ACP countries adopt declaration on upcoming WTO ministerial
Following a two-day meeting in Brussels, Belgium, trade ministers from the African, Caribbean and Pacific (ACP) countries adopted a declaration outlining their positions ahead of the WTO’s Tenth Ministerial Conference, which is due to be held in Nairobi this December.
“The ACP Group must work vigorously for the WTO Ministerial Conference in Nairobi to be a success. Part of the ACP strategy for the Ministerial is to safeguard continuation of the Doha Development Agenda [DDA] post-Nairobi, “said ACP Secretary General Patrick Gomes.
WTO Director-General Roberto Azevêdo, who attended the meeting and provided an overview of the negotiations, told ministers that “despite these very intensive efforts on all of the core DDA issues, I must report that – apart from in a few specific areas – little progress has been made.”
“We will not successfully conclude the DDA in Nairobi,” he added.
While expressing certain reservations on securing substantial outcomes on the DDA core issues, Azevêdo outlined nonetheless that convergence may be possible in other areas, such as export competition in agriculture, issues relating to least developed countries (LDCs) and development, as well as transparency provisions on anti-dumping and fisheries subsidies.
“Our members in Geneva have put forward proposals that have been recognised but are not yet included in the so called mini-package,” said Joshua Setipa, Minister of Trade and Industry of Lesotho, before mentioning “the road ahead is foggy,”
During a special session held separately, EU Trade Commissioner Cecilia Malmström also expressed some disappointment over the "lack of political will” from many WTO members, which she said has made it “very hard” to achieve a comprehensive agreement on all areas of the Doha Development Agenda.
Safeguarding the DDA post-Nairobi
The ACP declaration encourages WTO members to take “concrete steps to conclude the remaining issues in the DDA, with development as a key component.” The document further specifies that WTO members should ensure that all unresolved issues in the DDA on the development mandate should be addressed in a post-Nairobi context with a view of concluding the DDA “as soon as possible.”
“We are […] rather circumspect about suggestions by some WTO members that we abandon the DDA framework after Nairobi,” said Gomes, who reiterated that the ACP Group still believes in the DDA, which in their view holds an important development dimension.
In his remarks, Azevêdo explained that some WTO members are of the view that if there is no consensus to end the Doha Round, then the negotiations would simply have to continue. Others, meanwhile, insist that if there is no outcome in Nairobi then the DDA would be over in its present form.
However, the WTO chief noted, “all members agree to continue negotiations in the future on all of the DDA core issues, such as agriculture, market access, and services.”
Some observers note that since the last Ministerial Conference in Bali, Indonesia, two years ago, the ACP Group has been quite proactive in initiating the setup of the Trade Facilitation Agreement (TFA) Facility together with the LDC Group in order to encourage ratification of the TFA.
Earlier this year the Group presented various elements for defining a post-Bali work programme on the remaining DDA issues, followed by another proposal in July for bridging the gaps in such areas with a view of putting across a possible development package in Nairobi.
Sixty-one member countries of the ACP Group are also WTO members, with 7 observers. Most are LDCs and Small and Vulnerable Economies (SVEs) and suffer from inherent structural constraints and infrastructural deficits. Most of them also depend primarily on commodity exports towards traditional markets.
ACP ministers will meet as a group in Nairobi on 14 December, the eve of the Tenth WTO Ministerial Conference, to take stock of the situation and agree on a final position.
ACP countries insist on the preservation of the flexibilities for least developed countries and small and vulnerable economies in the course of future negotiations in agriculture and non-agriculture goods.
“The level of ambition for any flexibility shall be adjusted commensurate with the level of ambition in the negotiation as a whole,” says the declaration.
In the declaration, ACP trade ministers stress that decisions should be taken through a transparent and inclusive process, based on consensus. They further agree that members should be working towards reaching a development package that accounts for the concerns and interests of ACP countries.
The document also mentions repeatedly the importance of the development objectives of the DDA, including the principle of less than full reciprocity and special and differential treatment (S&DT) – in other words, those provisions which give developing countries certain special rights and which give developed countries the possibility of treating developing countries more favourably than other WTO members.
For example, the ACP Group supports different tariff reduction targets for developed and developing countries, as well as SVEs, based on the principles of S&DT and less than full reciprocity.
“LDCs shall be exempt from making tariff reduction,” says the declaration, which also calls for a review of prevailing non-tariff barriers (NTBs) in developed country markets.
Throughout the document, some concerns are raised over the potential risks of preferential erosion or the erosion of gains resulting from the graduation of some ACP states.
Additionally, the Group seeks “concrete and binding” decisions in the areas also being put forward by LDCs, especially on cotton, as well as on the 25 specific proposals on S&DT submitted by the G-90 this past summer. (See Bridges Africa, 9 October 2015)
On fisheries – a vital sector for many ACP countries- the Group is calling for disciplines on such subsidies, as outlined in their proposal earlier this year. (See Bridges Africa, 23 March 2015) At the same time, the Group cautions that such disciplines should not consign developing countries, especially Small Island Developing States (SIDS), to only “artisanal and small scale fishing.”
With regards to intellectual property rights (IPRs), the Group supports the extension of the transition period for LDC members under article 66.1 of the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), allowing them not to enforce IPRs on pharmaceutical products.
In June 2013, a general waiver exempting LDCs from the obligation to enforce IP rights was extended to 2021. This extension covers all products, including pharmaceutical products, and has been running in parallel with the special waiver on pharmaceutical products granted to LDCs until 2016. At the 24-25 February meeting of the WTO’s TRIPS Council, the LDC group submitted a request to extend the 2016 deadline, specifically by prolonging the transitional period for as long as the WTO member remains an LDC. (See Bridges Africa, 18 September)
A TRIPS Council meeting earlier this month to address that issue was suspended in the absence of a final decision on the extension. While informal talks have reportedly continued, there is no clear indication of when the meeting will resume.
Regarding domestic support for agriculture, the ACP Group underlines the need to achieve “meaningful cuts” in Overall Trade Distorting Support (OTDS) and Aggregate Measurement of Support (AMS), as well as “disciplines” to prevent box shifting, referring to the way subsidies are classified in the WTO under the Agreement on Agriculture.
The Group reiterates the need to preserve their flexibilities embedded under the 2008 agriculture draft modalities, known in trade jargon as Rev. 4.
The text also provides for the progressive elimination of all forms of export subsidies and export measures, including in the area of food aid, and insists on the preservation of flexibilities for LDCs and SVEs.
The document also calls upon WTO members to work “expeditiously towards finding a permanent solution on public stockholding for food security purposes.” Last year, WTO members agreed to ensure that the “peace clause” reached in Bali would not expire in 2017 if a so-called permanent solution was not found at that stage. That same 2017 target date was also moved forward to December 2015.
Under the peace clause, countries have agreed to refrain from challenging such programmes under WTO farm subsidy rules, subject to those programmes meeting certain conditions. (See Bridges Weekly, 27 November 2014)
The Group also seeks agreement based on the G-33 proposal to operationalise the special safeguard mechanism (SSM), which would allow developing countries to temporarily protect their domestic producers from agricultural import surges and price depressions. The G-33 coalition is made up of various developing countries with a sizeable share of smallholder farmers.
Regarding non-agricultural market access (NAMA), ACP ministers also reaffirmed the need to preserve the core flexibilities as contained in the 2008 draft modalities, which for NAMA are known as Rev.3. Ministers also specified that the Swiss formula, a type of tariff reduction formula currently proposed under the Rev. 3 text, is not “doable.”
Small and vulnerable economies
The ACP Group includes several small and vulnerable economies. In this context, ministers have urged WTO members to address meaningfully and substantially the structural disadvantages and vulnerabilities that SVEs face.
In June, the SVE Group submitted a contribution for inclusion into the post-Bali Work Programme. (Bridges Africa, 26 June 2015)
While no official sub-category exist for SVEs at the global trade body, it is generally acknowledged that these countries are particularly vulnerable to economic uncertainties and environmental shocks.
The recent accession of the Seychelles and the completion of the accession negotiations by Liberia were both praised by the ACP Group in its declaration, which also calls for the implementation of the WTO General Council decision of 25 July 2012 that revised the accession guidelines for least developed countries.
The revised LDC guidelines include, for instance, market access benchmarks on goods, along with provisions on transparency, special and differential treatment, and technical assistance.
Out of the 48 countries originally categorised as LDCs on the United Nations list, 34 are now WTO members. Twenty countries are still negotiating their accession terms, including seven other LDCs – Afghanistan, Bhutan, Comoros, Equatorial Guinea, São Tome and Principe, Ethiopia, and Sudan.
Countries currently negotiating to join the WTO also include Algeria, Belarus, Iran, Iraq, Libya, Serbia, and Uzbekistan. Since 1995, eight LDCs – namely, Cambodia (2004), Nepal (2004), Cape Verde (2008), Samoa (2012), Vanuatu (2012), and Laos (2013) – have acceded to the WTO. Yemen and Liberia are the last least developed countries to have joined the WTO over the past two years. (See Bridges Africa, 12 October 2015)
Joining the 161-member organisation is often perceived as a long process, with the poorest countries known for facing particular difficulties. Some recently-acceded LDCs are of the view that such countries are asked to take on commitments beyond their capacity during the bidding process.
Aid for Trade
The declaration also urges donors to come forward with substantial pledges at the occasion of the LDC Enhanced Integrated Framework (EIF) Pledging Conference, which will be held during the Ministerial Conference in Nairobi.
The EIF is a multi-donor programme which supports LDCs to be more active players in the global trading system by helping them tackle supply-side constraints to trade. The new phase of the Enhanced Integrated Framework (EIF) was launched over the summer and is expected to run from 2016 to 2022. Phase one of the EIF had 51 beneficiaries in five years, and a total of US$202 million was received from 23 donors.
The ACP Group encourages WTO members to provide additional Aid for Trade (AfT) funding in the area of infrastructure development, productive capacity, trade finance, connectivity, and costs of adjustments.
Given concerns about the potential for erosion of gains following the recent graduation of certain ACP countries, the Group therefore calls for the abandonment of per capita income statistics as the only measure to determine AfT eligibility.