TRADE AND DEVELOPMENT
Implementing decisions for developing economies
WTO members discussed the implementation of decisions taken at previous ministerial conferences.
At the 2011 Geneva Ministerial Conference, ministers called on WTO members to fully operationalize the mandate of the CTD as the focal point for development work within the WTO. Ambassador Blackman called for “progress” on this issue, including on several proposals currently on the table. He “encouraged the proponents to explore all possible ways to move forward, including by reaching out informally to other members”.
At the 2013 Bali Ministerial Conference, ministers mandated a review of the implementation of the special and differential (S&D) provisions contained in WTO agreements and decisions under a “Monitoring Mechanism”. Monitoring is to be based on submissions from members, including those made in other WTO bodies. To date, no submission has been made to the committee.
S&D provisions are flexibilities granted to developing and least-developed countries (LDCs) aimed at increasing trade opportunities, safeguarding developing and LDC interests in the form of longer transition periods for the implementation of WTO agreements and providing technical assistance, for example. Over 100 such provisions exist in the WTO's agreements and decisions. The Monitoring Mechanism provides a forum for monitoring these issues, with the objective of improving beneficiaries' ability to utilize them.
Ambassador Blackman recalled that members' submissions are essential to implement the mandate on the Monitoring Mechanism and urged members “to find a common understanding” on how to proceed. He would continue consulting with delegations on this matter, he said. Several members expressed frustration with the lack of progress.
Developing countries' participation in world trade
An updated note by the WTO Secretariat on the participation of developing countries in world trade was presented at the CTD regular session. From 2016 to 2018, the shares of developing economies in world merchandise and commercial services trade continued to rise despite strong fluctuations in world trade and gross domestic product (GDP). Merchandise trade in volume grew faster in developing economies than the world and developed countries average, at 4.5% annually for exports and 4.1% for imports. Developing countries' commercial services exports grew at an average annual rate of 9%.
China was the top trader among developing countries for both merchandise and commercial services trade. India and Viet Nam were the most dynamic merchandise traders and Egypt and Kuwait the most dynamic in commercial services. Over half of the top 20 developing economy merchandise traders are Asian. In addition, developing Asia accounts for almost two-thirds of developing economies' merchandise and commercial services trade.
Furthermore, from 2005 to 2015, the five economies that most expanded their level of participation within global value chains (GVCs) are from Asia: Cambodia, China, India, the Philippines and Viet Nam.
An estimated 53% of developing countries’ total exports have gone to other developing countries, totalling USD 4.1 trillion in 2018. Manufacturing remains the main driver of developing economies' growth, representing 70% of all exports, followed by fuel and mining products (20%) and agricultural goods (9%). Travel was the leading services sector among developing countries over the covered period.
Regional trade agreements between developing countries
As part of the WTO's Transparency Mechanism for Regional Trade Agreements, the CTD considered three preferential trade agreements among developing countries related to goods trade. Although deviating from the WTO principle of non-discrimination, these arrangements are allowed under the WTO 1979 Enabling Clause to help developing countries meet their development objectives. The consideration is based on a factual presentation prepared by the WTO Secretariat and questions and replies between members.
Partial Scope Agreement between El Salvador and Ecuador
The Partial Scope Agreement entered into force in November 2017. It aims to facilitate, expand, diversify and promote trade flows between El Salvador and Ecuador. It contains provisions relating, among other things, to trade in goods, rules of origin, customs procedures and trade facilitation, sanitary and phytosanitary measures, technical barriers to trade and trade defence.
The parties explained that the products covered include chocolate, plastics and textiles. A 46% increase in trade has been reported between the two countries, from USD 63.7 million in 2007 to USD 119 million in 2018. To date, 52% of each party's non-oil exports and 24% of their non-oil imports are using the preferences negotiated under this scheme, they added.
Framework Agreement between India and Thailand
India and Thailand presented their Framework Agreement, whereby they agree to expeditiously negotiate a bilateral free trade agreement to further strengthen and open trade. This agreement was amended in August 2004 and in January 2012.
The parties said they have implemented an Early Harvest Scheme, which forms an integral part of their free trade agreement covering trade in goods for the products covered by the agreement. Indian imports from Thailand have increased from USD 1.5 billion in 2006 to USD 9.4 billion in 2018. Indian exports to Thailand have increased from USD 1.3 billion in 2006 to USD 4.3 billion in 2018. In 2018, bilateral trade under this scheme increased by 18%, representing 11% of the total trade between the two countries.
Free Trade Agreement between MERCOSUR and Egypt
The Free Trade Agreement between MERCOSUR (comprising Argentina, Brazil, Paraguay and Uruguay) and Egypt entered into force in September 2017. It contains provisions on rules of origin, preferential safeguards, dispute settlement, sanitary and phytosanitary measures, technical barriers to trade, customs matters and investment promotion. The aim is to progressively eliminate tariff lines over a period of nine years, ending in December 2026.
The full list of regional trade agreements between WTO members notified to the WTO can be found here.
The next meeting of the Trade and Development Committee is tentatively scheduled to take place in April 2020.