The Doha Development The Doha Development AgendaAgenda

An UpdateAn UpdateWorld BankWorld Bank

December 1, 2005December 1, 2005

Key MessagesKey Messages A successful Doha Round is very important from a A successful Doha Round is very important from a

development perspectivedevelopment perspective Hong Kong Ministerial December 13-18, 2005 Hong Kong Ministerial December 13-18, 2005 originally originally

expected to agree negotiating modalities for agriculture expected to agree negotiating modalities for agriculture and non-agricultural market access (NAMA), plus progress and non-agricultural market access (NAMA), plus progress in services, rules, trade facilitation and development in services, rules, trade facilitation and development dimensiondimension

WTO Members now recalibrating expectations for Hong WTO Members now recalibrating expectations for Hong Kong, but maintaining the initial ambition for the RoundKong, but maintaining the initial ambition for the Round

Hong Kong “an intermediary stage on the way to full Hong Kong “an intermediary stage on the way to full modalities”; aim to agree on “a range of numbers – the modalities”; aim to agree on “a range of numbers – the outer parameters – in the July 2004 frameworks, and outer parameters – in the July 2004 frameworks, and corresponding texts in the rule-making part of the corresponding texts in the rule-making part of the negotiations”negotiations”• Draft Declaration issued November 26 Draft Declaration issued November 26

Sights must not be lowered if Doha is to be a true Sights must not be lowered if Doha is to be a true development rounddevelopment round

There is a lot of work to do before end 2006 There is a lot of work to do before end 2006

Important progress has already Important progress has already been madebeen made

Conditional agreement on elimination Conditional agreement on elimination of export subsidies of export subsidies

Narrowing of Singapore Issues to Narrowing of Singapore Issues to trade facilitation onlytrade facilitation only

TRIPS waiver on access to medicinesTRIPS waiver on access to medicines July 2004 Framework Agreement July 2004 Framework Agreement

elements on agricultureelements on agriculture Development at the center of a trade Development at the center of a trade

roundround

Outstanding issuesOutstanding issues Key issues remain to be resolvedKey issues remain to be resolved

• Agriculture, Agriculture, in particular market accessin particular market access CottonCotton

• Developing countries, especially MICs, Developing countries, especially MICs, on on NAMANAMA

• ServicesServices Including benchmarksIncluding benchmarks

• Development dimensionDevelopment dimension Complementary agenda on Complementary agenda on aid for aid for

tradetrade

Agricultural Market Access Agricultural Market Access ProposalProposal Cut on Cut on

highest highest tariffs %tariffs %

Sensitive Sensitive products %products %

Tariff CapTariff Cap

Dev’ed/Dev’ed/

Dev’ingDev’ing

US US 10/1010/10

9090 11 75/x75/x

EUEU10/2810/28

6060 88 100/150100/150

G20G2010/1210/12

7575 < or = 1< or = 1 100/150100/150

G10G1010/1010/10

45/50*45/50* 10/15*10/15* NONO

* Numbers indicative only

Large cuts are needed to reduce actual Large cuts are needed to reduce actual

trade distorting domestic supporttrade distorting domestic support

-

10

20

30

40

50

60

70

EU US Japan

Overhang

Actual

79%*

47%*

93%*

$US billion

*percentages refer to degree of overhang

NAMANAMA Definition of the formulaDefinition of the formula

• Agreement on Swiss formula, but not on Agreement on Swiss formula, but not on coefficientscoefficients

Flexibility for developing countriesFlexibility for developing countries• Some groups seek special treatmentSome groups seek special treatment

Newly acceded, small and vulnerable Newly acceded, small and vulnerable

• Differentiation among developing countriesDifferentiation among developing countries EU proposes the same coefficient for developed and EU proposes the same coefficient for developed and

advanced developing countries (with some additional advanced developing countries (with some additional flexibilities) - but this is very controversialflexibilities) - but this is very controversial

• Participation in sectoral negotiations?Participation in sectoral negotiations? E.g., jewels, sports equipment, pharmaceuticalsE.g., jewels, sports equipment, pharmaceuticals

• Treatment of unbound tariffsTreatment of unbound tariffs How to calculate the base rate for reductions?How to calculate the base rate for reductions?

ServicesServices 69 offers, plus 30 revised (EU25 counted as 69 offers, plus 30 revised (EU25 counted as

1), but low quality and lack of momentum 1), but low quality and lack of momentum Mandatory quantitative benchmarks for Mandatory quantitative benchmarks for

coverage of commitments in service coverage of commitments in service sectorssectors??• Opposed by many developing countriesOpposed by many developing countries

Plurilateral negotiationsPlurilateral negotiations• Mandatory participation benchmarks?Mandatory participation benchmarks?

Overall objectives for modesOverall objectives for modes GATS rulesGATS rules

• Broad agreement to continue negotiations and Broad agreement to continue negotiations and intensify effortsintensify efforts

Trade FacilitationTrade Facilitation Solid progress to dateSolid progress to date

• Large number of proposals, broad participationLarge number of proposals, broad participation Special and differential treatment (SDT), capacity Special and differential treatment (SDT), capacity

building (CB) and technical assistance (TA) building (CB) and technical assistance (TA) integral parts of any agreementintegral parts of any agreement• Link between TA and CB and implementation of Link between TA and CB and implementation of

commitments will be a critical part of the negotiations in commitments will be a critical part of the negotiations in 20062006

• Expectations that negotiations in this area will move Expectations that negotiations in this area will move from Uruguay Round-style “best endeavor” approach to from Uruguay Round-style “best endeavor” approach to commitments of secure financing for implementationcommitments of secure financing for implementation

• Role of international organizations, including BankRole of international organizations, including Bank Where next?Where next?

• Text based negotiations on Articles V, VIII and X of GATT Text based negotiations on Articles V, VIII and X of GATT 1994?1994?

Development IssuesDevelopment Issues Proposals to strengthen SDTProposals to strengthen SDT

• Focus on 28 (of the 88 proposals) agreed in principle for CancFocus on 28 (of the 88 proposals) agreed in principle for Cancùùn, PLUS n, PLUS 5 agreement-specific proposals from LDCs5 agreement-specific proposals from LDCs

Duty and quota free access for all LDC exportsDuty and quota free access for all LDC exports• Resistance from countries concerned with preference erosionResistance from countries concerned with preference erosion• Benefits require flexible rules of originBenefits require flexible rules of origin

Concerns re preference erosion and net food importersConcerns re preference erosion and net food importers• Losses may be less than expectedLosses may be less than expected: offsetting gains; time : offsetting gains; time

period for implementation; utilization of existing preferences; period for implementation; utilization of existing preferences; likely price rises for foodlikely price rises for food

• Serious problem for a few countries, who will require increased Serious problem for a few countries, who will require increased international assistance – international assistance – aid for trade-aid for trade- to cope with to cope with transitional adjustment coststransitional adjustment costs

• Adjustment costs should not be a reason to deny the benefits Adjustment costs should not be a reason to deny the benefits of liberalization to the vast majority of developing countriesof liberalization to the vast majority of developing countries

Extended transition periods for affected products raise risk Extended transition periods for affected products raise risk reducing gains from the roundreducing gains from the round

Aid for TradeAid for Trade Important complement to – but not substitute for Important complement to – but not substitute for

– an ambitious Doha Round– an ambitious Doha Round Integrated Framework (IF)Integrated Framework (IF)

• Increased funding, plus enhanced ability to leverage Increased funding, plus enhanced ability to leverage much larger bilateral and multilateral resourcesmuch larger bilateral and multilateral resources

Including to address Including to address infrastructure constraintsinfrastructure constraints• Geneva-based task force of donors and LDCs working on Geneva-based task force of donors and LDCs working on

a new governance structure, for agreement in April 2006a new governance structure, for agreement in April 2006 Contributions likely pending agreement on governanceContributions likely pending agreement on governance

AdjustmentAdjustment• Diagnostics and assistanceDiagnostics and assistance

Regional/cross-country needsRegional/cross-country needs• Exploring need for additional mechanisms Exploring need for additional mechanisms

Aid for Trade cont’d Aid for Trade cont’d

LDC proposalLDC proposal• Enhanced IF; adjustment facility Enhanced IF; adjustment facility

managed by the WTO; infrastructure managed by the WTO; infrastructure fund; debt relief, swaps and buy-back fund; debt relief, swaps and buy-back

Increased focus in bilateral programsIncreased focus in bilateral programs Scope to make progress in Hong Scope to make progress in Hong

KongKong• Proposals in Nov 26 draft DeclarationProposals in Nov 26 draft Declaration

RulesRules

Some highlightsSome highlights• Debate on clarification of disciplines on Debate on clarification of disciplines on

anti-dumping and subsidiesanti-dumping and subsidies (including (including fisheries subsidies) expected to become fisheries subsidies) expected to become more intense in 2006more intense in 2006

• Progress on transparency procedures Progress on transparency procedures concerning concerning RTAsRTAs, but limited progress , but limited progress on strengthening systemic disciplines on strengthening systemic disciplines

ConclusionConclusion November 2005, WTO Members November 2005, WTO Members recalibrate recalibrate

expectations for Hong Kong, but maintain the expectations for Hong Kong, but maintain the initial ambition for the Roundinitial ambition for the Round• The hardest decisions of the Doha Round will now need The hardest decisions of the Doha Round will now need

to be made in early 2006to be made in early 2006 • End of 2006 target for completion (US TPA expiry, June End of 2006 target for completion (US TPA expiry, June

2007)2007) There is too much at stake to lower sights on There is too much at stake to lower sights on

Doha Doha Bank will continue to contribute throughBank will continue to contribute through

• AdvocacyAdvocacy for an ambitious, pro-development Round for an ambitious, pro-development Round• Research Research on trade policy and reform on trade policy and reform • Aid for tradeAid for trade, including cooperation on enhanced IF, including cooperation on enhanced IF• TA and CB at globalTA and CB at global and country levels, including greater and country levels, including greater

integration of trade into country programsintegration of trade into country programs