CTD SPECIAL SESSION -- FINDING DELIVERABLES FOR 31 JULY

The special session of the Committee on Trade and Development met on numerous occasions over the last week and a half as it headed into the final stretch leading up to its 31 July deadline of reporting to the General Council -- "with clear recommendations for action" -- on the review of special and differential treatment (S&D). Informal and formal sessions were held on 27 June and 2-5 July. Discussions distilled down to four main focus areas: agreement-specific proposals and issues; institutional issues; cross-cutting issues; and the way forward. Another informal for the latter item was scheduled for 10 July. While many delegates have noted minimal expectations for the 31 July report, a few elements have emerged as potential deliverables.

Planning the road ahead

The 27 June informal meeting was intended to plan the road ahead, feeding into the regularly scheduled 2 July session and an expected draft report from Chair Ransford Smith (Jamaica) by 10 July. Divisions quickly emerged, however, over what areas should be dealt with and what timeframe should be envisioned. As such, Amb. Smith recommended four additional consultations. Sources in attendance noted that some industrialised countries were amenable to this, provided all issues were on the agenda. India made it known that it only wanted the proposals and institutional issues to be discussed (excluding principles & objectives and systemic issues). Furthermore, India noted that at present, they were not interested in looking beyond the July deadline. The meeting ended with little consensus other than the need for further consultations.

Back to the substantive

The 2 July formal session saw Members return to substantive issues. This entailed discussions on an addendum to a proposal from the least- developed country (LDC) group (TN/CTD/W/4/Add.1, not as yet de- restricted). This addendum called for, inter alia, the elimination of all tariff peaks and tariff escalation affecting semi-processed and processed products, debt relief through cancellation, targeted incentives to LDC enterprises to facilitate technology transfer, and a temporary compensation mechanism to account for reductions of most favoured-nation (MFN) tariff rates (where the share in the total export earnings of an LDC exceed 50 per cent).

Further discussions were also aired on Paraguay's proposal (TN/CTD/W/5, searchable at http://docsonline.wto.org) regarding the alleged illegitimate use of most-favoured nation (MFN) exemptions in the provision of preferential trading schemes. The proposal alleges that these exemptions are incompatible with the 1979 Enabling Clause (L/4903, searchable at link above), which stipulates, inter alia, that S&D should not be applied in a way that raises barriers or creates difficulties for other developing countries (see BRIDGES Weekly, 20 June 2002). In response, Hungary tabled a set of questions (TN/CTD/W/10, searchable at link above) seeking to clarify how a country might maintain preferential schemes if it is unable to discriminate based on basic criteria such as per capita income. Hungary suggested that if countries are not able to discriminate as such, then the options would be offer the schemes to all (including those with higher per capita incomes) or abolish them altogether. Commenting on the paper, Paraguay said that preferences must be granted on a rules-based reasoning in order to assure predictability in the trading system. Another issue that came to the fore in comments on this item was the implication of the self- selecting nature of being a 'developing country' in the WTO.

Also at the 2 July meeting, the US announced its intention to hold its own consultations on the historical utilisation of S&D provisions. Some developing country Members reiterated their concern that this could prove to be an onerous task with marginal returns. One African delegate noted however that this exercise was useful in providing a launching point for a long-term and comprehensive analysis of current S&D provisions -- which would feed directly into looking to future required provisions.

Several developed and middle-income Latin American developing country Members reiterated their position that the specialised committees were better suited to examine changes in the respective agreements. Those in disagreement retorted that the new negotiating mandate had given the CTD the responsibility to look at S&D, and that while subsidiary bodies should play a role in the process, the task should remain with the CTD.

Further consultations finding little consensus

While providing time to continue the substantive discussions from the 2 July session, the 3 July consultation on agreement-specific proposals and issues did not bear much fruit. The 4 July talks on institutional issues, however, did see some consensus on what some experts speculate may be one of the few deliverables ready for the 31 July report -- that of a monitoring mechanism. Aside from a consensus among Members that having such a mechanism is a good idea, differences persist over how it might be designed. One perspective espoused by a number of developed countries sees the subsidiary bodies as best suited to review S&D in the agreements for which they are responsible. Sources say this would likely lead to the submission of an annual report of some kind to the General Council or the CTD. The other, as outlined in the Africa Group proposal (TN/CTD/W/3/Rev.1), envisages an S&D Monitoring Body similar to that of the Trade Policy Review Body. Under the auspices of the CTD, this body would work with the specific committees on how to best strengthen and operationalise S&D in their respective agreements. This, said one developing country delegate, "would provide a suitable mechanism to translate the Doha Declaration into a true development agenda." Another item that sources close to the negotiations speculate could be a deliverable for the 31 July report is the integration into the 2003 annual Technical Assistance Plan of some of the criteria laid out in Annexes I & II of the Africa Group proposal (see above).

BRIDGES Weekly will report on the 10 July meeting in its next edition.

The next and final formal special session of the CTD prior to the 31 July deadline will be held on 17 July.

ICTSD reporting.