The Doha Development Agenda An Update World Bank December 1, 2005
Key Messages
A successful Doha Round is very important from a development perspective Hong Kong Ministerial December 13-18, 2005 originally expected to agree negotiating modalities for agriculture and non-agricultural market access (NAMA), plus progress in services, rules, trade facilitation and development dimension WTO Members now recalibrating expectations for Hong Kong, but maintaining the initial ambition for the Round Hong Kong “an intermediary stage on the way to full modalities”; aim to agree on “a range of numbers – the outer parameters – in the July 2004 frameworks, and corresponding texts in the rule-making part of the negotiations” • Draft Declaration issued November 26
Sights must not be lowered if Doha is to be a true development round There is a lot of work to do before end 2006
Important progress has already been made
Conditional agreement on elimination of export subsidies Narrowing of Singapore Issues to trade facilitation only TRIPS waiver on access to medicines July 2004 Framework Agreement elements on agriculture Development at the center of a trade round
Outstanding issues
Key issues remain to be resolved • Agriculture, in particular market access
Cotton
• Developing countries, especially MICs, on NAMA • Services
Including benchmarks
• Development dimension
Complementary agenda on aid for trade
Agricultural Market Access Proposal
US
Cut on highest tariffs %
Sensitive products %
Tariff Cap Dev’ed/ Dev’ing
90
1
75/x
60
8
100/150
75
< or = 1
100/150
45/50*
10/15*
NO
10/10
EU 10/28
G20 10/12
G10 10/10
* Numbers indicative only
Large cuts are needed to reduce actual trade distorting domestic support $US billion 70 79%*
60 Overhang
50 40
93%* Actual
30 47%*
20 10 EU
US
Japan
*percentages refer to degree of overhang
NAMA
Definition of the formula • Agreement on Swiss formula, but not on coefficients
Flexibility for developing countries • Some groups seek special treatment
Newly acceded, small and vulnerable
• Differentiation among developing countries
EU proposes the same coefficient for developed and advanced developing countries (with some additional flexibilities) - but this is very controversial
• Participation in sectoral negotiations?
E.g., jewels, sports equipment, pharmaceuticals
• Treatment of unbound tariffs
How to calculate the base rate for reductions?
Services
69 offers, plus 30 revised (EU25 counted as 1), but low quality and lack of momentum Mandatory quantitative benchmarks for coverage of commitments in service sectors? • Opposed by many developing countries
Plurilateral negotiations • Mandatory participation benchmarks?
Overall objectives for modes GATS rules • Broad agreement to continue negotiations and intensify efforts
Trade Facilitation
Solid progress to date
• Large number of proposals, broad participation
Special and differential treatment (SDT), capacity building (CB) and technical assistance (TA) integral parts of any agreement • Link between TA and CB and implementation of commitments will be a critical part of the negotiations in 2006 • Expectations that negotiations in this area will move from Uruguay Round-style “best endeavor” approach to commitments of secure financing for implementation • Role of international organizations, including Bank
Where next?
• Text based negotiations on Articles V, VIII and X of GATT 1994?
Development Issues
Proposals to strengthen SDT
• Focus on 28 (of the 88 proposals) agreed in principle for Cancùn, PLUS 5 agreement-specific proposals from LDCs
Duty and quota free access for all LDC exports
• Resistance from countries concerned with preference erosion • Benefits require flexible rules of origin
Concerns re preference erosion and net food importers
• Losses may be less than expected: offsetting gains; time period for implementation; utilization of existing preferences; likely price rises for food • Serious problem for a few countries, who will require increased international assistance – aid for trade- to cope with transitional adjustment costs • Adjustment costs should not be a reason to deny the benefits of liberalization to the vast majority of developing countries
Extended transition periods for affected products raise risk reducing gains from the round
Aid for Trade
Important complement to – but not substitute for – an ambitious Doha Round Integrated Framework (IF) • Increased funding, plus enhanced ability to leverage much larger bilateral and multilateral resources
Including to address infrastructure constraints
• Geneva-based task force of donors and LDCs working on a new governance structure, for agreement in April 2006
Contributions likely pending agreement on governance
Adjustment • Diagnostics and assistance
Regional/cross-country needs • Exploring need for additional mechanisms
Aid for Trade cont’d
LDC proposal • Enhanced IF; adjustment facility managed by the WTO; infrastructure fund; debt relief, swaps and buy-back
Increased focus in bilateral programs Scope to make progress in Hong Kong • Proposals in Nov 26 draft Declaration
Rules
Some highlights • Debate on clarification of disciplines on anti-dumping and subsidies (including fisheries subsidies) expected to become more intense in 2006 • Progress on transparency procedures concerning RTAs, but limited progress on strengthening systemic disciplines
Conclusion
November 2005, WTO Members recalibrate expectations for Hong Kong, but maintain the initial ambition for the Round • The hardest decisions of the Doha Round will now need to be made in early 2006 • End of 2006 target for completion (US TPA expiry, June 2007)
There is too much at stake to lower sights on Doha
Bank will continue to contribute through • Advocacy for an ambitious, pro-development Round • Research on trade policy and reform • Aid for trade, including cooperation on enhanced IF • TA and CB at global and country levels, including greater integration of trade into country programs
