OTN Special Update - (The Doha Round-2011 Agenda ) 2011-01-07
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OTN Special Update - (The Doha Round-2011 Agenda ) 2011-01-07 OTN Special Update - (The Doha Round-2011 Agenda ) 2011-01-07 Document Transcript

  • SPECIAL OFFICE OF TRADE NEGOTIATIONS … for trade matters OTN Update December 8, 2010 THE DOHA ROUND: THE 2011 AGENDA A GLIMMER OF HOPE already achieved.” It was further declared that “2011 is a critical window of opportunity, albeit It appears that the malaise which has permeated the narrow, and that engagement among our Doha Round since the collapse of the 2008 Mini- representatives must intensify and expand. We now ministerial has been lifted! Though the WTO DG has need to complete the end game.” 1 persistently promoted strategies aimed at advancing the Doha Round beyond its current impasse, it was The statements by the G-20 and APEC leaders are recognised that in the absence of genuine political will instructive in two primary ways. In the first instance, amongst the major WTO Members to make the statement reiterates that the conclusion of the compromises, little progress could be attained. Round will be based on the progress that has already been achieved. This suggests that there is The long awaited glimmer of hope finally arose in the collective acknowledgement amongst the G-20 and final quarter of 2010 following the conclusion of the APEC leaders, that a ‘re-opening’ of the November 2010 G-20 Seoul Summit and the APEC negotiations would be unacceptable. This could Yokohama Summit. In their Declarations, the leaders allay fears regarding the interpretation of the of the G-20 (and APEC) declared that they will direct political signals suggested by the President Obama their negotiators to “engage in across-the-board negotiations to promptly bring the Doha Development Round to a successful, ambitious, comprehensive, and balanced conclusion consistent with the mandate of the 1 Passage selected from The G20 Seoul Summit Leaders’ Declaration Doha Development Round and built on the progress November 11 – 12, 2010. OTN UPDATE is the flagship electronic trade newsletter of the Office of Trade Negotiations (OTN), formerly the Caribbean Regional Negotiating Machinery (CRNM). Published in English, it is a rich source of probing research on and detailed analyses of international trade policy issues and developments germane to the Caribbean. Prepared by the Information Unit of the OTN, the newsletter focuses on the OTN, trade negotiation issues within its mandate and related activities. Its intention is to provide impetus for feedback by and awareness amongst a variety of stakeholders, as regards trade policy developments of currency and importance to the Caribbean. http://www.crnm.org
  • 2 Administration’s position on the negotiations. 2 free trade while the Democrat Party is protectionist, it is tempting to conclude that it will be easier in Secondly, 2011 is identified as a critical window of 2011 to gain traction on US Congressional support opportunity. The tacit significance of this time period to conclude the Round. becomes richly illustrated when juxtaposed to the rhythm of the American electoral politics. Previously However, that convention is a simplification and DG Lamy expressed optimism regarding the likelihood belies the nuances of American politics. It has to be of completing the Round in 2010. However, such noted that the completion of the 2010 hopes were considered unrealistic. Though the congressional elections signals the beginning of the leadership of the US was regarded as important to 2012 Presidential election season (and President bring closure to the Round, at the time, in a mid-term Obama’s re-election campaign). This factor could election year, it was unlikely that the Obama negatively influence bipartisan consensus building Administration would expend political capital to build on trade issues and could, for example, persuade domestic consensus on the issues regarding the WTO otherwise pro-trade Republicans to frustrate any negotiations, (such as the reduction of agricultural victories that are being pursued by the Obama subsidies) at the expense of other domestic priorities. Administration. The U.S. critical role in bringing a Furthermore, the US President’s authority to ‘fast track’ conclusion to the Doha Round could be significantly trade deals expired in former President George Bush’s stymied should the White House, in the absence of second term and had not been renewed under the a renewed fast track authority, be unable to attain Obama Administration.3 Congressional support on the outstanding Doha issues. This notwithstanding, bipartisanship could In the wake of the conclusion of the 2010 US midterm still prove constructive, especially in these early elections, which resulted in the Democrats conceding months of the Presidential election season. to the Republicans, should one be persuaded by the popular convention that the Republican Party supports Intensive Work Programme Dead Ahead 2 Under the Obama Administration, the United States of America (U.S.) has advocated that the linchpin to the success of the Doha The early months of 2011 are therefore crucial for Round would remain in securing meaningful market access commitments in agriculture, NAMA and services, particularly from the WTO and will need to be capitalized upon by key advanced countries. Large Developing countries like India have been wary of this stance. As suggested by the words of Dr. Amit DG Lamy and other WTO members to secure the Mitra, Secretary General of the Federation of Indian Chambers of progress necessary to conclude the Round. Commerce and Industry (FICCI), “Such signals leave us worried that the new US Administration might not be willing to proceed on the basis of the ‘Doha mandate’. Instead, it may attempt to ‘reopen’ the negotiations, or included ‘new areas’ into the negotiating agenda. 3 This is simply not acceptable to us”. The Fast track negotiating authority (also called Trade Promotion See USTR’s ‘new approach’ may re‐open negotiations, CUTS Authority, TPA) for trade agreements is the authority of the International, May 14 2009. Available at President of the United States to negotiate agreements that the http://www.cuts‐citee.org/media‐ Congress can approve or disapprove but cannot amend or filibuster. USTR%E2%80%99s_new_approach.htm Fast‐track negotiating authority is granted to the President by Congress. OTN UPDATE is the flagship electronic trade newsletter of the Office of Trade Negotiations (OTN), formerly the Caribbean Regional Negotiating Machinery (CRNM). Published in English, it is a rich source of probing research on and detailed analyses of international trade policy issues and developments germane to the Caribbean. Prepared by the Information Unit of the OTN, the newsletter focuses on the OTN, trade negotiation issues within its mandate and related activities. Its intention is to provide impetus for feedback by and awareness amongst a variety of stakeholders, as regards trade policy developments of currency and importance to the Caribbean. http://www.crnm.org
  • 3 DG Lamy has not hesitated to swiftly rollout the plan Annual Davos Meeting scheduled to commence of action to push through the impasse. In his remarks January 25-30 2011, will provide an opportunity to to the informal meeting of the TNC on November 30 track the political impetus.4 It is anticipated that the 2010, DG Lamy outlined an intensive work U.S., EU, Brazil, China and India and key programme for the various Negotiating Groups negotiators will meet in the margins of that meeting beginning the weeks of 10 and 17 January. to form a political view as to whether the talks can be progressed further. From January 10, the Trade Facilitation, Trade and Environment, TRIPS and Development groups will begin intensive sessions, to be joined from 17 January by Agriculture, NAMA, Services and Dispute CARICOM’s Preparation to Settlement. The NG Rules will meet during the week Engage beginning February 4. With a presumed 80 percent of the Doha Round negotiations completed, the While, CARICOM countries have been carefully ultimate goal of the programme is to work out the monitoring the Round, it is essential that the region remaining 20 percent of the issues concerning, becomes increasingly vigilant and fully engaged industrial market access, trade facilitation, anti- during the implementation of the upcoming dumping and agricultural market access. It is programme to ensure that there is little or no anticipated that this programme will culminate in the derogation from the current draft texts in as far as preparation of new draft texts by the end of the first these reflect the Caribbean’s core offensive and quarter of 2011. defensive interests. What makes this development in the negotiations In order to do this successfully, with regards to the distinctive from preceding processes is that senior outstanding negotiating issues, CARICOM member officials are expected to engage in technical states will need to be clear about what their current exchanges but with specific political instructions interests are, and how those interests relate regarding the full scope and detail of concessions strategically to the collective interests of the various that will be necessary to break the impasse. The sub-groupings in which they are aligned (such as texts that will arise are expected to reflect the new the Small Vulnerable Economies (SVEs, G-33, and package deal. the African Caribbean and Pacific (ACP) groups). In addressing such considerations, CARICOM will The final results of this intensified technical process will in part, determine whether enough progress can be made to conclude the negotiations. At the same time, as the technical programme begins to roll out in 4 The Annual World Economic Forum Meeting held in Davos, January, it will be necessary to continue to monitor Switzerland, will convene in 2011 under the theme “Shared Norms the political pulse and atmospherics that will for the New Reality”. It is anticipated that attendance this year will include Senator the Honourable Marlene Malahoo Forte, Senator ultimately determine whether the Round can be and Minister of State in the Jamaica Ministry of Foreign Affairs and Foreign Trade. advanced to conclusion. In this regard, the upcoming OTN UPDATE is the flagship electronic trade newsletter of the Office of Trade Negotiations (OTN), formerly the Caribbean Regional Negotiating Machinery (CRNM). Published in English, it is a rich source of probing research on and detailed analyses of international trade policy issues and developments germane to the Caribbean. Prepared by the Information Unit of the OTN, the newsletter focuses on the OTN, trade negotiation issues within its mandate and related activities. Its intention is to provide impetus for feedback by and awareness amongst a variety of stakeholders, as regards trade policy developments of currency and importance to the Caribbean. http://www.crnm.org
  • 4 also need to weigh the implications of strategy. This Both the horizontal process, which is scheduled to will include weighing the benefits and risks of begin in early January, and the vertical process will engaging in a horizontal process relative to a affect the mapping of the final package. The way in ‘vertical’ process. Whereas, the horizontal process which these processes are exploited could however would allow for trade-offs among various impact a country’s negotiating leverage and by so negotiating groups, a vertical process would doing impact the extent to which a country is able facilitate the extraction of concessions within to preserve its hierarchy of interests and minimize specific negotiating groups. trade-offs. Through a horizontal process, for example, Nevertheless, the Caribbean will likely adopt the developing countries could seek to make position that with respect to the outstanding issues, concessions in one negotiating group, such as any additional movement attained, including the Trade Facilitation, in exchange for obtaining granting of additional concessions to the Caribbean concessions from developed countries on subsidies or other developing countries should not come at under the Agriculture negotiations. In this scenario, the expense of concessions that the Region has for CARICOM countries, the concession gained already secured in other ‘stabilized’ areas of the may be surpassed by the concessions given. negotiations. On the other hand, under a vertical process, the Taking a look at a few of the outstanding issues in negotiating context and a country’s negotiating the negotiations in some of the Negotiating Groups, leverage could be different. Obtaining movement we can discern the interests CARICOM member on agricultural subsidies from developed countries, states will be seeking to preserve. for example, could be demanded by developing countries but developed countries may concede only in exchange for different Agriculture market access concessions, which could involve greater The Caribbean’s Interests in tariff cut commitments for developing countries. the Outstanding Issues When considering the trade-offs in this scenario, for some developing countries, the reduction of 1. Agriculture developed country agricultural subsidization may There are three (3) pillars in negotiations in be highly valued because of its potential impact on Agriculture, namely, their competitive advantage in developed country agricultural markets. On the other hand, for other (i) market access (tariff liberalisation, trade smaller developing countries like CARICOM, contingency measures, etc); (ii) domestic support securing protection for their agricultural markets (overall trade distorting support, specific aggregate through limited tariff reduction commitments may measure support, etc) and (iii) export competition be more critical to their economies. (export subsidies, export credits and international food aid). The negotiations have concentrated on the market access pillar, with emphasis on the OTN UPDATE is the flagship electronic trade newsletter of the Office of Trade Negotiations (OTN), formerly the Caribbean Regional Negotiating Machinery (CRNM). Published in English, it is a rich source of probing research on and detailed analyses of international trade policy issues and developments germane to the Caribbean. Prepared by the Information Unit of the OTN, the newsletter focuses on the OTN, trade negotiation issues within its mandate and related activities. Its intention is to provide impetus for feedback by and awareness amongst a variety of stakeholders, as regards trade policy developments of currency and importance to the Caribbean. http://www.crnm.org
  • 5 Special Safeguard Mechanism (SSM) and The Special Safeguard Mechanism templates to be used in scheduling Members’ commitments. The treatment of the Special Safeguard Mechanism (SSM) 5 constitutes one of the more politically Issues of major significance to the Caribbean charged issues as it pits small and vulnerable subsistence farmers in developing countries Tariff cut modalities against large farms benefiting from domestic According to the last draft modalities in December support and or export subsidies in industrialised 2008 (TN/AG/W/4), most CARICOM countries are countries. The complexity of the SSM issue is allowed as SVEs to designate all agricultural compounded by the fact that the G-33 (heavily imports as Special Products and subject them to an supported by the SVEs, LDCs and African Group) average tariff reduction of 24 per cent over an is being fought by the Cairns Group – a group of implementation period of ten (10) years. Secondly, major agricultural exporters seeking additional a specific exemption allows Suriname to rebind its market access. The Cairns Group membership tariffs to a level equal to that of the level that will be includes traditional ACP allies such as Argentina, achieved by other CARICOM countries following Brazil and South Africa. It is widely recognised that the application of the tariff reduction modality. the SSM’s highly political nature renders it one of Suriname’s tariffs are currently bound at 20 per the issues requiring Ministerial guidance, if not cent, a level that renders that country unable to resolution. apply the CARICOM Common External Tariff (CET) In January 2010, the G-33 submitted a on agricultural imports. communication on SSM (TN/AG/GEN/30) outlining It would be desirable to secure the same flexibilities proposed changes to the Chairman’s text. The G- for Haiti as those secured for Suriname. As an UN- 33’s aim was to facilitate compliance with the Doha designated LDC, Haiti is not required to further mandate of establishing a simple, effective and reduce its tariffs under the Doha Round of operational trade contingency measure. The G-33 negotiations. However, that CARICOM Member communication also enumerated SVE-specific imposes bound and applied tariffs on agricultural concerns on the SSM. For example, the submission products at 21.3 per cent and 5.7 per cent recognised that SVEs face a number of constraints respectively. Similar to Suriname, the level of that justified the bestowal of additional SSM Haitian tariffs does not allow for the application of the CARICOM CET. A provision that allows Haiti to rebind its tariffs to the target average of other CARICOM countries would therefore assist in 5 The SSM is a rapid response instrument which is proposed to allow countries to apply a safeguard in the form of additional duties to facilitating Haiti’s fuller integration into the CSME. agricultural imports in circumstances where the volume of At a December 2009 meeting with CARICOM Trade agricultural imports increase rapidly beyond a specific volume benchmark or in circumstances where the price of agricultural Ministers, DG Lamy expressed his support for the imports fall below a specific level. In both cases, the volume and price effects would have a deleterious impact on local agricultural additional flexibilities for Haiti. production/producers and food security. OTN UPDATE is the flagship electronic trade newsletter of the Office of Trade Negotiations (OTN), formerly the Caribbean Regional Negotiating Machinery (CRNM). Published in English, it is a rich source of probing research on and detailed analyses of international trade policy issues and developments germane to the Caribbean. Prepared by the Information Unit of the OTN, the newsletter focuses on the OTN, trade negotiation issues within its mandate and related activities. Its intention is to provide impetus for feedback by and awareness amongst a variety of stakeholders, as regards trade policy developments of currency and importance to the Caribbean. http://www.crnm.org
  • 6 flexibilities. The G-33 submission further noted that SVEs are subjected to higher transaction costs, as well as limitations in crop diversification that inhibit these countries from addressing the challenges of food and livelihood security and therefore make them more vulnerable to the adverse effects of import surges and price declines. Against this background, the G-33 reiterated its support for seeking enhanced flexibilities in the SSM for SVEs. Consultations have continued on SSM, with discussions on prorating, seasonality and price check mechanism. The main substantive issue with the SSM remains establishing criteria for applying additional tariffs that go above the “pre-Doha” rates. For the Caribbean, this issue should be resolved as part of special flexibilities to be granted to SVEs. The SVE Group, to which CARICOM member states are aligned, is pursuing as much flexibility as possible in SSM by proposing less stringent criteria for taking safeguard action. Specifically, the SVEs have proposed that regarding the volume-based SSM, safeguard action should be applied on the basis of a rolling average of imports in the preceding three-year period for which data are available (hereafter "base imports"). Preference erosion On this basis, the SVE group has also provided recommendations on applicable triggers and Preference erosion constitutes the Caribbean’s third remedies as set out in Table 1. principal interest in the market access pillar of negotiations on agriculture. Developed countries will generally apply a “tiered formula”, i.e. higher tariffs will be subject to higher cuts, thereby subjecting the products with high levels of protection (and thus preference margins) to deep cuts. There are also the provisions on reducing tariff escalation6 as well as provisions on the modalities for ‘Tropical Products’7. On the other hand, also on the table OTN UPDATE is the flagship electronic trade newsletter of the Office of Trade Negotiations (OTN), formerly the Caribbean Regional Negotiating Machinery (CRNM). Published in English, it is a rich source of probing research on and detailed analyses of international trade policy issues and developments germane to the Caribbean. Prepared by the Information Unit of the OTN, the newsletter focuses on the OTN, trade negotiation issues within its mandate and related activities. Its intention is to provide impetus for feedback by and awareness amongst a variety of stakeholders, as regards trade policy developments of currency and importance to the Caribbean. http://www.crnm.org
  • 7 are proposed provisions on ‘Preference Erosion SHOULD BE ESTABLISHED BETWEEN THE Products’8,, and ‘Sensitive Products’ which relate to the flexibilities given to all countries to effect CONCLUSION OF THE LONGSTANDING lower levels of tariff reduction in exchange for BANANA TRADE DISPUTE AND THE granting expanded access through tariff rate SETTLEMENT OF THE PREFERENCE quotas. EROSION PACKAGE. INDIA’S SUBSTANTIVE The Geneva Agreement on Trade in Bananas (GATB)9 which ended the long standing dispute DISAGREEMENT REFLECTS ITS INTEREST IN between the European Union and a group of Latin EXPORTING SUGAR, COFFEE, TEA, RICE, American countries over the EU’s tariffs on banana AND TROPICAL FRUITS TO BOTH THE EU imports, was accompanied by additional agreements made between the ACP, EU and the AND US. THESE ARE ALL PRODUCTS THAT Tropical Products Proponents on the treatment of WILL BENEFIT FROM PREFERENCE Tropical Products (TP) and Preference Erosion EROSION TREATMENT VIA MODULATED (PE). The ACP, EU and Latin American are seeking to make these agreements part of the final Doha TARIFF REDUCTION WITHIN THE DOHA package deal. DEVELOPMENT AGENDA (DDA). FOR THIS HOWEVER, INDIA CONTINUES TO OPPOSE REASON, INDIA SUBMITTED TO THE ACP THE LINKING OF THE BANANA GROUP IN NOVEMBER 2009 A SLATE OF AGREEMENT WITH THE DEAL ON TP/PE. AGRICULTURAL PRODUCTS FOR WHICH IT INDIA HAS ARGUED THAT ITS CONCERNS IS SEEKING TROPICAL PRODUCT HAVE NOT BEEN FULLY INCORPORATED DESIGNATION AND TREATMENT. IT IS INTO THE ACP/EU/MFN DEAL. INDIA HAS BELIEVED THAT INDIA’S ACTIONS FURTHER CONTENDED THAT NO LINK REPRESENT AN ATTEMPT TO INCREASE ITS 6 The practice of applying higher tariffs to processed products than to the primary products from which they are derived. 7 The Framework for Establishing Modalities in Agriculture stipulates a commitment to achieve the fullest liberalisation of trade in tropical agricultural products. A group of Latin American countries, namely Bolivia, Colombia, Costa Rica, Ecuador, El Salvador, Guatemala, Honduras, Nicaragua, Panama, Peru and Venezuela are the major proponents of Tropical Products. 8 This proposal, which was submitted by the ACP, EU and Latin American countries on 15 December 2009 to the Chairman of the Special Session on Agriculture and the Chairman of the TNC, lists the goods that the members of the group have agreed should benefit from gentler and slower tariff cuts under the proposed ‘preference erosion’ treatment, as well as which goods should be slated for faster and deeper liberalisation as ‘tropical products’. 9 Under this agreement bananas will be treated as neither a ‘Preference Erosion’ nor a ‘Tropical Product’ but rather on a stand‐alone basis. The agreement envisages a tariff reduction schedule with an initial reduction of the EU’s MFN tariff from the current Euro 176 per tonne to EUR 148 per tonne in 2010 and then to EUR 114 per tonne by 2017. In a separate ACP/EU agreement, a EUR 190 million Banana Accompanying Measures (BAM) programme will be implemented. The aim of the EU‐funded programme is to assist ten (10) affected ACP banana exporting states to adjust to the reduction in the value of their preferential access to the EU market. OTN UPDATE is the flagship electronic trade newsletter of the Office of Trade Negotiations (OTN), formerly the Caribbean Regional Negotiating Machinery (CRNM). Published in English, it is a rich source of probing research on and detailed analyses of international trade policy issues and developments germane to the Caribbean. Prepared by the Information Unit of the OTN, the newsletter focuses on the OTN, trade negotiation issues within its mandate and related activities. Its intention is to provide impetus for feedback by and awareness amongst a variety of stakeholders, as regards trade policy developments of currency and importance to the Caribbean. http://www.crnm.org
  • 8 LEVERAGE WITH THE EU IN THEIR Issues of major significance to the Caribbean BILATERAL FTA NEGOTIATIONS AS WELL AS The Horizontal Mechanism (HM) TO SECURE SPECIFIC ACCESS ON RICE TO The Horizontal Mechanism (HM) or the Procedures THE US MARKET. for the Facilitation of Solutions to NTBs is an Under the TP and PE agreement, the Caribbean informal dispute resolution mechanism that interest has concentrated on four principal explores trade solutions without affecting the rights products. These are rum, sugar, rice and bananas. and obligations under the WTO Agreements. If adopted, the HM would allow for the establishment With respect to rum, the Caribbean industry will of a consultative forum in which countries disputing benefit from preference erosion treatment, with an the interpretation of another Member’s NTB would implementation period of ten (10) years. accept mediation by an independent actor. The initiative enjoys near universal support among WTO With respect to sugar, both the EU and US are Members. likely to declare it a Sensitive Product. Sugar would therefore benefit from a gentler cut than that The African Group is a strong proponent of the HM proposed for preference erosion products. although the ACP is yet to develop a definitive position. Some Members have expressed concern With respect to rice, the proponents of Tropical with respect to the coverage of the HM and the Products agreed to remove husked rice, the body’s relationship with other WTO Committees Caribbean’s main type of rice export, from their list and the DSB. Some Members (such as Thailand allowing this product to be accorded full preference and India) want the HM to apply also to agricultural erosion treatment, provided that no other interested goods while others believe that such scope would country objects. The strength of India’s interest in breach the purview of NAMA negotiations. all forms of rice and its intent to designate rice as a tropical product compels the Caribbean to stridently A number of CARICOM countries recognize the protect the value of its preferential access to the EU value of the HM but are alarmed that as importers market. of relatively few tariff lines, the administrative requirements to institute this new system could be burdensome. Furthermore, some countries fear that 2. Non-Agricultural Market Access (NAMA) the establishment of the HM with its non-recourse to DSU might lead to greater scrutiny of the NAMA negotiations have concentrated on a limited compatibility of their domestic laws and regulations slate of issues. These are the horizontal with WTO obligations. It is in that context that mechanism, treatment of remanufactured goods, additional consultations are required to determine TBT-related sectoral initiatives, sectorals and how the HM would be operationalised and what scheduling. would be its possible impact on SVEs. OTN UPDATE is the flagship electronic trade newsletter of the Office of Trade Negotiations (OTN), formerly the Caribbean Regional Negotiating Machinery (CRNM). Published in English, it is a rich source of probing research on and detailed analyses of international trade policy issues and developments germane to the Caribbean. Prepared by the Information Unit of the OTN, the newsletter focuses on the OTN, trade negotiation issues within its mandate and related activities. Its intention is to provide impetus for feedback by and awareness amongst a variety of stakeholders, as regards trade policy developments of currency and importance to the Caribbean. http://www.crnm.org
  • 9 NAMA related Preference Erosion The negotiation of Sectoral Initiatives11 remains Preference Erosion constitutes the other NAMA inextricably linked to preference erosion treatment issue of major interest to the Caribbean. The ACP for industrial goods. Though participation in applied objective filters to generate fifty-seven (57) Sectorals is not mandatory, a number of products exported to the EC and a further twenty- industrialised countries have insisted that advanced nine (29) to the U.S. to benefit from preferential developed countries should join such initiatives in erosion treatment. Included in the ACP proposal order to establish “critical mass” of trade in each are swordfish; deepwater rose shrimp, molluscs, industrial sector. Sectors enumerated include women’s cotton trousers, men’s shirts, T-shirts, motor vehicles, bicycles, chemicals, electronics, women’s knitted jerseys, brassieres, cotton bed fish, forest, gems and jewellery, raw materials, linen and aluminium doors and windows. textiles and industrial machinery. It should be noted that the EU – one of the ACP’s major preferential The major stumbling block remains the treatment to trading partners – is a strong proponent of sectoral be awarded to DAMs, i.e. Bangladesh, Pakistan, initiatives. Sri Lanka, Nepal and Cambodia with respect to their exports to the US. The proposed concessions Though the Caribbean is not the intended target of to the DAMs would have the effect of denuding the industrialised countries’ offensive interest in economic value of the preference erosion treatment sectoral initiatives, for specific reasons, the Region on seventeen (17) of the twenty-nine (29) tariff lines retains considerable interest in this aspect of the granted to the ACP. negotiations. The major Caribbean concern rests with Haiti and First, the tariff reduction in these specific sectors is the possible impact of this proposed treatment of to be higher than the reduction provided for under the DAMs on that country’s preferences on clothing exports to the US under the Haitian Hemispheric Opportunity through Partnership Encouragement (HOPE) Act. 10 10 The preferential treatment received by Bangladesh in the U.S. market, for example, is very negligible. As a result, erosion of preference in the U.S. market due to tariff reduction under NAMA negotiations is expected to be insignificant for Bangladesh. On the other hand, the reduction of U.S. export duties under the NAMA negotiations will reduce the duties on products of export interest to Bangladesh. This is particularly the case with respect to apparel exports. The reduction of U.S. duties on Bangladesh’s apparel exports will likely improve its competitive position in the U.S. market and compromise the U.S. market share of Caribbean’s and Sub‐Saharan apparel exported under the U.S. unilateral preference schemes for the Caribbean. 11 Sectoral initiatives are proposals from some WTO members for the elimination or harmonization at low levels of customs tariffs in specific sectors. The tariff reduction in these specific sectors is to be higher than the reduction provided for under the Swiss formula reduction of tariffs. The WTO members participating in the sectoral must comprise the majority of the total trade of all WTO members in that sector. OTN UPDATE is the flagship electronic trade newsletter of the Office of Trade Negotiations (OTN), formerly the Caribbean Regional Negotiating Machinery (CRNM). Published in English, it is a rich source of probing research on and detailed analyses of international trade policy issues and developments germane to the Caribbean. Prepared by the Information Unit of the OTN, the newsletter focuses on the OTN, trade negotiation issues within its mandate and related activities. Its intention is to provide impetus for feedback by and awareness amongst a variety of stakeholders, as regards trade policy developments of currency and importance to the Caribbean. http://www.crnm.org
  • 10 the Swiss formula reduction of tariffs and therefore Special and Differential Treatment (SDT) reflects the level of ambition of the Round. Indeed, this is a stance that the US has increasingly The Caribbean’s main interest in this discipline adopted in an attempt to prise improved access to revolves around the treatment of SDT and, more the markets of advanced developing countries. specifically, securing commitments on trade capacity building measures. The ACP argues that Second, the treatment of Sectorals can impact the negotiations on trade facilitation are predicated on tariff reduction of products which are preference the proviso that developing countries will assume erosion products. Some of the items proposed to new commitments once enhanced trade capacity benefit from sectoral treatment are fish and fish has been obtained. products, clothing and footwear which are preference erosion products of interest to the One of the major donors, the US, has tabled a new Caribbean and the wider ACP. The ACP has proposal (TN/TF/W/166) on special and differential already tabled a recommendation that the products treatment. However, the ACP views the US selected for preference erosion should be removed proposal as both unbalanced and inconsistent with from sectoral initiatives. The Caribbean and the the Doha development mandate. The Chairman wider ACP will need to continue to defend this has requested the resubmission of proposals on interest in the upcoming months. special and differential treatment by both the ACP (TN/TF/W/161) 13 and a group of Latin American 3. Trade Facilitation countries, led by Guatemala. Caribbean efforts have been principally directed at Negotiations in Trade Facilitation have not the Special and Differential Treatment plank. The progressed significantly, in spite of being identified August 2010 version of the draft Consolidated as one of the areas to benefit from an early harvest. Negotiating Text (TN/TF/W/165/Rev.4)12 provides a One fundamental issue that divides developing more defined contour of a possible Agreement on country members from industrialised ones rests on Trade Facilitation. Negotiations on trade facilitation funding of trade capacity building measures. In this have concentrated on Article I - XI of the draft- regard, the EU has refrained from declaring the consolidated text with a subsequent exchange of source of its contribution to trade related technical views on Article XII, i.e. the proposed modalities for assistance measures in the field of trade facilitation. special and differential treatment (SDT). Beyond issues of principle, the ACP concern remains that the EU’s development assistance envelope for the ACP is defined by the EDF with Issues of major significance to the Caribbean the current budget cycle slated to conclude in 2013. 12 13 Text available at Text available at http://www.wcoomd.org/files/1.%20Public%20files/PDFandDocum http://www.wcoomd.org/files/1.%20Public%20files/PDFandDocum ents/Procedures%20and%20Facilitation/WTO_Documents_E/tnTF ents/Procedures%20and%20Facilitation/WTO_Documents_E/W161 W165R4E.pdf %20E.pdf OTN UPDATE is the flagship electronic trade newsletter of the Office of Trade Negotiations (OTN), formerly the Caribbean Regional Negotiating Machinery (CRNM). Published in English, it is a rich source of probing research on and detailed analyses of international trade policy issues and developments germane to the Caribbean. Prepared by the Information Unit of the OTN, the newsletter focuses on the OTN, trade negotiation issues within its mandate and related activities. Its intention is to provide impetus for feedback by and awareness amongst a variety of stakeholders, as regards trade policy developments of currency and importance to the Caribbean. http://www.crnm.org
  • 11 The SVE Group has developed a draft submission 4. Services on Draft Licensing and Qualification Disciplines on DDA negotiations in trade in services span four Domestic Regulation. The document has benefited areas, i.e. market access; domestic regulation; from considerable feedback of Delegations. GATS rules; and the LDC waiver. Most members However, it remains in draft form as all Members of have made progress in services negotiations the Group are yet to fully support the proposed contingent only on minimum demands being met in submission. both Agriculture and NAMA. Furthermore, the negotiations within the various Subsidies strands of trade in services have also proved challenging. This is best expressed in the intimate The OTN has finalised a draft SVE position paper nexus between market access and rule-making. on the treatment of subsidies in the trade in The Chairman has consistently asserted that services. The paper seeks to justify the continued several Members believe that the level of ambition use of subsidies in SVEs by enumerating of the disciplines is closely connected with conditions under which services could be advances on the market access side of the services subsidised. These conditions include applying negotiations, and more broadly with progress in environmental protection, developing new sub- other areas of the DDA. Issues of major sectors in services and facilitating rural significance to the Caribbean development. The OTN paper also seeks to address issues such as disciplining services subsidies, the relevance of the Agreement of Domestic Regulation Subsidies and Countervailing Measures (ASCM) in framing subsidies disciplines in services and The ACP and SVE Groups collaborate extensively examining the case for a differentiated approach in negotiations on trade in services. The most across all modes of supply. Informed by the notable sphere of ACP/SVE interaction extends to discussions triggered by the OTN paper, the SVE the possible reorganisation of the licensing and Group will later determine the merits of preparing a qualification requirements of the 20 March draft text submission on this issue. prepared by the Chairperson of the Working Party on Domestic Regulation (WPDR). A draft text has been prepared by the ACP technical consultants The Least Developed Country (LDC) Waiver and is aimed at streamlining the WPDR draft text by avoiding duplication. The effort is also seen as The negotiations have been exposed to an attempt to counter attempts by Switzerland and considerable political pressure to agree on the other countries to introduce revised texts on key terms of the LDC Waiver. The LDCs, which areas of domestic regulation already “stabilised” in includes Haiti, have demanded that the Doha the negotiations on trade in services. Round of negotiations, as a development round, OTN UPDATE is the flagship electronic trade newsletter of the Office of Trade Negotiations (OTN), formerly the Caribbean Regional Negotiating Machinery (CRNM). Published in English, it is a rich source of probing research on and detailed analyses of international trade policy issues and developments germane to the Caribbean. Prepared by the Information Unit of the OTN, the newsletter focuses on the OTN, trade negotiation issues within its mandate and related activities. Its intention is to provide impetus for feedback by and awareness amongst a variety of stakeholders, as regards trade policy developments of currency and importance to the Caribbean. http://www.crnm.org
  • 12 should deliver an early harvest to the LDC Group, as a cardinal principle. In that context, using with the LDC waiver in Services being one of the arguments based on the de minimis principle, the anticipated deliverables. In order to address the SVEs have tabled textual proposals on how SDT in marginalisation of LDCs in trade in services there fisheries subsidies can be applied. has been an agreement that Members would deviate from MFN obligations in order to award It has been recognised by the SVEs that the LDCs access to Members’ services markets. A prohibition of those subsidies causing overfishing textual proposal has been developed by a group of should be reconciled with the use of fisheries countries led by Norway and has received subsidies for the sustainable development of overwhelming support by almost all Members. developing countries. However, having argued that their members control less than 0.1 per cent of global fish stocks catch and that consequentially they do not significantly contribute to overfishing, SVEs have advocated that they should be allowed 5. Rules to utilise fisheries subsidies for economic development. Negotiations in this context have centered on three (3) pillars, namely (i) anti-dumping, and horizontal The SVEs accept the use of conditionalities on subsidies; (ii) rules on RTAs; and (iii) fisheries fisheries management but do not agree with the subsidies boat-specific criteria as enumerated in the last draft of the negotiating text. The SVEs seek additional flexibilities and, in that respect, have developed SVE-specific benchmarks. The eligible countries Issues of major significance to the Caribbean would be those with a 0.1 per cent share of NAMA trade and 1 per cent share of marine wild fish capture. Fisheries Subsidies The major focus of the Caribbean in this cluster of DDA negotiations remains fisheries subsidies. The 6. Dispute Settlement Understanding primary objective of the talks continues to be In his July 2008 text, the Chairman of the Special strengthening disciplines on fisheries subsidies, Session on DSU (Ambassador Saborio of Costa through, inter alia, the prohibition of certain forms of Rica) identified twelve (12) issues to be addressed. fisheries subsidies that contribute to overcapacity These are third party rights; panel composition; and over-fishing. The mandate of the negotiations remand; mutually agreed solutions; strictly targets both overcapacity and overfishing. confidential information; sequencing; post- The centrality of special and differential treatment in retaliation; transparency and amicus curiae briefs; all facets of the negotiations has been established timeframes; developing country interests, including OTN UPDATE is the flagship electronic trade newsletter of the Office of Trade Negotiations (OTN), formerly the Caribbean Regional Negotiating Machinery (CRNM). Published in English, it is a rich source of probing research on and detailed analyses of international trade policy issues and developments germane to the Caribbean. Prepared by the Information Unit of the OTN, the newsletter focuses on the OTN, trade negotiation issues within its mandate and related activities. Its intention is to provide impetus for feedback by and awareness amongst a variety of stakeholders, as regards trade policy developments of currency and importance to the Caribbean. http://www.crnm.org
  • 13 special and differential treatment; flexibility and seek to develop a Caribbean proposal aimed at Member control; and effective compliance. reforming the DSB to take account of the region’s needs. Recent plurilateral discussions have centred on three (3) issues, namely, (i) effective compliance; (ii) sequencing; and (iii) post-retaliation. The Way Forward It is imperative that all CARICOM Members remain Issues of major significance to the Caribbean fully engaged during the upcoming accelerated In spite of its marginal share of global trade, technical process to ensure that the Region’s core Caribbean countries have amassed significant interests are safeguarded and additional benefits experiences with the functioning of the WTO harnessed. Dispute Settlement Body. There are two sets of During this time, the Office of Negotiations of the exposure to the DSB, namely, consideration of CARICOM Secretariat will be accelerating its own longstanding preferential treatment of EU sugar technical support to CARICOM Members' Doha and banana regimes and the internet gaming case Round negotiations and will continue to lend involving the United States and Antigua and support to all the member states and stakeholders. Barbuda. In the case of sugar and bananas, Caribbean (and ACP) countries’ formal involvement was limited to third party status. This is in spite of the considerable contribution of these commodities to the economies of affected ACP countries. This diminished legal status highlighted the weakness of the current DSB rules to take account of the economic impact of WTO Members in determining a party’s status in a trade dispute. The dispute involving Antigua and Barbuda also underscores the need to amend the DSU rules so that a small WTO member can instantly secure the benefits of its successful approaches to the DSU. Both categories of DSB cases demonstrate the need for pro-developmental reform of the DSU, in particular to take account of the needs of small, vulnerable and preference–dependent economies of the Caribbean. The requested intervention will OTN UPDATE is the flagship electronic trade newsletter of the Office of Trade Negotiations (OTN), formerly the Caribbean Regional Negotiating Machinery (CRNM). Published in English, it is a rich source of probing research on and detailed analyses of international trade policy issues and developments germane to the Caribbean. Prepared by the Information Unit of the OTN, the newsletter focuses on the OTN, trade negotiation issues within its mandate and related activities. Its intention is to provide impetus for feedback by and awareness amongst a variety of stakeholders, as regards trade policy developments of currency and importance to the Caribbean. http://www.crnm.org