WTO news: what’s been happening in the WTO

27 September 2002

World Bank grant kicks off Bank-WTO assistance on standards

New facility to help developing countries meet standards, smoothing the path to global markets. Partners urge G-8 and donor support for the new venture.

The World Bank and the World Trade Organization are establishing a new fund, called the Standards and Trade Development Facility, as part of their efforts to link aid to trade opportunities in the fight against poverty.

The fund — in cooperation with other organizations — will provide a stimulus to important new projects for developing countries in this critical area, helping them shape and implement international standards on food safety, and plant and animal health. The goal is to provide grants and financial support for technical assistance projects in developing countries through enhanced collaboration between the international organizations involved.

The Food and Agriculture Organization (FAO), the World Health Organization (WHO) and the World Organization for Animal Health (OIE) are expected to join the Bank and the WTO in the facility. Also expected to participate are the Codex Alimentarius (the food safety standards-setting organization run jointly by the FAO and WHO), and the Secretariat of the International Plant Protection Convention at the FAO.

Developing countries say they often have difficulty meeting disease and contaminant standards for their food exports to richer countries’ markets. The new facility will help these nations strengthen and better implement food safety and plant and animal health measures — a win-win outcome for developed and developing nations. This will help smooth the path for exports from the developing world to global markets, thereby spurring growth and poverty reduction in poor countries.

The initiative also represents a concrete commitment of the Bank and WTO to place developing countries in a stronger position to take advantage of the WTO agreements, and in particular of the Agreement on the Application of Sanitary and Phytosanitary Measures.

The World Bank has agreed to provide an initial US$300,000 to establish the new fund, and the WTO will allocate funding from the Doha Development Trust Fund to launch the Facility. The WTO will administer the facility for the partners.

Members of the Group of Eight — meeting in Kananaskis, Canada, in June — pledged to back new initiatives in standards, and the WTO and the World Bank hope the G-8 members will follow through with pledges of new financing to support the facility.

“This facility represents a concrete step toward giving the developing world a greater voice in the world trading system, and in a way that can bring real benefits through greater exports,” World Bank President James Wolfensohn said in announcing the facility’s creation. “The Bank has made standards and related trade facilitation measures a key priority for our institution — the success of the Facility is an important part of that long-term commitment”.

The WTO Director-General Supachai Panitchpakdi said “Enhanced technical assistance and capacity building are essential if developing countries are to participate more fully in the multilateral trading system. In the area of sanitary and phytosanitary (SPS) regulations developing countries have often had difficulty in meeting standards set in developed countries. This World Bank initiative will greatly assist developing countries in meeting these important SPS regulations and should facilitate more trade and higher living standards in the developing world. We applaud the Bank’s initiative”.

In a joint statement issued at the Doha Ministerial Conference in November 2001, the heads of the World Bank, the WTO, OIE, FAO and the WHO declared that they were committed to work together to help developing countries participate more fully in setting and making use of international SPS standards. (See press release 254)

According to World Bank research, Africa could gain over $1 billion a year from higher exports of nuts, dried fruits, and other agricultural commodities if it participated in the development of international standards, and implemented those rules. Bank studies also show that if governments followed international standards for pesticide residues in bananas — instead of the more restrictive national standards set by many developed countries — African banana exports would jump by $410 million a year. The same is true for beef. The adoption of science-based international standards for minimum residue levels of veterinary drugs could boost South Africa’s beef exports by $160 million a year, for example.

Related websites: World Bank and www1.worldbank.org/wbiep/trade/standards.html; World Trade Organization; WHO; OIE; Codex Alimentarius; IPPC

(Press release issued simultaneously by the World Bank in Washington and the WTO in Geneva)