Geneva,
Switzerland
JUly 31, 2004
IP/04/1011
Meeting
in Geneva this week, the World Trade Organisation has taken a
decision which effectively completes half of the trade
negotiations launched in Doha in November 2001- the Doha
Development Agenda (DDA). The text adopted today sets the
parameters of the future package in five key areas: agriculture,
industrial products, development issues, trade facilitation, and
services. To complete the Round, the framework needs to be
filled out, notably with figures. The DDA is crucial to
bolstering international economic growth and helping developing
countries integrate into the global economy. The decision
adopted today gives a clear signal that the multilateral trading
system can deliver on the real needs of all its members,
especially developing countries, and maintaining an ambitious
round that is broad in scope.
Speaking
from Geneva EU Trade Commissioner Pascal Lamy said: "The DDA is
about making trade work for all, and delivering growth and
development. After the setback in Cancun, today's decision shows
that the multilateral trading system is alive and kicking. But
we have only walked half of the way: we need now to rapidly
conclude this round, thus bringing good news to a world economy
in need of stimulus ». He added: «The EU letter circulated in
May appears to have triggered a much needed impetus in the talks
which have now succeeded. It is another demonstration that when
Europe stands united we can punch our weight and moreover, to
the benefit of the entire trading community, especially
developing countries."
Commenting on the agreement, EU Agriculture Commissioner Franz
Fischler said: “Today we got a deal which will boost the world
economy, farm trade and the opportunities for poorer countries.
This agreement also ensures that other rich countries will
follow the EU on its reform path. The EU’s reformed farm policy
will not be called into question. Now, EU farmers have a clear
perspective, developing countries will see better market access
and less unfair competition.”
The text
adopted today - known as the “Oshima text” by reference to the
current Chairman of the WTO General Council, Ambassador Oshima,
sets clear and precise parameters on each of the key issues
under negotiation. In the months ahead WTO members will develop
the agreed framework into concrete, detailed and specific
commitments with a view to completing the Round as soon as
possible.
The
DDA's final result remains an indivisible package in the form of
a Single Undertaking for all WTO members: "nothing is agreed
until everything is agreed". In addition to the five issues
addressed in today's decision the final result should also cover
the remaining items on the agenda satisfactorily such as trade
and environment, dispute settlement, geographical indications
(GIs) or anti-dumping rules.
It has
been agreed that the next WTO Ministerial will take place in
Hong Kong in December 2005.
Key
elements of the Geneva agreement
Agriculture
The
framework agreement will deliver a considerably bigger farm
trade liberalisation compared to the Uruguay Round. It will
bring a substantial cut in trade-distorting agriculture support,
the elimination of trade distorting export competition practices
and a significant opening of agriculture markets. All developing
countries will benefit from special treatment, allowing them to
liberalise less over a longer period. The world's 50 poorest
countries do not have to undertake any commitments. Today’s
decision fully recognises the EU’s fundamental farm policy
reforms and ensures that also other rich countries make their
farm support systems more trade-friendly.
A
solution for cotton
The
framework recognises the vital importance of cotton for a
certain number of developing countries, and addresses the issue
ambitiously, expeditiously and specifically within the
agriculture negotiations. The work will encompass all
trade-distorting policies affecting the sector, from import
tariffs, trade-distorting cottons subsidies to export
subsidisation. The EU for its part has already abolished all
exports subsidies and tariffs for cotton and has undertaken a
fundamental reform of its cotton subsidies eliminating the most
trade-distorting support.
Industrial products
Trade in
non-agricultural products represents around 90% of world trade
and 70% of developing countries trade in goods. Lowering tariffs
means trade growth. A decrease in tariffs of around 50% has been
estimated to increase trade by around € 200 bio.
The
agreement provides for a reduction of tariffs according to the
following principles:
·
Ambitious
formula to cut tariffs: a non-linear formula, with deeper cuts
for higher tariffs for all products, without a priori
exclusions. The text also foresees possibilities for more
ambitious tariff cuts/elimination for certain sectors, in
particular those of interest for developing countries (so-called
sectoral initiatives)
·
Special
rules for developing countries: developing countries would have
longer transition periods and flexibilities in tariff cuts.
·
The
particular situation of Least Developed Countries (LDCs): the
world's 50 poorest developing countries will be exempted from
having to reduce their industrial tariffs. They will only be
required to bind their tariffs in order to enhance transparency
and predictability of their trading systems. Developed and
emerging developing countries are invited to provide LDCs with
duty-free and quota-free access to their markets – as the EU has
done in Everything But Arms initiative (EBAs) – to support
diversification and increase their integration in the
multilateral trading system.
·
The text
also provides guidelines for addressing non-tariff barriers to
trade
Services
Services
represent between half and two thirds of the economies of both
developed and developing countries. 15 of the world’s 40 leading
service exporters are from developing countries.
Opening
up possibilities for foreign firms to provide services - such as
telecoms, banking, distribution or tourism, as well as the
temporary entry of foreign professionals - are vital to modern
and efficient economies.
The text
gives a political impetus to the on-going negotiations which are
based on requests and offers. Improved offers should be tabled
by May 2005. Members who have not yet presented offers should do
so as soon as possible.
Cutting down red-tape at the border: launch of negotiations on
trade facilitation
Excessive customs procedures and red tape can represent up to 5%
of the value of the imports, thus creating an important obstacle
to trade. Recent studies calculate that halving the costs of
customs procedure could lead to savings up to € 300 bio.
Today's
decision adopts guidelines for the negotiation aimed at
expediting the movement, release and clearance of goods.
Developing countries will adopt commitments according to their
capacity to implement them.
The
other so-called Singapore issues (competition, investment and
transparency in public procurement) are dropped from the Doha
Agenda but work on them will continue in the WTO.
Development issues
The
agreement calls for the strengthening of provisions on Special
and Differential Treatment (SDT) in favour of developing
countries and implementation issues. On trade related assistance
(TRA), the agreement welcomes progress made and underlines the
continued commitment of WTO members to improve the quality,
quantity and co-ordination of TRA as key to underpin the
negotiations and their implementation.
The EU
is committed to providing TRA. From 2001-2003 we have committed
2 billion Euro and have set aside for the next 4-5 years again
an amount of 2 billion Euro.
The EU
will continue to build alliances and work together with a very
broad range of both developed and developing countries to ensure
a rapid outcome of the Doha Development Agenda, if possible
during 2005.
Internally within the EU, the Commission will continue to
consult EU Member States and the European Parliament on the
basis of our mandate and maintain a structured dialogue with
civil society on DDA issues.
For more
information:
http://europa.eu.int/comm/trade/issues/newround/doha_da/cancun/index_en.htm
http://europa.eu.int/comm/agriculture/external/wto/cancun/index_en.htm
For the
full text of the WTO Decision
http://europa.eu.int/comm/trade
http://www.wto.org
The
agriculture text in detail
Cutting trade distorting agricultural support
The
framework locks in the recent reforms of the EU's Common
Agricultural Policy (CAP). They will not be called into
question. The agreement also ensures that other developed
countries, in particular the US, will have to undertake reforms.
This will be achieved by a combination of disciplines of the
different forms of support.
·
Overall
levels of the most trade distorting domestic support will have
to be substantially reduced
·
A down
payment of 20% of this reduction will be made in year 1 of the
implementation period. This is a bigger cut than the reductions
made following the Uruguay Round over six years
·
Big
subsidisers will make the deepest cuts
·
Blue box
support cannot exceed 5% of agricultural production, no further
reduction is foreseen
·
The
non-trade distorting green box remains untouched
·
The de
minimis-loophole will be reduced
Ending trade distorting export practices
On
export competition, the EU’s objective was to ensure equal
treatment for all forms of trade-distorting export practices in
the world. This has been secured.
·
EU export
subsidies, export credits, credit guarantees and insurance
programmes with repayment periods beyond 180 days will be
eliminated by an end date to be agreed
·
Export
credits, credit guarantees and insurance programmes with
repayment periods below 180 days will be subject to strict
disciplines regarding subsidies and any other trade-distorting
elements
·
Trade
distorting practices with respect to export State Trading
Enterprises will also be eliminated
·
Genuine
food aid for people in need will obviously continue. However,
for food aid which is being abused for commercial displacement
concrete disciplines will be imposed. The question of providing
food aid only in grant form will be addressed in the
negotiations
Opening agriculture markets
The deal
will substantially improve market access. Farm tariffs will be
cut according to a single, tiered approach: the higher the
tariff, the higher the tariff cut will be. However, the
agreement caters for the EU’s concern to address sensitive
products. Countries can self select an appropriate number of
sensitive products which will can be treated in a more lenient
way. As compensation, tariff rate quotas have to be opened in
order to ensure better market access.
A
special, better deal for developing countries
All
developing countries will benefit from a special and
differential treatment across the board via:
·
Longer
implementation periods for all commitments
·
Lower
tariff and subsidy cuts
·
Special
treatment on market opening for so-called special products to
address food security, livelihood and rural development concerns
·
Fullest
liberalisation of trade with tropical products
·
Addressing
the erosion of trade preferences
Least
developed countries do not have to undertake any commitments to
reduce tariffs or farm support. In addition, developed countries
and those developing countries in a position do so should
provide duty-free and quota-free market access for products from
LDCs. The EU has already unilaterally implemented such a measure
with its “Everything But Arms” initiative. |
