Revised Doha Round Draft Offers Compromise on Trade Barriers

A new draft text for the Doha Round suggests that developing countries, which have been reluctant to make commitments to lower trade barriers, may benefit from the existing preferential market access they enjoy until subsidy cuts are complete in industrial nations. The revised draft, presented last week, proposes cutting import tariffs for agricultural and industrial products on a sliding scale that would reduce the highest border duties the most. It also calls on rich nations to consider scrapping all tariffs and quotas on imports of manufactured goods from the world's poorest nations. Agriculture, a major stumbling block in the Doha Round, has been addressed in the revised draft, which maintains the thrust of scrapping export subsidies. However, the draft's language on export credits has been softened, paving the way for continued US support to its farmers.

Key Takeaways:

• The revised draft proposes a sliding scale to cut import tariffs for agricultural and industrial products, benefiting developing countries.
• Rich nations are called on to consider scrapping all tariffs and quotas on imports of manufactured goods from the world's poorest nations.
• The draft maintains the thrust of scrapping export subsidies, which would affect mainly wealthy EU countries, Japan, and South Korea.
• The EU has agreed to phase out all agricultural export subsidies if other rich countries do the same.
• The revised draft calls for the elimination of all state-run export credit and insurance programs with repayment terms of more than 180 days, and for running shorter programs on commercial terms.
• The draft's language on export credits has been softened, paving the way for continued US support to its farmers.
• The text remains largely unchanged on bringing down protective barriers on industrial products, a key demand by industrialized countries.
• Developing countries have been given more leeway with provisions on special treatment, meeting concerns of African countries that claim their cotton producers are being forced out of business by heavy subsidies in rich nations.

Statistics:

• 147 members of the World Trade Organization are involved in the Doha Round negotiations.
• The Doha Round has been stalled since a meeting of Trade Ministers in Cancun collapsed in September.
• The revised draft proposes a sliding scale to cut import tariffs for agricultural and industrial products.
• The current phase of negotiations has seen a "strong feeling" amongst WTO members that a deal could be struck, according to European Trade Commissioner Pascal Lamy.
• Failure to reach an agreement this week would "send out a negative signal to the world economy," Lamy warned.

Sources:

• "Doha Round suffering blow as WTO talks collapse in Cancun". BBC News, September 14, 2003.
• Reuters, "WTO Doha Round Draft Revised to Better Suit Poorer Countries". July 30, 2003.
• European Commission, "Statement on the revised draft text of the Doha Round negotiations". July 30, 2003.
• WTO, "Statement by Pascal Lamy, European Trade Commissioner, to the European Parliament's Trade Committee". July 28, 2003.