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LDC needs should be accorded priority under Doha ‘Plan B’

05 July 2011

Press sources have reported calls from the Least Developed Countries’ (LDC) meeting in Istanbul in early May 2011 for ‘a mini deal’ under the Doha Round to focus on the needs of LDCs. Following the LDC meeting, South African Minister of Trade and Industry Rob Davies has called for the pursuit of ‘Plan B’, an alternative plan, since there is now no hope of concluding the trade round in 2011. Minister Davies argued that ‘the fundamental focus should be to deliver something for the least-developed countries’, notably: a resolution of the cotton issue, duty-free, quota-free access for LDCs to all developed and advanced developing country markets; and an aid-for-trade package to help LDCs overcome non-tariff barriers to their exports.

Dr Davies argued that delivery on a development package for LDCs could change the mood of the negotiations, generating ‘some kind of new spirit’. Australia’s Trade Minister Craig Emerson was reported to take a similar view, noting that ‘a down-payment in December could generate much-needed momentum for the stalled negotiations’.

These calls follows proposals from WTO Director-General Pascal Lamy for a ‘three-lane approach’ to the Round, with the ‘fast lane’ being a package for LDCs, a ‘middle lane’ consisting of LDC-plus issues that are near maturity and maintain the development focus, and a ‘slow lane’ consisting of ‘outstanding issues such as agriculture, services, and non-agricultural market access’.

According to ICTSD, ‘while agreeing to Lamy’s proposal, members insisted that the principle of a “single undertaking” – in which “nothing is agreed until everything is agreed” – should remain under this new plan.’ However, ‘early harvest’ measures could then be ‘implemented on a provisional or a definitive basis’.

According to ICTSD, the inclusion of cotton in the December deliverables for LDCs is proving contentious, with the US wanting ‘everyone’s cotton programs’ to be discussed. There is also uncertainty over what other issues could be included. Director-General Lamy has suggested that rules-of-origin issues applied to LDCs could be included, while some representatives want export subsidies to be included, since there is a broad consensus on the need for discipline in this area and the modalities have been largely agreed.

This however leaves the thorny issue of ‘how a December early harvest would relate to what’s left of the negotiating mandate’, in view of the principle of a ‘single undertaking’. If the Doha process were to stall after an LDC package had been agreed, then the issue of agricultural subsidies and tariffs, ‘which only came under the scope of global trade rules in the previous Uruguay Round of trade negotiations, would escape meaningful discipline yet again.’

In a statement on 31 May 2011, the EC Ambassador to the WTO, while agreeing with the priority to be accorded to the needs of LDCs, warned that any December package should not be seen as ‘the end of the road’. He also warned against ‘overloading the boat’, and observed that there was only ‘a very limited number of issues’ where sufficient consensus existed.

Editorial comment

Reaching consensus over the coming months on what should form part of the LDC package in the WTO is potentially a critical area for ACP engagement, since it will yield an ‘early harvest’ of gains for almost half of the ACP member states. Cotton issues are likely to prove the most difficult area in this regard. This could raise a dilemma for the ACP, over whether the group should aim to negotiate on all the issues of greatest concern to ACP member states including the cotton issue, or whether, recognising the sensitivities involved, they should accept a simple ‘step forward’ on these issues as implicitly proposed by Director-General Lamy as regards cotton.

An additional complicating factor for the ACP is that ‘fast-tracking’ particular LDC issues would leave the WTO with concerns of certain ACP regions, such as the Caribbean and the Pacific, and of major ACP trading nations, largely unaddressed. However, the hard reality is that given the impasse in the broader WTO negotiations, the simple choice may be between something – but not everything – for LDCs, or no agreements at all.

A summary analysis of the economic benefits arising from the various elements which could go into a fast-track LDC package would appear to be necessary to inform ACP decision-making on the main issues to be given priority in the negotiations, in order to bring the greatest benefits to the largest number of ACP countries.


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