADA procedure is beyond their capabilities. A provision should be there for ex-officio initiation of an anti-dumping investigation exclusively by LDCs.
The imposition of anti-dumping duty should effectively remove the injury to a domestic industry eliminating the margin of dumping through increased export price by that same amount, thereby ensuring that the exporter is not selling at injurious prices.
Article 8 of the Anti-Dumping Agreement should be clarified to ensure that price undertaking is encouraged and preferred being more transparent and compliance friendly. Price undertaking given by any exporter from LDCs must be accepted.
RTAs: In view of the continued and rapidly increasing BFTAs, RTAs, GSPs, EPAs and other preferential arrangements in all possible combinations a separate WTO agreement should be adopted on all forms of RTAs to ensure transparency and compatibility with WTO and also ensuring non-reciprocal market access for 100% products originating from LDCs without discrimination.
Besides, WTO environmental policies must not burden LDC domestic companies with additional costs, thus giving them a competitive disadvantage in international markets.
Policy coherence: Bangladesh and other LDC countries should uphold and implement the Decision on Measures in Favour of Least-Developed Countries to ensure that "LDCs are not subjected to conditionalities on loans, grants and official development assistance that are inconsistent with their rights and obligations under the WTO Agreements."
The writer is an adviser of the FBCCI. He can be reached at
e-mail: a.manzur@yahoo.com
The general council of the World Trade Organisation (WTO) decided in May that its seventh ministerial conference will be held at its headquarters in Geneva from November 30-December 2.
The theme of this year's meeting is: "The WTO, the Multilateral Trading System and the Current Global Economic Environment."
Meanwhile, an informal meeting of the trade ministers of some WTO member countries held in New Delhi on September 3-4, has set the ball rolling for serious negotiations in Geneva later in the month for concluding the on-going Doha Round of trade talks.
The global crisis and LDCs: The current global economic crisis has its origin in the advanced industrial economies of the West. While LDCs bear no responsibility for creating the crisis, they are suffering its worst effects, and they also lack the means for countering the immediate and longer-time effects. Their economies have been devastated. Small businesses, firms, mines, jobs, revenues and livelihoods have been swept away; the poverty eradication and social development programmes have suffered. The crisis has also highlighted the continued dependence of the LDCs on the export of a narrow basket of commodities.
LDCs' response to the global economic crisis requires a combination of: (a) urgent actions and extra resources to address the financing gaps and to implement measures to counter the immediate effects of the crisis; (b) the adoption of pro-active policies in the areas of trade, finance, and production to re-position their economies and put them on the path of sustainable development.
The current financial crisis will no doubt have profound, and possibly prolonged, effects on the LDCs, whose recent good economic performance has been heavily dependent on external factors.
There is a real danger that the progress which has been made in reducing poverty in LDCs may be undermined. It is therefore critical and urgent that we consider ways in which we can mitigate the effects of this worsening global economic environment on developing countries, LDCs in particular.
Has trade liberalisation helped poor countries? Analyses by Joseph Stiglitz and Paul Samuelson show that across-the-board trade liberalisation is in fact harmful to the economies of poor countries.
World Bank economists have admitted that during periods of trade liberalisation ". . . job destruction rates can be expected to proceed at a much faster pace than job creation. Globalisation could therefore, be associated with higher unemployment rates".
Some of the major concerns about the current Doha round are that the reduction in tariffs is biased in favour of developed countries, as developing countries with higher tariffs would have to reduce their tariffs more. Further liberalisation and reduction of tariffs in industrial goods and agriculture, will result in closure of local industries, an increase in job losses and unemployment.
The developing countries should not make any commitment to complete the Doha Round till the issues that have prevented the developing countries from benefiting from the Uruguay Round trade liberalisation are resolved to the satisfaction of the developing countries.
All DDA agenda related to LDCs, including duty- and quota-free market access in goods and services (mode 1, 3 and 4) under Paragraph 36 of HKMD and GATS modalities exclusively for LDCs, should be immediately operationalised.
Bangladesh RMG, for example, is exported to the US on MFN tariffs causing serious price erosion because of unfair competition from duty-free suppliers and exports from giants like China, India and others. This has eroded the welfare gains of Bangladesh business and workers, specially under the spell of GFC.
The phasing out of non-reciprocal preference while lingering the transitional period of MFN tariff reduction schedule by two years is not compatible with WTO commitments.
LDCs should strongly support the Indian proposal: "It is proposed that a Steering Group be established under the General Council to comprehensively examine all WTO-related instruments allowing Members to grant preferential access to LDCs. Following such examination, Members may consider/propose a single instrument that would address all forms of preferential market access for LDCs, with a view to providing greater clarity and predictability, and to contribute to the further integration of LDCs in the multilateral trading system. Moreover, given the importance of this exercise, it is also proposed that direction from Ministers at the Seventh Ministerial Conference be sought for initiating the process."
Services negotiations: "GATS LDC Modalities" should be acted upon and member countries should be called upon to adopt measures accordingly. The members countries should be called upon to publish and notify domestic regulations to ensure transparency, predictability and rational treatment on facilitating movement of skilled and unskilled persons. The immigration and visa procedures should be simplified.
Proposals on agriculture: Bangladesh private sector strongly urges the WTO MEMBER countries to implement sub-paragraphs 3 (i) and (ii) of the "Decision on Measures concerning the possible negative effects of the reform programme on least-developed and net food-importing developing countries".
l In order to ensure that an increasing proportion of agricultural products, including foodstuffs, are made available to the least developed countries in fully grant form and/or on appropriate concessional terms, developed and developing countries should be required to provide subsidised price support mechanism in favour of the agricultural products imported by the LDCs. Such transactions shall also be exempt from any restrictions in providing Export Financing Support.
l Technical and financial assistance to least-developed and net food-importing developing countries to improve their agricultural productivity and infrastructure should be ensured by according full consideration to the requests made by the respective LDCs.
TRIPS: The developed countries should be called upon to notify annually the implementation of Article 66.2 of the TRIPS Agreement by reporting on the actual transfer of technology to LDCs.
"Extension of the Transition Period under Article 66.1 of the TRIPS Agreement for LDC Members for Certain Obligations with Respect to Pharmaceutical Products until 1 January 2016 with respect to paragraph 7 of the Doha Declaration on the TRIPS Agreement and Public Health" should be further extended to facilitate the capacity building and growth of Pharmaceutical Products Industries in LDCs.
The waiver adopted by the General Council on 8 July 2002, in respect of the obligations of LDCs under Article 70.9 of the TRIPS Agreement until 1 January 2016 should also be extended until the required level of capacity-building is reached.
Article 27.3 (b) of the TRIPS Agreement should be revised to prohibit patents on plants, animals, micro-organisms, essentially biological processes for the production of plants or animals, and non-biological and microbiological processes for the production of plants or animals.
WTO and WIPO should undertake jointly with the concerned LDCs to carry out respective priority needs assessments for technical and financial cooperation to implement the TRIPS Agreement. The priority needs, among others, should include:
l Financial and logistical assistance to complement ongoing intellectual property reform programmes, such as funds to hire intellectual property policy analysts;
l Setting up a "National Intellectual Property Policy Forum" through which representatives from government, the private sector, and civil society would produce a draft national policy framework;
l To develop a national strategy on intellectual property;
l Taking up specific activities and timelines for updating the intellectual property legal framework and administration infrastructure;
l Harnessing effectively technology transfer and compulsory licensing measures;
l Strengthening enforcement and regulation, and
l Intellectual property to be used as a tool for socio-economic development, through the establishment of a national scientific and technological creative base.
Subsidies and dumping: Subsidies are one of the major challenges facing LDCs in key markets. The competitiveness of the LDCs is eroded by the fact that their pricing cannot match those offered by their highly subsidised rivals in developed and developing countries. Bangladesh should strongly support the ACP proposal for special and differential rules, disciplines, and standards on subsidies for the LDCs with a view to promoting research and development, growth in disadvantaged regions and environmental restructuring etc.
All exports from the LDCs should be exempted from antidumping, countervailing and safeguard measures by the developed and non-LDC developing countries. the Safeguard measures should not be applicable against LDCs.
LDCs are the foremost victims of dumped and subsidised exports yet initiating an anti-dumping investigation and imposing anti-dumping duty under normal ADA procedure is beyond their capabilities. A provision should be there for ex-officio initiation of an anti-dumping investigation exclusively by LDCs.
The imposition of anti-dumping duty should effectively remove the injury to a domestic industry eliminating the margin of dumping through increased export price by that same amount, thereby ensuring that the exporter is not selling at injurious prices.
Article 8 of the Anti-Dumping Agreement should be clarified to ensure that price undertaking is encouraged and preferred being more transparent and compliance friendly. Price undertaking given by any exporter from LDCs must be accepted.
RTAs: In view of the continued and rapidly increasing BFTAs, RTAs, GSPs, EPAs and other preferential arrangements in all possible combinations a separate WTO agreement should be adopted on all forms of RTAs to ensure transparency and compatibility with WTO and also ensuring non-reciprocal market access for 100% products originating from LDCs without discrimination.
Besides, WTO environmental policies must not burden LDC domestic companies with additional costs, thus giving them a competitive disadvantage in international markets.
Policy coherence: Bangladesh and other LDC countries should uphold and implement the Decision on Measures in Favour of Least-Developed Countries to ensure that "LDCs are not subjected to conditionalities on loans, grants and official development assistance that are inconsistent with their rights and obligations under the WTO Agreements."
The writer is an adviser of the FBCCI. He can be reached at
e-mail: a.manzur@yahoo.com