28 November 2005

Lamy says the Round’s development potential must be preserved

Director-General Pascal Lamy, on 28 November 2005, presented a Secretariat note on Development Aspects of the Doha Round to the WTO's Committee on Trade and Development. He said that “what is already on the table can translate into a good result for development,” adding that “it would certainly be disastrous if what we have disappears because we fail to move the negotiations forward”.


I am happy to be here with you again today, this time to present and discuss the development paper on which the Secretariat has worked hard so that we can better understand the numerous development aspects of the Doha Development Agenda and the ongoing negotiations.

When Ministers adopted the Doha Declaration, they demonstrated their awareness of the crucial linkages that exist between trade and development. The needs and interests of developing countries are clearly at the heart of the Doha Development Agenda.

Our task through this Round is to ensure that the development dimension remains at the very centre of these negotiations in every area of the Round's agenda. As I have said on many occasions, development is at the core of this Round. Development is the raison d'être of the Doha Round.

The development gains which can be realized span all the sectors now being negotiated. It is for this reason that we have worked hard to prepare a paper which highlights all of these elements in a more analytical way, pillar by pillar. And I wanted personally to present the paper to you today.

  • Agriculture is obviously of critical importance to all developing and least-developed countries, and is also in many ways the key to the negotiations. Developing countries stand to gain from increased market access in developed markets and expanded opportunities in other developing countries. They will also gain from substantial reductions in trade-distorting domestic support in developed countries and from the elimination of all forms of export subsidies. The UR contributed in this direction. Developing country agricultural exports increased by 24% between 1995 and 2003 and developing countries have increased their share of world exports from 40 to 42%, at a time when agriculture exports increased from $299 billion to $352 billion. Trade growth has been particularly strong between developing countries which increased by 32% between 1995 and 2003. We must now ensure that the DDA takes developing countries well beyond that.

  • In agriculture, we should not forget such issues of importance to developing countries as cotton, commodities, tropical products and addressing preference erosion. On all these issues there are proposals on the table addressing if not responding to the concerns of developing countries. Also to keep in mind in the agriculture negotiations, as in all areas of the negotiations, is the issue of special and differential treatment, including the flexibility to designate a number of products as Special Products based on criteria of food security, livelihood security and rural development needs.

  • In the NAMA negotiations, market access is a key issue for developing countries. I should add that market access interests lie not only in developed country markets, but also in other developing country markets and improved opportunities in South-South trade. In addition to addressing high tariffs, tariff peaks and tariff escalation, it is also important that non-tariff barriers, that hinder and distort trade, be equally addressed. We are also aware of certain specific concerns of developing countries including the preservation of policy space, the need to provide adequate protection to infant industries, the maintenance of unbound duties in sensitive sectors and preventing the loss of tariff revenue. LDCs, meanwhile, consider as key the improved market access possibilities in the form of duty free/quota free access for their development goals and hope to secure more of this type of access to other developed markets as well as to more advanced developing countries. The UR contributed in this direction. Developing country industrial exports increased quickly in the last 10 years. From 1995 to 2003, the average of world export growth rate is 5.5% for industrial products. During the same period of time, the same average for developing countries has been 7.4%. We must now ensure that the DDA takes developing countries well beyond that.

  • As for the development dimension in the Services negotiations, developing countries stand to gain considerably from the further opening of trade in services, both on the part of their trading partners and in terms of their own policy regimes. The sectors addressed so far by individual developing countries extend across all major services covered by the Agreement and all modes with a focus on movement of natural people (mode 4) as well as cross border supply of services under modes 1 and 2. At the same time, there are adjustment costs that may be involved with liberalization which will need to be addressed with adequate prudential supervision and through assistance and capacity-building programs.

  • Turning to Trade Facilitation. This is, of course, a more recent area of negotiation. However, I think the gains to be enjoyed from lowering trade-related transaction costs are well recognized. I should highlight that this is an issue of particular importance to landlocked developing countries and LDCs, for which steps to facilitate transit traffic along with facilitating their own cross border trade can produce a marked reduction in their import costs and an improvement in their export competitiveness in world markets.

  • In the area of Special and Differential Treatment, gains would accrue to developing countries by making the S&D provisions more precise, effective and binding. In the ultimate analysis, the S&D provisions must respond to, and be reflective of, the concerns of developing countries, and especially the least-developed countries amongst them.

The points that I have raised are just a few of the development aspects in each of the sectors under negotiation. I hope I have given you an idea of the numerous results that these negotiations can produce in terms of “development”. All of these important subjects for the developing countries appear in our draft Ministerial Declaration and will be at the heart of our discussions this week. They will also be part of our work in Hong Kong and after Hong Kong to the end of the Doha Round.

Before beginning our discussions, let me finish by giving you my main conclusions on the current state of play as regards development at this stage of the negotiations.

Firstly, the fact is that we already have on the table a number of proposals which have a considerable potential for development. I am thinking, among other examples, of the reduction in agricultural subsidies, both domestic support and export subsidies. In short, the developing countries have much to gain in all sectors of the ongoing negotiations.

Secondly, since the developing countries are the potential winners in the current negotiations, they cannot afford to disregard these advantages and benefits which are already considerably greater than those resulting from the Uruguay Round. Failure of the ongoing negotiations would mean loss of earnings for the developing countries. To revert to the example of agriculture, it would mean that we were missing the historical opportunity to ensure and lock in real cuts in trade-distorting agricultural subsidises used by rich economies. In fact, without the Doha Round, these countries could even further increase the distortions that currently plague the agricultural trading system. Virtually all countries would lose — but developing countries would lose more than others, since the lack of further reform in the agriculture sector in developing countries would mean that the current situation would not change — or could even get worse.

Thirdly, I am very much aware that these negotiations, and generally the opening up of markets, must translate into real benefits to all people in their everyday lives. For that to happen it is clear that developing countries will need technical and financial assistance, if they are to build the supply-side capacity to benefit fully from the opportunities that the Doha Round will provide. “Aid for Trade” will therefore need to accompany the results oft he round to assist developing countries increase their capacity to participate in the multilateral trading system.

In conclusion, let me say that this paper before you represents an overview of the potential that could be realized for development gains. What is already on the table can translate into a good result for development. It would certainly be disastrous if what we have disappears because we fail to move the negotiations forward. The overall goal is to ensure that the package stays on the table and translates into real benefits at the end of the round — benefits for developing countries and least-developed countries, for small economies and for land-locked developing countries.