World business supports issuance of compromise texts on WTO Doha round
Submitted by Anastvatz on Wed, 2007-07-18 04:55.
huliq.com
ICC strongly supports the issuance of compromise texts today by the heads of the Doha round agriculture and non-agricultural market access negotiating groups as a practical way forward to reach consensus in the World Trade Organization’s Doha Development Agenda.
The “draft compromise texts” released by the chairman of the agricultural negotiating group, Ambassador Crawford Falconer of New Zealand, and his counterpart for non-agricultural market access, Ambassador Donald Stephenson of Canada, with the endorsement of WTO Director-General Pascal Lamy, outline ways to bridge the gaps among positions expressed by the 150 WTO member governments.
Importantly, these documents will now provide a negotiating basis for WTO members to intensify their efforts to reach agreement on a framework for liberalizing trade in agricultural and industrial products, and thereby pave the way for completing the Doha round by the end of this year.
“We warmly welcome the issuance of these texts by the chairs and commend them for their efforts. Expectations are high that WTO members will make good use of them and muster the political will needed to reach consensus as soon as possible and to bring the Doha round to a successful conclusion by year-end,” said ICC Chairman Marcus Wallenberg, who is also Chairman of SEB, the Swedish banking group. “The Doha Development Agenda (DDA) constitutes an historic opportunity to create jobs, generate economic growth and raise living standards throughout the world,” Mr Wallenberg added.
ICC, which represents hundreds of thousands of companies in 130 countries, has been unflagging in its calls for a successful, balanced and comprehensive agreement in the DDA. -International Chamber of Commerce
Tuesday, July 24, 2007
WTO mediators float plans to salvage Doha Round
WTO mediators float plans to salvage Doha Round
Web posted at: 7/18/2007 7:2:37
Source ::: Agencies
peninsulaqatar
GENEVA • Mediators at the World Trade Organisation made a bid to salvage a global free trade deal yesterday by proposing compromises to overcome impasses in the key areas of agriculture and industrial goods.
The proposals are seen as possibly the last chance to save the so-called Doha Round, which has lurched from crisis to crisis since it was launched in Qatar in 2001 to help lift millions of people out of poverty.
In an attempt to break the deadlock, diplomats chairing the WTO negotiations floated detailed texts spelling out ranges of cuts for farm subsidies and a formula for import tariff cuts for agricultural and industrial goods.
"Some of those narrow ranges or target numbers or technical draft text will be very painful, for sure. But that pain will be required to get agreement," said New Zealand's ambassador to the WTO, Crawford Falconer, who chairs the agriculture negotiations.
Under his plan, the United States would have to cut a ceiling for farm subsidies to between $13bn and $16.4bn a year, lower than its offer so far of $17bn.
The European Union would have to cut its highest tariffs on farm imports by 73 per cent, more than its offer of 60 per cent.
Don Stephenson, Canada's ambassador to the WTO and chairman of the industrial goods talks, said countries needed to "search for balance" between their competing interests.
"This text is a bridging exercise," he told a Geneva news conference after proposing that developing nations should accept deeper cuts to manufacturing tariffs than their recent offers.
Developing countries would have tariffs for industrial goods below 12 per cent on average and only a handful would have them above 15 per cent, although the poorest countries would be permitted to maintain higher average duties.
Developed countries should cut tariffs to below three per cent on average with "peaks," or individually high duties, under 10 per cent, Stephenson said.
Trade diplomats say reactions from WTO countries to the proposals will determine whether the Doha round can be wrapped up in 2007. WTO chief Pascal Lamy has warned that without a deal this year, the talks could be put on ice for several years.
The EU welcomed the proposals as "a useful step forward" but warned it had "important concerns and other significant issues in the negotiations that are not included in these texts".
Meanwhile, an official said yesterday that the United States was preparing a "comprehensive" response to WTO farm and industrial proposals. "Both of the texts will demand close analysis as we develop a comprehensive US reaction," Gretchen Hamel, spokeswoman at the US Trade Representative's office (USTR) said.
India and Brazil, other core members of the WTO, said it was too early to comment although Washington said it hoped the new texts could pave the way for a deal.
Disputes over farm and industrial goods have dogged the Doha Round negotiations for years.
The talks were suspended last July for six months after some countries resisted exposing sensitive industries such as rice, dairy, clothing and car parts, to more foreign competition.
Hopes for a Doha deal, which would also include trade in services, took another hit in June when a meeting between the EU, the United States, India and Brazil collapsed acrimoniously.
If the chairs' proposals are well-received, diplomats say trade ministers could be called to Geneva this fall for another try at concluding the deal which the World Bank says could add $96bn annually to the global economy.
"This deal is still doable," Stephenson said. "This deal is still within the members' grasp if they want it."
Web posted at: 7/18/2007 7:2:37
Source ::: Agencies
peninsulaqatar
GENEVA • Mediators at the World Trade Organisation made a bid to salvage a global free trade deal yesterday by proposing compromises to overcome impasses in the key areas of agriculture and industrial goods.
The proposals are seen as possibly the last chance to save the so-called Doha Round, which has lurched from crisis to crisis since it was launched in Qatar in 2001 to help lift millions of people out of poverty.
In an attempt to break the deadlock, diplomats chairing the WTO negotiations floated detailed texts spelling out ranges of cuts for farm subsidies and a formula for import tariff cuts for agricultural and industrial goods.
"Some of those narrow ranges or target numbers or technical draft text will be very painful, for sure. But that pain will be required to get agreement," said New Zealand's ambassador to the WTO, Crawford Falconer, who chairs the agriculture negotiations.
Under his plan, the United States would have to cut a ceiling for farm subsidies to between $13bn and $16.4bn a year, lower than its offer so far of $17bn.
The European Union would have to cut its highest tariffs on farm imports by 73 per cent, more than its offer of 60 per cent.
Don Stephenson, Canada's ambassador to the WTO and chairman of the industrial goods talks, said countries needed to "search for balance" between their competing interests.
"This text is a bridging exercise," he told a Geneva news conference after proposing that developing nations should accept deeper cuts to manufacturing tariffs than their recent offers.
Developing countries would have tariffs for industrial goods below 12 per cent on average and only a handful would have them above 15 per cent, although the poorest countries would be permitted to maintain higher average duties.
Developed countries should cut tariffs to below three per cent on average with "peaks," or individually high duties, under 10 per cent, Stephenson said.
Trade diplomats say reactions from WTO countries to the proposals will determine whether the Doha round can be wrapped up in 2007. WTO chief Pascal Lamy has warned that without a deal this year, the talks could be put on ice for several years.
The EU welcomed the proposals as "a useful step forward" but warned it had "important concerns and other significant issues in the negotiations that are not included in these texts".
Meanwhile, an official said yesterday that the United States was preparing a "comprehensive" response to WTO farm and industrial proposals. "Both of the texts will demand close analysis as we develop a comprehensive US reaction," Gretchen Hamel, spokeswoman at the US Trade Representative's office (USTR) said.
India and Brazil, other core members of the WTO, said it was too early to comment although Washington said it hoped the new texts could pave the way for a deal.
Disputes over farm and industrial goods have dogged the Doha Round negotiations for years.
The talks were suspended last July for six months after some countries resisted exposing sensitive industries such as rice, dairy, clothing and car parts, to more foreign competition.
Hopes for a Doha deal, which would also include trade in services, took another hit in June when a meeting between the EU, the United States, India and Brazil collapsed acrimoniously.
If the chairs' proposals are well-received, diplomats say trade ministers could be called to Geneva this fall for another try at concluding the deal which the World Bank says could add $96bn annually to the global economy.
"This deal is still doable," Stephenson said. "This deal is still within the members' grasp if they want it."
USA : National Cotton Council apprehensive of Doha draft modalities
USA : National Cotton Council apprehensive of Doha draft modalities
July 18, 2007
The National Cotton Council is alarmed by the draft modalities text issued by Crawford Falconer, the chairman of the WTO agricultural negotiations. Falconer’s draft text includes the inequitable, cotton-specific language tabled by the C-4 countries.
The NCC made it clear to the Administration last month that if the draft modalities contained the C-4 cotton proposal, the cotton industry would have to re-evaluate its position on the Doha negotiations and on a possible extension of trade promotion authority.
Over the last three years, the U.S. cotton industry has worked with the U.S. government and with the WTO to focus program delivery that met developmental goals and objectives for West African cotton-producing countries.
These programs, when combined with a substantive, equitable outcome on agricultural support in the Doha negotiations, would improve the economic condition of the West African cotton industry.
The NCC clearly demonstrated that eliminating U.S. cotton subsidies will not provide a solution for the economic plight of West African cotton producers. Similar evidence has been presented to the C-4, the WTO and attendees of numerous development conferences by disinterested third parties.
Chairman Falconer appears to believe that singling out cotton will encourage developing countries to support this package. This targeting of a specific commodity should concern all Doha Round participants.
The WTO’s handling of the cotton issue seems to demonstrate that the organization can be taken hostage by a small, select set of interests that unfairly target a specific sector of another member’s economy.
The new agriculture text makes it clear that if a Doha Round is agreed to, U.S. agricultural policy will be written in Geneva, not in Washington. The newly-issued text would reach deep into U.S. agricultural policy and dictate to the U.S. Congress how they must write farm programs.
The NCC urges the U.S. Administration to strongly oppose the cotton-specific language contained in this draft and not to accept any set of modalities or any agreement that contains similar language. Without this type of assurance, the U.S. cotton industry will undoubtedly oppose any extension of Trade Promotion Authority.
National Cotton Council
July 18, 2007
The National Cotton Council is alarmed by the draft modalities text issued by Crawford Falconer, the chairman of the WTO agricultural negotiations. Falconer’s draft text includes the inequitable, cotton-specific language tabled by the C-4 countries.
The NCC made it clear to the Administration last month that if the draft modalities contained the C-4 cotton proposal, the cotton industry would have to re-evaluate its position on the Doha negotiations and on a possible extension of trade promotion authority.
Over the last three years, the U.S. cotton industry has worked with the U.S. government and with the WTO to focus program delivery that met developmental goals and objectives for West African cotton-producing countries.
These programs, when combined with a substantive, equitable outcome on agricultural support in the Doha negotiations, would improve the economic condition of the West African cotton industry.
The NCC clearly demonstrated that eliminating U.S. cotton subsidies will not provide a solution for the economic plight of West African cotton producers. Similar evidence has been presented to the C-4, the WTO and attendees of numerous development conferences by disinterested third parties.
Chairman Falconer appears to believe that singling out cotton will encourage developing countries to support this package. This targeting of a specific commodity should concern all Doha Round participants.
The WTO’s handling of the cotton issue seems to demonstrate that the organization can be taken hostage by a small, select set of interests that unfairly target a specific sector of another member’s economy.
The new agriculture text makes it clear that if a Doha Round is agreed to, U.S. agricultural policy will be written in Geneva, not in Washington. The newly-issued text would reach deep into U.S. agricultural policy and dictate to the U.S. Congress how they must write farm programs.
The NCC urges the U.S. Administration to strongly oppose the cotton-specific language contained in this draft and not to accept any set of modalities or any agreement that contains similar language. Without this type of assurance, the U.S. cotton industry will undoubtedly oppose any extension of Trade Promotion Authority.
National Cotton Council
U.S. says Doha risks being delayed several years
U.S. says Doha risks being delayed several years
Thu Jul 5, 2007 1:59 PM IST135
By James Grubel
CAIRNS, Australia (Reuters) - A deal to free up world trade could be delayed several years if no progress is made by the end of 2007, the United States said on Thursday, as it stepped up criticism of India and Brazil over failed talks.
Talks between the United States, the European Union, Brazil and India, aimed at reaching a breakthrough in the World Trade Organization's (WTO) Doha round, collapsed in late June, leaving the future of the long-running trade negotiation in doubt.
U.S. Trade Representative Susan Schwab, swiping at India and Brazil over the breakdown of talks in Potsdam, Germany, said some countries wanted Doha to fail and it was now crucial for some new progress before 2008.
"I think there is a sense that if we don't get it done this year, Doha could well go into hibernation for several years to come," Schwab told reporters on the sidelines of a trade meeting in the Australian city of Cairns.
"There are some countries who really don't want a Doha round outcome," Schwab said. "I think that's unfortunate."
While she did not specifically name India or Brazil as wanting the talks to fail, Schwab said the United States was surprised at "how rigid and inflexible" they were in Potsdam.
The Doha round was launched nearly six years ago with the aim of freeing up world trade, boosting global growth and helping to lift millions of people out of poverty.
Many countries had hoped the so-called G4 talks in Germany would lead to a successful Doha outcome. But they broke down over how much major developing nations should open up to farm and manufactured imports, and how much support Europe and the United States continue to give their farmers.
HELP FROM APEC
Schwab is in Australia for a meeting of trade ministers from the 21-member Asia-Pacific Economic Cooperation (APEC) forum, which issued a statement of firm support of the Doha round after the first day of meetings on Thursday.
APEC trade ministers said new negotiating texts, being drawn up at the WTO in Geneva, needed to be ambitious and balanced, and all APEC economies remained committed to work towards a successful outcome.
"We will demonstrate the necessary political will and flexibility, and call upon other WTO members to do the same," they said in a joint statement.
APEC economies account for 60 percent of world economic activity and about 50 percent of world trade, and Schwab said the forum of Pacific-rim nations could make a significant contribution to help get Doha back on track.
"I don't know if the world will take notice, as long as the WTO secretariat takes notice and as long as the negotiating groups take notice," she said.
India is one of 15 nations wanting to join APEC when the 10-year moratorium on new members expires later this year, and APEC leaders will discuss enlarging the forum when they meet for the leaders' summit in Sydney in September.
While Schwab would not comment directly about India's chances of being accepted as an APEC member, she said the forum needed to make sure it included countries that can show leadership and be forward looking on trade.
"It's very hard to make the kind of progress that APEC has made over the years if you have one or more economies that needs to be dragged kicking and screaming along the path, rather than being upfront or forward leaning," she said.
Thu Jul 5, 2007 1:59 PM IST135
By James Grubel
CAIRNS, Australia (Reuters) - A deal to free up world trade could be delayed several years if no progress is made by the end of 2007, the United States said on Thursday, as it stepped up criticism of India and Brazil over failed talks.
Talks between the United States, the European Union, Brazil and India, aimed at reaching a breakthrough in the World Trade Organization's (WTO) Doha round, collapsed in late June, leaving the future of the long-running trade negotiation in doubt.
U.S. Trade Representative Susan Schwab, swiping at India and Brazil over the breakdown of talks in Potsdam, Germany, said some countries wanted Doha to fail and it was now crucial for some new progress before 2008.
"I think there is a sense that if we don't get it done this year, Doha could well go into hibernation for several years to come," Schwab told reporters on the sidelines of a trade meeting in the Australian city of Cairns.
"There are some countries who really don't want a Doha round outcome," Schwab said. "I think that's unfortunate."
While she did not specifically name India or Brazil as wanting the talks to fail, Schwab said the United States was surprised at "how rigid and inflexible" they were in Potsdam.
The Doha round was launched nearly six years ago with the aim of freeing up world trade, boosting global growth and helping to lift millions of people out of poverty.
Many countries had hoped the so-called G4 talks in Germany would lead to a successful Doha outcome. But they broke down over how much major developing nations should open up to farm and manufactured imports, and how much support Europe and the United States continue to give their farmers.
HELP FROM APEC
Schwab is in Australia for a meeting of trade ministers from the 21-member Asia-Pacific Economic Cooperation (APEC) forum, which issued a statement of firm support of the Doha round after the first day of meetings on Thursday.
APEC trade ministers said new negotiating texts, being drawn up at the WTO in Geneva, needed to be ambitious and balanced, and all APEC economies remained committed to work towards a successful outcome.
"We will demonstrate the necessary political will and flexibility, and call upon other WTO members to do the same," they said in a joint statement.
APEC economies account for 60 percent of world economic activity and about 50 percent of world trade, and Schwab said the forum of Pacific-rim nations could make a significant contribution to help get Doha back on track.
"I don't know if the world will take notice, as long as the WTO secretariat takes notice and as long as the negotiating groups take notice," she said.
India is one of 15 nations wanting to join APEC when the 10-year moratorium on new members expires later this year, and APEC leaders will discuss enlarging the forum when they meet for the leaders' summit in Sydney in September.
While Schwab would not comment directly about India's chances of being accepted as an APEC member, she said the forum needed to make sure it included countries that can show leadership and be forward looking on trade.
"It's very hard to make the kind of progress that APEC has made over the years if you have one or more economies that needs to be dragged kicking and screaming along the path, rather than being upfront or forward leaning," she said.
WTO unveils compromise proposals for final Doha Round deal
WTO unveils compromise proposals for final Doha Round deal
The World Trade Organization (WTO) circulated to its members on Tuesday compromise proposals on agriculture trade and industrial market access as a latest attempt to save the long-stalled Doha Round free trade talks.
According to the proposals, the United States must substantially cut its trade-distorting farm subsidies by 66 percent to 73 percent to a level between 13 billion U.S. dollars and 16.4 billion U.S. dollars.
The United States currently insists that its annual cap for farm subsidies should be as high as 17 billion U.S. dollars.
The proposals also demand that the European Union reduce its agricultural tariffs by up to 73 percent, while major developing countries like Brazil and India should also offer greater market access for industrial products.
The proposals, in the form of two papers, were drafted by the WTO's agriculture negotiations chairperson Crawford Falconer and non-agricultural market access (NAMA) chairperson Don Stephenson respectively.
They were said to be based on the 150 WTO member governments' latest positions in the negotiations.
The two papers were circulated at the same time because members link the two subjects, namely agriculture trade and NAMA, the WTO said in a statement.
"The drafts are by no means the final word. They put the possible areas of agreement on paper so that members can react and further revise the texts," the statement said.
The Doha Round of global trade talks were launched in 2001 with a lofty goal to lift millions out of poverty by lowering trade barriers of mainly industrial countries.
The negotiations have long been blocked from progress by complex differences on agriculture trade and industrial market access, which include the precise magnitude of tariff cuts, reductions in trade distorting domestic farm subsidies and the degree of flexibility to be extended to developing countries in opening their markets to greater competition from imports.
WTO Director-General Pascal Lamy on Tuesday expressed his support for the draft proposals and urged WTO members to continue narrowing their differences in further negotiations based on the proposals.
"Finding such compromise is always difficult and no delegation will get all it wants. But these texts are representative of members' views and constitute a fair and reasonable basis for reaching ambitious, balanced and development-oriented agreements," Lamy said in a statement.
The United States and European Union have quickly issued statements on the draft proposals, saying they would study the texts carefully before making formal reactions.
According to WTO officials, the two chairmen's proposals will be taken up by the 150 WTO member governments in negotiating sessions next week. A crucial WTO ministerial meeting is also scheduled for September.
If any major WTO member rejects the proposals as the basis for a final deal, the Doha Round talks would probably be frozen for years due to political factors in the United States and other WTO members.
But if the proposals are widely received, the six-year-old Doha Round could hopefully be concluded by the end of this year or early next year, as suggested by the WTO chief.
Source: Xinhua
The World Trade Organization (WTO) circulated to its members on Tuesday compromise proposals on agriculture trade and industrial market access as a latest attempt to save the long-stalled Doha Round free trade talks.
According to the proposals, the United States must substantially cut its trade-distorting farm subsidies by 66 percent to 73 percent to a level between 13 billion U.S. dollars and 16.4 billion U.S. dollars.
The United States currently insists that its annual cap for farm subsidies should be as high as 17 billion U.S. dollars.
The proposals also demand that the European Union reduce its agricultural tariffs by up to 73 percent, while major developing countries like Brazil and India should also offer greater market access for industrial products.
The proposals, in the form of two papers, were drafted by the WTO's agriculture negotiations chairperson Crawford Falconer and non-agricultural market access (NAMA) chairperson Don Stephenson respectively.
They were said to be based on the 150 WTO member governments' latest positions in the negotiations.
The two papers were circulated at the same time because members link the two subjects, namely agriculture trade and NAMA, the WTO said in a statement.
"The drafts are by no means the final word. They put the possible areas of agreement on paper so that members can react and further revise the texts," the statement said.
The Doha Round of global trade talks were launched in 2001 with a lofty goal to lift millions out of poverty by lowering trade barriers of mainly industrial countries.
The negotiations have long been blocked from progress by complex differences on agriculture trade and industrial market access, which include the precise magnitude of tariff cuts, reductions in trade distorting domestic farm subsidies and the degree of flexibility to be extended to developing countries in opening their markets to greater competition from imports.
WTO Director-General Pascal Lamy on Tuesday expressed his support for the draft proposals and urged WTO members to continue narrowing their differences in further negotiations based on the proposals.
"Finding such compromise is always difficult and no delegation will get all it wants. But these texts are representative of members' views and constitute a fair and reasonable basis for reaching ambitious, balanced and development-oriented agreements," Lamy said in a statement.
The United States and European Union have quickly issued statements on the draft proposals, saying they would study the texts carefully before making formal reactions.
According to WTO officials, the two chairmen's proposals will be taken up by the 150 WTO member governments in negotiating sessions next week. A crucial WTO ministerial meeting is also scheduled for September.
If any major WTO member rejects the proposals as the basis for a final deal, the Doha Round talks would probably be frozen for years due to political factors in the United States and other WTO members.
But if the proposals are widely received, the six-year-old Doha Round could hopefully be concluded by the end of this year or early next year, as suggested by the WTO chief.
Source: Xinhua
Chairs chart middle path to revive Doha
Chairs chart middle path to revive Doha
From D Ravi Kanth,DH News Service,Geneva:
In an attempt to revive the teetering Doha Round, the chairs for agriculture and industrials negotiations, on Tuesday, tabled what they claimed middle ground compromise texts...
In an attempt to revive the teetering Doha Round, the chairs for agriculture and industrials negotiations, on Tuesday, tabled what they claimed middle ground compromise texts.
But developing country trade diplomats expressed concern that the two chairs — Ambassador Crawford Falconer for agriculture and Ambassador Don Stephenson — weakened the “developmental” component as mandated in Doha agreement, the July 2004 framework agreement and Hong Kong Ministerial Declaration.
Proposed farm cut
The chair for Doha farm negotiations proposed a cut between 33 and 47 per cent for farm products entering into India and other developing country markets. Effectively, developing countries will have to reduce on an average of more than 40 per cent while G-20 had proposed 36 per cent.
More work needed
On India’s major demand for special products, Ambassador Crawford Falconer stated more work needs to be done on the basis of indicators presented by G-33 developing country coalition. He remained silent on the number of special products as well as degree of tariff reduction for those products. Earlier, the chair proposed a cut between 10-20 per cent for special products.
Decision later
Stating that “a number of you (India, China, Indonesia and others) have made clear to me that you disagree with that view,” he said he will leave the issue to be decided later.
The chair suggested a reduction between 66 per cent and 73 per cent for the United States in its trade-distorting domestic subsidies that amount to reducing them to a level of US$ 13-16.4 billion. India and other developing countries in the G-20 had called for a reduction to less than US$12 billion, diplomats said. On cuts in import tariffs for industrial products for developing countries, the chair for Doha industrials negotiations Ambassador Don Stephenson suggested a coefficient between 19 and 23 that would bring India’s bound duties from 34 per cent to 12-13 per cent.
From D Ravi Kanth,DH News Service,Geneva:
In an attempt to revive the teetering Doha Round, the chairs for agriculture and industrials negotiations, on Tuesday, tabled what they claimed middle ground compromise texts...
In an attempt to revive the teetering Doha Round, the chairs for agriculture and industrials negotiations, on Tuesday, tabled what they claimed middle ground compromise texts.
But developing country trade diplomats expressed concern that the two chairs — Ambassador Crawford Falconer for agriculture and Ambassador Don Stephenson — weakened the “developmental” component as mandated in Doha agreement, the July 2004 framework agreement and Hong Kong Ministerial Declaration.
Proposed farm cut
The chair for Doha farm negotiations proposed a cut between 33 and 47 per cent for farm products entering into India and other developing country markets. Effectively, developing countries will have to reduce on an average of more than 40 per cent while G-20 had proposed 36 per cent.
More work needed
On India’s major demand for special products, Ambassador Crawford Falconer stated more work needs to be done on the basis of indicators presented by G-33 developing country coalition. He remained silent on the number of special products as well as degree of tariff reduction for those products. Earlier, the chair proposed a cut between 10-20 per cent for special products.
Decision later
Stating that “a number of you (India, China, Indonesia and others) have made clear to me that you disagree with that view,” he said he will leave the issue to be decided later.
The chair suggested a reduction between 66 per cent and 73 per cent for the United States in its trade-distorting domestic subsidies that amount to reducing them to a level of US$ 13-16.4 billion. India and other developing countries in the G-20 had called for a reduction to less than US$12 billion, diplomats said. On cuts in import tariffs for industrial products for developing countries, the chair for Doha industrials negotiations Ambassador Don Stephenson suggested a coefficient between 19 and 23 that would bring India’s bound duties from 34 per cent to 12-13 per cent.
Countries trying to kill Doha, says US
Countries trying to kill Doha, says US
Tim Colebatch, Cairns
July 5, 2007
SOME countries are trying to kill the Doha Round trade negotiations, US Trade Representative Susan Schwab has warned.
These countries wanted it to appear that the US was to blame because of its unwillingness to make deep cuts in farm subsidies, she said.
In an interview with The Age yesterday, Ms Schwab refused to name the countries responsible, but appeared to be talking about India, which has demanded that the US roughly halve its proposed maximum subsidy.
Ms Schwab, a career trade specialist, took over the top job last year.
Earlier, she warned that if the only consensus from the Doha Round was for cosmetic reforms that failed to provide "meaningful market access", she could not sell the agreement to the US Congress, which must ratify any deal.
Ms Schwab is in Cairns for a meeting of trade ministers of the Asia-Pacific Economic Co-operation forum, which opens today.
Australian Trade Minister Warren Truss said a key task of the meeting would be to discuss how to make best use of the short time left to get a deal in the Doha Round, which appears to be sinking.
Ms Schwab told The Age the last opportunity for a Doha Round deal in this phase now rested with the chairman of the committees on agriculture and manufacturing, who would submit their proposed texts this month, for members to adopt or reject. If those texts were rejected, the Doha Round "doesn't bear considering".
"I believe if those texts are low-ambition texts, then we're in deep trouble," she said. "The US, like a lot of our trading partners, would find it very difficult, if not impossible, to sell at home a low-level-of-ambition Doha outcome. We need meaningful market access."
While the US was still committed to a deal, other countries were not, she said. She slammed a proposal by the G20 group of developing countries, with India as the main spokesman, that the US lower its farm subsidy ceiling from the $US22.5 billion ($A26.28 billion) it had offered to something in the "low teens" (in $US billion), or even less.
India, supported by many developing countries, argues that it is hypocritical for the US to demand big cuts in tariffs protecting manufacturers in developing countries when it wanted a subsidy ceiling roughly twice as much as the $US11 billion spent on farm supports last year.
But Ms Schwab said US farm subsidies had fallen only because of high prices on world markets, particularly for corn, which had risen almost above the level of price supports. In five of the past nine years, she said, the US had spent more than the ceiling it was proposing.
"And honestly, some of the countries that are doing this are doing this because they really want to kill the Doha Round, and they want to blame somebody else," she said. "I'm absolutely convinced of that.
"I'm not naming names. But honestly, if you are lacking ambition in Doha, and you want somebody else to take the blame for it, then you identify a target for another country or group of countries that you know they can never meet."
Tim Colebatch, Cairns
July 5, 2007
SOME countries are trying to kill the Doha Round trade negotiations, US Trade Representative Susan Schwab has warned.
These countries wanted it to appear that the US was to blame because of its unwillingness to make deep cuts in farm subsidies, she said.
In an interview with The Age yesterday, Ms Schwab refused to name the countries responsible, but appeared to be talking about India, which has demanded that the US roughly halve its proposed maximum subsidy.
Ms Schwab, a career trade specialist, took over the top job last year.
Earlier, she warned that if the only consensus from the Doha Round was for cosmetic reforms that failed to provide "meaningful market access", she could not sell the agreement to the US Congress, which must ratify any deal.
Ms Schwab is in Cairns for a meeting of trade ministers of the Asia-Pacific Economic Co-operation forum, which opens today.
Australian Trade Minister Warren Truss said a key task of the meeting would be to discuss how to make best use of the short time left to get a deal in the Doha Round, which appears to be sinking.
Ms Schwab told The Age the last opportunity for a Doha Round deal in this phase now rested with the chairman of the committees on agriculture and manufacturing, who would submit their proposed texts this month, for members to adopt or reject. If those texts were rejected, the Doha Round "doesn't bear considering".
"I believe if those texts are low-ambition texts, then we're in deep trouble," she said. "The US, like a lot of our trading partners, would find it very difficult, if not impossible, to sell at home a low-level-of-ambition Doha outcome. We need meaningful market access."
While the US was still committed to a deal, other countries were not, she said. She slammed a proposal by the G20 group of developing countries, with India as the main spokesman, that the US lower its farm subsidy ceiling from the $US22.5 billion ($A26.28 billion) it had offered to something in the "low teens" (in $US billion), or even less.
India, supported by many developing countries, argues that it is hypocritical for the US to demand big cuts in tariffs protecting manufacturers in developing countries when it wanted a subsidy ceiling roughly twice as much as the $US11 billion spent on farm supports last year.
But Ms Schwab said US farm subsidies had fallen only because of high prices on world markets, particularly for corn, which had risen almost above the level of price supports. In five of the past nine years, she said, the US had spent more than the ceiling it was proposing.
"And honestly, some of the countries that are doing this are doing this because they really want to kill the Doha Round, and they want to blame somebody else," she said. "I'm absolutely convinced of that.
"I'm not naming names. But honestly, if you are lacking ambition in Doha, and you want somebody else to take the blame for it, then you identify a target for another country or group of countries that you know they can never meet."
APEC, Doha talks continue
APEC, Doha talks continue
Sydney (dpa) - Trade ministers from the Asia-Pacific met in Australia Thursday to try to stave off a collapse in the latest round of talks to liberalize world trade.
Representatives of the 21 Asia-Pacific Economic Cooperation (APEC) economies gathered in the far northern city of Cairns to salvage something from the Doha Round of the 150-member World Trade Organization (WTO) talks.
"If we are able to reach a degree of consensus, well, that can provide some leadership," Australian Trade Minister Warren Truss said in comments that reflected pessimism that APEC could succeed where other international organizations had failed. "The G4 and the G6 and similar processes based around small negotiating groups have not succeeded."
The European Union, the United States, Brazil and India are the Group of Four (G4) nations. They met in Potsdam, Germany, last month to breathe new life into the 6-year-old Doha Round, but delegates gave up after India and Brazil walked out of the meeting.
Australia is the current host of APEC, the region's most important intergovernmental grouping, which also includes Brunei, Canada, Chile, China, Hong Kong, Indonesia, Japan, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, the Philippines, Russia, Singapore, South Korea, Taiwan, Thailand, the United States and Vietnam.
US Trade Representative Susan Schwab said on her arrival in Cairns that APEC had the capacity to give momentum to the Doha Round - as it did in the 1990s during the Uruguay Round. She also said that an APEC free trade agreement could become a building block for a global trade pact.
"So much of our trade is in the Asia-Pacific region, and it would make an incredible amount of sense to see an Asia-Pacific-wide trade agreement," she told reporters.
APEC members account for about half of world trade. Schwab warned against trying for a Doha Round deal that skirted around the most difficult issues of agricultural and manufacturing protection.
"We couldn't sell that at home," she said.
Sydney (dpa) - Trade ministers from the Asia-Pacific met in Australia Thursday to try to stave off a collapse in the latest round of talks to liberalize world trade.
Representatives of the 21 Asia-Pacific Economic Cooperation (APEC) economies gathered in the far northern city of Cairns to salvage something from the Doha Round of the 150-member World Trade Organization (WTO) talks.
"If we are able to reach a degree of consensus, well, that can provide some leadership," Australian Trade Minister Warren Truss said in comments that reflected pessimism that APEC could succeed where other international organizations had failed. "The G4 and the G6 and similar processes based around small negotiating groups have not succeeded."
The European Union, the United States, Brazil and India are the Group of Four (G4) nations. They met in Potsdam, Germany, last month to breathe new life into the 6-year-old Doha Round, but delegates gave up after India and Brazil walked out of the meeting.
Australia is the current host of APEC, the region's most important intergovernmental grouping, which also includes Brunei, Canada, Chile, China, Hong Kong, Indonesia, Japan, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, the Philippines, Russia, Singapore, South Korea, Taiwan, Thailand, the United States and Vietnam.
US Trade Representative Susan Schwab said on her arrival in Cairns that APEC had the capacity to give momentum to the Doha Round - as it did in the 1990s during the Uruguay Round. She also said that an APEC free trade agreement could become a building block for a global trade pact.
"So much of our trade is in the Asia-Pacific region, and it would make an incredible amount of sense to see an Asia-Pacific-wide trade agreement," she told reporters.
APEC members account for about half of world trade. Schwab warned against trying for a Doha Round deal that skirted around the most difficult issues of agricultural and manufacturing protection.
"We couldn't sell that at home," she said.
APEC Trade Ministers Gather in Cairns to Try to Revive Doha
APEC Trade Ministers Gather in Cairns to Try to Revive Doha
By En-Lai Yeoh
July 3 (Bloomberg) -- Ministers responsible for half the world's trade meet in Australia this week to try to revive global talks some say are on their deathbed.
Trade ministers from 21 Asia-Pacific Economic Cooperation economies will come together in Cairns July 5 and 6, where they will attempt to resuscitate the so-called Doha round of trade liberalization negotiations.
Talks have stalled over the failure of the United States, the European Union, India, Brazil and China to open up agricultural and industrial markets and end subsidies.
``I think Doha's dead,'' said Manu Bhaskaran, Singapore- based partner for the Centennial Group, a Washington-based consulting company. ``It'll have to be regional, bilateral arrangements for now.''
Two weeks ago, talks between the U.S., EU, Brazil and India -- collectively known as G4 -- broke down in Potsdam, Germany, leaving this week's meeting as one of the last opportunities for top commerce officials to rescue Doha.
APEC Ministers will urge the opposing parties to show ``the necessary flexibility,'' and indicate the group's willingness to mediate between the factions to seal a deal before a year-end deadline, Japan's Kyodo News said June 29, citing a draft communiqué.
India, Brazil and the EU are not part of APEC, a 21-member group that accounts for 41 percent of the world's population and 56 percent of its GDP.
The WTO, EU, India and Brazil are all likely to be represented in Cairns, an APEC official said on condition of anonymity.
Doha Round
The 150-nation World Trade Organization has set a 2007 deadline for the Doha round. Ideally, the framework of a deal should be complete by early August.
Developing nations want the EU and the U.S. to scale back agricultural tariffs that protect their farmers. Europe and America are seeking more access to industrial and manufactured goods markets in countries like India and Brazil.
U.S. Agriculture Secretary Mike Johanns said both India and Brazil ``chose not to negotiate'' in Potsdam.
The ambitious and troubled Doha agenda, launched six years ago, is designed to open market access, add hundreds of billions of dollars in global commerce and lift millions of people out of poverty. It has stalled over a failure to reach deals on rice, poultry, bananas and manufactured goods, among others.
WTO rules require that all members agree to the agenda.
Market Access
``Unless and until there is sufficient new market access in agriculture and manufacturing and services, the Doha round will never meet its development promise,'' U.S. Trade Representative Susan Schwab said June 21 after the Potsdam meetings.
A week later, Schwab's office said it would complain to the WTO over the European Union's banana import restrictions, indicating that the divide was not merely between the developed and the developing world.
President George W. Bush's so-called fast track, or Trade Promotion Authority, expired at the end of June. It allowed trade deals to essentially bypass Congressional scrutiny --which could take months. A hostile Congress could pick apart any deal struck by Bush's negotiators and stall a deal beyond 2007.
``Without fast track authority, there's no way Congress will approve any deal,'' said Bhaskaran of the Centennial Group.
Difficult Numbers
``Frankly, I'm not so optimistic (on Doha),'' Malaysia's Trade Minister Rafidah Aziz told reporters June 29. ``The problem is we're now down to the numbers, and that's where the positions are very, very difficult.''
``Who are we to move giants?'' said Aziz. ``Unfortunately, we suffer in the process because nothing moves. I'm not optimistic.''
The World Bank said in 2005 a successful implementation of Doha could add as much as US$126 billion in real income gain and reduce extreme poverty by around 32 million by 2015.
``At the end of the day, the fate of a few hundred thousand politically important voting farmers in the West and Japan will matter a lot more than the poor in Africa and Asia,'' said Centennial's Bhaskaran. ``These people will have a lot to answer for.''
APEC includes Australia, Brunei, Canada, Chile, China, Hong Kong, Indonesia, Japan, South Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, the Philippines, Russia, Singapore, Taiwan, Thailand, the United States and Vietnam.
To contact the reporter on this story: En-Lai Yeoh in Cairns, Australia at eyeoh1@bloomberg.net
Last Updated: July 2, 2007 23:21 EDT
By En-Lai Yeoh
July 3 (Bloomberg) -- Ministers responsible for half the world's trade meet in Australia this week to try to revive global talks some say are on their deathbed.
Trade ministers from 21 Asia-Pacific Economic Cooperation economies will come together in Cairns July 5 and 6, where they will attempt to resuscitate the so-called Doha round of trade liberalization negotiations.
Talks have stalled over the failure of the United States, the European Union, India, Brazil and China to open up agricultural and industrial markets and end subsidies.
``I think Doha's dead,'' said Manu Bhaskaran, Singapore- based partner for the Centennial Group, a Washington-based consulting company. ``It'll have to be regional, bilateral arrangements for now.''
Two weeks ago, talks between the U.S., EU, Brazil and India -- collectively known as G4 -- broke down in Potsdam, Germany, leaving this week's meeting as one of the last opportunities for top commerce officials to rescue Doha.
APEC Ministers will urge the opposing parties to show ``the necessary flexibility,'' and indicate the group's willingness to mediate between the factions to seal a deal before a year-end deadline, Japan's Kyodo News said June 29, citing a draft communiqué.
India, Brazil and the EU are not part of APEC, a 21-member group that accounts for 41 percent of the world's population and 56 percent of its GDP.
The WTO, EU, India and Brazil are all likely to be represented in Cairns, an APEC official said on condition of anonymity.
Doha Round
The 150-nation World Trade Organization has set a 2007 deadline for the Doha round. Ideally, the framework of a deal should be complete by early August.
Developing nations want the EU and the U.S. to scale back agricultural tariffs that protect their farmers. Europe and America are seeking more access to industrial and manufactured goods markets in countries like India and Brazil.
U.S. Agriculture Secretary Mike Johanns said both India and Brazil ``chose not to negotiate'' in Potsdam.
The ambitious and troubled Doha agenda, launched six years ago, is designed to open market access, add hundreds of billions of dollars in global commerce and lift millions of people out of poverty. It has stalled over a failure to reach deals on rice, poultry, bananas and manufactured goods, among others.
WTO rules require that all members agree to the agenda.
Market Access
``Unless and until there is sufficient new market access in agriculture and manufacturing and services, the Doha round will never meet its development promise,'' U.S. Trade Representative Susan Schwab said June 21 after the Potsdam meetings.
A week later, Schwab's office said it would complain to the WTO over the European Union's banana import restrictions, indicating that the divide was not merely between the developed and the developing world.
President George W. Bush's so-called fast track, or Trade Promotion Authority, expired at the end of June. It allowed trade deals to essentially bypass Congressional scrutiny --which could take months. A hostile Congress could pick apart any deal struck by Bush's negotiators and stall a deal beyond 2007.
``Without fast track authority, there's no way Congress will approve any deal,'' said Bhaskaran of the Centennial Group.
Difficult Numbers
``Frankly, I'm not so optimistic (on Doha),'' Malaysia's Trade Minister Rafidah Aziz told reporters June 29. ``The problem is we're now down to the numbers, and that's where the positions are very, very difficult.''
``Who are we to move giants?'' said Aziz. ``Unfortunately, we suffer in the process because nothing moves. I'm not optimistic.''
The World Bank said in 2005 a successful implementation of Doha could add as much as US$126 billion in real income gain and reduce extreme poverty by around 32 million by 2015.
``At the end of the day, the fate of a few hundred thousand politically important voting farmers in the West and Japan will matter a lot more than the poor in Africa and Asia,'' said Centennial's Bhaskaran. ``These people will have a lot to answer for.''
APEC includes Australia, Brunei, Canada, Chile, China, Hong Kong, Indonesia, Japan, South Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, the Philippines, Russia, Singapore, Taiwan, Thailand, the United States and Vietnam.
To contact the reporter on this story: En-Lai Yeoh in Cairns, Australia at eyeoh1@bloomberg.net
Last Updated: July 2, 2007 23:21 EDT
Doha trade talks may go into deep freeze: WTO chief
The World Trade Organization (WTO) chief Pascal Lamy at a news conference in Mexico City, in this March 23, 2007 file photo. Lamy said on Monday the Doha Round on cutting tariffs and subsidies risks heading into a "deep freeze" but could be saved if key countries made small concessions. REUTERS/Henry Romero
Doha trade talks may go into deep freeze: WTO chief
Mon Jul 2, 2007 10:38 PM IST146
By Laura MacInnis
GENEVA (Reuters) - World Trade Organisation (WTO) chief Pascal Lamy said on Monday the Doha Round on cutting tariffs and subsidies risks heading into a "deep freeze" but could be saved if key countries made small concessions.
In a speech to a United Nations Economic and Social Council meeting in Geneva, he said nations digging in their heels in the nearly six-year-old negotiations could sabotage big gains to the global economy if they did not moderate their stances.
"Today the Doha Round is at a crossroad: the path towards success or the slow move towards a deep freeze," Lamy said.
Named after the Qatari capital where it was launched in late 2001, the Doha round is meant to boost trade flows and help developing countries whose producers have struggled to overcome market barriers and price-distorting subsidies.
The negotiations have stalled over European and U.S. farm subsidies and tariffs, and concerns among emerging nations about opening up their markets to industrial goods and services provided by firms in rich countries.
Lamy said the collapse of talks in Potsdam in late June between the European Union, the United States, Brazil and India on the outlines of a deal "could be fatal" for Doha if the four do not play a constructive role over the coming period.
The former European trade negotiator said only small moves were needed from key countries to secure an accord.
"Reaching agreement on subsidies depends on additional concessions from the U.S. (that are) equivalent to less than a week's worth of transatlantic trade," he said.
Europe and Japan would need to agree to "an additional handful of percentage reduction" in their highest farm tariffs, and Brazil and India would be required to accept similar small cuts in the duties they impose on manufactured goods, he said.
"What remains to be done is small compared to all the proposals already on the table," he said. "It is also small compared to the potential benefits of rebalancing the multilateral trading system in favour of developing countries."
The World Bank has estimated that a Doha deal would add $96 billion to the global economy annually by 2015. Many analysts believe the biggest cost of failure in the WTO talks could be a spike in trade disputes and protectionist measures.
The WTO's 150 members need to reach consensus on a Doha deal for it to take force.
© Reuters 2007. All Rights Reserved.
Africans Fear 'Ruin' in Europe Trade Talks
Africans Fear 'Ruin' in Europe Trade Talks
Africa Renewal (United Nations)
NEWS
23 July 2007
Posted to the web 23 July 2007
By Gumisai Mutume
The warnings are grim. Cape Verde may lose 80 per cent of its import revenues. Three-quarters of Ghana's industry may collapse. And African countries could end up even more dependent on trade with Europe than with each other. Such worries about the possible impact of ongoing "free trade" negotiations between Europe and its former colonies in Africa, the Caribbean and Pacific (ACP) are beginning to galvanize public debate in the region.
African governments, policy analysts, regional economic groups and civil society organizations are increasingly speaking with one voice: the Economic Partnership Agreements (EPAs) now being hammered out between Europe and the ACP countries must be significantly modified to safeguard those countries' prospects for development.
"If the EPAs are signed as they are, it will be suicide and death for farmers," Jules Zongo, national president of Burkina Faso's regional chambers of agriculture, declared at a protest march and rally of 2,000 farmers in that country's capital, Ouagadougou, in December. Several months earlier, civil society organizations rallied in Senegal, as part of a global Stop EPA campaign, to demand that their government not sign the agreements unless significant changes are made.
African leaders have taken note of such calls. When heads of state from throughout West Africa converged on Ouagadougou for a summit meeting in January 2007, Burkina's President Blaise Compaoré affirmed that the "legitimate concerns" of farmers and other producers must be considered in any trade talks with the European Union (EU).
Among other venues, opposition to the EPAs also featured at the World Social Forum in Nairobi, Kenya, in January, at which tens of thousands of civil society representatives chanted and carried signs declaring: "Fight poverty... Say no to EPAs." In April, the Africa Youth Coalition Against Hunger mobilized more than 1,000 activists from 20 countries in the Gambia to launch a "big noise campaign" to stimulate public debate on the proposed agreements.
Beyond the concrete impact that the new agreements may ultimately have on people's lives, the negotiations are attracting wider attention for another reason: they began at a time when talks to further liberalize global trade, under the so-called Doha round of the World Trade Organization (WTO), seemed stalled.
One factor in the indefinite suspension of the Doha round last year was the reluctance of richer countries to liberalize their agricultural sectors, while at the same time they insisted that developing nations open their own economies even further to products from the North. Some analysts regard the EPA negotiations as an attempt by the more powerful EU to extend to its weaker ACP trading partners, through a different forum, agreements that it could not obtain at the WTO. The 27 countries of the EU have a combined gross domestic product of US$14 bn, while 39 of the 79 ACP nations are among the world's least developed countries (LDCs).
New scenario
Although the Doha round talks have bogged down, earlier changes at the WTO have already seriously affected the nature of the EU's relations with the ACP countries. From 1975 to 1994, the EU and ACP shared special development cooperation arrangements through a series of five-year agreements, originally known as the Lomé Conventions. Through those agreements, the EU granted trade preferences to ACP exports, without requiring similar treatment for EU products in ACP markets.
The so-called Uruguay Round of trade negotiations, which concluded in 1994, adopted new rules requiring parties to regional trade agreements to eliminate duties and other restrictive regulations on "substantially all the trade" among them. But for some regions application of the rules was postponed, as the WTO, which emerged from the Uruguay talks in 1995, agreed to a special exception allowing the EU to maintain "non-reciprocal" preferences for ACP exporters until December 2007.
With the WTO deadline in mind, in 2000 the two groups signed a new cooperation accord known as the Cotonou Agreement, covering aid, trade and political cooperation. Its aim was to "facilitate the economic and political integration of the ACP countries into a liberalized world market." Its framers also envisaged the conclusion of negotiations on EPAs or other alternative trade arrangements by the start of 2008, to comply with WTO rules. Initial talks on the EPAs began in 2002.
Some developing countries now fear that the EU's approach to such EPAs will oblige them to remove trade protections so quickly and to such an extent that the development of their own industries will be harmed. "At no point in time was an EPA as a free trade agreement the first choice for the ACP," says Mauritius' ambassador to the EU, Sutiawan Gunessee. "It was not. But we had no alternative."
According to Zimbabwean Trade Minister Obert Mpofu, any new trade agreements should reinforce, not undermine, "the development of our economies, employment generation, wealth creation for our people and ultimately poverty reduction."
Ending dependency?
In contrast, EU Trade Commissioner Peter Mandelson views the EPAs as beneficial. He argues that they will shift the relationship between the EU and Africa from one of dependency on tariff preferences to one that promotes business competitiveness. After 30 years of preferential market access, African countries still export a limited range of basic commodities, he points out. "Most of these are sold at lower prices than they were 20 years ago. This is not sustainable. It certainly isn't sustainable development."
Countered Nigerian Commerce Minister Aliyu Modibo Umar: "If 30 years of non-reciprocal free market access into the EU did not improve the economic situation of the ACP, how can a reciprocal trading arrangement achieve anything better?" Instead, he argues, simply liberalizing trade will "further widen the gap between the two [blocs] and probably destroy the little development that some ACP countries have managed to achieve over the past years."
Unloading grain at the port of Dakar, Senegal: Africa worries that Europe is trying to bring in new trade issues that have not been agreed at the World Trade Organization.
Hard choices
Under the type of EPAs currently proposed by the EU, ACP countries would eventually have to liberalize 80-90 per cent of their trade with the regional bloc in order to gain duty-free access to European markets. That would allow ACP countries to use tariffs to protect only a small portion of their products from competition with European goods.
To stay within that narrow band, governments would have to make some hard choices, notes Oxfam in a 2006 report, Unequal Partners. They could choose, for example, to maintain tariffs on valuable revenue-raising imports such as cars and electronics, protect staple foods such as maize, exempt a few existing industries from competition or retain the ability to support future industrial development.
Fiscal losses
In the short term, lifting tariffs on European goods would deprive many governments of an important source of fiscal revenue. "Many countries would lose the valuable income they earn from tariff duties," notes Mr. Godfrey Kanyenze of the Labour and Economic Development Institute of Zimbabwe. Until countries are able to diversify their revenue bases - often a long process - they could be confronted with national budget deficits, possibly leading to lower spending on education, health care, poverty reduction and social security.
A 2002 study by the Common Market for East and Southern Africa, a regional trade bloc, found that if all EU imports entered that region duty-free, governments would lose about 25 per cent of their trade taxes and about 6 per cent of total tax revenue. Another study, by Germany's Hamburg Institute of International Economics, estimated that declines in import duties in countries of the Economic Community of West African States would range from the equivalent of $2.2 mn in Guinea-Bissau to $487.8 mn in Nigeria. The decline would be sharpest in Cape Verde, where 80 per cent of import revenues are likely to be lost. If no adjustments on spending were made, Cape Verde and the Gambia would incur budget deficits of 4.1 and 3.5 per cent respectively.
Such "doomsday" predictions need to be treated with caution, responds EU Trade Commissioner Mandelson. "If we look closely, most studies are highly theoretical," he argues. "They assume immediate and complete liberalization, and ignore the economic benefits of reform." According to Mr. Mandelson, the EU and ACP can negotiate the timing and phasing of tariff reductions to guard against any sharp drops in government income.
The commissioner adds that while some "transitional protection" may be necessary, the aim should be to reduce protection to encourage local industries to become more competitive. Over time, ACP countries will need to adapt their economies to compete with the rest of the world.
'Back door' issues
In principle, the central objective of the Cotonou Agreement is poverty reduction. Both parties agree that whatever arrangements are negotiated, they should foster development in the ACP countries. But they differ on what policies would best serve that purpose, echoing debates that previously unfolded within the WTO.
The EU, for example, is proposing that ACP countries adopt stringent rules to protect foreign investment, promote domestic competition and increase transparency in government procurement procedures. Similar proposals - known as the "Singapore issues" after the WTO ministerial meeting at which they were first raised - were blocked by developing countries, which feared the rules would hinder their ability to use trade policy to promote development (see Africa Renewal, January 2004).
But rich countries, following their failure to introduce such issues into WTO agreements, are now trying to insert them into multilateral and bilateral agreements as conditions for aid or loans, notes Mr. Irungu Houghton of Kenya, a pan-Africa policy analyst for Oxfam. EPAs are one part of this broader effort to bring the Singapore issues in through "the back door," he argues.
In several countries, Mr. Houghton told Africa Renewal, "there is intense pressure to open up procurement processes for public contracts and supplies to non-indigenous suppliers, who because of their international reach are able to produce those goods at a much lower cost than local contractors." Such a liberalization of procurement would take away one of the few tools governments have traditionally used to promote local industry - that is, favouring domestic companies ahead of foreign ones.
Mr. Houghton notes that similar changes in government procurement policies are also appearing in Country Assistance Strategies - documents that spell out loan conditions from the continent's main lender, the World Bank.
The implications of adopting all the Singapore issues in Africa have not been fully studied. But policy analysts agree that simply implementing new laws to enact the reforms will by itself be costly. Oxfam estimates that rewriting domestic laws and changing business procedures in each of the 16 areas of reform agreed under the Uruguay Round would cost an average country $2.5 mn.
The European Commission (the secretariat of the EU) insists, however, that there will be "no EPA without investment rules and full reciprocity." The commission argues that "the EPAs are, at root, about putting progressive trade policy into practice," by reducing bad business practices hindering investment in Africa.
'A field of ruins'
But opposition is mounting to the EPAs, as currently envisaged by the EU. In 2004 civil society organizations from across the world rallied in London to launch a Stop EPAs campaign. The campaigners charge that in their current form EPAs are essentially narrow "free trade" agreements intended to further liberalize the markets of ACP countries. They cite examples of earlier trade liberalization measures. In 1986 Côte d'Ivoire cut tariffs by 40 per cent, resulting in massive layoffs in the chemical, textile, footwear and automobile assembly industries. Senegal lost one-third of manufacturing jobs between 1985 and 1990 after reducing tariffs from 165 per cent to 90 per cent. The campaigners are calling for EU-ACP trade relations that support the weaker partners' pursuit of economic development.
The organizations endorsing the campaign include the Economic Justice Network in South Africa, Third World Network-Africa in Ghana, Civil Society Trade Network of Zambia, Action Aid and Oxfam International. In a number of African countries, including Burkina Faso, Ghana, Nigeria, Kenya and Senegal, thousands of farmers, workers and civil society activists have staged public protests against the perceived consequences of EPAs.
In April, West African business representatives also voiced alarm. Meeting in Dakar under the auspices of the regional chamber of commerce of the eight-country West African Economic and Monetary Union, they affirmed their readiness to become more competitive in global markets, but not to enter into competition "with unequal arms." Commenting specifically on the EPAs, Mr. Iddi Ango, president of the regional chamber, said that "if we open up our countries, given the current state of our enterprises, it will not be an opportunity, but a disaster, a field of ruins."
Mr. Ibrahim Akalbila, national coordinator of the Ghana Trade and Livelihood Coalition, comprising civil society and farmers' groups in that country, cites the high domestic subsidies that many European governments continue to provide their producers, allowing European products to undersell producers in poor developing countries. "Whether it is tomatoes and rice, textiles or iron rods," he said in April, "cheap imports, illegally dumped into our markets, are destroying whole areas of economic activity, and with it, the lives of millions."
'EPA light'
Some European analysts acknowledge the validity of the ACP criticisms. But they also note that the EU faces a dilemma: how to reconcile the special status of the ACP group with its obligations to the WTO.
One possible solution, they suggest, is for the EU to accept an agreement that is only as reciprocal as necessary to meet WTO requirements, while leaving the ACP countries some room to safeguard their domestic markets and industries. The European Centre for Development Policy Management, an independent foundation funded by a number of European governments, proposes the adoption of an "EPA light."
Such an arrangement would initially require ACP countries to open up their markets only enough to comply with WTO rules. They would liberalize just 50-60 per cent of their EU trade over a long transitional period of 20 years or more, while the EU would continue to grant full market access to all ACP countries. During the transition, the EU also would support the building of viable industries in ACP countries.
Along similar lines, the UN Economic Commission for Africa (ECA) argues that the primary focus of EPAs over an initial 12-year period should be to strengthen intra-African trade, to help local industries first become more competitive with their African counterparts. Only after this period, notes the Addis Ababa-based ECA, should EPAs then consider opening African economies to EU competition. And even then, tariff reductions should be phased in gradually, to allow countries time to adjust to the rigours of global markets.
Alternative options
If ACP countries ultimately decide not to sign EPAs, there are a number of other options they could pursue. At the Cotonou meeting in 2000, the EU agreed that if EPAs were not accepted, it would propose "alternative possibilities, in order to provide these countries with a new framework for trade which is equivalent to their existing situation and in conformity with WTO rules." A country, however, would first have to reject an EPA before work could begin on an alternative.
One such option would be to develop new trade arrangements agreeable to both sides. For example, notes Action Aid, the EU could continue offering ACP countries preferential access to European markets while allowing them to protect their vital industries or cut tariffs in ways that do not jeopardize their economic development goals. But such provisions would require changes to current WTO rules on regional trade agreements. With the Cotonou deadline looming and the Doha round talks still suspended, that option seems unlikely.
Therefore, both parties may have to rely on existing trade regimes. One of these is the Generalized System of Preferences (GSP): nonreciprocal market-access schemes open to all developing countries that meet certain standards in human and labour rights, environmental protection and good governance.
Nations classified as least developed countries - 39 out of the 77 countries currently taking part in the EPA negotiations - could benefit from one of the variants within the GSP framework, the "Everything But Arms" initiative. It grants LDCs nonreciprocal duty-free and quota-free access to the EU for all goods except arms and munitions.
Non-LDCs could also decide to seek GSP treatment, but they would not be eligible for full duty-free access to the EU market. Moreover, GSP arrangements are narrower in scope than EPAs or the current ACP-EU agreement, since they cover only market access. Unlike the Lomé or Cotonou agreements, they do not include any development assistance, in the form of either financial aid or technical cooperation. GSP rules are also considered more restrictive and onerous than those of the Lomé/Cotonou agreements: hence the reluctance of ACP countries to rely solely on them.
The European Commission acknowledges that the GSP alternative would be a "second best" solution, from the development perspective of the ACP countries. A GSP arrangement is not negotiated, like a contract. The EU would design it and offer it on its own terms, and could amend or suspend it at any time. The products covered would not include all those of interest to ACP countries. And if an ACP country were to develop a new product not on the list, that item would be excluded.
Some civil society organizations argue that in a worst-case scenario, GSPs could be used as a starting framework for a new trade arrangement, but with their flaws corrected to provide both market access and development assistance to ACP countries.
Because of the controversy, the British Parliament held public consultations on the EPAs in 2005. Subsequently, its parliamentary committee on international development recommended that the UK push the EU to ensure that alternatives for non-LDC ACP states guarantee the same level of market access as the Lomé arrangements. "Development," it concluded, "should be integral to any trade options presented to the ACP, even when they are not the first choice of the EU."
Copyright © 2007 Africa Renewal. All rights reserved.
Africa Renewal (United Nations)
NEWS
23 July 2007
Posted to the web 23 July 2007
By Gumisai Mutume
The warnings are grim. Cape Verde may lose 80 per cent of its import revenues. Three-quarters of Ghana's industry may collapse. And African countries could end up even more dependent on trade with Europe than with each other. Such worries about the possible impact of ongoing "free trade" negotiations between Europe and its former colonies in Africa, the Caribbean and Pacific (ACP) are beginning to galvanize public debate in the region.
African governments, policy analysts, regional economic groups and civil society organizations are increasingly speaking with one voice: the Economic Partnership Agreements (EPAs) now being hammered out between Europe and the ACP countries must be significantly modified to safeguard those countries' prospects for development.
"If the EPAs are signed as they are, it will be suicide and death for farmers," Jules Zongo, national president of Burkina Faso's regional chambers of agriculture, declared at a protest march and rally of 2,000 farmers in that country's capital, Ouagadougou, in December. Several months earlier, civil society organizations rallied in Senegal, as part of a global Stop EPA campaign, to demand that their government not sign the agreements unless significant changes are made.
African leaders have taken note of such calls. When heads of state from throughout West Africa converged on Ouagadougou for a summit meeting in January 2007, Burkina's President Blaise Compaoré affirmed that the "legitimate concerns" of farmers and other producers must be considered in any trade talks with the European Union (EU).
Among other venues, opposition to the EPAs also featured at the World Social Forum in Nairobi, Kenya, in January, at which tens of thousands of civil society representatives chanted and carried signs declaring: "Fight poverty... Say no to EPAs." In April, the Africa Youth Coalition Against Hunger mobilized more than 1,000 activists from 20 countries in the Gambia to launch a "big noise campaign" to stimulate public debate on the proposed agreements.
Beyond the concrete impact that the new agreements may ultimately have on people's lives, the negotiations are attracting wider attention for another reason: they began at a time when talks to further liberalize global trade, under the so-called Doha round of the World Trade Organization (WTO), seemed stalled.
One factor in the indefinite suspension of the Doha round last year was the reluctance of richer countries to liberalize their agricultural sectors, while at the same time they insisted that developing nations open their own economies even further to products from the North. Some analysts regard the EPA negotiations as an attempt by the more powerful EU to extend to its weaker ACP trading partners, through a different forum, agreements that it could not obtain at the WTO. The 27 countries of the EU have a combined gross domestic product of US$14 bn, while 39 of the 79 ACP nations are among the world's least developed countries (LDCs).
New scenario
Although the Doha round talks have bogged down, earlier changes at the WTO have already seriously affected the nature of the EU's relations with the ACP countries. From 1975 to 1994, the EU and ACP shared special development cooperation arrangements through a series of five-year agreements, originally known as the Lomé Conventions. Through those agreements, the EU granted trade preferences to ACP exports, without requiring similar treatment for EU products in ACP markets.
The so-called Uruguay Round of trade negotiations, which concluded in 1994, adopted new rules requiring parties to regional trade agreements to eliminate duties and other restrictive regulations on "substantially all the trade" among them. But for some regions application of the rules was postponed, as the WTO, which emerged from the Uruguay talks in 1995, agreed to a special exception allowing the EU to maintain "non-reciprocal" preferences for ACP exporters until December 2007.
With the WTO deadline in mind, in 2000 the two groups signed a new cooperation accord known as the Cotonou Agreement, covering aid, trade and political cooperation. Its aim was to "facilitate the economic and political integration of the ACP countries into a liberalized world market." Its framers also envisaged the conclusion of negotiations on EPAs or other alternative trade arrangements by the start of 2008, to comply with WTO rules. Initial talks on the EPAs began in 2002.
Some developing countries now fear that the EU's approach to such EPAs will oblige them to remove trade protections so quickly and to such an extent that the development of their own industries will be harmed. "At no point in time was an EPA as a free trade agreement the first choice for the ACP," says Mauritius' ambassador to the EU, Sutiawan Gunessee. "It was not. But we had no alternative."
According to Zimbabwean Trade Minister Obert Mpofu, any new trade agreements should reinforce, not undermine, "the development of our economies, employment generation, wealth creation for our people and ultimately poverty reduction."
Ending dependency?
In contrast, EU Trade Commissioner Peter Mandelson views the EPAs as beneficial. He argues that they will shift the relationship between the EU and Africa from one of dependency on tariff preferences to one that promotes business competitiveness. After 30 years of preferential market access, African countries still export a limited range of basic commodities, he points out. "Most of these are sold at lower prices than they were 20 years ago. This is not sustainable. It certainly isn't sustainable development."
Countered Nigerian Commerce Minister Aliyu Modibo Umar: "If 30 years of non-reciprocal free market access into the EU did not improve the economic situation of the ACP, how can a reciprocal trading arrangement achieve anything better?" Instead, he argues, simply liberalizing trade will "further widen the gap between the two [blocs] and probably destroy the little development that some ACP countries have managed to achieve over the past years."
Unloading grain at the port of Dakar, Senegal: Africa worries that Europe is trying to bring in new trade issues that have not been agreed at the World Trade Organization.
Hard choices
Under the type of EPAs currently proposed by the EU, ACP countries would eventually have to liberalize 80-90 per cent of their trade with the regional bloc in order to gain duty-free access to European markets. That would allow ACP countries to use tariffs to protect only a small portion of their products from competition with European goods.
To stay within that narrow band, governments would have to make some hard choices, notes Oxfam in a 2006 report, Unequal Partners. They could choose, for example, to maintain tariffs on valuable revenue-raising imports such as cars and electronics, protect staple foods such as maize, exempt a few existing industries from competition or retain the ability to support future industrial development.
Fiscal losses
In the short term, lifting tariffs on European goods would deprive many governments of an important source of fiscal revenue. "Many countries would lose the valuable income they earn from tariff duties," notes Mr. Godfrey Kanyenze of the Labour and Economic Development Institute of Zimbabwe. Until countries are able to diversify their revenue bases - often a long process - they could be confronted with national budget deficits, possibly leading to lower spending on education, health care, poverty reduction and social security.
A 2002 study by the Common Market for East and Southern Africa, a regional trade bloc, found that if all EU imports entered that region duty-free, governments would lose about 25 per cent of their trade taxes and about 6 per cent of total tax revenue. Another study, by Germany's Hamburg Institute of International Economics, estimated that declines in import duties in countries of the Economic Community of West African States would range from the equivalent of $2.2 mn in Guinea-Bissau to $487.8 mn in Nigeria. The decline would be sharpest in Cape Verde, where 80 per cent of import revenues are likely to be lost. If no adjustments on spending were made, Cape Verde and the Gambia would incur budget deficits of 4.1 and 3.5 per cent respectively.
Such "doomsday" predictions need to be treated with caution, responds EU Trade Commissioner Mandelson. "If we look closely, most studies are highly theoretical," he argues. "They assume immediate and complete liberalization, and ignore the economic benefits of reform." According to Mr. Mandelson, the EU and ACP can negotiate the timing and phasing of tariff reductions to guard against any sharp drops in government income.
The commissioner adds that while some "transitional protection" may be necessary, the aim should be to reduce protection to encourage local industries to become more competitive. Over time, ACP countries will need to adapt their economies to compete with the rest of the world.
'Back door' issues
In principle, the central objective of the Cotonou Agreement is poverty reduction. Both parties agree that whatever arrangements are negotiated, they should foster development in the ACP countries. But they differ on what policies would best serve that purpose, echoing debates that previously unfolded within the WTO.
The EU, for example, is proposing that ACP countries adopt stringent rules to protect foreign investment, promote domestic competition and increase transparency in government procurement procedures. Similar proposals - known as the "Singapore issues" after the WTO ministerial meeting at which they were first raised - were blocked by developing countries, which feared the rules would hinder their ability to use trade policy to promote development (see Africa Renewal, January 2004).
But rich countries, following their failure to introduce such issues into WTO agreements, are now trying to insert them into multilateral and bilateral agreements as conditions for aid or loans, notes Mr. Irungu Houghton of Kenya, a pan-Africa policy analyst for Oxfam. EPAs are one part of this broader effort to bring the Singapore issues in through "the back door," he argues.
In several countries, Mr. Houghton told Africa Renewal, "there is intense pressure to open up procurement processes for public contracts and supplies to non-indigenous suppliers, who because of their international reach are able to produce those goods at a much lower cost than local contractors." Such a liberalization of procurement would take away one of the few tools governments have traditionally used to promote local industry - that is, favouring domestic companies ahead of foreign ones.
Mr. Houghton notes that similar changes in government procurement policies are also appearing in Country Assistance Strategies - documents that spell out loan conditions from the continent's main lender, the World Bank.
The implications of adopting all the Singapore issues in Africa have not been fully studied. But policy analysts agree that simply implementing new laws to enact the reforms will by itself be costly. Oxfam estimates that rewriting domestic laws and changing business procedures in each of the 16 areas of reform agreed under the Uruguay Round would cost an average country $2.5 mn.
The European Commission (the secretariat of the EU) insists, however, that there will be "no EPA without investment rules and full reciprocity." The commission argues that "the EPAs are, at root, about putting progressive trade policy into practice," by reducing bad business practices hindering investment in Africa.
'A field of ruins'
But opposition is mounting to the EPAs, as currently envisaged by the EU. In 2004 civil society organizations from across the world rallied in London to launch a Stop EPAs campaign. The campaigners charge that in their current form EPAs are essentially narrow "free trade" agreements intended to further liberalize the markets of ACP countries. They cite examples of earlier trade liberalization measures. In 1986 Côte d'Ivoire cut tariffs by 40 per cent, resulting in massive layoffs in the chemical, textile, footwear and automobile assembly industries. Senegal lost one-third of manufacturing jobs between 1985 and 1990 after reducing tariffs from 165 per cent to 90 per cent. The campaigners are calling for EU-ACP trade relations that support the weaker partners' pursuit of economic development.
The organizations endorsing the campaign include the Economic Justice Network in South Africa, Third World Network-Africa in Ghana, Civil Society Trade Network of Zambia, Action Aid and Oxfam International. In a number of African countries, including Burkina Faso, Ghana, Nigeria, Kenya and Senegal, thousands of farmers, workers and civil society activists have staged public protests against the perceived consequences of EPAs.
In April, West African business representatives also voiced alarm. Meeting in Dakar under the auspices of the regional chamber of commerce of the eight-country West African Economic and Monetary Union, they affirmed their readiness to become more competitive in global markets, but not to enter into competition "with unequal arms." Commenting specifically on the EPAs, Mr. Iddi Ango, president of the regional chamber, said that "if we open up our countries, given the current state of our enterprises, it will not be an opportunity, but a disaster, a field of ruins."
Mr. Ibrahim Akalbila, national coordinator of the Ghana Trade and Livelihood Coalition, comprising civil society and farmers' groups in that country, cites the high domestic subsidies that many European governments continue to provide their producers, allowing European products to undersell producers in poor developing countries. "Whether it is tomatoes and rice, textiles or iron rods," he said in April, "cheap imports, illegally dumped into our markets, are destroying whole areas of economic activity, and with it, the lives of millions."
'EPA light'
Some European analysts acknowledge the validity of the ACP criticisms. But they also note that the EU faces a dilemma: how to reconcile the special status of the ACP group with its obligations to the WTO.
One possible solution, they suggest, is for the EU to accept an agreement that is only as reciprocal as necessary to meet WTO requirements, while leaving the ACP countries some room to safeguard their domestic markets and industries. The European Centre for Development Policy Management, an independent foundation funded by a number of European governments, proposes the adoption of an "EPA light."
Such an arrangement would initially require ACP countries to open up their markets only enough to comply with WTO rules. They would liberalize just 50-60 per cent of their EU trade over a long transitional period of 20 years or more, while the EU would continue to grant full market access to all ACP countries. During the transition, the EU also would support the building of viable industries in ACP countries.
Along similar lines, the UN Economic Commission for Africa (ECA) argues that the primary focus of EPAs over an initial 12-year period should be to strengthen intra-African trade, to help local industries first become more competitive with their African counterparts. Only after this period, notes the Addis Ababa-based ECA, should EPAs then consider opening African economies to EU competition. And even then, tariff reductions should be phased in gradually, to allow countries time to adjust to the rigours of global markets.
Alternative options
If ACP countries ultimately decide not to sign EPAs, there are a number of other options they could pursue. At the Cotonou meeting in 2000, the EU agreed that if EPAs were not accepted, it would propose "alternative possibilities, in order to provide these countries with a new framework for trade which is equivalent to their existing situation and in conformity with WTO rules." A country, however, would first have to reject an EPA before work could begin on an alternative.
One such option would be to develop new trade arrangements agreeable to both sides. For example, notes Action Aid, the EU could continue offering ACP countries preferential access to European markets while allowing them to protect their vital industries or cut tariffs in ways that do not jeopardize their economic development goals. But such provisions would require changes to current WTO rules on regional trade agreements. With the Cotonou deadline looming and the Doha round talks still suspended, that option seems unlikely.
Therefore, both parties may have to rely on existing trade regimes. One of these is the Generalized System of Preferences (GSP): nonreciprocal market-access schemes open to all developing countries that meet certain standards in human and labour rights, environmental protection and good governance.
Nations classified as least developed countries - 39 out of the 77 countries currently taking part in the EPA negotiations - could benefit from one of the variants within the GSP framework, the "Everything But Arms" initiative. It grants LDCs nonreciprocal duty-free and quota-free access to the EU for all goods except arms and munitions.
Non-LDCs could also decide to seek GSP treatment, but they would not be eligible for full duty-free access to the EU market. Moreover, GSP arrangements are narrower in scope than EPAs or the current ACP-EU agreement, since they cover only market access. Unlike the Lomé or Cotonou agreements, they do not include any development assistance, in the form of either financial aid or technical cooperation. GSP rules are also considered more restrictive and onerous than those of the Lomé/Cotonou agreements: hence the reluctance of ACP countries to rely solely on them.
The European Commission acknowledges that the GSP alternative would be a "second best" solution, from the development perspective of the ACP countries. A GSP arrangement is not negotiated, like a contract. The EU would design it and offer it on its own terms, and could amend or suspend it at any time. The products covered would not include all those of interest to ACP countries. And if an ACP country were to develop a new product not on the list, that item would be excluded.
Some civil society organizations argue that in a worst-case scenario, GSPs could be used as a starting framework for a new trade arrangement, but with their flaws corrected to provide both market access and development assistance to ACP countries.
Because of the controversy, the British Parliament held public consultations on the EPAs in 2005. Subsequently, its parliamentary committee on international development recommended that the UK push the EU to ensure that alternatives for non-LDC ACP states guarantee the same level of market access as the Lomé arrangements. "Development," it concluded, "should be integral to any trade options presented to the ACP, even when they are not the first choice of the EU."
Copyright © 2007 Africa Renewal. All rights reserved.
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