WTO GC Meet:
Alternatives For The Future 

ASHOK B SHARMA / The Financial Express (India) 15dec03

The general council of the World Trade Organisation (WTO) is meeting in Geneva on December 15 with a hope to break the deadlock of the Cancun ministerial. Many member countries have expressed their willingness to move the negotiating process forward. This calls for a compromise of the existing positions taken by the two warring camps, namely the developed countries on one side and the developing countries consisting the G-20 and the African, Caribbean and Pacific (ACP) commonly called the G-90 on the other side.

Which side is first prepared to make a compromise ? Here lies the key to success of moving the negotiating process forward. For all justified reasons, the developed countries should first extend its offer for a compromise, particularly in the farm sector. But will they be able to extend their offer for a compromise, particularly in view of the forth coming presidential election in the US and the proposed exapansion of the European Union and the ensuing elections there? Agriculture, being the very basis of economy everywhere is a politically sensitive sector.

One way out for the developed nations is to make a commitment for reduction in subsidies and tariffs barriers over a specific period of time and promise to ensure market access to the products of the developing countries. This is enough to thaw the ice, if not melt it totally. In response the developing countries can take up the initiative of correspondingly reducing their tariff barriers over the same period of time to render market access to the products of the developed world. The Canadian minister for agriculture and food, Lyle Vanclief who was on a visit to India last week was also of the similar views that the developed countries should first take the initiative.

If such an initiative is taken by the developed world in letter and in spirit, the process of negotiations can move further, the WTO Secretariat will have enough work to accomplish in 2004 till the next WTO ministerial meet slated in Hong Kong on January 2005.

The European Union trade commissioner, Pascal Lamy in the G-20 meeting in Brasilia on December 12 said that his 15-nation bloc is now more willing to eliminate export subsidies and what remains to be negotiated is the timing and modalities. He also said that the EU is ready to negotiate stronger disciplines in trade distorting domestic subsidies, but it wants to hear in return how far the developing nations will go in opening their service sector and what their position is on anti-dumping.

Yes, if Lamy is sincere in eliminating trade distorting subsidies, much can be achieved to move the negotiating process forward. But what are trade distorting subsidies? The chairman’s draft in the last Cancun ministerial introduced new terminologies like ‘least trade-distorting subsidies’, ‘trade-distorting subsidies’, leaving other subsidies to be called as ‘non-trade-distorting subsidies’. The chairman’s draft has created a new confusion in subsidies. As it is the commitment for subsidy reduction is complicated by the presence of Blue Box, Green Box and Amber Box.

The most logical way to solve the subsidy tangle is first to bring all the subsidies under one single box and discipline it to a percentage of the country’s GDP. This will do away with the developed countries game of reducing subsidies under different head and shifting the same amount as permissible subsidy under Green Box.

Next is the issue of market access. Simple reduction in tariff in the developed world may not facilitate market access for the products of developing countries.

There are many non-tariff barriers like technical barriers to trade (TBT) and sanitary and phytosanitary (SPS) norms in developed countries which can restrict trade. There is a need for harmonising SPS norms through Codex which can be accepted for trade in lieu of country-specific norms. Other norms for TBT should also be standardised for global acceptance.

There are other areas for negotiations like services where the developing countries stand to gain if the movement of natural persons is liberalised through mode 4. Non-Agriculture Market Access (NAMA) needs to negotiated carefully in view of the presence of large number of labour-intensive small scale units in the Third World.

Finally, if nothing much is achieved for moving the WTO negotiations further it would be better to concentrate more on South-South trade, which is already 40 per cent of the global trade. the Brazilian president, Luiz Inacio Lula da Silva has mooted such a proposal in the recent G-20 meet. In such a move the G-20 also needs to rope in G-90 also.

source: http://www.financialexpress.com/fe_full_story.php?content_id=48424 15dec03