Africa, Development & Aid, Economy & Trade, Financial Crisis, Food and Agriculture, Global, Global Geopolitics, Global Governance, Headlines, Labour, Trade & Investment, Trade and poverty: Facts beyond theory

TRADE: “Poor Countries Have Already Given Enough in Doha Round”

GENEVA, Feb 14 2011 (IPS) - South Africa has expressed sharp concern over concerted attempts by leading industrialised countries, particularly the U.S. and the European Union (EU), to extract onerous commitments from developing countries as a condition to concluding the stalled Doha Round trade negotiations.

“We are deeply concerned over attempts to raise the level of ambition by leading industrialised countries in industrial goods and services that would call for a substantial payment from developing countries,” South Africa’s trade and industry minister Dr Rob Davies told IPS.

At a time when many African countries are struggling to recover from the raging global economic crisis that has resulted in mass unemployment, it would be “unfair” to expect either South Africa or poorer countries to agree to onerous commitments to provide market access in industrial goods and services, he said.

Over the last two weeks, members of the World Trade Organisation (WTO) stepped up efforts to accelerate the Doha Round trade negotiations, which entered its 10th year. The Doha Round was supposed to have been concluded by Jan 1, 2005.

But stark disagreement between industrialised countries and some developing countries, on one side, and a large majority of developing and least developed countries, on the other, over the level of commitment to reductions in egregious subsidies, high tariffs on farm products and tariffs on industrial products; and to market-opening for services put paid to an early agreement.

Recently, former WTO director general Peter Sutherland, who was responsible for concluding the previous Uruguay Round of trade negotiations, issued a report calling on members to conclude the Doha Round this year, failing which the credibility of the global trading system will be irreparably damaged.

“The emerging countries must provide substantial market access in industrial goods and services to conclude the Doha Round,” he told IPS.

Trade chiefs of the U.S. and the EU made similar comments at the World Economic Forum in Davos a fortnight ago.

The U.S. and the EU made a strong pitch for “real” and “new” market access in industrial goods and services in emerging countries — China, India, Brazil, South Africa, and Argentina, among others — to finalise the Doha Round of trade negotiations this year.

During the Davos meeting, trade ministers reiterated their commitment to avail themselves of the “window of opportunity” to conclude the Doha negotiations this year.

But there remained pointed differences on what ought to be the level of ambition and whether it is proper to demand a huge payment from developing countries to conclude the negotiations.

Trade ministers of Brazil, India, China, and South Africa issued a common declaration in Davos maintaining that the final outcome in Doha trade negotiations must hinge on the principle of “reciprocity” that would require proportional commitments between developing countries and developed countries.

More importantly, the four ministers insisted that final commitments in the market access areas of agriculture, industrial goods, and services must be based on the mandate that was agreed in the Jul 2004 framework agreement and the Hong Kong Ministerial Declaration of 2005.

The declaration and the agreement reaffirmed the centrality of development and the interests of poor countries in the Doha Round.

The trade ministers said there should be no “reopening” of the texts that were tabled in Dec 2008 in industrial goods and services, which reflected the final compromises that members ought to make.

The trade majors, however, are in no mood to adhere to the commitments as suggested by China, India, Brazil, and South Africa.

The EU, for example, said there is “asymmetry” in what they are going to provide in agriculture and what they are going to receive in industrial goods and services as part of the Doha commitments.

EU trade commissioner Karel De Gucht told his counterparts in Davos that Brussels will need more market access from the emerging countries, regardless of what the mandate stipulated.

In similar vein, U.S. trade representative Ron Kirk maintained that the emerging countries bear the responsibility to conclude the Doha trade negotiations. He said the U.S. faces high unemployment, which requires real market access to big emerging developing countries.

Commenting on these conflicting positions, the South African trade minister said, “despite a moderately ambitious agriculture package (that is on the table), we had already paid much more in industrial goods and services.

“We want an agreement because we are committed to addressing the systemic issues in the global trading system, such as cotton and duty-free/quota-free access,” said Davies, emphasising that the “credibility” of the global trading system rests on how it treats poor countries in Africa and elsewhere.

Despite a clear mandate on cotton, which needs to be addressed “ambitiously,” “expeditiously,” and “specifically” according to July 2004 framework agreement and the Hong Kong Ministerial Declaration of 2005, there is no progress because the U.S. wants to address this issue only after there is an agreement in all other areas.

The U.S. is also not ready to address duty-free and quota-free market access for the poorest countries until all other issues are resolved.

In a series of meetings of the Doha negotiating groups on agriculture and industrial goods at the WTO this past week, the differences on the level of ambition between industrialised countries and developing countries like India, South Africa, and Argentina came into the open.

While the U.S. and the EU insisted on increasing the level of ambition by bridging the “gap” between members’ positions, the developing countries reminded members that the level of ambition will have to reflect paragraph 24 of the 2005 Hong Kong Ministerial Declaration which called for a proportional outcome between agriculture and industrial goods.

“It is difficult to believe that countries which managed to get a range of exceptions in agricultural market access want the developing countries to offer more on industrial goods and services,” Davies said, arguing that those who are asking for more should also pay more in areas of interest to South Africa and other African countries.