UNCTAD Seminar for the WTO-LDC Group on Market Access:
Binding Tariff-Free and Quota-Free Market Access for LDCs under the WTO
Framework
Monday, 9th May 2005
Palais des Nations (Room XXII), Geneva
Objective:
To highlight negotiating options for LDCs, with a view to increasing the
stability, and improving the utility, of tariff-free and quota-free market
access for all products from LDCs under the WTO framework.
Focus:
a)
Binding the market access under the WTO can be the biggest gains
to LDCs from the Doha Round.
b)
What are strategic options available for LDCs to achieve this
objective in the ongoing negotiations towards the Hong Kong
Ministerial?
Participants:
ƒ
Geneva-based LDC delegates (for UNCTAD and for WTO)
ƒ
Special Programme for LDCs (Marcel Namfua)
Programme:
Moderator - H. E. Ambassador Toufiq Ali of Bangladesh
9h30-10h00
Opening Speech & Overview
ƒ
10h00-10h30
Preferential access to the LDCs, and currently-negotiated tariff cut
formula in NAMA (and in agriculture)
ƒ
10h30-11h15
Ralf Peters, DITC, UNCTAD
Possible legal framework & strategic options
ƒ
11h15-13h00
Lakshmi Puri, Director, DITC, UNCTAD
Bonapas Onguglo, DITC, UNCTAD
Discussions
LDC seminar on Market Access
UNCTAD Seminar for the WTO-LDC Group on Market Access:
Binding Tariff-Free and Quota-Free Market Access for LDCs under the WTO
Framework
Monday, 9th May 2005, Palais des Nations (Room XXII), Geneva
OBJECTIVE OF THE SEMINAR
ƒ
This seminar is organized for the delegates of least-developed countries (LDCs) to
discuss their strategic options in the Doha-Round negotiations on market access,
particularly concerning ways to secure tariff-free and quota-free market access for LDCs
under the WTO legal framework.
BACKGROUND
ƒ
The negotiating objective of LDCs in the ongoing Doha Round on market access is
clearly expressed in the paragraph 15 (i) and (ii) of the Part I of the 2003 Dhaka
Declaration of the Second LDC Trade Ministers' Meeting:1
15. Invite the attention of the Members of the WTO to the particular vulnerability of the
least-developed countries and the special structural difficulties they face and call
upon the WTO bodies and Fifth Ministerial Conference to agree on:
(i). Binding commitment on duty-free and quota-free market access for all products
from least-developed countries on a secure, long-term and predictable basis with
realistic, flexible and simplified rules of origin to match the industrial capacity of LDCs
in order to raise their market share in world trade;
(ii). A binding commitment from our trading partners guaranteeing a substantive and
concrete increase in the market share of the LDCs in the world trade.
ƒ
Also recall that the Millennium Development Goals (MDGs) recognize tariff-free and
quota-free market access for LDCs' exports as being one of the targets to be achieved.2
A binding commitment to provide such market access opportunities to LDCs under a
multilateral framework will be the quickest and surest way for developed countries to
implement their commitment under the MDGs. This is exactly the type of international
policy coherence that LDCs and other developing countries have been calling for.
ƒ
The ongoing negotiations on agriculture and on NAMA are moving, albeit at a slow pace,
towards preparing inputs for the Hong Kong Ministerial in December 2005. By the end of
July 2005, the WTO General Council is expected to adopt the first evaluation of the
negotiations based on the 2004 July Framework, including the first "approximation" of the
modalities in the area of agriculture.
ƒ
At this juncture, concrete actions from LDCs is required to ensure that their negotiating
objective gets firmly placed in the draft conclusion to be discussed and agreed at the
Hong Kong Ministerial.
ƒ
Reiterating and elaborating LDCs' market access objectives at the Third LDCs Trade
Ministers' Meeting (to be held in Zambia, June 2005) will be the ideal first step.
ƒ
1
Second LDC Trade Ministers' Meeting: Dhaka declaration (LDC-II/2003/L.1/Rev.1), 2 June 2003.
2
Under the Goal 8 (Develop a Global Partnership for Development) of the MDGs, Target 13 states as the
following: "Address the special needs of the least developed countries. Includes: tariff and quota-free access for
least developed countries' exports; enhanced programme of debt relief for heavily indebted poor countries (HIPC)
and cancellation of official bilateral debt; and more generous ODA for countries committed to poverty reduction."
2
LDC seminar on Market Access
WHY SECURING MARKET ACCESS FOR LDCS UNDER THE WTO?
ƒ
Up until now, the "gains" to LDCs from the Doha negotiations on market access may
have appeared ambiguous. This is because further tariff cuts at a multilateral level are
considered not to provide an improved market access to LDCs, given that most
developed countries already provide LDCs with tariff-free and quota-free market access
to almost all exported items.
ƒ
However, not all preferences have been fully utilized. Almost one-third of LDCs' total
exports to the Quad market that are eligible for preferential access end up paying MFN
duties.3
ƒ
To improve the linkage between preferential market access and export growth and
product diversification, improvement in the following areas needs to be made: the security
of access; usability of access; and improvement in supply capacity.
Lack of security of Access
ƒ
The exact scheme of preferential market access provided to LDCs by developed
countries differs from one preference-granting country to another. Each varies in terms of
the product coverage (and in some cases the country coverage), the rules of origins,
possibility of applying trade remedies (e.g. safeguard measures) and other conditionality
attached to the eligibility to receive preferences (e.g. graduation).
ƒ
All of these preferential arrangements for LDCs are an autonomous program, designed
and implemented independently by each preference-granting developed countries. The
duration for such a program may be as short as one year. Whether a LDC becomes
subject to some trade remedies, or becomes excluded from the preferential treatment,
depends on the commercial interest of the preference-granting countries, not of
beneficiaries.
ƒ
Uncertainty over the future of market access limits the positive impacts of preferential
market access on increasing the foreign direct investment flows into LDCs, which triggers
a trade dynamics leading to export diversification in a long term.
Usability of preferential market access
ƒ
The rules of origin in preferential market access for LDCs not only vary from one
preferential scheme to another, but also tend to be quite stringent. Varying rules of
origins dependent on the export destination and stringent requirements reduce price
advantages to LDCs that could have been created by preferential tariff margins, thus
undermine the effectiveness of preferences.4
Lack of supply capacity
ƒ
While duty-free and quota-free market access benefits LDCs, dismantling tariff barriers to
LDC exports is only a necessary but not a sufficient condition for improving LDCs' export
performance for a longer term. "Behind the border" support, aimed at improving their
supply capacity through strengthening technical and institutional infrastructure is
necessary in order to make better market access evolve into better market entry.5
ƒ
Linking the preferential market access to improvement of supply capacity is particularly
important, considering the fact that continuation of multilateral trade liberalization will in
any case erode preferences in the long run. Only when LDCs become capable of
meeting the market requirements competitively do such preferences become
commercially meaningful for LDCs.
ƒ
3
UNCTAD, Least -Developed Countries Report 2004 (page 251), 2004.
UNCTAD, Improving Market Access for Least Developed Countries, (UNCTAD/DITC/TNCD/4), May 2001.
5
UNCTAD and the Commonwealth Secretariat, Duty and Quota Free Market Access for LDCs: an Analysis of
Quad Initiatives, (UNCTAD/DITC/TAB/Misc.7), May 2001.
4
3
LDC seminar on Market Access
ACTIONS REQUIRED FOR IMPROVING THE USABILITY AND UTILITY OF PREFERENCES TO LDCS
ƒ
Against the above background, the negotiating objective expressed in the 2003 Dhaka
Declaration can be further elaborated as follows:
a)
Bind the tariff-free and quota-free market access to all products from LDCs under
the WTO framework;
b)
Ensure the usability of the "bound" preferences by simplifying and harmonizing the
rules of origin across all preference-granting countries;
c)
Link the provision of preferential market access to technical and financial
assistance in the following areas: marketing, transport, sanitary and phytosanitary
(SPS) measures and improving product quality;
d)
Possibly expand preferential market access opportunities to take into account
the new trade geography, i.e. seeking opportunities in other developing country
markets.
STRATEGIC OPTIONS AND ISSUES FOR DISCUSSIONS
ƒ
What are necessary legal process for "binding" tariff-free and quota-free market access
for all products of LDCs under the WTO framework?
ƒ
What are strategic options to make preferential market access accompanied with actual
provision of technical/financial support for enhancing supply capacity in LDCs?
ƒ
What strategic moves do we need to counter the lack of political will on the side of
preference-granting countries?
ƒ
How do LDCs convince other developing countries to support the initiative?
ƒ
How do we mobilize the public opinion and make the best of their support in achieving
this market access objectives?
4