The Institute of Policy Studies (IPS) of Sri Lanka in collaboration with four other partner organizations in the South Asian region, viz., India, Pakistan, Bangladesh and Nepal are engaged in carrying out a research study on the “WTO Doha Round and Implications for South Asia” in the run-up to the forthcoming Sixth Ministerial Meeting scheduled to be held in December 2005 in Hong Kong. WTO was aiming to have a first draft of a negotiating framework ready by July 2005. However, the meeting of the WTO General Council ended without adopting any texts or new agreements indicating that much work lies ahead for the Doha Programme to have a ‘final’ result by 2006.
The three main areas of negotiations on agriculture are on market access, domestic support and export subsidies. Market access remains the key issue in agriculture negotiations for Sri Lanka. Given that it has a relatively low bound rate on agricultural tariffs (at 50 per cent), Sri Lanka as a member of the G33 is seeking flexibility to designate an appropriate number of products as special products (SP) exempt from duty reduction, based on criteria of food security, livelihood security, and rural development needs; and access to a special safeguard mechanism (SSM) for developing countries. As a net food importing developing country issues of food aid, export credit, etc. remain important issues in the agriculture negotiations for Sri Lanka.
Under negotiations on non-agricultural market access (NAMA) the key issues are the choice of tariff reduction formula or approach, the treatment of binding, preference erosion and non-tariff barriers, etc. For countries such as Sri Lanka where bound coverage is low but the applied rate is also low, proposed tariff reduction formulae can have adverse implications. In order to avoid such pitfalls, Sri Lanka spearheaded moves to include a paragraph in the framework text that allows a small number of developing countries not to undertake tariff reductions through the formula if their bound coverage is less than 35 per cent. However, these countries will be required to bind their tariffs at the average of bound tariff rates for all developing countries.
In the area of services, there has been little progress so far as evidenced by the limited number and low quality of market opening offers received so far. Several developing countries, including Sri Lanka, want to see progress in developed countries’ commitments in Mode 4 (movement of natural persons). While Sri Lanka had made some initial offers on liberalization of financial services, telecommunications and tourism, these have not been followed up with further offers. In the areas of rules, work is under way in trade facilitation with a view to simplifying and harmonizing international trade procedures.
Developing countries will be keen to ensure that negotiations contain special and differential (S&D) treatment, financial or technical assistance components as mandated by the July Package. Sri Lanka too has extended strong support to ongoing negotiations on trade facilitation and developing country positions on S&D treatment. In development issues, the core of the problem is S&D treatment for least developed and developing countries and addressing issues of implementation. Sri Lanka is keen to ensure that negotiations take account of the development needs and capacities of countries and ‘differentiate’ accordingly. In this respect, Sri Lanka has supported an initiative to take into account the special needs of ‘small, vulnerable economies’ without, however, creating a sub-category of its own.
On the substance of issues leading up to the Hong Kong Ministerial, there is a clear difference of perception between developed and developing countries on the nature and effects of the WTO rules and what the Doha Programme is supposed to achieve in terms of balance and development goals. For the Hong Kong meeting to be a ‘success’, it will have to show more concrete progress on modalities for agriculture and NAMA, a critical mass of offers in services, significant progress in rules and trade facilitation, and a ‘proper reflection’ of the development dimensions.
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