AID FOR TRADE TASK FORCE STILL DELIBERATING ON SCOPE OF MECHANISM

On 20 March, the WTO Aid for Trade Task Force held its second meeting since its inception, to decide how to fulfil its mandate to produce recommendations on the ways such assistance can contribute to the development dimension of the Doha Round. Composed of representatives from thirteen Member countries and chaired by Ambassador Mia Horn Af Rantzien of Sweden, the Task Force is scheduled to report to the General Council in July (see BRIDGES Weekly, 8 March 2006).

Sources report that the recent gathering was primarily a brainstorming exercise about what an Aid for Trade mechanism acceptable to both recipient and donor countries might look like. Discussions focused on the need to agree on the scope of such a package, as well as its financing, implementation, and monitoring. A representative of the Organisation for Economic Cooperation and Development presented a paper to the Task Force describing the various trade-related assistance initiatives currently being implemented by different international organisations.

The next meeting is scheduled for 18 April, where WTO Director-General Pascal Lamy is expected to report on his consultations with various international and regional financial institutions, such as the World Bank, International Monetary Fund (IMF), and the Inter-American Development Bank. The Task Force is also contemplating an open-ended consultation with all Members in mid-May.

In an ongoing but separate meeting, trade policymakers from sixty countries attended a conference on Aid for Trade organised by the Commonwealth Secretariat in Geneva from 21-22 March. Held at the UN Conference on Trade and Development (UNCTAD), the meeting considered a recent paper by Nobel Laureate Joseph Stiglitz and Andrew Charlton, which called for rich countries' Aid for Trade donation commitments to be binding under WTO dispute settlement. It suggested that such funds could be allocated to a 'Global Trade Facility,' to be administered by the World Bank but governed separately by a rotating board of WTO Members.

Stiglitz and Charlton's report on Aid for Trade for the Commonwealth Secretariat is available at http://www.unctad.org/sections/ditc_tncdb/docs/ditc_tncd_bpGeneva03-06_en.pdf.

ICTSD reporting; "'Aid for Trade' on the Agenda as Trade Policy Makers Meet in Geneva," COMMONWEALTH SECRETARIAT PRESS RELEASE, 21 March 2006.

LDC SUBCOMMITTEE DISCUSSES SECRETARIAT REPORTS ON MARKET ACCESS, TEXTILES

At its meeting on 16 March, the WTO Sub-committee on Least Developed Countries (LDCs) focused on two papers prepared by the Secretariat, one on market access issues related to products of export interest to LDCs (TN/MA/S/19) and the other on options for LDCs to improve their competitiveness in textiles and clothing trade (WT/COMTD/LDC/W/37).

The market access paper evaluates the impact of tariffs on LDC merchandise exports from 1995-2005. Although LDC exports increased by 34 percent in 2004, compared to 21 per cent for exports worldwide, 47 percent of LDC exports are accounted for by five oil exporting countries. Manufacturing and commodity exporters experienced growth rates of 19 and 22 per cent, respectively, while eight of the WTO's 32 LDC Members saw exports decline. The paper noted a shift from food to clothing exports over the ten year period.

In the discussion that followed the Secretariat's presentation, LDCs, represented by Nepal and Bangladesh, stressed the need to both expand their export base and receive increased market access in order to benefit from trade liberalization. They also called for more and better technical assistance. The Secretariat agreed to the LDCs' request to prepare a separate note on non-tariff barriers in time for the sub-committee's next meeting in July.

The second paper suggested that in the short-term LDCs should enhance the competitiveness of existing textile and clothing production. Looking to the future, the paper proposes that LDC governments seek to develop higher-value added activities in cooperation with international institutions.

Much of the discussion focused on the expiry of quotas on textile and clothing trade in January 2005. LDCs called for developed country Members to loosen the strict rules of origin associated with preferential market access schemes such as the EU's 'Everything But Arms' initiative and the US' 'African Growth and Opportunity Act,' in order to ensure that LDCs are actually able to benefit from them.

ICTSD reporting.