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Moving forward WTO debates of ‘practical importance’ to the ACP

09 December 2012

Addressing ACP Ministers of Trade on 24 October 2012, WTO Director-General Pascal Lamy praised the ACP Group for its ‘instrumental role’ in moving forward the trade debate, and sought to identify ‘the issues that can be delivered in the shorter term of practical importance to the ACP’. These included trade facilitation, ‘aid for trade’, regional integration, strengthening engagement with global value chains and non-tariff measures. 

On trade facilitation, Mr Lamy emphasised the importance of improving customs administration, enhancing revenue collection, addressing corruption and attracting foreign investment. It was argued that a WTO agreement on trade facilitation could halve the costs of doing business across borders (from 10% of the value of trade to 5%). It was also maintained that a WTO agreement ‘recognises the explicit link between adopting WTO commitments and technical assistance needed to implement them’. This closely links to ‘aid for trade’, the second area of ‘practical importance’, which was described by Mr Lamy as ‘an essential component’ to ACP trade policies.

The Director-General praised the ACP for its recognition of the centrality of regional integration to economic development. This was closely connected to the fourth area of ‘practical importance’, namely using strengthened regional integration to redefine ACP engagement in global value chains. 

On non-tariff measures, Director-General Lamy highlighted the growing importance of non-tariff measures to trade and stressed the importance of ensuring greater ‘consistency and transparency’ in the application of non-tariff measures to ensure a level playing field. 

According to an article by the South Centre, an inter-governmental think-tank, at a public forum in September organised by the Centre, the Indian ambassador to the WTO was highly critical of the WTO trade facilitation agenda, maintaining that it would ‘result mainly in facilitating more imports into rather than exports [from] developing countries’. South Africa’s ambassador to the WTO, meanwhile, used the public forum to launch a critique of the concept of global value chains as ‘being advocated in the WTO’. The concept was seen as simply providing a further avenue for pressurising developing countries into liberalising, rather than engaging with the issue of how to ‘increase the share that poorest countries have on the value added’.

Further analysis published by the Groupe d’Économie Mondiale at the Paris-based Sciences-Po has highlighted the limited role of the WTO Secretariat in promoting the ‘aid for trade’ initiative. Institutionally, the Secretariat was not seen as being ‘in a position to lead or influence the initiative’, with its role ‘largely limited to calling for more financial resources’, according to a policy brief. The analysis maintains that ‘no attempt at increasing coherence between trade policy, aid policy and development policy has been made.’ The analysis further argues that the ‘aid for trade’ initiative has ‘grown increasingly delinked from the Doha Round’, with ‘aid for trade’ support ‘slipping off donors’ priorities list’.

In addition, analysis posted on ICTSD’s website has highlighted how ‘the application of the ECOWAS common external tariff… would be a problem with regard to respecting the individual commitments undertaken by the group’s members at the multilateral level.’ The analysis maintains that unless they are granted a special waiver, a number of ECOWAS members will face difficulties in the WTO in applying the agreed common external tariff, as this would require increasing tariffs beyond their bound WTO commitments. 

Editorial comment

Wider analysis raises questions about the relevance to the immediate needs of ACP countries of the particular approaches being advocated in the WTO in many of the areas of ‘practical importance’ identified by Director-General Lamy. There are concerns in the ACP that trade facilitation measures, strengthened engagement with global value chains, ‘aid for trade’ support and initiatives to address the trade-inhibiting effects of non-tariff measures should all primarily be aimed at enhancing the production and export capacities of ACP countries, in ways that enlarge the retained share of ACP countries and nationals in global wealth.

It is far from clear whether the current approaches being debated in the WTO, including the adoption of ‘plurilateral’ approaches (whereby smaller groups of countries move ahead with elaborating rules and others are later invited to agree)  to issues of primary concern to developed economies, will ensure that this central underlying ACP concern is addressed.

In addition, in areas of importance to the ACP, such as reconciling WTO requirements and commitments with the day-to-day reality of regional tariff harmonisation processes, it is unclear what kind of lead will be provided by the WTO Secretariat in support of the implementation of agreed ACP regional positions.

Significantly, in identifying shorter-term deliverables of ‘practical importance’ to the ACP, the WTO Director-General made no reference to the cotton initiative proposed by the C4 group of African countries, which has been seen by the ACP as a litmus test of the credibility of the Doha Development Round.

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