External Expansion Limited

Thursday, 8 May 2014


This week in Geneva has begun a new meeting scheduled by the WTO aimed at push the role of trade in the future objectives of sustainable development. The head of the WTO, Roberto Azevedo delivered his speech in which among other things highlighted the central role trade has played to lift millions of people out of poverty in recent years and would start working for the trade to be recognized in the current discussions on the post- 2015 development agenda.

First, the Director General referred to the successful results achieved in the Bali Ministerial Conference after the fifteenth year of meetings, which led to restore the credibility of the WTO as an organization that is capable of making multilateral decisions and delived to results. The concrete outcomes reported in Bali offer benefits in three key areas: they were agriculture, trade facilitation and development. In addition, the conference launched a process whereby members will decide by the end of this year on a clear roadmap for the completion of the Doha Development Agenda (DDA). In Agriculture, there has been progress in terms of food security, tariff rate quota administration and export competition in response to the demands made by different groups of developing countries, highlighting also some decisions separated on cotton and the importance of this sector to the least developed countries. Regarding Trade Facilitation, by streamlining customs procedures this agreements could provide a great boost to the global economy, and allow most of the benefits accrue to the developing countries. This will allow an expansion in developing country exports of up to 9.9% and the creation of up to 18 million jobs in developing economies. This agreement on trade facilitation puts power in the hands of developing countries by the way the S&D provisions treatment will be carried out. The implementation of the agreement will be directly linked to the capacity of the country to do so. The level of capacity will be self determined by the country concerned an they will receive support to build that capacity by means of technical assistance, capacity building programms, etc. The agreement generated debate that developed countries migth try to “grab Trade Facilitation and run” in their favor, but have assured them that this will not happen because they promised support in the agreement in a timely and proper way. With regard to Development, agreed to put in place a monitoring mechanism for special and differential treatment provisions. That mechanism is going to take a look at all the S&D provisions that are contained in WTO texts, taking 3 specific decisions for Least Developed Countries (LDCs). The first there was to include customs duty free and quota free market access for LDC exports. The second, there was to relax the rules of origin requirements for goods coming from LDCs . And the third, there was the decision on the operationalization of a services waiver for LDCs.

Secondly, according to the instructions of ministers in Bali, they prepared a clearly defined roadmap for conclusion of the Doha Development Agenda (DDA). The negotiations dating back to 2001 and any compromise is adopted should address issues relating to industrial goods, services and agriculture crucially for many developing countries. You have been little discussed issues in the past 6 years so they must be returned into play and thus avoid re-treat in the future. They are convinced that if they make further progress and they find solutions on these problems then everything else will fall into place, but if they do not advance in this any further progress in their agenda would be very limited. They claim not to return to the positions and expectations of 2008 proposed by the Negotiating Chairs, it would be impossible to get a good full, productive and conclusive engagement unmodified texts. Therefore, based on these texts retaining everything that can be able to reach a successful agreement will provide opportunities for development and potentially improve the lives of many people.

Third, the WTO Director General spoke about the macroeconomic picture that exposed a few weeks ago and commented on this blog (Accordingto the WTO Least Developed hit more severely by Global Slowdown) about world trade. He referred to the disruption suffered by the trade in recent years and that the 2013 did not break that trend as growth slowed to 2.1%. He further emphasized that the prospects for 2014 and 2015 are more encouraging although based on assumptions of other factors such as GDP growth calculated by other organisations (IMF and OECD) and materialize is growing hope that global trade increase by 4.7% in 2014 and 5.3% in 2015. Said that growth in the dollar value of exports of LDCs was 1% in 2012 to 5% in 2013, going well below its average since 2005, is 13% , which is much lower than the 24% increase in 2011. Nevertheless, LDCs can benefit disproportionately from any improvement in the global economy in the future, since a large portion of their exports (almost 20%) goes to the recovering European Union. They clear that trade will improve as the global economy also improves and will also actively support trade growth by avoiding protectionism in times of uncertainty and by reaching new trade agreements.

In conclusion, he said he would redouble efforts to implement the Bali Package and develop the Doha Development Agenda (DDA) that they can deliver a real boost to trade once the round ended. He also invited the governments start thinking about their own priorities for future sustainable development goals and about the role of trade in achieving them, since in recent years trade has played a central role in lifting millions of people out of poverty. Also work personally to ensure that the power of trade support sustainable development is recognized.

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Until the next article...

Leonardo Dufau

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