Excerpts: The draft framework for negotiations at the WTO has been agreed to at Geneva. What does the draft agreement mean? Since the collapse of the Cancun Ministerial, the process of negotiations in the WTO to advance the Doha Development Round had been stalled. The July Framework was an initiative to put the process of negotiations back on track. The agreement reached in Geneva on August 1 essentially means that process has been restarted. What has been agreed is a framework for negotiations. Details still need to be decided. But this agreement has paved the way for further negotiations. India and some other developing countries have been claiming the draft is a victory for them. Is it really a victory? What measures does the draft contain for the developing countries? Actually, the process of rule-making or negotiations in the WTO has been conventionally dominated by developed countries "" the US, the European Union (EU), Canada and Japan "" the so-called Quad countries. Of late, however, developing countries have built effective coalitions such as the Group of 20 (G-20) and were able to raise their concerns in an efficient manner and have been able to successively improve the package in their favour. Developed countries were trying to put some vague language regarding the phase-out of their export subsidies and credits and reduction in domestic support, while seeking ambitious tariff liberalisation in agriculture at Cancun and in the earlier drafts of the July Framework. The package agreed to on August 1 appears to take care of some of our concerns. Developed country export subsidies will be eliminated and domestic support will be cut, while the support given by developing countries to their resource-poor farmers will not be subject to reduction commitments. Although tariffs on agricultural products have to come down drastically, we can exercise some flexibility in the form of special products and special safeguard mechanisms that can be used to protect crops that are important for the livelihood of our farmers. Three of the four Singapore issues on which we had reservations "" namely investment, competition policy and transparency in government procurement "" have been dropped from the Doha Round. However, what has been agreed to is only a framework. The actual modalities and details are to be worked out. We have to be alert throughout the process of negotiations to make sure that there is no erosion in the intent of what has been agreed to in Geneva last week. We have to also ensure that the final outcome on non-agricultural market access is able to protect our interests. What happens next? Members will carry forward the negotiations to work out modalities and details. For instance, the timeframe for dismantling farm subsidies by developed countries will have to be decided. They also have to work out the detailed modalities for tariff reduction and work further on the non-agricultural market access issue. The earliest date of completion of the Doha Round has been pushed to end-2005 when the Hong Kong Ministerial Conference will take place. A more realistic target would be 2007. Does the draft ensure that developed countries like the US and the EU will have to reduce their huge domestic support and export subsidies given to agriculture? When will the process begin? According to the agreed draft, the EU will eliminate its agricultural export subsidies ,valued at about euro 3 billion, and the US will curb its food aid and export credit programmes. The timeframe for this phase-out still has to be agreed upon. Developed countries have also agreed to cut trade-distorting domestic support given to agriculture by 20 per cent in the first year. However, at the instance of the US, counter-cyclical payments made to farmers when prices are down have been excluded from the definition of agriculture production subsidies. What are the implications of the draft for agriculture-dependent countries like India? Will developing countries also have to open their market and lower tariffs in agriculture? What protective measures are present in the draft to protect their interests? The de minimis support given by developing countries such as India to their resource-poor farmers will not be subject to reduction commitments. Agricultural tariffs will have to come down but India will be able to set aside a number of special products (SP) from market access commitments to address food security and livelihood concerns. These special products can continue to be protected. Also, there is a special safeguard mechanism (SSM) provided that can be invoked in situations of import surge. Developed countries can also exclude some sensitive products from market access commitments. What about the issue of market access in non-agricultural sectors such as services? How will countries like India benefit? Further work needs to be done on non-agricultural market access (NAMA) since the modalities proposed in the agreed draft have not been accepted by all countries. However, flexibility has been provided to developing countries. Developing countries such as India expect a longer timeframe for tariff cuts. There will be some flexibility for developing countries in the case of sector-by-sector tariff reduction. We also need to ensure that the formula for tariff reduction upholds the principle of "less-than-full-reciprocity" as enshrined in the Doha mandate. In the area of services, members will be submitting their revised offers by the May 2005 deadline. The revised offers are expected to pay special attention to sectors and modes of particular interest to developing countries. The three Singapore issues have been dropped out of the Doha work programme. Is this enough to ensure that they will not be included in WTO negotiations again? Because of a lack of explicit consensus for launching negotiations on three Singapore issues, negotiations will not take place during the Doha Round. However, there is nothing to stop these issues resurfacing in the subsequent rounds if there is general agreement on their inclusion. What does the beginning of negotiations in trade facilitation mean? What are the implications for India? The modalities for negotiations on trade facilitation have been agreed to which provide flexibility with respect to the transition period for developing countries. They will also not be required to undertake investments beyond their means, and emphasis has been put on technical assistance. In the actual negotiations we have to make sure that the agreement does not put an unduly heavy burden of implementation on developing countries and that they get the required technical and financial assistance in a timely manner. Is it really a win-win for developing countries at the WTO? What are the concerns now? We need to gear ourselves up for the upcoming negotiations with adequate preparation. We should also put on the negotiating table some issues of our interest in a proactive manner and should begin to set the trade agenda rather than just reacting to the given agenda all the time. For instance, a Working Group has been set up under the Doha mandate on transfer of technology. We should seek a framework to facilitate transfer of technology under that. We should also put some proposals for making special and differential treatment provisions in different WTO Agreements really effective and operational. The WTO provides a rule-based framework for governing international trade. We need to strengthen it by making the process of decision- or rule-making more equitable and balanced by giving developing countries a greater voice. A more participatory approach will serve the cause of the world trading system much better for longer-term sustainability. |