OTN Special Update - (The Doha Round-2011 Agenda ) 2011-01-07

OTN UPDATE is the flagship electronic trade newsletter of the Office of Trade Negotiations (OTN), formerly the Caribbean Regional Negotiating Machinery (CRNM). Published in English, it is a rich source of probing research on and detailed analyses of international trade policy issues and developments germane to the Caribbean. Prepared by the Information Unit of the OTN, the newsletter focuses on the OTN, trade negotiation issues within its mandate and related activities. Its intention is to provide impetus for feedback by and awareness amongst a variety of stakeholders, as regards trade policy developments of currency and importance to the Caribbean.

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A GLIMMER OF HOPE It appears that the malaise which has permeated the Doha Round since the collapse of the 2008 Mini-ministerial has been lifted! Though the WTO DG has persistently promoted strategies aimed at advancing the Doha Round beyond its current impasse, it was recognised that in the absence of genuine political will amongst the major WTO Members to make compromises, little progress could be attained.

The long awaited glimmer of hope finally arose in the final quarter of 2010 following the conclusion of the November 2010 G-20 Seoul Summit and the APEC Yokohama Summit. In their Declarations, the leaders of the G-20 (and APEC) declared that they will direct their negotiators to “engage in across-the-board negotiations to promptly bring the Doha Development Round to a successful, ambitious, comprehensive, and balanced conclusion consistent with the mandate of the Doha Development Round and built on the progress

already achieved.” It was further declared that “2011 is a critical window of opportunity, albeit narrow, and that engagement among our representatives must intensify and expand. We now need to complete the end game.” 1

The statements by the G-20 and APEC leaders are instructive in two primary ways. In the first instance, the statement reiterates that the conclusion of the Round will be based on the progress that has already been achieved. This suggests that there is collective acknowledgement amongst the G-20 and APEC leaders, that a ‘re-opening’ of the negotiations would be unacceptable. This could allay fears regarding the interpretation of the political signals suggested by the President Obama Administration’s position on the negotiations. 2

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SPECIAL OTN Update

January 7, 2011

1 Passage selected from The G20 Seoul Summit Leaders’ Declaration November 11 – 12, 2010.


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Secondly, 2011 is identified as a critical window of opportunity. The tacit significance of this time period becomes richly illustrated when juxtaposed to the rhythm of the American electoral politics. Previously DG Lamy expressed optimism regarding the likelihood of completing the Round in 2010. However, such hopes were considered unrealistic. Though the leadership of the US was regarded as important to bring closure to the Round, at the time, in a mid-term election year, it was unlikely that the Obama Administration would expend political capital to build domestic consensus on the issues regarding the WTO negotiations, (such as the reduction of agricultural subsidies) at the expense of other domestic priorities. Furthermore, the US President’s authority to ‘fast track’ trade deals expired in former President George Bush’s second term and had not been renewed under the Obama Administration.3

In the wake of the conclusion of the 2010 US midterm elections, which resulted in the Democrats conceding to the Republicans, should one be persuaded by the popular convention that the Republican Party supports free trade while the

Democrat Party is protectionist, it is tempting to conclude that it will be easier in 2011 to gain traction on US Congressional support to conclude the Round.

However, that convention is a simplification and belies the nuances of American politics. It has to be noted that the completion of the 2010 congressional elections signals the beginning of the 2012 Presidential election season (and President Obama’s re-election campaign). This factor could negatively influence bipartisan consensus building on trade issues and could, for example, persuade otherwise pro-trade Republicans to frustrate any victories that are being pursued by the Obama Administration. The U.S. critical role in bringing a conclusion to the Doha Round could be significantly stymied should the White House, in the absence of a renewed fast track authority, be unable to attain Congressional support on the outstanding Doha issues. This notwithstanding, bipartisanship could still prove constructive, especially in these early months of the Presidential election season.

Intensive Work Programme Dead Ahead The early months of 2011 are therefore crucial for the WTO and will need to be capitalized upon by DG Lamy and other WTO members to secure the progress necessary to conclude the Round.

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2 Under the Obama Administration, the United States of America (U.S.) has advocated that the linchpin to the success of the Doha Round would remain in securing meaningful market access commitments in agriculture, NAMA and services, particularly from key advanced countries. Large Developing countries like India have been wary of this stance. As suggested by the words of Dr. Amit Mitra, Secretary General of the Federation of Indian Chambers of Commerce and Industry (FICCI), “Such signals leave us worried that the new US Administration might not be willing to proceed on the basis of the ‘Doha mandate’. Instead, it may attempt to ‘reopen’ the negotiations, or included ‘new areas’ into the negotiating agenda. This is simply not acceptable to us”. See USTR’s ‘new approach’ may re‐open negotiations, CUTS International, May 14 2009. Available at http://www.cuts‐citee.org/media‐USTR%E2%80%99s_new_approach.htm

3 The Fast track negotiating authority (also called Trade Promotion Authority, TPA) for trade agreements is the authority of the President of the United States to negotiate agreements that the Congress can approve or disapprove but cannot amend or filibuster. Fast‐track negotiating authority is granted to the President by Congress.


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Annual Davos Meeting scheduled to commence January 25-30 2011, will provide an opportunity to track the political impetus.4 It is anticipated that the U.S., EU, Brazil, China and India and key negotiators will meet in the margins of that meeting to form a political view as to whether the talks can be progressed further.

CARICOM’s Preparation to Engage While, CARICOM countries have been carefully monitoring the Round, it is essential that the region becomes increasingly vigilant and fully engaged during the implementation of the upcoming programme to ensure that there is little or no derogation from the current draft texts in as far as these reflect the Caribbean’s core offensive and defensive interests.

In order to do this successfully, with regards to the outstanding negotiating issues, CARICOM member states will need to be clear about what their current interests are, and how those interests relate strategically to the collective interests of the various sub-groupings in which they are aligned (such as the Small Vulnerable Economies (SVEs), G-33, and the African Caribbean and Pacific (ACP) groups). In addressing such considerations, CARICOM will

DG Lamy has not hesitated to swiftly rollout the plan of action to push through the impasse. In his remarks to the informal meeting of the TNC on November 30 2010, DG Lamy outlined an intensive work programme for the various Negotiating Groups beginning the weeks of 10 and 17 January.

From January 10, the Trade Facilitation, Trade and Environment, TRIPS and Development groups will begin intensive sessions, to be joined from 17 January by Agriculture, NAMA, Services and Dispute Settlement. The NG Rules will meet during the week beginning February 4. With a presumed 80 percent of the Doha Round negotiations completed, the ultimate goal of the programme is to work out the remaining 20 percent of the issues concerning, industrial market access, trade facilitation, anti-dumping and agricultural market access. It is anticipated that this programme will culminate in the preparation of new draft texts by the end of the first quarter of 2011.

What makes this development in the negotiations distinctive from preceding processes is that senior officials are expected to engage in technical exchanges but with specific political instructions regarding the full scope and detail of concessions that will be necessary to break the impasse. The texts that will arise are expected to reflect the new package deal.

The final results of this intensified technical process will in part, determine whether enough progress can be made to conclude the negotiations. At the same time, as the technical programme begins to roll out in January, it will be necessary to continue to monitor the political pulse and atmospherics that will ultimately determine whether the Round can be advanced to conclusion. In this regard, the upcoming

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4 The Annual World Economic Forum Meeting held in Davos, Switzerland, will convene in 2011 under the theme “Shared Norms for the New Reality”. It is anticipated that attendance this year will include Senator the Honourable Marlene Malahoo Forte, Senator and Minister of State in the Jamaica Ministry of Foreign Affairs and Foreign Trade.


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also need to weigh the implications of strategy. This will include weighing the benefits and risks of engaging in a horizontal process relative to a ‘vertical’ process. Whereas, the horizontal process would allow for trade-offs among various negotiating groups, a vertical process would facilitate the extraction of concessions within specific negotiating groups.

Through a horizontal process, for example, developing countries could seek to make concessions in one negotiating group, such as Trade Facilitation, in exchange for obtaining concessions from developed countries on subsidies under the Agriculture negotiations. In this scenario, for CARICOM countries, the concession gained may be surpassed by the concessions given.

On the other hand, under a vertical process, the negotiating context and a country’s negotiating leverage could be different. Obtaining movement on agricultural subsidies from developed countries, for example, could be demanded by developing countries but developed countries may concede only in exchange for different Agriculture market access concessions, which could involve greater tariff cut commitments for developing countries. When considering the trade-offs in this scenario, for some developing countries, the reduction of developed country agricultural subsidization may be highly valued because of its potential impact on their competitive advantage in developed country agricultural markets. On the other hand, for other smaller developing countries like CARICOM, securing protection for their agricultural markets through limited tariff reduction commitments may be more critical to their economies.

Both the horizontal process, which is scheduled to begin in early January, and the vertical process will affect the mapping of the final package. The way in which these processes are exploited could however impact a country’s negotiating leverage and by so doing impact the extent to which a country is able to preserve its hierarchy of interests and minimize trade-offs.

Nevertheless, the Caribbean will likely adopt the position that with respect to the outstanding issues, any additional movement attained, including the granting of additional concessions to the Caribbean or other developing countries should not come at the expense of concessions that the Region has already secured in other ‘stabilized’ areas of the negotiations.

Taking a look at a few of the outstanding issues in the negotiations in some of the Negotiating Groups, we can discern the interests CARICOM member states will be seeking to preserve.

The Caribbean’s Interests in the Outstanding Issues 1. Agriculture

There are three (3) pillars in negotiations in Agriculture, namely, (i) market access (tariff liberalisation, trade contingency measures, etc); (ii) domestic support (overall trade distorting support, specific aggregate measure support, etc) and (iii) export competition (export subsidies, export credits and international food aid). The negotiations have concentrated on the market access pillar, with emphasis on the Special Safeguard Mechanism (SSM) and templates to be used in scheduling

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Members’ commitments.

Issues of major significance to the Caribbean

Tariff cut modalities

According to the last draft modalities in December 2008 (TN/AG/W/4), most CARICOM countries are allowed as SVEs to designate all agricultural imports as Special Products and subject them to an average tariff reduction of 24 per cent over an implementation period of ten (10) years. Secondly, a specific exemption allows Suriname to rebind its tariffs to a level equal to that of the level that will be achieved by other CARICOM countries following the application of the tariff reduction modality. Suriname’s tariffs are currently bound at 20 per cent, a level that renders that country unable to apply the CARICOM Common External Tariff (CET) on agricultural imports.

It would be desirable to secure the same flexibilities for Haiti as those secured for Suriname. As an UN-designated LDC, Haiti is not required to further reduce its tariffs under the Doha Round of negotiations. However, that CARICOM Member imposes bound and applied tariffs on agricultural products at 21.3 per cent and 5.7 per cent respectively. Similar to Suriname, the level of Haitian tariffs does not allow for the application of the CARICOM CET. A provision that allows Haiti to rebind its tariffs to the target average of other CARICOM countries would therefore assist in facilitating Haiti’s fuller integration into the CSME. At a December 2009 meeting with CARICOM Trade Ministers, DG Lamy expressed his support for the additional flexibilities for Haiti.

The Special Safeguard Mechanism

The treatment of the Special Safeguard Mechanism (SSM) 5 constitutes one of the more politically charged issues as it pits small and vulnerable subsistence farmers in developing countries against large farms benefiting from domestic support and or export subsidies in industrialised countries. The complexity of the SSM issue is compounded by the fact that the G-33 (heavily supported by the SVEs, LDCs and African Group) is being fought by the Cairns Group – a group of major agricultural exporters seeking additional market access. The Cairns Group membership includes traditional ACP allies such as Argentina, Brazil and South Africa. It is widely recognised that the SSM’s highly political nature renders it one of the issues requiring Ministerial guidance, if not resolution.

In January 2010, the G-33 submitted a communication on SSM (TN/AG/GEN/30) outlining proposed changes to the Chairman’s text. The G-33’s aim was to facilitate compliance with the Doha mandate of establishing a simple, effective and operational trade contingency measure. The G-33 communication also enumerated SVE-specific concerns on the SSM. For example, the submission recognised that SVEs face a number of constraints that justified the bestowal of additional SSM

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5 The SSM is a rapid response instrument which is proposed to allow countries to apply a safeguard in the form of additional duties to agricultural imports in circumstances where the volume of agricultural imports increase rapidly beyond a specific volume benchmark or in circumstances where the price of agricultural imports fall below a specific level. In both cases, the volume and price effects would have a deleterious impact on local agricultural production/producers and food security.


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flexibilities. The G-33 submission further noted that SVEs are subjected to higher transaction costs, as well as limitations in crop diversification that inhibit these countries from addressing the challenges of food and livelihood security and therefore make them more vulnerable to the adverse effects of import surges and price declines. Against this background, the G-33 reiterated its support for seeking enhanced flexibilities in the SSM for SVEs.

Consultations have continued on SSM, with discussions on prorating, seasonality and price check mechanism. The main substantive issue with the SSM remains establishing criteria for applying additional tariffs that go above the “pre-Doha” rates. For the Caribbean, this issue should be resolved as part of special flexibilities to be granted to SVEs. The SVE Group, to which CARICOM member states are aligned, is pursuing as much flexibility as possible in SSM by proposing less stringent criteria for taking safeguard action.

Specifically, the SVEs have proposed that regarding the volume-based SSM, safeguard action should be applied on the basis of a rolling average of imports in the preceding three-year period for which data are available (hereafter "base imports"). On this basis, the SVE group has also provided recommendations on applicable triggers and remedies as set out in Table 1.

Preference erosion

Preference erosion constitutes the Caribbean’s third principal interest in the market access pillar of negotiations on agriculture.

Developed countries will generally apply a “tiered formula”, i.e. higher tariffs will be subject to higher cuts, thereby subjecting the products with high levels of protection (and thus preference margins) to deep cuts.

There are also the provisions on reducing tariff escalation6 as well as provisions on the modalities for ‘Tropical Products’7. On the other hand, also on the table are proposed provisions on ‘Preference Erosion Products’8,, and ‘Sensitive Products’ which relate to the

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flexibilities given to all countries to effect lower levels of tariff reduction in exchange for granting expanded access through tariff rate quotas.

The Geneva Agreement on Trade in Bananas (GATB)9 which ended the long standing dispute between the European Union and a group of Latin American countries over the EU’s tariffs on banana imports, was accompanied by additional agreements made between the ACP, EU and the Tropical Products Proponents on the treatment of Tropical Products (TP) and Preference Erosion (PE). The ACP, EU and Latin American are seeking to make these agreements part of the final Doha package deal.

However, India continues to oppose the linking of the banana agreement with the deal on TP/PE. India has argued that its concerns have not been fully incorporated into the ACP/EU/MFN deal. India has further contended that no link should be established between the conclusion of the longstanding banana trade dispute and the settlement of the preference erosion package. India’s substantive disagreement reflects its interest in exporting sugar, coffee, tea, rice, and tropical fruits to both the EU and U.S. These are all products that will benefit from preference erosion

treatment via modulated tariff reduction within the Doha development agenda (DDA). For this reason, India submitted to the ACP group in November 2009 a slate of agricultural products for which it is seeking tropical product designation and treatment. It is believed that India’s actions represent an attempt to increase its leverage with the EU in their bilateral FTA negotiations as well as to secure specific access on rice to the U.S. market.

Under the TP and PE agreement, the Caribbean interest has concentrated on four principal products. These are rum, sugar, rice and bananas.

With respect to rum, the Caribbean industry will benefit from preference erosion treatment, with an implementation period of ten (10) years.

With respect to sugar, both the EU and U.S. are likely to declare it a Sensitive Product. Sugar would therefore benefit from a gentler cut than that proposed for preference erosion products.

With respect to rice, the proponents of Tropical Products agreed to remove husked rice, the Caribbean’s main type of rice export, from their list allowing this product to be accorded full preference erosion treatment, provided that no other interested country objects. The strength of India’s interest in all

6 The practice of applying higher tariffs to processed products than to the primary products from which they are derived. 7 The Framework for Establishing Modalities in Agriculture stipulates a commitment to achieve the fullest liberalisation of trade in tropical agricultural products. A group of Latin American countries, namely Bolivia, Colombia, Costa Rica, Ecuador, El Salvador, Guatemala, Honduras, Nicaragua, Panama, Peru and Venezuela are the major proponents of Tropical Products. 8 This proposal, which was submitted by the ACP, EU and Latin American countries on 15 December 2009 to the Chairman of the Special Session on Agriculture and the Chairman of the TNC, lists the goods that the members of the group have agreed should benefit from gentler and slower tariff cuts under the proposed ‘preference erosion’ treatment, as well as which goods should be slated for faster and deeper liberalisation as ‘tropical products’. 9 Under this agreement bananas will be treated as neither a ‘Preference Erosion’ nor a ‘Tropical Product’ but rather on a stand‐alone basis. The agreement envisages a tariff reduction schedule with an initial reduction of the EU’s MFN tariff from the current Euro 176 per tonne to EUR 148 per tonne in 2010 and then to EUR 114 per tonne by 2017. In a separate ACP/EU agreement, a EUR 190 million Banana Accompanying Measures (BAM) programme will be implemented. The aim of the EU‐funded programme is to assist ten (10) affected ACP banana exporting states to adjust to the reduction in the value of their preferential access to the EU market.

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forms of rice and its intent to designate rice as a tropical product compels the Caribbean to stridently protect the value of its preferential access to the EU market.

2. Non-Agricultural Market Access (NAMA)

NAMA negotiations have concentrated on a limited slate of issues. These are the horizontal mechanism, treatment of remanufactured goods, TBT-related sectoral initiatives, sectorals and scheduling.


The Horizontal Mechanism (HM)

The Horizontal Mechanism (HM) or the Procedures for the Facilitation of Solutions to NTBs is an informal dispute resolution mechanism that explores trade solutions without affecting the rights and obligations under the WTO Agreements. If adopted, the HM would allow for the establishment of a consultative forum in which countries disputing the interpretation of another Member’s NTB would accept mediation by an independent actor. The initiative enjoys near universal support among WTO Members.

The African Group is a strong proponent of the HM although the ACP is yet to develop a definitive position. Some Members have expressed concern with respect to the coverage of the HM and the body’s relationship with other WTO Committees and the DSB. Some Members (such as Thailand and India) want the HM to apply also to agricultural goods while others believe that such scope would breach the purview of NAMA negotiations.

A number of CARICOM countries recognize the value of the HM but are alarmed that as importers of relatively few tariff lines, the administrative requirements to institute this new system could be burdensome. Furthermore, some countries fear that the establishment of the HM with its non-recourse to DSU might lead to greater scrutiny of the compatibility of their domestic laws and regulations with WTO obligations. It is in that context that additional consultations are required to determine how the HM would be operationalised and what would be its possible impact on SVEs.

NAMA related Preference Erosion

Preference Erosion constitutes the other NAMA issue of major interest to the Caribbean. The ACP applied objective filters to generate fifty-seven (57) products exported to the EC and a further twenty-nine (29) to the U.S. to benefit from preferential erosion treatment. Included in the ACP proposal are swordfish; deepwater rose shrimp, molluscs, women’s cotton trousers, men’s shirts, T-shirts, women’s knitted jerseys, brassieres, cotton bed linen and aluminium doors and windows.

The major stumbling block remains the treatment to be awarded to DAMs, i.e. Bangladesh, Pakistan, Sri Lanka, Nepal and Cambodia with respect to their exports to the US. The proposed concessions to the DAMs would have the effect of denuding the economic value of the preference erosion treatment on seventeen (17) of the twenty-nine (29) tariff lines granted to the ACP.

The major Caribbean concern rests with Haiti and the possible impact of this proposed treatment of the DAMs on that country’s preferences on clothing

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exports to the US under the Haitian Hemispheric Opportunity through Partnership Encouragement (HOPE) Act. 10

The negotiation of Sectoral Initiatives11 remains inextricably linked to preference erosion treatment for industrial goods. Though participation in Sectorals is not mandatory, a number of industrialised countries have insisted that advanced developed countries should join such initiatives in order to establish “critical mass” of trade in each industrial sector. Sectors enumerated include motor vehicles, bicycles, chemicals, electronics, fish, forest, gems and jewellery, raw materials, textiles and industrial machinery. It should be noted that the EU – one of the ACP’s major preferential trading partners – is a strong proponent of sectoral initiatives.

Though the Caribbean is not the intended target of industrialised countries’ offensive interest in sectoral initiatives, for specific reasons, the Region retains considerable interest in this aspect of the negotiations.

First, the tariff reduction in these specific sectors is to be higher than the reduction provided for under the Swiss formula reduction of tariffs and therefore reflects the level of ambition of the Round. Indeed, this is a stance that the US has increasingly adopted

in an attempt to prise improved access to the markets of advanced developing countries.

Second, the treatment of Sectorals can impact the tariff reduction of products which are preference erosion products. Some of the items proposed to benefit from sectoral treatment are fish and fish products, clothing and footwear which are preference erosion products of interest to the Caribbean and the wider ACP. The ACP has already tabled a recommendation that the products selected for preference erosion should be removed from sectoral initiatives. The Caribbean and the wider ACP will need to continue to defend this interest in the upcoming months.

3. Trade Facilitation

Caribbean efforts have been principally directed at the Special and Differential Treatment plank. The August 2010 version of the draft Consolidated Negotiating Text (TN/TF/W/165/Rev.4)12 provides a more defined contour of a possible Agreement on Trade Facilitation. Negotiations on trade facilitation have concentrated on Article I - XI of the draft-consolidated text with a subsequent exchange of views on Article XII, i.e. the proposed modalities for special and differential treatment (SDT).

10 The preferential treatment received by Bangladesh in the U.S. market, for example, is very negligible. As a result, erosion of preference in the U.S. market due to tariff reduction under NAMA negotiations is expected to be insignificant for Bangladesh. On the other hand, the reduction of U.S. export duties under the NAMA negotiations will reduce the duties on products of export interest to Bangladesh. This is particularly the case with respect to apparel exports. The reduction of U.S. duties on Bangladesh’s apparel exports will likely improve its competitive position in the U.S. market and compromise the U.S. market share of Caribbean’s and Sub‐Saharan apparel exported under the U.S. unilateral preference schemes for the Caribbean. 11 Sectoral initiatives are proposals from some WTO members for the elimination or harmonization at low levels of customs tariffs in specific sectors. The tariff reduction in these specific sectors is to be higher than the reduction provided for under the Swiss formula reduction of tariffs. The WTO members participating in the sectoral must comprise the majority of the total trade of all WTO members in that sector.

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Special and Differential Treatment (SDT)

The Caribbean’s main interest in this discipline revolves around the treatment of SDT and, more specifically, securing commitments on trade capacity building measures. The ACP argues that negotiations on trade facilitation are predicated on the proviso that developing countries will assume new commitments once enhanced trade capacity has been obtained.

One of the major donors, the US, has tabled a new proposal (TN/TF/W/166) on special and differential treatment. However, the ACP views the US proposal as both unbalanced and inconsistent with the Doha development mandate. The Chairman has requested the resubmission of proposals on special and differential treatment by both the ACP (TN/TF/W/161)

13 and a group of Latin American countries, led by Guatemala.

Negotiations in Trade Facilitation have not progressed significantly, in spite of being identified as one of the areas to benefit from an early harvest. One fundamental issue that divides developing country members from industrialised ones rests on funding of trade capacity building measures. In this regard, the EU has refrained from declaring the source of its contribution to trade related technical assistance measures in the field of trade facilitation. Beyond issues of principle, the ACP concern remains that the EU’s development assistance envelope for the ACP is defined by the EDF with the current budget cycle slated to conclude in 2013.

4. Services

DDA negotiations in trade in services span four areas, i.e. market access; domestic regulation; GATS rules; and the LDC waiver. Most members have made progress in services negotiations contingent only on minimum demands being met in both Agriculture and NAMA.

Furthermore, the negotiations within the various strands of trade in services have also proved challenging. This is best expressed in the intimate nexus between market access and rule-making. The Chairman has consistently asserted that several Members believe that the level of ambition of the disciplines is closely connected with advances on the market access side of the services negotiations, and more broadly with progress in other areas of the DDA. Issues of major significance to the Caribbean

Domestic Regulation

The ACP and SVE Groups collaborate extensively in negotiations on trade in services. The most notable sphere of ACP/SVE interaction extends to the possible reorganisation of the licensing and qualification requirements of the 20 March draft text prepared by the Chairperson of the Working Party on Domestic Regulation (WPDR). A draft text has been prepared by the ACP technical consultants and is aimed at streamlining the WPDR draft text by avoiding duplication. The effort is also seen as an attempt to counter attempts by Switzerland and other

12 Text available at http://www.wcoomd.org/files/1.%20Public%20files/PDFandDocuments/Procedures%20and%20Facilitation/WTO_Documents_E/tnTFW165R4E.pdf

13 Text available at http://www.wcoomd.org/files/1.%20Public%20files/PDFandDocuments/Procedures%20and%20Facilitation/WTO_Documents_E/W161%20E.pdf

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countries to introduce revised texts on key areas of domestic regulation already “stabilised” in the negotiations on trade in services.

The SVE Group has developed a draft submission on Draft Licensing and Qualification Disciplines on Domestic Regulation. The document has benefited from considerable feedback of Delegations. However, it remains in draft form as all Members of the Group are yet to fully support the proposed submission.

Subsidies

The OTN has finalised a draft SVE position paper on the treatment of subsidies in the trade in services. The paper seeks to justify the continued use of subsidies in SVEs by enumerating conditions under which services could be subsidised. These conditions include applying environmental protection, developing new sub-sectors in services and facilitating rural development. The OTN paper also seeks to address issues such as disciplining services subsidies, the relevance of the Agreement of Subsidies and Countervailing Measures (ASCM) in framing subsidies disciplines in services and examining the case for a differentiated approach across all modes of supply. Informed by the discussions triggered by the OTN paper, the SVE Group will later determine the merits of preparing a submission on this issue.

The Least Developed Country (LDC) Waiver

The negotiations have been exposed to considerable political pressure to agree on the terms of the LDC Waiver. The LDCs, which includes Haiti, have demanded that the Doha Round of negotiations, as a

development round, should deliver an early harvest to the LDC Group, with the LDC waiver in Services being one of the anticipated deliverables. In order to address the marginalisation of LDCs in trade in services there has been an agreement that Members would deviate from MFN obligations in order to award LDCs access to Members’ services markets. A textual proposal has been developed by a group of countries led by Norway and has received overwhelming support by almost all Members.

5. Rules

Negotiations in this context have centered on three (3) pillars, namely (i) anti-dumping, and horizontal subsidies; (ii) rules on RTAs; and (iii) fisheries subsidies.


Fisheries Subsidies

The major focus of the Caribbean in this cluster of DDA negotiations remains fisheries subsidies. The primary objective of the talks continues to be strengthening disciplines on fisheries subsidies, through, inter alia, the prohibition of certain forms of fisheries subsidies that contribute to overcapacity and over-fishing. The mandate of the negotiations targets both overcapacity and overfishing.

The centrality of special and differential treatment in all facets of the negotiations has been established as a cardinal principle. In that context, using arguments

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based on the de minimis principle, the SVEs have tabled textual proposals on how SDT in fisheries subsidies can be applied.

It has been recognised by the SVEs that the prohibition of those subsidies causing overfishing should be reconciled with the use of fisheries subsidies for the sustainable development of developing countries. However, having argued that their members control less than 0.1 per cent of global fish stocks catch and that consequentially they do not significantly contribute to overfishing, SVEs have advocated that they should be allowed to utilise fisheries subsidies for economic development.

The SVEs accept the use of conditionalities on fisheries management but do not agree with the boat-specific criteria as enumerated in the last draft of the negotiating text. The SVEs seek additional flexibilities and, in that respect, have developed SVE-specific benchmarks. The eligible countries would be those with a 0.1 per cent share of NAMA trade and 1 per cent share of marine wild fish capture.

6. Dispute Settlement Understanding

In his July 2008 text, the Chairman of the Special Session on DSU (Ambassador Saborio of Costa Rica) identified twelve (12) issues to be addressed. These are third party rights; panel composition; remand; mutually agreed solutions; strictly confidential information; sequencing; post-retaliation; transparency and amicus curiae briefs; timeframes; developing country interests, including special and differential treatment; flexibility and Member control; and effective compliance.

Recent plurilateral discussions have centred on three (3) issues, namely, (i) effective compliance; (ii) sequencing; and (iii) post-retaliation.


In spite of its marginal share of global trade, Caribbean countries have amassed significant experiences with the functioning of the WTO Dispute Settlement Body. There are two sets of exposure to the DSB, namely, consideration of longstanding preferential treatment of EU sugar and banana regimes and the internet gaming case involving the United States and Antigua and Barbuda.

In the case of sugar and bananas, Caribbean (and ACP) countries’ formal involvement was limited to third party status. This is in spite of the considerable contribution of these commodities to the economies of affected ACP countries. This diminished legal status highlighted the weakness of the current DSB rules to take account of the economic impact of WTO Members in determining a party’s status in a trade dispute.

The dispute involving Antigua and Barbuda also underscores the need to amend the DSU rules so that a small WTO member can instantly secure the benefits of its successful approaches to the DSU. Both categories of DSB cases demonstrate the need for pro-developmental reform of the DSU, in particular to take account of the needs of small, vulnerable and preference–dependent economies of the Caribbean. The requested intervention will seek to develop a Caribbean proposal aimed at reforming the DSB to take account of the region’s needs.

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The Way Forward It is imperative that all CARICOM Members remain fully engaged during the upcoming accelerated technical process to ensure that the Region’s core interests are safeguarded and additional benefits harnessed.

During this time, the Office of Negotiations of the CARICOM Secretariat will be accelerating its own technical support to CARICOM Members' Doha Round negotiations and will continue to lend support to all the member states and stakeholders.

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Business

OTN Special Update - (The Doha Round-2011 Agenda ) 2011-01-07