150pxls.gif (76 bytes)

MILLENNIUM DEVELOPMENT GOALS

Doha Development Agenda

At the WTO’s Fourth Ministerial Conference held in Doha, Qatar, in November 2001, ministers recognized the central role that international trade can play in the promotion of economic development. Acknowledging the fact that the majority of WTO members are developing countries, they agreed to continue making positive efforts to ensure that developing countries, and in particular LDCs, secure a share in the growth of world trade commensurate with their development needs. Thus, in launching the Doha Development Agenda (DDA) talks they placed developing countries’ needs and interests at the heart of the negotiations.

Furthermore, specific efforts are being made in the negotiations to address the needs of the LDCs, as well as those of “small and vulnerable economies”.

See also:
More on the DDA
Developmental aspects of the DDA 

 

“The majority of WTO Members are developing countries. We seek to place their needs and interests at the heart of the Work Programme adopted in this Declaration”

Doha Ministerial Declaration, November 2001

A fundamental aspect of the Doha Round of negotiations is that it addresses some of the imbalances in trade rules that have hindered developing country exports. This is to ensure that the rules under consideration provide developing countries with real market opportunities and accordingly opportunities to enhance their development and growth prospects. The development dimension permeates all negotiating areas. When the Doha Round is concluded, the multilateral trading system will be more open — particularly for developing countries’ exports — and will have a strengthened rule-making structure that will be more balanced, especially towards developing country interests and concerns. There is, therefore, a clear connection between concluding the DDA negotiations and bringing about MDG 8.

The official MDG indicators, developed to assess progress towards achieving the goals, spell out the importance of increased market access in meeting the needs of developing and least-developed countries. These include: 1) increased duty-free access for developing countries, 2) tariff reduction (especially on agricultural products, textiles and clothing) and 3) the reduction of trade-distorting subsidies from developed countries. All of these elements are part of the WTO agreements and are subject to negotiations. A successful conclusion of the Doha Round would therefore go a long way in addressing developing country needs and contribute significantly to the achievement of MDG 8.

 

A successful conclusion of the Doha Round would address developing country needs and contribute significantly to the achievement of MDG 8

Concluding the Doha Development Round would address the trade distortions which plague the agriculture sector to the detriment of developing countries, many of which enjoy a comparative advantage in this sector. The MDGs also recognize the agricultural sector as an important area where progress towards development can be made. A more open agricultural sector would also allow for the diversification of agricultural production in developing countries. A decision taken by WTO members to provide duty-free and quota-free market access to products from LDCs (see Box 1) will be beneficial to those countries.

The agricultural sector has traditionally been a highly protected sector in many countries. While agriculture makes a significant contribution to the economies of a large number of developing countries, many of the world’s agricultural producers are disadvantaged in the world trading environment because of high tariff barriers and competition from producers — particularly in developed countries — that receive high levels of domestic or export-related support. Already prior to the launching of the Doha Round, WTO members had committed themselves to the long-term objective of establishing a fair and market-oriented trading system for agricultural products. The Doha Round strengthened this resolve by allowing for continued negotiations between members to achieve this objective. In the context of the Doha Round, tariff barriers and trade-distorting domestic support in agriculture will be substantially cut. Furthermore, WTO members have agreed as part of the overall package to eliminate agricultural export subsidies completely.

Important market access opportunities can similarly be expected for developing countries in the nonagricultural area. Trade in industrial products accounts for more than 90 per cent of world trade in goods and encompasses some key products of export interest to many developing countries. Thanks to previous rounds of trade negotiations, tariffs in developed countries on industrial products are today on average relatively low. However, this average often hides remaining high tariffs on products in which developing countries have a particular stake. A reduction in tariffs and non-tariff barriers to industrial trade would thus provide important export possibilities for developing countries. In fact, the mandate for the industrial negotiations specifically calls for the reduction or elimination of trade barriers on products of export interest to developing countries. As with agriculture, LDCs will reap additional benefits in the industrial area from the duty-free and quota-free market access decision (see Box 1).

 

Box 1: Duty-free and quota-free market access for LDCs

Duty-free and quota-free (DFQF) market access for products originating in LDCs has been a long-standing aspiration of LDCs in the multilateral trading system and is a shared objective of the international community as expressed in the Millennium Development Goals. WTO members at the launch of the Doha Round in November 2001 committed themselves to the objective of providing DFQF market access to LDC products. Building on this commitment, in December 2005, at the WTO’s Sixth Ministerial Conference in Hong Kong, China, they agreed that developed country members of the WTO would provide DFQF market access for at least 97 per cent of products originating from LDCs. Developing country members, within their capacity, were also invited to provide DFQF market access for LDCs’ products.

While most developed country members have already met the 97 per cent threshold of providing DFQF market access to products originating from LDCs, a significant benefit to LDCs from the conclusion of the Doha Round will be that all developed country members will be required to take on this commitment. This contributes directly to the achievement of MDG 8 by increasing the “proportion of total developed country imports from developing countries and least developed countries, admitted free of duty”. Furthermore, some developing members have also undertaken initiatives to provide DFQF access for LDCs. Given the growing importance of developing market destinations for LDC exports, these initiatives also hold great potential for further expansion of South-South trade.

Another important element in the Hong Kong Decision concerns preferential rules of origin, which govern preferential trade arrangements including tariff concessions. Members stressed the need to ensure that those rules as “applicable to imports from LDCs are transparent and simple and contribute to facilitating market access”.

Other elements of the Doha Round also support the achievement of MDG 8. WTO members are simultaneously working to bring down other obstacles to merchandise trade. The aim of the Doha Round’s trade facilitation negotiations is to improve the efficiency of transactions by expediting the movement, release and clearance of goods across borders, thereby reducing transaction and transit costs that are particularly important for landlocked developing countries, while increasing possibilities for small and medium-sized enterprises to expand and participate more actively in international trade.  The Doha Round also encompasses services. Services is the dominant economic activity in virtually all countries of the world, and the opening of services trade can provide many opportunities to developing countries. Developing countries have voiced their interest in many services sectors (including professional services, computer and related services, telecommunication services, construction and related engineering services, distribution services, energy services, environmental services, financial services, tourism services and transport services) and in supplying services through the various means identified by the WTO, including through the cross-border supply of services and the temporary movement of professionals across borders. Negotiations are also advancing to provide LDC service providers with preferential market access.

 

The opening of services trade can provide many opportunities to developing countries

Through further market opening in emerging economies, the Doha Development Round negotiations will also enhance the potential for South-South trade, with the resulting benefits to developing countries. This could be a very significant outcome of the Doha Round.

Additionally, the Doha Round would strengthen the multilateral trading system through addressing fisheries subsidies, which contribute to over-fishing. The negotiations will also lead to an improvement in the existing rules against unfair trading practices. Strengthening the regulations governing the multilateral trading system will benefit all WTO members, but smaller players in global trade will benefit in particular, as they will from the fact that the principle of special and differential treatment (S&D) in favour of developing countries governs all areas of negotiation in the Doha Round. Finally, the Doha Round will provide for more certainty in trading arrangements by securing binding commitments from member countries. Estimates of the gains to developing countries from a conclusion of the Doha Round are summarized in Box 2.

In summary, completion of the Doha Round would be a fundamentally important contribution by the WTO to the realization of the MDGs. The Doha Round provides a unique opportunity for the international community to tackle issues in international trade that cannot be addressed in other forums.

In summary, completion of the Doha Round would be a fundamentally important contribution of the WTO to the realization of the MDGs. The Doha Round provides a unique opportunity for the international community to tackle issues in international trade that cannot be tackled in other forums.

 

Box 2: Potential gains to developing countries from the conclusion of the Doha Round

According to a recent study by Adler et al. (2009)(1), the trade gains for a sample of 15 developing countries in agriculture, non-agricultural market access and services are estimated to be US$ 7.8 billion, US$ 38.9 billion and US$ 68.8 billion respectively. Kinman et al. (2007)(2) show that, in proportion to GDP, trade gains from the conclusion of the Doha Round are twice as large for developing countries and three times as large for least-developed countries as they are for developed countries, with the largest trade surge being trade between developing countries. Taking into account the effects of measures such as trade facilitation and the Aid for Trade initiative, Hoekman and Nicita (2010)(3) show that a marginal reduction in trade costs can boost the trade expansion effects of the Doha Round by a factor of two or more. In addition, Adler et al. (2009) show that the income gains for developing countries from greater market access and trade facilitation as a result of the Doha Round amount to 0.3 and 1.5 per cent of GDP respectively. In both cases this is almost double the percentage increase for developed countries. Finally, Bouet and Laborde (2010)(4) argue that a failure to conclude the Doha Round would not only prevent an increase in world trade, but may also precipitate a worldwide move towards protectionism that would reduce world trade by US$ 808 billion. This “preventive” role of the DDA represents the systemic benefits stemming from the adoption of binding and enforceable commitments. The authors show that in terms of real income, about two-thirds of global gains resulting from this “preventive” role accrue to developing countries.

Notes:
1. Adler, M., Brunel, C., Hufbauer, G.C. and Schott, J.J. (2009), “What’s on the table? The Doha Round as of August 2009”, Peterson Institute for International Economics Working Paper Series N° WP 09-6.
2. Kinnman, S. and Lodefalk, M. (2007), “What is at stake in the Doha Round”, The World Economy 30:8, pp. 1305-1325.
3. Hoekman, B. and Nicita, A. (2010), “Assessing the Doha Round: Market access, transactions costs and Aid for Trade facilitation”, The Journal of International Trade and EconomicDevelopment 19:1, pp. 65-79.
4. Bouet, A. and Laborde, D. (2010), “Assessing the potential cost of a failed Doha Round”, World Trade Review 9:2, pp. 319-351.