Parliamentary
Conference on the WTO
June 24-25 2010, IPU Headquarters, Geneva
21st Session of the Steering Committee
Summary of the
Presentations to the Steering Committee
Recent Development at WTO
Mr. Harsha Vardhana Singh, Deputy Director-General
of the WTO appeared before Members of the Steering Committee. He stressed the
importance of parliamentary participation at the WTO and how relations between
parliamentarians and the WTO have grown since 1999. WTO depends upon the
involvement and support of the legislatures of its 153 members, not only to
share information with their constituencies, but to take required legislative
action when needed to implement WTO members’ agreements.
The Steering Committee was given an
overview of the current state of multilateral trade negotiations and ongoing
efforts to conclude the Doha Round. Mr. Singh first mentioned the importance
of the WTO system for the global economic recovery. He indicated that global
trade dropped by 12% in 2009 as a result of the economic crisis but that the
volume of trade is estimated to grow by 9.5% in 2010. He stressed the important
role in this recovery of multilateral actions to maintain market access.
Because of the WTO discipline, WTO members were aware of the actions they were
allowed to implement. In addition, the WTO monitoring report gave countries the
opportunity to know what actions were being implemented elsewhere; it also kept
the spotlight on the various economic measures and gave ammunition domestically
to support trade. In order to maintain the economic stimulus, Mr Singh
suggested that countries need to reduce protectionist measures and emphasize
trade finances.
Mr. Singh also believes that the
current round of multilateral negotiations is part of the economic stimulus. He
indicated that those countries, who are most supportive of a conclusion of the
Doha round are the developing countries. He mentioned the various issues that
are still on the negotiating table and noted that 80% of the items have been
covered and that some significant movement for the remaining 20% has occurred.
Some members of the Steering Committee pointed out that some remaining
stumbling blocks represent major parts of the economy for many countries (for
example cotton) and that the 80-20% split suggested by WTO officials may not be
appropriate for all countries. While Mr. Singh agrees that the importance of
the remaining issues on the table varies between countries, he stressed that
progress has been made and that the political will to conclude the round must
now be translated in negotiations commitments: Gaps have been identified,
technical meetings and meetings at senior level are occurring but the WTO has
not set any timeframe because it will mostly depend on countries’ political will.
In response to questions about the possibility to compartmentalize the
negotiations, Mr. Singh mentioned that decoupling the negotiations is not
currently considered and that countries will have to find a balance between
what they are willing to give and what they will take.
Mr. Singh also talked about the
importance of a multilateral approach in the conclusion of Doha round. In
response to questions about the growing importance of regional or bilateral
free trade agreements (FTAs), he indicated that issues such as agriculture and
fisheries subsidies, antidumping rules, trade and environment cannot be covered
in FTAs. Countries may also want to harmonize the different rules they have to
follow under various FTAs since it can be burdensome for exporting companies.
Finally, participants in the Doha round are also participants in other
negotiations (climate change, etc.), and a success in finalizing the
multilateral trade negotiations would be a strong signal that countries can
work together.
The Aid-for Trade Campaign
Ms Patricia Francis, executive director
of the International Trade Centre (ITC), appeared before the Steering Committee
to present the Aid-for-Trade (AFT) initiative. The AFT initiative was launched
at the Hong Kong Ministerial Conference of the World Trade Organization (WTO)
in December 2005. It is recognized as a complement to the Doha round of
multilateral trade negotiations. AFT assists developing countries to increase
exports of goods and services, to integrate into the multilateral trading system,
and to benefit from liberalized trade and increased market access.
There is a clear distinction between
AFT and other development assistance. Projects, including infrastructure
development, are considered as AFT if the activities involved have been
identified as trade-related development priorities in the recipient countries’
national development strategies. ITC works mainly with small and medium-sized
enterprises (SMEs) in least developed countries (LDCs) and its strategy covers
three areas:
·increase companies’ competitiveness, thus
boosting their abilities to engage in domestic, regional and international
trade;
·support efforts to develop the capacity of trade
support institutions that exist to assist the private sector, at national and
regional levels; and
·strengthening the ability of policy-makers to
integrate businesses into the global economy.
According to Ms. Francis, the trade
collapse from late 2008 had a devastating effect on many of the LDCs, which
depended on only a few export products and markets. Consequently, there has
been an increased need for market-intelligence tools as developing countries
understand more and more the value of knowing what is happening in the market.
ITC’s programs cover technical assistance and capacity building, and
development of productive capacity. Nevertheless, Ms. Francis indicated that
there will be challenges as well as benefits in joining the global trading
system. There are also often supply-side obstacles in developing countries that
need to be addressed. But she believes that it is in countries’ interest to
become part of the global system: for example, ITC performed an analysis that
showed that LDCs, who were members of the WTO, were recovering from the crisis
more rapidly than those who were not.
Ms. Francis also indicated that the
economic crisis did not affect AFT pledges as they have increased at a higher
rate than other types of development assistance. WTO officials confirmed that
90% of the 2007 pledges were spent. Ms Francis gave examples of program
delivery: ITC will work with a specific industry to establish a market, a
product, and what is necessary to get that product to the market. For example,
it may look at how to elevate the industry to international environmental
standards. Successful programs also include infrastructure development such as
trade corridors in Africa.
Ms. Francis also described the recently
launched WTO Aid-for-Trade Work Programme 2010-2011, and the Enhanced
Integrated Framework (EIF), the technical assistance program dedicated to
delivering AFT. She then stressed that parliaments have much to contribute to
ensuring effective implementation of the AFT agenda notably through:
·Raising awareness of the contribution export
trade can make to economic growth.
·Focusing attention on the need to create a
business-friendly, enabling environment, removing the supply-side constraints
to trade.
·Mainstreaming trade in national development
strategies and plans.
·Promoting dialogue with the private sector and
the development of public-private partnerships; listening to the business
community, to understand their needs and articulate them in policy-making
forums.
·Mobilizing resources and developing effective
export finance mechanisms.
·Ensuring predictability and transparency of aid
flows to enhance their impact.
·Monitoring the effectiveness of export promotion
programmes and evaluating their impact.
The Successful Settlement of the
Banana Dispute
Ms Gabrielle Marceau from the WTO
appeared before the Steering Committee to discuss the settlement of the banana
dispute, one of the longest-running trade disputes in the history of the recent
multilateral trading system. This dispute opposed a number of Latin American
countries and the European Union (EU) over the privileged treatment given to a
number of countries in Africa, the Caribbean and the Pacific (ACP countries) to
export bananas to the EU.
Ms. Marceau presented a summary of the
dispute and described how the EU banana import regime was violating a number of
WTO principles and rules. For example, a countries import regime must not
discriminate a country against another (the most favoured nation clause). Ms
Marceau indicated that the complexity of this dispute was that it involved two
groups of developing countries. Under WTO rules, a system of favourable
treatment is allowed for developing countries but all developing countries must
be treated the same way.
Ms. Marceau indicated that although the
WTO dispute resolution panel ruled that the EU banana import regime was
violating WTO rules, the discussions to implement changes to the import regime
failed several time. Some of the parties requested that WTO Director-General
Pascal Lamy use his good offices to help broker an agreement. Parties finally
reached an agreement, which was announced on 15 December 2009. According to WTO
officials, this agreement confirms that negotiations on a difficult issue can
succeed and that it sends a positive message for the current round of
multilateral trade negotiations.