Trade Facilitation, LDC Accession Dominate Agenda at Paris Trade Ministers' Meet

30 May 2012

With the overall Doha Round talks still at an impasse, approximately 20 trade ministers meeting on the sidelines of the Organisation for Economic Co-operation and Development's (OECD) Ministerial Council Meeting discussed the potential of soon finalising an agreement on trade facilitation and updated guidelines on WTO accession for the poorest countries. However, obstacles in both areas still remain, as some officials acknowledged privately.

Other topics addressed at the 23 May trade ministers' gathering in Paris included the potential expansion of the Information Technology Agreement (ITA) and the possibility of a services plurilateral pact.

Trade facilitation

Given the absence of progress in the Doha talks, WTO members were directed at last December's ministerial conference to examine those negotiating areas where agreement might be reached. In recent months, an idea that has appeared to gain traction amongst some members is the possibility of concluding an agreement on trade facilitation, which deals with issues such as customs and border measures.

"There was a high level of agreement that this must be a priority, that we must continue to remove the disputed areas in the text and not bind that up in negotiations in other areas, whether they be in agriculture or whether they be in industrial tariffs or the other elements of the Doha agenda, consistent with the [ministerial] decision that we would break those linkages," Australian Trade Minister Craig Emerson commented after last week's meeting.

However, emerging economies such as India and Brazil have repeatedly argued against de-linking trade facilitation from other aspects of the Doha Round, an argument that was again raised at the Paris gathering, sources told Bridges.

Along with the discussions on whether trade facilitation can truly be a "self-balancing pillar" within the overall Doha Round context, ministers in Paris also addressed whether balance is indeed possible within the actual trade facilitation talks themselves. For instance, many developing countries, particularly least developed countries (LDCs), have traditionally argued that commitments must be matched with resources - a concern that was reiterated during last week's discussion.

LDC accession

Guidelines for LDC accession to the WTO were established in 2002, urging members to exercise restraint in the demands made of LDCs during the accession negotiations. However, least developed countries have long complained that their trading partners routinely ask them to take on accession commitments beyond what they are capable of, as seen in the cases of the five most recent LDCs to accede. These commitments, they argue, were also well beyond those that were required from LDCs that had previously joined the global trade body.

At last December's ministerial conference, members committed to developing market opening benchmarks for acceding LDCs by July 2012 in order to remove some of these difficulties - a goal that trade ministers meeting in Paris last week generally reaffirmed.

"The discussion [in Paris] did lead to I think a high level of agreement that we would do everything possible to conclude the negotiations on the LDC accession package before the summer break," Emerson told reporters after the 23 May trade ministers' gathering.

"It's not a part of our Doha mandate, but it is an area where we can demonstrate that we can come together and do something we haven't done, frankly, [in] the last ten years," US Trade Representative Ron Kirk commented.

The LDC accession guidelines have been under discussion in the WTO's LDC Sub-Committee since January. Sources note that the group is hoping to have an outcome ready in time for the next sub-committee meeting in June, which could then be brought to the General Council - the WTO's highest decision-making body outside of the ministerial conference - in late July.

Discussions in Geneva on revising the guidelines have touched on the areas of market access negotiations, process, WTO rules, technical assistance, and capacity-building, one developing country official familiar with the talks told Bridges. The main work, however, is in the market access negotiations area, where the group is working particularly on developing benchmarks in goods. While discussions have also taken place on benchmarks for services, sources note that these talks are less advanced.

Although the discussions in Geneva regarding goods benchmarks are said to be far along, the focus is now on determining the level of binding coverage - in other words, how many tariff lines acceding LDCs will have to bind upon joining the WTO - and average bound rates (i.e. the average maximum tariff rate agreed to by each WTO member), and the implicit trade-off between the two.

Members involved in the discussions have been weighing whether to bind more tariff lines, and in exchange allow LDCs a higher average bound rate - in essence providing some tariff flexibility for acceding LDCs in exchange for the certainty provided by high binding coverage - or whether to allow LDCs to exclude more tariff lines from binding caps, while giving them less flexibility in the lines that are bound. These issues, sources commented to Bridges, have proven to be difficult in the negotiating process.

While some developed country members have reportedly been pushing for high binding coverage for the sake of ensuring predictability in the trading system, this has met with resistance from some developing countries.

"The objective [of the MC8 decision] was not to legitimise the status quo, but to facilitate the accession of LDCs by lessening the burden being imposed on them in bilateral negotiations," one developing country delegate commented. There needs to be a "real negotiation on the figures [for binding coverage and average bound rates]," the official continued, in order to "change what the acceding countries have suffered [in the past]."

"We'll have to try. This is the time to strike the negotiating deal," another developing country official familiar with the talks commented. "We just don't want to accept anything if it really doesn't add anything. Otherwise we could just stick to the 2002 guidelines."

ICTSD reporting.

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