Global Policy Forum

Defining a Development Agenda for WTO

South Centre
Bulletin 21

As the process of drafting the Doha Ministerial Declaration gets under way, it is time to crystallise the often-talked about "development" concerns. Defining the "development content" of the trade agenda from the viewpoint of African countries, and equally true for many other developing countries, implies both long-term and short-term objectives on many different topics and disciplines. Some of these are highlighted in the following article, extracted from a contribution by the UNCTAD secretariat to the recent Abuja meeting of the OAU/AEC African Trade Ministers (21-23 September 2001).

One aspect of the development content of the African trade agenda is particularly crucial: how to ensure that the different trade arrangements will help to reduce poverty? In other words, what concrete provisions should be included in the regional and multilateral trade agreements so as to take into account the needs of the most vulnerable sectors of the economies and to enable them to share the benefits of trade liberalization? In a recent paper, Mr. Moses Tekere, Director of the Trade and Development Studies Centre in Harare, Zimbabwe, identified specific pre-conditions to ensure that trade liberalization will address poverty. One of them would be to reduce trade distortions, such as subsidies on export products in which the poor have a comparative advantage. This issue is one of the priority goals of the African countries, and it is fair to expect that the WTO will take the appropriate action.

Other measures identified by Mr. Tekere as instruments for linking trade and poverty reduction concern the "policy spaces" that a Government requires to formulate national development policies, and that are often considered as constrained both by the current WTO trade disciplines and by the policies supported by the international financial institutions through their loans. There are two opposing arguments in the debate on the scope left for domestic development measures: one is the "loss of autonomy" usually mentioned when referring to such WTO agreements as the Agreement on Trade-related Investment Measures (TRIMs) or the Agreement on Trade-related Intellectual Property Rights (TRIPS). The African countries have stated their concerns regarding the implementation of certain provisions of these agreements. The other argument is the need to "level the playing field" and avoid any distortions in free trade. But unfortunately, in the real world, the playing field is not level, because of asymmetries arising from the different levels of development.

The concept of special and differential treatment in trade provisions, which should contain clear obligations instead of a "best endeavour" wording, is one way to resolve the conflict between the need for balanced trade rules and for some room for manoeuvre to adopt domestic development measures. The most meaningful way to ensure effective special and differential treatment is through the formulation of concrete negotiating proposals on the implementation of the existing WTO disciplines and the ongoing work on the WTO's "built-in agenda". The African countries have taken a very constructive stance at the WTO, by shaping their own trade and development agenda through interesting proposals, where a special and differential treatment is emerging in clear terms that suits their needs.

Since the preparatory process for the Third WTO Ministerial Conference in Seattle, the African countries have expressed their concerns and suggestions on many WTO issues by submitting proposals to the relevant WTO bodies. In recent months, in the run-up to Doha, more proposals have come from African countries on different topics, demonstrating their interest in being proactive stakeholders in the multilateral trading system. The articulation between the different layers of negotiations (subregional schemes, preferential regimes and the WTO) poses additional challenges. More resources are needed in terms of technical assistance to enhance capacity-building, particularly for the LDCs. Nevertheless, the increasing quality and expertise evinced by African negotiators is impressive. The implementation of the TRIPS and agriculture agreements are only two examples of the constructive positions taken by the African countries.

On TRIPS, in November 1999 the Kenyan communication to the WTO General Council on behalf of the African Group was probably the first comprehensive proposal encompassing that agreement as a whole, introducing specific inputs stemming from the needs of the developing countries in this field. That proposal set forth basic principles that continue to be at the core of the debate on the implementation and review of the TRIPS rules, such as the idea that patents on life forms should be prohibited, and that the knowledge and innovations of indigenous people and local communities should be protected.

The constructive role of the African countries in the debate on TRIPS and health at the WTO is but one recent example of what the developing countries can achieve when they express their own positions in that forum. We can be sure that the ongoing debate on TRIPS and health is already setting a standard against which the debate on other topics involving trade and vital public policies will be assessed in the near future. What is most striking in this regard, beyond the substantive issues involved in the implementation of the TRIPS Agreement, is that the African delegates are increasingly focusing their strategies on the rights conferred on WTO members by the existing provisions: the right to develop new medicines, the right to ensure access to medical care at affordable prices and to protect public health, and the right to grant compulsory licences. In the past, there has tended to be greater focus on the obligations derived from the existing agreements than on the rights they provide to the members.

Similarly, the proposal on agriculture made by the African Group last March defines clear interests and objectives for the negotiations on agriculture, which provide a precise content to what could be a special and differential treatment in this sector. First, the autonomous liberalization undertaken by the countries of the region deserves credit and is the starting point for the African position. Indeed, African countries have advanced the need to draw up a mechanism to provide "credit" for autonomous liberalization in agriculture and services, since those sectors have been significantly liberalized under their structural adjustment programmes. The African proposal then defines the role of tariffs as "the only viable trade policy instrument to protect domestic production, while severe fiscal constraints limit the possibility for utilising export subsidies and domestic support in any comparable manner to developed economies. African countries' commitment to further domestic tariff reduction in agriculture will therefore be linked to substantial progressive reduction of domestic support and export subsidies in developed countries".

Other elements of this joint proposal on agriculture give the "non-trade concerns" - which are defined as food security, sustainable rural development and poverty alleviation - a clear development content, from the African countries' perspective. Similarly, definitions are given to what kind of market access is required for all agricultural exports, including those more processed exports which are often penalised by tariff peaks and escalations. The proposal also provides for the "policy spaces" and poverty reduction measures mentioned above, by suggesting that the "input and investment subsidies available to low-income farmers" be made non-actionable and that the need to "strengthen vulnerable producers and to improve their export competitiveness" be taken into account.

There are many other areas of the WTO disciplines where the development content needs similar work on identifying the interests of the African countries and the developing countries in general. Such issues as trade in textiles (high subsidies on cotton, for instance, are among the most distortionary measures affecting the exports of developing countries), the increasing complexity of sanitary and phytosanitary standards, and the need for compatibility between trade and environmental rules are only a few examples of topics that lie at the core of development interests in the trade agenda, requiring a definition which only the developing countries themselves can provide.

Similarly, such areas as trade in services deserve both attention and strategic decisions in the negotiations at the WTO. These negotiations attract less attention from both the media and civil society and tend to appear less controversial than other issues, such as agriculture or TRIPS. The issues at stake in services, and the national interests involved, may be difficult to identify because of the great dispersion of the commitments in many services sectors, where each one has its own specific issues - but it is nonetheless obvious that the positions taken on services are of crucial importance to development strategies.

African countries have indeed increased their capacity to undertake the national sectoral studies needed to assess and improve the schedules of commitments to which they agreed during the Uruguay Round. More will certainly be done in that direction in the coming months in order to identify which sectors or subsectors of services should be included in the individual negotiating positions, given that the African countries have expressed their intention to preserve the current architecture of the GATS, based on the "positive list" approach, and to obtain recognition for the autonomous liberalization undertaken in many services sectors. Here, the African countries will share with other developing countries some practical problems in the negotiations: how to gauge the autonomous liberalization implemented in the different services sectors, where there are no tariffs or other quantitative indicators involved? Likewise, what are the appropriate criteria for assessing whether a commitment on services should be "bound"? In the commitments on goods, the difference between the bound levels and the tariffs actually applied allows a margin for manoeuvre in trade policy on goods; it is hard to devise a similar "cushion" in the area of services, where the difference between existing liberalization and the "bound" levels is usually more difficult to identify and evaluate.

Article IV of the GATS, which provides for special and differential treatment in trade in services, is one of the provisions on which it is up to the developing countries themselves to provide suggestions for more effective implementation at the sectoral level, particularly in the services sectors where they have specific interests, and together with the "horizontal" provisions that still need to be better defined in the ongoing negotiations - such as safeguards, government procurement, and subsidies in trade in services. The implementation of the developed countries' commitments on the movement of natural persons is also important for all the African countries, particularly where professional services are concerned.

In preparing for the negotiations on services - and in reviewing the implementation of all the agreements - the links between some WTO agreements should be identified in terms of their impact on development policies. For instance, there are links between the implementation of the GATS and TRIPS agreements as to geographical indications and transfer of technology. Similarly, it is now obvious that the implementation of the agreement on sanitary and phytosanitary standards has significant implications for trade in agriculture (and particularly for trade in genetically modified organisms) - implications which were not foreseen when the agreement was being drafted.

Therefore, in addition to the many "layers" of trade policies - bilateral, regional and multilateral - that need to be looked at together, there are the horizontal links between the WTO disciplines that also have to be considered in the process of identifying national and regional interests.

In general, all the numerous implementation issues raised by the existing WTO rules are the most important topics in all the recent declarations and statements of African Ministers. Indeed, like most developing countries, African countries continue to face difficulties in mastering the agreements and disseminating them to the economic operators so that they can benefit from them. Institutional domestic capacities, such as those required for regular notification obligations, continue to be weak in many cases. Some African countries face difficulties in changing their national legislation to comply with the WTO rules.

More Information on Poverty and Development in Africa
More Information on WTO

FAIR USE NOTICE: This page contains copyrighted material the use of which has not been specifically authorized by the copyright owner. Global Policy Forum distributes this material without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. We believe this constitutes a fair use of any such copyrighted material as provided for in 17 U.S.C § 107. If you wish to use copyrighted material from this site for purposes of your own that go beyond fair use, you must obtain permission from the copyright owner.


FAIR USE NOTICE: This page contains copyrighted material the use of which has not been specifically authorized by the copyright owner. Global Policy Forum distributes this material without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. We believe this constitutes a fair use of any such copyrighted material as provided for in 17 U.S.C § 107. If you wish to use copyrighted material from this site for purposes of your own that go beyond fair use, you must obtain permission from the copyright owner.