News Release
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Franz Fischler
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No. 123/04
August 2, 2004
WTO: MID-POINT AGREEMENT PAVES WAY
FOR FUTURE CONCLUSION OF DOHA DEVELOPMENT ROUND AND STRONGER MULTILATERAL SYSTEM
Geneva, July 31 -- the World Trade Organization (WTO) has taken a decision
which effectively completes half of the trade negotiations launched in November
2001 in Doha – the
Doha Development Agenda (DDA).
The text adopted 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. 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.”
Known as the “Oshima text” for the current Chairman of the WTO General Council,
Ambassador Oshima, the text agreed yesterday 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 liberalization
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 liberalize less over a longer
period. The world's 50 poorest countries do not have to undertake any commitments.
Today’s decision fully recognizes 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 recognizes 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 subsidization. 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 billion.
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
billion. 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
and have set aside for the next 4-5 years again an amount of €2 billion.
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
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Press Contacts:
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Anthony Gooch
202-862-9523
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Maeve O'Beirne
202-862-9549
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