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A framework package to guide the next phase of the WTO Doha Round negotiations was agreed in Geneva by the WTO General Council on 31 July 2004. The agreement was greeted by widespread satisfaction [media release - external link to Beehive website] across the WTO membership, including from New Zealand. The package marked an important step forward in the Doha Round, and reflected the immense political support from across the Membership for making the Doha Round a success. New Zealand considers the framework to be an excellent basis from which to continue the Doha negotiations across all issues.
The framework package covers all key negotiating issues in the Doha Round, and consists of a general statement from the General Council and detailed annexes covering agriculture, non-agricultural market access (NAMA), services and trade facilitation (being the only one of the three “Singapore issues” to be progressed in the Doha Round).
The agriculture framework (Annex A) is most notable for securing the historic commitment to the elimination of all agricultural export subsidies, a subsidy that is particularly harmful for many New Zealand exports. It also provided for new disciplines to be negotiated on other unfair forms of export competition including government-funded export credits and food aid practices (to ensure that donations do not disrupt normal commercial trade).
The framework agreement also provided for large cuts to trade-distorting domestic support provided to farmers, although the exact size of the cuts is still to be negotiated. Importantly, the European Union and United States (two large providers of domestic support to their farmers) agreed to make a down payment reduction of 20% in the first year after negotiations are completed.
On market access, the framework should ensure that real cuts to tariff barriers are made, providing for substantial improvements for all products. A tiered formula (although again details are still to be agreed) will ensure that higher tariffs are cut by the greatest amount, and tariff rate quotas should also be expanded. There will be scope for countries to designate some products as “special” that will not be subject to the full tariff reduction formula, although these products will still have to provide “substantial improvements” through a combination of tariff rate quota expansion and tariff reductions. Importantly, the framework does not preclude an ambitious outcome on agriculture and sets the framework for New Zealand to negotiate market access improvements that will benefit New Zealand’s agricultural exporters.
The Doha Mandate for non-agricultural market access (NAMA – covering industrial products, forestry and fisheries products) calls for the comprehensive reduction or elimination of tariffs, by addressing tariff peaks, high tariffs, tariff escalation and non-tariff barriers, and covers all products with no exclusions.
The NAMA negotiating framework (Annex B of the agreement) was essentially the text from the Cancún Ministerial meeting in 2003 (known as the Derbez text). The text included a formula for market access reductions that should seek to reduce all tariffs down to a similar level, but in particular to reduce very high tariffs. These formula reductions may then be supplemented by sectoral initiatives that go beyond the base reductions in certain products. Special and differential treatment provisions will provide extra flexibility for developing countries.
As in other areas of the framework package, the NAMA Annex will be used as a basis for the ongoing negotiations, but Members did agree that Annex B provides the “elements” required for future agreement.
On Services 44 WTO members (counting the 25 EC countries as one member) have submitted "initial" offers as part of the Doha GATS negotiations. This accounts for over 90% of global GDP. The July framework package called for submission of "revised" offers by May 2005 and the positive outcome on framework issues should inject greater momentum into the GATS negotiations. The negotiations and development of New Zealand’s approach to them will continue throughout 2004, with further GATS meetings scheduled for September and December.
Another important feature of the framework package was the agreement by the General Council for negotiations to begin on trade facilitation. This agreement means that the remaining three “Singapore Issues” (transparency in government procurement, trade and competition and trade and investment) will not be discussed by the WTO during the Doha Round, and represented a final decision on an issue that has been very contentious for some time.
The agreement on trade facilitation (Annex D) provided guidance for the negotiations to begin towards improving the environment for the global movement of goods. It also reflected the importance of assisting developing countries to improve their own trade facilitation practices.
Development concerns are at the heart of the current WTO negotiations. The Doha Ministerial Declaration recognised explicitly that “international trade can play a major role in the promotion of economic development and the alleviation of poverty”. The development aspects of the Doha Development Agenda range from specific issues identified by developing countries as priorities to broader objectives, such as improved market access. Developing countries are also accorded special and differential treatment (SandDT) through provisions within the WTO agreements. The Doha Declaration agreed that all SandDT provisions should be reviewed with a view to strengthening them and making them more precise, effective and operational.
The July framework package rededicated and recommitted Members to fulfilling these development dimensions of the Doha Agenda. On SandDT and implementation-issues, the framework package instructed Members to continue the work already underway and states new deadlines for advancing work in these areas. On technical assistance and the work programme for least-developed countries, the text reiterated Doha commitments. The General Council also reaffirmed that it would continue to take due account of the concerns of least developed countries.
New Zealand believes the Doha round represents the single best opportunity to realise the development potential of trade, by addressing the harmful distortions in the international trading system. Reform of trade-distorting practices in agriculture in particular will be of significant net benefit to most developing countries. New Zealand recognises that trade will not solve all the problems faced by developing countries, but we believe that developed economies must ensure that the opportunity to benefit from globalisation is available to everyone.
