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URFIG-supported Document about WTO

STATEMENT BY AMBASSADOR ALI MCHUMO OF TANZANIA ON BEHALF OF LDCs ON WTO "DRAFT MINISTERIAL DECLARATION" AT THE INFORMAL MEETING OF THE GENERAL COUNCIL

(2 October, 2001)

Mr. Chairman, first of all, speaking on behalf of the LDCs, I would like to thank you for your efforts in putting together this first draft of the Ministerial Declaration. I know it is not an easy task, for it requires the consideration of many diverse views and diverse interests from the many Members of the WTO. Let me also endorse the statement made by Zimbabwe on behalf of the African Group. Yesterday we expressed our disappointment on the Draft on Implementation. I am afraid I can say the same thing with regard to this Draft Declaration since in our view it has not adequately taken into account the interests and views of LDCs as expressed by the LDC Ministers in Zanzibar.

The LDCs have been calling for the recognition of the imbalances and problems generated by the present WTO system and rules and the need for their correction. However these problems are not adequately reflected in the Declaration, including the preamble. Nor are adequate remedies put
forward in the document.

The LDC Ministers also expressed in Zanzibar that they are not prepared for negotiations on the Singapore and other new issues, and that they are also unable to participate in negotiations on a broad agenda nor implement new obligations due to the LDCs' limited capacity. Yet the draft declaration is proposing a broad-based negotiating agenda that includes many new issues
that imply a heavy burden of new obligations for LDCs and other developing countries.

We therefore propose that major changes be made to the draft declaration. In this statement I will make some general remarks and indicate points for changes, at a future date we may present more precise language.

At the outset, allow us to make a few more general points.

Firstly, the principles for special and differential treatment provisions should be spelt out in detail and these should be based on the need to assist developing countries (including LDCs) to achieve their development objectives.

Secondly, we are concerned about the separation of the Ministerial Declaration from the Decision on Implementation Issues. This may well lead to downplay or downgrade the importance of implementation issues, which could end up being treated on a separate track. This unfortunate situation could be remedied by "mainstreaming" the implementation issues and bringing
them into the Ministerial Declaration itself.

Thirdly, the section on LDCs is too weak. It does not deal with the important issues of implementation, accession and the need to bind trade preferences for LDCs. The need to overcome supply side constraints is not emphasised enough.

Fourthly, the section on technical assistance and capacity building emphasises the need to assist LDCs to understand and implement WTO rules, and does not emphasise the need to address the supply side concerns.

Fifthly, the difficulties faced by developing countries seeking accession to the WTO are not dealt with in this draft.

We will now comment on the sections of the draft declaration, and make proposals which we would like to see incorporated into the next draft.

PREAMBLE

In the preamble (paras 1-5 and 8) there are many nice words about the contributions of the trading system and WTO. It is undeniable that the trading system has several positive aspects. However the preamble is imbalanced in not recognising the points made by LDCs and other developing
countries on the downside in the operations and implementation of the system, such as the imbalances in the rules, the inequitable distribution of benefits and losses, the lack of tangible benefits to poorer countries, the massive losses to poor countries and poor people from the continuous decline
in commodity prices and terms of trade, or the threats to livelihood and jobs when small firms and small farmers are unable to cope with the flood of cheap imports. In short, the marginalisation of LDCs and some other developing countries should be mentioned so that there is recognition of
these problems by Ministers with the view to resolving them.

At Zanzibar the LDC Ministers adopted a document entitled the LDCs' Development Agenda at the 4th WTO Ministerial Conference. We would like to see prominence given to the concept and the substance of a Development Agenda, which should be the overarching framework for the next stage of the WTO's development, and which therefore should be the overarching framework of the Doha Declaration. In recent months there have been many statements made by the WTO director general and by our developed country partners about how the next phase of the WTO's discussions must be centred on development. Therefore the declaration, in its preambular section, as well as throughout
all its sections, must centre on development concerns.

The preamble should therefore include the key points relating to Ministers agreeing to implement a Development Agenda at the WTO in the next phase of organisation's evolution, aimed at ainstreaming development concerns in the WTO, and to enable development to take center stage in the WTO. The Development Agenda should include the following points, as adopted by the LDC Ministers at Zanzibar: satisfactorily addressing the wide range of implementation issues; operationalising the special and differential treatment; ensuring trade policy flexibility to accommodate the interests of LDCs and other developing countries; securing meaningful preferential
market access for LDCs; taking full account of the interests of LDCs and other developing countries in the built-in agenda and mandated reviews; fairer procedures and conditions for LDCs and developing countries seeking accession; effective capacity building; and ensuring an inclusive and transparent negotiating process. We recognise that this is a full agenda that can adequately take up the time of the WTO membership in the next several years.

IMPLEMENTATION PROBLEMS

I need not dwell on this section since yesterday we had commented on this issue and
we shall do so again tomorrow.

AGRICULTURE (Para 11)

This section (para 11) only lists down issues, stating the text is to be elaborated later. Agriculture is the critical issue on which many other issues depend. But the section is at present empty. The following points should be included in the section. LDCs expect the ending or severe curbing of subsidies in industrial countries as these subsidies enable cheap food products from the rich countries to flood into the poorer countries. Export subsidies for products of particular export interest to LDCs should be abolished before the review of the Second Phase of the agriculture negotiations in March 2002. LDCs also expect the implementation of bound duty-free and quota-free market access conditions to exports of LDCs covering all agricultural products in their primary, semi-processed and processed forms. LDCs should also be allowed to review and if necessary to readjust their bound tariff rates, in cases where the implementation of the reform process has led a situation where their small farmers' livelihoods are affected by import competition. The right of the small and poor farmers in LDCs to be protected from cheap imports threatening their livelihoods should be recognised.

SERVICES (Para 12)

On para 12 on services, the following points made by the LDCs Ministers in Zanzibar should be included in the next draft:

-- LDCs should receive recognition and credit for their autonomous liberalisation.

-- There should be full and effective implementation of Art IV of GATS, to strengthen LDCs' domestic services capacity e.g. through access to technology and distribution channels and information networks.

-- Commitments shall be made by developed countries in Mode 4 (movement of natural persons) and limitations in mode 4 should be eliminated. Members shall take steps so that administrative practices do not impede the full and effective implementation of their commitments under GATS regarding Mode 4.

MARKET ACCESS FOR NON-AGRICULTURAL PRODUCTS (Para 13)

We would like to remind Members that during the stocktaking meeting in July 2001, the LDCs had highlighted the problem of deindustrialisation faced by many LDCs as a result of removal or reduction of tariffs in the industrial sector. In many LDCs, there has been the closure of many local firms in many sectors, and the loss of manufacturing jobs. Keeping this major problem in mind, we view with concern and we are unable to accept para 13 on negotiations on non-agricultural products. LDCs require more time before agreeing to fresh negotiations in this area. We particularly object to the sentence that "product coverage shall be comprehensive and without a priori exclusions". The "concession" to developing countries and LDCs that their commitments will involve "less than full reciprocity" is insufficient and ambiguous.

Instead of negotiations, a study process (through a working group) can be initiated to examine the effects that previous tariff reductions have had on the economies and social development of LDCs and other developing countries, including the impact on local firms, on employment and government revenue. The study process should also examine the possible effects of future tariff reductions on countries. The study process could among other things determine whether there should be negotiations in this area. In the discussions, it should be made clear that exemptions from further liberalisation commitments will be given to LDCs and to other developing countries that have been and would be adversely affected by liberalisation measures.

TRIPS AGREEMENT (Para 14-17)

The section on TRIPS (para 14-17) is extremely disappointing. In our view it is basically empty of content, ignoring the evidence of problems generated in recent years and the need to resolve these many problems.

We propose the TRIPS paras be amended and the following be added:

1. Regarding Article 27.3b, Ministers agree that the review process should clarify that all living organisms, including plants, animals and parts of plants and animals, including gene sequences, and biological and other natural processes for the production of plants, animals and their parts, shall not be granted patents.

It should also be clarified that Members have the option to select their own sui generis system (appropriate national system of protection) for plant variety protection, including systems that accord due recognition to traditional knowledge and traditional practices, and the rights of farmers to use, save and exchange seeds and to sell their harvest. It should be clarified that nothing in the TRIPS agreement prevents Members from taking measures to ensure food security and safeguard farmers' livelihoods in developing countries. It should affirm that the TRIPS Agreement shall not be interpreted in a manner than endangers food security. The sui generis system can also be in line with the OAU model law on community rights and biodiversity, the Convention on Biological Diversity` and the FAO International Undertaking on Plant Genetic Resources.

2. Exclusion from patentability shall be extended to medicines which Member countries deem necessary to treat life threatening and serious ailments such as HIV/AIDS, malaria and cholera, as well as poverty-related diseases in developing countries, in order to contribute to the access of the poor to affordable treatment.

3. Public health: We affirm our common understanding that nothing in the TRIPS Agreement prevents Members from taking measures to protect public health. In line with this common understanding, we endorse a clarification and interpretation of the TRIPS Agreement (as contained in the Ministerial Declaration on TRIPS and Public Health) that will allow and encourage Members, particularly developing countries and LDCs, to avail themselves to the widest range of policy options for the protection and promotion of public health.

4. Articles 7 and 8: We affirm that each provision of the TRIPS Agreement shall be read and interpreted in light of its objectives, principles and purpose, as set out in Articles 7 and 8 of the TRIPS Agreement.

5. Technology Transfer: We affirm that the provisions of Art. 66.2 of the TRIPS Agreement are obligatory and instruct the TRIPS Council to consider and implement immediate means of fulfilling the objectives of this provision.

Before January 2002, developed country Members shall put into effect meaningful incentives to their enterprises for the transfer of technology in pursuance with their commitments under Article 66.2 of TRIPS. Notification of these measures shall be provided at the first meeting of the TRIPS Council in 2002, using the same procedures of notification as those in Article 63.2.

We also instruct the TRIPS Council to identify and implement additional measures (other than the provision of incentives) to make effective the obligation to transfer technology to LDCs; this decision should be made at the latest one year after the 4th Ministerial.

6. Non-violation complaints: We agree that Article 64.2 shall be modified so as to make it clear that subparagraphs 1(b) and 1(c) OF Art XXIII of GATT 1994 shall not apply to the TRIPS agreement.

7. The transitional period for LDCs in the TRIPS agreement shall be extended so long as they retain the status of an LDC, in view of the lack of capacity of LDCs to implement and benefit from the agreement, and also in view of their weak technology base and capacity.

SINGAPORE ISSUES

LDCs cannot agree with the parts of the Draft-relating to the Singapore issues. The LDC Ministers indicated that the four "Singapore issues" were not yet ripe for negotiations as the issues were complex and the LDCs were not able to fully understand the implications for them. Therefore the LDCs' position on the sections on new issues is as follows:

Trade and Investment:

We are unable to accept para 18. We prefer the option of para 19. The implications of rules in this area have not been fully discussed nor understood.

Trade and Competition:

We are unable to accept para 20. We would rather prefer the option of para 21.

Transparency in government procurement:

We are unable to accept para 22. LDCs are not prepared to launch negotiations in this area and hence the study process in the working groups has to continue.

Trade facilitation:

We are unable to accept para 23. We are not prepared to launch negotiations in this area.
LDCs are of the view that trade facilitation measures are necessary and beneficial and but they share the view that this area does not require new rule making. Hence the study process in the working group should continue.

WTO RULES

On para 24, regarding anti-dumping and countervailing actions, we propose the following (which had been adopted in Zanzibar):

As LDCs are neither able to defend their industries against dumped and subsidised imports nor to protect the legitimate interests of their exporters, simplified procedures for taking anti-dumping and anti-subsidy actions should be devised for the use of LDCs.

The best endeavour provisions of Art 15 of the Agreement on Anti-Dumping (AAD) need to be operationalised so as to impart stability to the initiatives undertaken to improve market access for LDCs.

An agreed interpretation of Art 5:8 of the AAD to raise the threshold for the volume of imports from LDCs from 3 per cent to 7 per cent, and exempting them from cumulation.

An agreed interpretation of Art 27:10 of the ASCM to increase the threshold for imports from LDCs from 4 per cent to 10 per cent and exempting them from cumulation.

TECHNICAL COOPERATION AND CAPACITY BUILDING (Para 33)

Para 33 on this topic is weak Technical assistance to help countries understand the WTO rules and implement obligations is not sufficient. We would like all points in the Zanzibar outcome (especially the LDCs' Development Agenda, para 24) to be included. To be included is the provision of technical assistance and capacity building programmes for LDCs in order to address the supply side constraints for them. A few days ago we had the opportunity to preview the new WTO strategy for technical assistance and capacity building, which fully incorporated our concerns. The paragraph present in the Draft at best falls short of that strategy.

SECTION ON LEAST-DEVELOPED COUNTRIES (Para 34)

Para 34 contains a section specifically on LDCs. We thank you for heeding our call to have a specific section for LDCs. Although the section contains some good points, it does not adequately reflect the need for concrete commitments. We propose that the following points be added to the next draft:

We take note of the outcome of the Third United Nations Conference on the Least Developed Countries and of the LDCs Trade Ministers Meeting in Zanzibar, and stress that full integration of the Least Developed Countries in the Multilateral Trading System shall require fundamental and comprehensive contribution by the WTO members. We therefore agree to:

* Make a binding commitment on duty free and quota free market access for all products originating from LDCs with realistic and flexible Rules of Origin to match the level of industrial capacity of the LDCs;

* Apply a standstill to all contingency protection measures on market access for export products of LDCs;

* Bind and fully implement all existing the S& D provisions in favour of the Least Developed Countries, and to adopt new provisions (which shall also be bound) that are needed for the development of the LDCs;

* Accord increased technical assistance, including through integrated framework in the development, strengthening and diversification of production and exports of goods and services of the Least Developed Countries under a regular budget;

* Provide technical and financial support to LDCs prior to the introduction of any new TBT or SPS measure in those LDCs which whose exports would be adversely affected.

* Withdraw all quantitative restrictions on all textile and clothing products from the LDCs beginning from 1 January 2002;

* Not expect reciprocity from the least developed countries in making commitments and to provide sufficient flexibility to LDCs in the implementation of their obligations.

* Facilitate the accession of LDCs into the WTO with a more streamlined process of accession, under terms consistent with their development, financial and trade needs. The LDC countries seeking accession should not be asked to undertake commitments higher than those undertaken by LDC members of the WTO, and the transitional periods mandated by WTO Agreements applied to them should start from the date of accession.

With regard to the last section on "organization and management of the Work Programme", paras 36-42 as we have said at the beginning of our statement, our Ministers in Zanzibar were very clear that LDCs are not in a position to undertake broad based negotiations involving many new issues due to lack of capacity to negotiate and implement new commitments. What we interpret in this section is that we are preparing for a broad based programme of negotiations and with the inclusion of a number of new issues for which we are not prepared as already indicated. Counting on new areas of negotiations alone, there are more than 8 clusters, not to talk of the mandated negotiations and on implementation issues. Clearly, this is a heavy burden which LDCs are not ready to undertake and we would urge you to review this section in order to bring about a programme which our Ministers called "manageable" and that will fully accommodate LDCs' interests.

I thank you Sir.