WORK ON DEVELOPMENT SEES LIMITED PROGRESS AT WTO

As part of the 31 July framework package (see related article, this issue), Members put the final touches on the development text, which deals with, inter alia, special and differential treatment (S&D), implementation-issues, and technical assistance. On S&D and implementation-issues -- core elements of the development text, the language undertakes little in the way of new commitments and simply instructs Members to continue the work that has been underway since early 2002, setting new deadlines for advancing work on both items. Finalising the S&D language had become possible after intensive discussions among a small group of developing countries, which met on 25 July to overcome remaining differences regarding the treatment of small, vulnerable economies (primarily with respect to market access). On technical assistance and the work programme for least-developed countries, the text mostly reiterates earlier commitments.

Limited Progress On S&D

With limited post-Cancun movement on the mandate to strengthen S&D (see BRIDGES Weekly, 8 April 2004), Members were seeking language that would lay the foundation for the Committee on Trade and Development (CTD) special session to continue its work. Notably they did not adopt the 27 recommendations on 28 Agreement-specific proposals that were agreed 'in principle' in the lead-up to the Cancun Ministerial; however they did set a new deadline of July 2005 for the Committee to complete its review of the "outstanding" Agreement-specific proposals -- the fourth such deadline. In a 15 July letter to the General Council Chair, CTD special session Chair Faizel Ismail (South Africa) indicated that he "did not detect any measure of support among the proponents [of the S&D review] for the adoption of these proposals, at this stage". Members also agreed to address "other outstanding work", referring to, inter alia, cross-cutting issues (dealing mostly with systemic concerns), the monitoring mechanism, and the incorporation of S&D into the architecture of WTO rules.

Developing Countries Overcome Divergence

Prompting a re-drafting of the initial development language (see http://www.ictsd.org/ministerial/cancun/docs/JOB(04)-96.pdf), advanced Latin American and East Asian developing countries reportedly diverged with their African, Caribbean and Pacific (ACP) country counterparts over phrasing that was seen to confer greater benefits to the latter group. In particular, the concerns of the Latin American and East Asian developing countries centred on language that was seen as accepting the special treatment of a de facto new class of developing country WTO Member. Such an acceptance would, these Members feared, consolidate and institutionalise preferential market access as a norm in the multilateral trading system (for example via regional trade agreements such as the EU-ACP Economic Partnership Agreements).

One such sticking point was language indicating that the concerns of small, vulnerable developing economies "shall be taken into account, without creating a sub-category of Members". The other revolved around language to the effect that developing country reduction commitments in agriculture and non-agricultural market access would take account of "their levels of development in particular sectors". As part of a compromise worked out by Brazil, Colombia, Costa Rica, India, Jamaica, Kenya, Nigeria, Thailand and Uruguay, the 'shall' in "shall be taken into account" was changed to "should," and the language tying market access reductions to levels of development in particular sectors was removed. Furthermore, new language at the start of this paragraph on 'other development issues' makes explicit mention of "the fundamental principles of the WTO and relevant provisions of GATT 1994", effectively qualifying the ensuing language on providing special attention to developing countries with particular concerns (i.e. by way of the underlying most-favoured nation (MFN) principle of the WTO, which says that any benefit conferred to one Member must be conferred to all).

At the heart of this matter is one of the most contentious issues to arise during the S&D review -- that of differentiating between developing countries. Indeed, a number of developed country Members have pointed to the lack of any mechanism to differentiate between the larger advanced developing countries and the smaller non-LDC countries as the major stumbling block to deepening the effectiveness of S&D provisions. Developing country proponents of the S&D review -- while possibly differing in private over the value of such a mechanism -- have held that putting in place such a mechanism does not form part of the mandate on S&D. In resisting demands for such a mechanism, a number of African Members have also pointed to the lack of any additional convergence on proposals made under the review that focused exclusively on the LDCs.

These concerns have flared on the heels of the 9 May letter from EC Trade Commissioner Pascal Lamy and Agriculture Commissioner Franz Fischler, which suggested that the 'G-90' should essentially have the "Round for Free" (see BRIDGES Weekly, 13 May 2004).

Implementation Issues

On implementation-related issues -- which deal with both difficulties meeting one's negotiated obligations and perceived imbalances with certain WTO rules -- the text calls on the TNC, negotiating bodies, and other WTO bodies to "redouble" efforts to finding "appropriate solutions". It also instructs the General Council to "review progress and take any appropriate actions no later than July 2005".

The final iteration of the text also included greater specificity on options for the DG to assist in moving the work forward, including by appointing so-called 'Friends' to assist in his consultations, and adds a deadline of May 2005 for the DG to report to both the General Council and the TNC. The last-minute inclusion of a reporting obligation to the TNC responds in part to the call from some developing countries (namely Brazil and India) for an explicit link with the work of the TNC, which in being responsible for the overall negotiations, is viewed as placing these issues within the single undertaking.

Since the mandate handed down by Ministers at Doha in November 2001, not more than a few of these issues have been resolved. In July 2003 (see BRIDGES Weekly, 17 July 2003), the dossier was handed over to the DG in hopes of re-igniting some momentum on this set of issues that has been hanging over Members' heads since before the 1998 Seattle Ministerial Conference.

ICTSD Reporting; "Deal Made on Developing Country Provisions In WTO Doha Round Framework, Nations Say," WTO REPORTER, 27 July 2004.