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    Declaration of the Group of 77 and China
    on the Fourth WTO Ministerial Conference at Doha, Qatar

    22 October 2001


    1. The Group of 77 and China support the rules-based multilateral
    trading system (MTS) as one of the essential instruments for the promotion of economic development. the facilitation of developing countries' integration into the Global economy and the eradication of poverty worldwide. We recognise the critical importance of the rules-based multilateral trading system and of transparent decision-making process in the WTO managing globalisation and reducing the scope for unilateral actions.

    2. Developing countries have a clear interest in strengthening
    the system in a marine, that promotes their development. In many respects multilateral rules need to be improved to become more responsive to the trade and development interests of developing countries and to achieve equitable objectives.

    3. Due to the systemic shortfalls in the international economic and
    trading system a large majority of the developing countries have, so far, failed to accrue a share in the global economic prosperity. Moreover. the global economic slowdown/recession is going to affect all including most seriously the developing countries and the poorest among them.

    4. In the above context, we note with great concern that the
    benefits of the existing multilateral trading system continue to elude
    developing countries. Progress towards full liberalization in sectors of
    particular interest to them is lagging behind, and significant, imbalances between rights and obligations exist in multilateral trade agreements (MTAs), as well as in conditions of market access. In this regard, the decreasing participation of developing countries in the world trade should be urgently addressed. Addressing these asymmetries and the development deficit should receive primacy in all future work programmes in WTO since the key to sustained global economic growth lies in unlocking, the potential growth of developing countries. The development dimension must be fully incorporated into the MTS.

    5. We express deep disappointment on the lack of any meaningful
    progress on implementation issues. Despite a clear consensual decision in May and December 2000 by the WTO General Council to address and adopt decisions no later than the 4th Ministerial Meeting. We note that the developing countries have identified 104 implementation issues which emanate from the inadequate or faulty implementation of agreements, in letter and spirit; those arising from incorrect interpretation of the provisions of those agreements: and those which arise from inherent asymmetries and imbalances within the WTO agreements. We reiterate the need for full and
    faithful implementation and the redressal of existing imbalances arising from the Uruguay Round Agreement, which is an important step towards confidence building and restoring the credibility of the multilateral trading system and therefore must be meaningfully resolved, with urgency before the 4th Ministerial Meeting and without any extraneous linkages.

    6. We note that the Uruguay Round Agreements have not resulted. as promised. in greater market access to the developed countries' markets for the exports of developing and least developed countries. The continued existence in developed countries of tariff peaks, tariff escalations and other non-tariff barriers such as arbitrary and complex rules of origin, technical barriers to trade, and sanitary and phytosanitary measures used for protectionist purposes. as well as abuse of the so called trade remedies such as anti-dumping. countervailing duties and safeguard actions particularly in sectors of interest for developing, countries including textiles and clothing, agriculture and other agro-industrial products has had a serious negative impact on the trade and development prospects of the developing and least developed countries and has prevented these countries from reaping the benefits of trade liberalization. The Ministerial Meeting in Doha should address the negative impact of these measures on market access opportunities for developing countries with a view to their elimination.

    7. We believe that since the Special and Differential (S&D)
    provisions in the existing UR agreements, are mostly in form and not in substance. WTO Agreements should take into account the special development needs of developing countries. including LDCs, in a more meaningful and effective manner and call upon developed countries to urgently undertake positive measures to respond to the development, financial and trade needs of developing countries without reciprocal obligations. It also needs to ensure their effective applicability in terms of the intended objectives, by making those provisions more precise and effective. These provisions need
    to be legally binding and must be operationalised and made enforceable so that these do not remain merely "best endeavour clauses." The members should agree to conclude a Framework Agreement on the S&D Provisions.

    8. The on-going mandated negotiations in the areas of Agriculture
    and Services as well as mandated reviews need to result in improved market access opportunities and more fair and equitable rules for developing countries. We urge the Doha Ministerial Conference to redouble efforts in this regard.

    9. Trade in agriculture has been thereto characterized by high
    levels of protection through the use of high level of subsidies and a range of tariff and non-tariff barriers in the developed countries. Deeply concerned by the lack of progress on the on-going mandated negotiations under article 20 of the AoA, we stress the need for the 4th Ministerial Conference to take the necessary decisions for achieving the fundamental reform of agriculture, leading to its' incorporation into the rules and disciplines of the WTO, through:

    o The adoption of effective modalities for eliminating the trade and
    production­-distorting measures as well as the trade impeding, impact of such instruments on developing- countries exports in agriculture:

    o Developed countries' undertaking to eliminate tariff peaks. tariff
    escalations: to substantially reduce bound tariffs: to substantially. reduce domestic support: and to eliminate all forms of export subsidies. An improved differential and favourable treatment which is operational, effective and binding, is critical to promote the development potential of agriculture in the developing- countries:

    o The redressal of the inequitable nature of existing provisions of
    the Agreement on Agriculture. In this regard the proposal by developing countries on "Development Box" should be included in the provisions of a renewed and more equitable agreement as well as other proposals made by developing countries and S&D and the concerns of single commodity producers and SIDS. Proposals made by developing countries on non-trade concerns-namely food security and rural development shall also be addressed. As agreed, the appropriate mechanisms should be established to ensure the
    implementation of the commitments made in the Decision on Measures in favour of Net Food importing Developing- Countries and LDCS.

    10. Trade preferences remain crucial in increasing developing
    countries shares in international trade and they should be meaningful and not tied to non-trade conditionalities.

    11. We note with deep concern the substantial lag in the
    participation of developing countries in the trade in services. The ongoing mandated negotiations on trade in services shall be conducted on the basis of progressive liberalization as a means to promote the economic growth of all trading partners and the development of the developing countries. We, therefore, re-affirm the importance of the Guidelines and Procedures for Negotiations adopted by the Council for Trade and Services on 28th March 2001 (document S,/L/ 93), which shall form the basis for continuing the negotiations with a view to achieving the objectives of the General Agreement on Trade in Services. as stimulated in the Preamble, Article IV and Article XIX of that Agreement.

    12. We consider that negotiations should make operational the
    provisions under the TRIPs Agreement relating to the transfer of technology, to the mutual advantage of producers and users of technological knowledge, and seek mechanisms that allow for the disclosure of the sources of traditional knowledge and (genetic resources used in inventions, in order to achieve a fair and equitable sharing of benefits. In this regard. the TRIPs agreement should be supportive of and not run counter to the objectives and principles of the CBD with view to ensuring the protection of biological resources and to promote disciplines to protect traditional knowledge and
    genetic resources. The TRIPS review shall fully take into account the
    developmental dimension and during the course of this review members should agree not to invoke dispute settlement procedures against the developing countries.

    13. We affirm that nothing in the TRIPS agreement should prevent governments from taking measures for protecting public health and nutrition as well as from ensuring affordable access to essential medicines and life saving drugs in keeping with public health concerns of developing countries.

    14. We underline the importance of the review of the Agreement on
    Trade Related Investment Measures and reiterate that appropriate amendments in the TRIPS Agreement are necessary for developing countries to enable them to pursue their goals for development and rapid industrialization including indigenisation. We also stress that there should be a positive approach to requests for further extension of the transition period for developing countries under the TRIPS Agreement and in accordance to the 8 May 2000 Decision by the General Council. We further affirm that there should not be
    any expansion in the list of the measures covered by the disciplines of the TRIPS Agreement and during the course of the review members should agree not to invoke dispute settlement procedures against the developing countries.

    15. There is an immediate need for a meaningful integration of
    the textile and clothing sector, in view of very limited liberalization of
    trade, affecting items under specific quota restraints and meaningful
    increase in access possibilities for small suppliers from developing
    countries. Measures in this regard should include, inter alia, accelerated liberalization through removal of restrictions in accordance with the ATC and application of moratarium on antidumping, anti-subsidy and safeguard measures resorted to by industrialized countries.

    16. Measures to address implementation and mandated negotiations
    including the review of various WTO agreements already constitute a broad agenda for work. We recognize that issues such as trade and investment. competition, transparency in government procurement. trade facilitation, are important. However, any decision to conduct negotiations on these issues in WTO should be on a consensual basis and would need to be carefully assessed in respect of any implication on developing countries and their capacity to engage in negotiations. Furthermore, proposals of the developing countries to redress the development deficit in WTO must constitute first priority for any additional negotiations.

    17. We note that developing countries have highlighted some issues
    like trade and debt. trade and finance and trade and transfer of technology in the preparatory process for Doha and earlier Seattle. The establishment of mechanisms to meaningfully address these issues, which are of utmost concern to developing countries. should be urgently considered.

    18. We consider that developing countries continue to be constrained
    among others by limited technical and institutional capacities to fully
    adapt their national laws and fulfill their obligations as required and take full advantage of the provisions of the multilateral trade agreements. We urge developed country members of the WTO to fulfill their obligations and undertakings with regard to capacity building, and other technical assistance support to developing and least developed countries in letter and spirit. There is a need to enhance and ensure the provision of necessary resources on a predictable and regular basis and that technical cooperation activities should be funded from the regular budget of the WTO. We call for strengtheng technical assistance and capacity building activities of WTO. The international agencies of United Nations and other relevant organizations. Technical assistance should not be subject to conditionalities.

    19. We stress the importance for all countries of consistency between
    national trade policies and the multilateral trade agreements. In this
    regard. we reiterate our concern and call or the elimination of the
    continuing use of coercive economic measures against developing countries, through, inter alia, unilateral economic and trade sanctions which are in contradiction with international law, in particular new attempts aimed at extraterritorial application of domestic law. which constitute a violation of the United Nations Charter and of WTO rules.

    20. There is an urgent need to implement the commitments undertaken in the Plan of Action adopted at the Third United Nations Conference on the Least Developed Countries (LDC III) in particular Commitment 5. "Enhancing the Role of Trade in Development" and Commitment 7 Mobilizing Financial Resources". There should be a binding commitment to grant LDCs duty free and quota free access by the developed countries for their exports.

    21, The developed countries should also give due regard to the
    interest of other developing countries for future improved market access commitments.

    22. The Integrated framework (IF) remains a viable mandate for
    delivering co-ordinated trade and trade-related technical assistance to LDCs. The IF trust fund requires adequate funding and greater transparency in its implementation, including the basis for selecting beneficiary countries.

    23. In view of the increasing marginalization of Least
    Developed Countries (LDCs) in world trade, we urge the Ministerial
    Conference of WTO to take into account the spirit and recommendations of the Declaration of the recently LDCs Trade Ministers Meeting held in Zanzibar, to enhance their participation in the multilateral trading system.

    24. LDC applicants for WTO membership should allowed to accede
    on a fast track on the basis of flexible agreed criteria and obligations
    commensurate with their stage of development and based on the S&D treatment in favour of LDCs. The commitments of acceding LDCs should not exceed those of LDCs currently Members of WTO.

    25. We reaffirm that ILO is the competent body to set and deal with
    all issues relating to labour standards. We therefore firmly oppose any linkage between trade and labour standards. We are also against the use of environmental standards as a new form of protectionism. We believe that issues relating to such standards should be dealt with by the competent international organizations and not by the WTO.

    26. Developing concepts such as global coherence with other
    intergovernmental organizations like ILO and UNEP should be cautioned against as it may be used to link trade with social and environmental issues for protectionist purposes.

    27. We stress the need to address the specific problems of small
    economies, which are being increasingly marginalized in the multilateral trading system. Therefore, the ministerial decision should reflect the need to address the specific problems faced by small economies and to agree on a relevant work program for them.

    28. We also take note of the problems of the land-locked developing
    countries and SIDS emanating from the constraints due to their geographical location. Ways to address these problems should be identified.

    29. We recognize that regional and sub-regional integration amongst
    developing countries is essential to reversing the process of
    marginalisation and constitute a dynamic building block for their effective participation into the multilateral trading system. However, we are concerned with RTAS, involving developed countries. which discriminate against many developing and the least developed countries. We, therefore, call for the elimination of tariff differentials that discriminate against developing countries in RTAs amongst the developed countries.

    30. We take note of current work on enhancing coherence and
    complementary amongst the Bretton Woods institutions and the WTO, whose policies and obligations should be mutually supportive in promoting the development objective of the MTS. especially those of developing countries, with a view to ensuring policy consistency. improved co-ordination on technical and financial assistance, improving foreign direct investment (FDI) flows. reduction of the debt burden and eradicating poverty. To this end, the imposition of cross conditionalities or additional conditions on Governments shall be avoided.

    31. The universality of the World Trade Organization should be
    achieved as soon as possible in order to strengthen the multilateral trading system. We strongly believe that appropriate assistance should be made available to developing countries seeking accession. They should be offered terms that do neither exceed nor are unrelated to the commitments of developing country and LDC members of WTO. We urge that all WTO members refrain from placing excessive or onerous demands on applications from developing countries. Therefore, there is a need for a transparent, streamlined and accelerated accession process that is in keeping with WTO rules and discipline.

    32. We recognize the very extensive market access and other
    commitments made by the newly acceding developing countries. This should be taken into account in future trade negotiations.

    33. We call upon the need of continuing the work program on
    e-commerce. We also reaffirm the need to bridge the digital divide and eliminate all restrictions to the participation of developing countries and to access to modern technologies.

    34. The clarification of the applicable WTO rules to electronic
    Commerce will be of interest to all Members. Future work in this context should aim to create new opportunities for the expansion of trade, and in particular, for greater participation in international trade on the part of developing countries and for their small and medium enterprises.

    35. We reiterate the need to urgently reach a decision in WTO with
    regard to the request for permanent observers status that have been
    submitted by regional and other intergovernmental organizations from developing countries.

     

     

    PREPARATIONS FOR THE
    2001 MINISTERIAL CONFERENCE

    Proposal for Framework Agreement
    on Special and Differential Treatment.

    Communication from Cuba, Dominican Republic, Honduras, India, Indonesia, Kenya, Malaysia, Pakistan, Sri Lanka, Tanzania, Uganda, Zimbabwe

    The recognition of inherent inequality of 'players' in the Multilateral Trading System and the special needs and development concerns of the developing countries figured, for the first time, in the Havana Charter. The concept of Special and Differential treatment is a
    fundamental building bloc of the multilateral trading system. It was
    conceived in acknowledgement of the fact that developing countries are at a very different stages of economic, financial and technological developments and therefore have entirely different capacities as compared to developed countries in taking on multilateral commitments and obligations. It had, therefore, been accepted that special advantages and flexibilities must be provided to developing countries so that they are able to adopt appropriate national policies to support their trade regime. In essence, therefore, Special and Differential treatment provisions are to be looked at not as exceptions to the general rules but more importantly as an integral and inherent objective of the multilateral trading system.


    2. The preamble of the Marrakesh Agreement establishing
    the WTO clearly recognizes the need for positive efforts to ensure that developing countries and the least developed countries secure a share in the growth in international trade commensurate with the needs of their economic development. It is perhaps important to look at the process of the development and elaboration of S&D treatment for developing countries in the multilateral trading system.

    3. In the GATT the important milestones in this regard were:
    a) Modification of article XVIII of GATT in 1954-55 to include Article XVIII-B which allowed developing countries to use quantitative
    restrictions for balance-of-payments (BoP) purposes;

    b) Establishment of UNCTAD and the creation of the Committee on
    Trade and Development in the GATT in 1964;

    c) Addition of Part IV on Trade and Development to the GATT in
    1965; and

    d) Adoption of the Enabling Clause in 1979 at the end of the Tokyo
    Round. This process signified the growing importance of the S&D treatment for developing countries in the multilateral trading system and, at the very least, the political recognition by developed countries of the need for S&D to attract and accommodate developing countries in the system.

    4. Special and Differential Treatment was based on the recognition that the developing countries were placed differently in international trade and that these difficulties as well as the imperative of promoting social and economic development required that the developing
    countries be treated differently in the Multilateral Trading System :

    5. The basic content of S&D provisions consisted of :
    i) Better market access for exports by developing
    countries so that they could boost economic development through exports.

    ii) A lower level of obligations for developing countries
    providing them the necessary flexibility to pursue policy options
    appropriate for industrialization and economic development and ;

    iii) A modest level of expectation from developing countries
    as regards their application of various GATT agreements.

    6. One guiding principle for S&D was an acceptance of deviation from the general rule of quid pro quo or reciprocity for the developing countries.

    7. The concept of S&D underwent a dramatic transformation in
    the Uruguay Round Agreements. The S&D treatment prior to WTO was in recognition of the special problems of development faced by developing countries, but in the WTO agreements it only recognized the special problems that developing countries may face in the implementation of the agreements. This major shift in the focus from the problems of development to the problems of implementation meant that:

    i) It was assumed that the level of development had no
    relationship with the level of rights and obligations under the multilateral trading system,

    ii) The same policies could be applicable for countries at
    various levels of development. It was thought that all what was required was the grant of short transition periods and technical assistance for the developing countries ; and

    iii) Developing countries did not have the option to sign or
    otherwise on the various agreements because all of them, excepting four plurilateral agreements, were part of the Single Undertaking.

    8. This dramatic erosion of S&D treatment was further
    compounded by the fact that the WTO agreements went far beyond the traditional border measures covered under the GATT and included many more areas of domestic economic policy making. In addition, these agreements were enforceable through a binding dispute settlement mechanism under the WTO.

    9. The Uruguay Round Agreements shifted the thrust from
    enhanced market opportunities to grant of transition periods and technical assistance. The developing countries could hardly benefit from the almost 145 S&D provisions (in the Uruguay Round Agreements) which mostly do not go beyond a best endeavour promise and therefore are not legally enforceable. Lack of any mechanism to ensure effective implementation of S&D provisions
    in the WTO has been a major area of concern for developing countries.

    10. It is imperative to undertake a thorough review of the
    concept of S&D as its basis objective is to create a level playing field for unequal players in the Multilateral Trading System. This should seen in the establishment of a concrete and binding S&D regime which is responsive to the development needs of the developing countries. There is an urgent need for such S&D regime which mainly focuses on enhancing market access opportunities (for developing countries) and provides policy options aimed at unlocking their growth and development potential. The guiding basis, therefore, should be that;
    i) the liberalization of trade is not an end in itself but the means to an end, that is, economic growth and development of all members and

    ii) different levels of development achieved by members require
    different sets of policies to achieve economic growth and development.

    11. First, because developed countries, too, have enjoyed such flexibility and differential treatment during their earlier periods of economic development. In fact, some of them are still getting such treatment, particularly in areas such as textiles and clothing, and agriculture. Second, in this age of interdependence, the long
    term prosperity of developed countries depends on the economic development of developing countries. S&D treatment that facilitates developing countries to grow and develop will ultimately benefit all not just in terms of more and affluent markets but by ensuring a more peaceful world.

    12. The system and the rules should ensure equal participation
    by, and equal benefits to, all. In the immediate/short term, all the
    existing S&D provisions in various WTO agreements should be fully
    operationalised/implemented. The implementation should go beyond
    technicalities and include operationalisation of provisions that presently lack operational modalities.

    13. In the medium term, the agreements should be suitably
    amended in the light of the experience by the developing countries that these provisions fall short of providing necessary flexibility to pursue appropriate policies and facilitate economic development in the developing countries. The WTO must demonstrate sensitivity to developmental objectives of majority of its Membership and to sustain credibility. Many of the Implementation proposals submitted by developing countries, in the backdrop of, uneven growth and development in the years following the establishment
    of WTO, can be viewed as an initial endeavour for extension and elaboration of enhanced, effective and a binding S&D regime.

    14. In order to institutionalize and rationalize the adoption
    and application of S&D provisions in various WTO Agreements, WTO Members should elaborate a framework/umbrella agreement on S&D treatment which should include provisions reflecting the objectives and principles of S&D treatment for developing countries, as outlined above. The Doha Ministerial should recognize the importance of this issue and agree to the negotiation of such a "framework" agreement on S&D.

    15. Some of the elements which can form part of the Agreement on S&D could be as follows :
    · Special and Differential treatment shall be mandatory and
    legally binding through the dispute settlement system of the WTO (including notification requirements and inclusion of these commitments in country schedules).

    · In any future agreement, that the Members may agree, there
    shall be an evaluation of the development dimension. This evaluation should include the fact as to how these agreements facilitate attainment of developmental targets (e.g. as set out in the Millennium Declaration).

    · The Members shall undertake an evaluation of the implications of any future agreement, with respect to implementation costs in terms of financial, capacity building and technical assistance, etc.

    · The transition periods shall be linked to objective economic
    (debt level, level of industrial development, human development index, etc.) and social (literacy and life expectancy) criteria.

    · Without an evaluation of the fact whether an Industrial Policy has a demonstrable adverse impact on trade, there shall be no prohibition of policies which promote growth and development in developing
    countries.

    · The application of the concept of Single Undertaking for developing countries should not be automatic.

    28.06.2002

     

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