WORKING GROUP ON TRADE, DEBT, FINANCE TO SIMPLY RENEW DOHA MANDATE?

Chair Ambassador Kweronda Ruhemba of Uganda suspended the 3-4 October formal session of the WTO Working Group on Trade, Debt and Finance (WGTDF) on its second day, after the group was unable to reach consensus on the language of the draft text of the report that it is supposed to submit to the General Council later this month. However, trade sources report that Members managed to bridge their differences at a 5 October informal consultation hosted by the chair, and that they are likely to ask the Hong Kong Ministerial Conference to simply renew the mandate of the WGTDF, rather than expand and strengthen it.

The July Package (WT/L/579) requires the General Council to communicate the progress and recommendations of the WGTDF to the Hong Kong Ministerial Conference in December. In recent informal consultations, Members differed on precisely what the group's recommendations ought to be. Although countries largely agreed that the group should continue its work after Hong Kong, they were split on the terms under which it should do so.

The group of African, Caribbean, and Pacific (ACP) countries (WT/WGTDF/W/30 and W/32), supported by Argentina (W/33), has been pushing the WGTDF to recommend that the Ministerial Conference create a permanent WTO Committee on Trade, Debt, and Finance. Furthermore, the ACP group's two submissions on the matter set out a specific agenda for this committee that included reviewing WTO rules that might affect countries' debt and balance-of-payments positions; supporting economic diversification in commodity-dependent developing countries; promoting increased market access for developing and least-developed country (LDC) exports; urging rich countries to cancel bilateral debts, including those resulting from export credits; and changing the WTO's trade policy review to include an assessment the effect of developed countries' development assistance, debt, and export credit policies on developing and least-developed countries. Even if Members did not agree to establishing a permanent committee, the ACP Group and Argentina wanted the WGTDF to address these issues in its post-Hong Kong work.

Trade negotiators reported that the US and some other developed countries had opposed Argentina and the ACP countries in recent informal consultations. Arguing that Members had not agreed on the ACP and Argentine proposals, they said that the group's recommendations should simply refer to the Doha mandate on trade, debt, and finance (Paragraph 36) that gave rise to the WGTDF in 2001. Other delegations called for the report to mention the 'Coherence Declaration,' a Uruguay Round document that suggests that "the WTO should... pursue and develop cooperation with the international organisations responsible for monetary and financial matters."

At the 5 October consultation, the US-backed position effectively won out. A trade negotiator said that delegations at the gathering agreed that the WGTDF's report to the General Council would essentially repeat the group's Doha mandate, i.e., to examine "the relationship between trade, debt and finance, and of any possible recommendations on steps that might be taken within the mandate and competence of the WTO to enhance the capacity of the multilateral trading system to contribute to a durable solution to the problem of external indebtedness of developing and least-developed countries, and to strengthen the coherence of international trade and financial policies, with a view to safeguarding the multilateral trading system from the effects of financial and monetary instability." Some delegations saw this as being better than the even weaker language in the Coherence Declaration.

ICTSD will provide coverage of the 10 October WGTDF meeting in the next issue of BRIDGES Weekly.

ICTSD reporting.