Doha Round and Progress Made on Key Developmental Issues Veena Jha

1. UNCTAD Doha Round and Progress Made on Key Developmental Issues Veena Jha Coordinator UNCTAD India Programme TERI 3 May 2006

2. Leveling the playing field : Economic size Institutional, human and financial capacities Market power Economic operators Calibrated reciprocity S&DT is also good for developed countries, including their large economic operators: Creating customers & thus new market opportunities. The case for S&DT and development issues

3. Key development issues in DWP • 4 inter-linked dimensions to development issues in the Doha Ministerial Declaration • Implementation issues – para 12 of the DMD • S&DT issues- para 44 of DMD • LDCs specific issues – para 42 of DMD • S&DT shall be an integral part of various negotiating issues

4. Implementation issues • Doha mandate -- Negotiations on implementation issues to be an integral part of the Doha Work Programme -- Possibility of early harvest envisaged • Progress so far --Deadlines breached, but no meaningful decision reached. -- Deeper understanding of concerns, but no convergence of conflicting positions --Many issues being discussed, but active engagement mainly on GI extension and TRIPS-CBD issues.

5. Disappointments & growing disillusionment • Missed deadlines • Disagreement over « intent » of Doha mandate; • Disagreement over the appropriate forum; • Disagreement over « principles » & specifics and over which first; • Lack of genuine engagement by developed countries; • Changing content of monitoring mechanism

6. S&DT issues • Doha mandate -- Make S&DT more precise, operational, effective and mandatory • Progress achieved -- An informal categorisation of 88 proposals -- No concrete results despite serious work

7. Implementation and S&DT issues: Way forward • Formalise the prioritisation of S&DT and Implementation issues in terms of their commercial and development values. • Conclude examination of the proposals with decisions being taken on issues of top priority by the time modalities for agriculture and NAMA are finalised. In respect of other issues final decision should be taken before the end of 2006.

8. LDC specific issue: DFQF • Doha mandate para 42 -- Commitment to the objective of duty-free quota-free (DFQF) market access for products originating in LDCs.

9. DFQF: HK Ministerial Declaration • Developed-country Members shall, and developing country Members declaring themselves in a position to do so should: provide duty-free and quota-free market access for all products originating from all LDCs by 2008 or the start of the implementation period • At least 97 per cent of products originating from LDCs to be initially covered with steps taken to progressively achieve full coverage

10. DFQF: implication of 3% exclusion • LDCs have small export basket which cannot be significantly expanded to increase number of products • Bangladesh’s export to US limited to 602 items out of 10, 265 items at 8-digit – 5% coverage • Bangladesh’s export to Japan confined to 281 items out of 9255 items – 3% coverage • Three-fourth of Bangladesh’s export earnings come from 1 product group – garments/ apparels; 6 items constitute 90% of exports • Nepal’s major exports are garments, carpets and towels • 3% exclusion has the potential to restrict meaningful market access for LDCs

11. DFQF: India’s initiative • Based on detailed work by UNCTAD India Programme, GOI has decided to extend unilateral tariff preferences to African LDCs. • Main objective is to include products of export interest to these countries

12. Benefiting from DFQF: Supply side constraints • LDCs export efforts hampered by • Inadequate trade-related infrastructure • Inadequate compliance with product standards • High cost of trade facilitation measures • Low competitiveness • Innovative solutions needed to address supply side constraints of LDCs

13. Benefiting from DFQF: Addressing supply side constraints • Encourage regional integration of production networks • Providing technical assistance for improving export marketing, market entry services and management knowledge • Providing training for skill enhancement and meeting standards

14. New paradigm for addressing LDCs supply side constraints • Asian countries have low cost of providing most of the services required for addressing LDCs supply side constraints. • New paradigm required – Harness financial resources of developed countries with low cost technical delivery by certain developing countries

15. DFQF: Way forward • Devise and implement appropriate aid-for-trade packages • Complex rules of origin should not undermine the market access provided to LDCs • 3% exclusion should not result in excluding items of interest to LDCs • Put time limit within which 97% would be extended to 100% coverage

16. S&D for LDCs in specific areas of negotiations • S&D is an integral part in all pillars of agriculture negotiations • Progress achieved -- LDCs not required to make a contribution in market access and domestic support pillars -- In NAMA negotiations, LDCs would not be required to apply the formula nor participate in sectorals

17. Conclusions • Regional cooperation between Asian and African countries can bring greater stability, better policy coordination, improved infrastructure planning and a more dynamic pattern of trade and development. Harnessing the synergies between developed countries and certain developing countries would facilitate LDCs to maximise their benefits from the Doha Work Programme. This model can be applied to South Asian countries as well.

18. Forward Looking S and D • Re-think and re-posit the case for S&DT; • Internalize S&DT into national development strategies • Make effective use of S&DT provision; • Continuosly seek more, better & effective S&DT • Seek a broad-based set of S&DT provisions which commercially meaningful & promote core development interests

19. Issues at Stake for the Doha Mandate • Preserve principles of non-reciprocity of Part IV of GATT, non-full reciprocity of DMD, and Enabling Clause; • Internalize costs of implementation & adjustment into agreements or via positive coherence with IFIs; • Watchful on effectiveness of S&DT.

20. THANK YOU