MEMBERS LARGELY FAVOURABLE TO NEW APPROACH ON SMALL ECONOMIES' PROBLEMS

Most WTO Members responded positively to a two-track approach for considering the problems faced by small, vulnerable economies in the multilateral trading system, at a 17 October meeting of the Committee on Trade and Development Dedicated Session -- Small Economies (CTD-DS). A group of 21 Members*, most of them sponsors of earlier proposals on the work plan for small economies in the Doha Round, put forward a two-track approach (WT/COMTD/SE/W/14) that would have small economies make proposals on how to address their particular problems directly to the relevant WTO bodies, while the CTD-DS would continue to monitor the progress of these proposals. This approach essentially corresponds to a longstanding demand of many developed countries, a point first conceded by the sponsors of the new paper in a 29 July press release.

Chair Ambassador Gomi Tharaka Senadhira of Sri Lanka started informal consultations on 19 October on the group's recommendations for future work. This report will be submitted to the General Council, which will in turn report on it to the Hong Kong Ministerial Conference in December.

The CTD-DS is mandated by Paragraph 35 of the Doha Declaration to "frame responses to the trade-related issues identified for the fuller integration of small, vulnerable economies into the multilateral trading system, and not to create a sub-category of WTO Members."

Proposals directed to negotiating groups

At the committee's May meeting, Members including the EU, New Zealand, and Japan had suggested that small economies would be better off putting their proposed solutions to agreement-specific problems to the relevant negotiating bodies rather than to the CTD-DS (see BRIDGES Weekly, 1 June 2005).

The new proposal describes how they have done so, citing papers that its sponsor countries have submitted to the WTO negotiating groups on agriculture, non-agricultural market access (NAMA) and rules since July. The agriculture submission stressed the importance of the farm sector to food security and employment in small, vulnerable economies, and called for a tariff reduction formula flexible enough to accommodate their need to provide protection. The paper on NAMA said that small economies "would wish to see" a NAMA outcome that did not impact their applied tariff rates and exempted small economies from commitments on "products which have strategic value for their economic development." Both documents were attached as appendices to the new submission. The third, a proposal on fisheries subsidies, was discussed in the Negotiating Group on Rules in September (see BRIDGES Weekly, 5 October 2005).

At the meeting, the EU, US, China, India and Brazil expressed tentative support for the two-track approach.

Mauritius indicated that it, along with ten other Members, was going to submit proposals on technical barriers to trade, sanitary and phytosanitary measures, accession and intellectual property rights to relevant WTO bodies.

Small economies: we are not seeking to create new category

Sources indicate that a handful of delegations including Peru complained that the proposal would introduce differentiation among developing countries in the WTO, a longstanding objection of many developing country WTO Members.

The proponents of the approach, as in earlier submissions (WT/COMTD/SE/W/12 and W/13), denied that they were seeking to create any such new categories, or to take anything away from other developing countries. Acknowledged that no single problem they faced was unique to small and vulnerable economies, they argued that they were simply seeking the sort of variable treatment among developing countries that already exists in the WTO Agreements and the July Package (WT/L/579, http://www.wto.org/english/tratop_e/dda_e/draft_text_gc_dg_31july04_e.htm). Certain WTO subsidies obligations, they noted, do not kick in for developing countries until their per capita annual gross national income surpasses USD 1000. The July Package calls for "differential treatment" for net food-importing developing countries.

The road to Hong Kong... and beyond

The small economies' proposal urged the WTO negotiating bodies and other committees examining their concerns "to give meaningful consideration to appropriate responses." Group chairs were asked to ensure that such responses are reflected in draft versions of a Hong Kong ministerial declaration, "so that enhanced special and differential treatment concessions are extended to small economies where appropriate." It also called on the Ministerial Conference to specifically mention the work of the CTD-DS, and to instruct WTO bodies "to continue to address the concerns of small, vulnerable economies.

Senadhira circulated a preliminary 'zero draft' of the group's recommendations for the Ministerial Conference to delegates at the meeting. It is said to be similar to the committee's Doha mandate, urging Members to continue work to "facilitate the fuller integration of small, vulnerable economies into the multilateral system." It does not specify a particular date for the CTD-DS to complete its work.

*The sponsors of the proposal are: Antigua and Barbuda, Barbados, Bolivia, Cuba, Dominica, Dominican Republic, El Salvador, Fiji, Grenada, Guatemala, Honduras, Jamaica, Mauritius, Mongolia, Nicaragua, Papua New Guinea, Paraguay, Solomon Islands, St. Kitts and Nevis, St. Vincent and the Grenadines, and Trinidad and Tobago.

ICTSD reporting; "WTO Work Programme on Small Economies," PRESS RELEASE (from proponents of the small economy work plan), 29 July 2005.