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Fine-tuning Doha Development Agenda

M. Zakir Hossain
IN 2001, WTO members started negotiations on the Doha Development Agenda (DDA). And while international negotiations tend to give rise to disagreements between developed and developing countries, negotiations over the DDA have launched several different conflicts, which continue to be problematic for the WTO today.
The DDA is problematic on three main points. The first issue involves market access for agricultural products between importers and exporters of agricultural products. The importers (i.e. Japan, India and the EU) require flexibility and practical tariff reductions, in contrast to exporters' (i.e. the US and the Cairns Group) demands for bold tariff reductions. The second issue concerns domestic support for farmers, in which the US is up against several WTO members.
The third issue is non-
agricultural market access (Nama), with developed countries arguing to reduce tariffs on products and developing countries demanding full flexibility. These complications have made it all the more difficult to reach an agreement since the round started. In May 2008, revised drafts on agriculture and Nama were presented, but these also met with controversy, halting the negotiations process as member countries remain at loggerheads.
Ambassador Bhatia criticised the latest draft for failing to secure more market access for developing countries, as per the Doha mandate, while die EU found fault with the draft for providing too much flexibility for developing countries. The US stated they would withdraw from the Doha deal if there was no real market access, particularly in emerging countries.
India has been highly critical of the drafts, stating that the Nama draft would hamper die growth of industries in developing countries.
The Automotive Component Manufacturer's Association of India (Acma) has described the most damaging element of Nama's text as its proposal to constrain sensitive tariff lines. Meanwhile, South Centre, an intergovernmental policy think-tank for developing countries, criticised the draft's stagnancy in domestic support and access to sensitive products. On the same issue, Canadian agriculture minister Gerry Ritz said: "Canada firmly opposes proposals for any over quota tariff cuts or tariff expansion forsensitive products."
These various opinions on each topic have made it all the more difficult to reach an agreement; however. Brazilian President Luiz Inacio Lula da Silva said: "We should have a conclusion by July 30." According to him, die current stalling in negotiations at the Doha Round will be over when developed countries accept more flexibility in agricultural markets to broaden access for products from develop-
ing countries, but he must bear in mind that this is easier said than done.
Outside of the DDA. countries have begun to negotiate free trade agreements on their own --Australia and Chile concluded their FTA in May, while Australia and Japan decided their FTA in June, proving the case of bilateral FTAs over multilateral negotiations. The move towards bilateral agreements shows a common discontent and concern among member countries for the DDA negotiations.
On June 30, WTO's Director General Pascal Lamy demanded maximum efforts over the next few weeks at a meeting of the TYade Negotiations Committee, stating the immediate challenge as improving the agriculture and NAMA drafts, with regard to establishing modalities. Another informal meeting, agreed upon by all members and scheduled for late July, was declared in order to discuss these modalities; it is this meeting that will conclude the DDA.
Bangladesh, like other less developed countries (LDCs), plays a pivotal part in the debates over the DDA, facing both challenges and opportunities in the negotiations process. It is important for Bangladesh to introduce a formula
for determining tariff cuts, and bound tariff lines. The readymade garments (RMG) industry occupies over three-fourths of exports, constituting 90% of Bangladesh's exports to the US. This brings forth the importance of Nama, as any change in trade of industrial products will impact the country's exports.
Given the overwhelming dependency on single products and a single market, Bangladesh must expand its RMG industry and diversify supplies. Recent studies showed duty-free trade would increase Bangladeshi textile exports to the US by 50%. A study by the International Food Price Research Institute (IFPRI) demonstrated that given a 100% DFQF market access to developed countries, global income from a successful round of trade negotiations would amount to $69 billion, where the LDCs' share would be about $8 billion.
Regarding agricultural issues, Bangladesh has been exempted from tariff reductions under the present round. WTO members are required to provide the DFQF market for at least 97% of the products from LDCs by 2008. TYade liberalisation in western countries will increase the possibility of exporting these products from
Bangladesh, since the country has a comparative advantage in different agricultural products; but this may have negative consequences for Bangladesh, as it is a net food importer.
Another consequence of liberalisation will be the potential increase in food prices from the agreement to eliminate export subsidies by 2013. Fortunately, certain sensitive and special products will be excluded from tariff reductions, but the government must determine these immediately.
Concluding the DDA will lead to a positive turn for Bangladesh, as the connections amongst trade, environment and sustainable development become clearer. This is a relationship that the DDA cannot ignore, and for which the DDA must find a balance, particularly in regards to the search for carbon neutral development and the immediate needs of developing countries.
Taking into consideration the concept of sustainable development, Bangladesh and other LDCs should not make concessions. Bangladesh should inform members that enhanced market access and trade can help less developed countries generate resources needed to combat to climate
change. The DDA must take this into account. If it fails, it will not only delay development, but also negatively impact the environment.
Concerns for the DDA are not only global but also domestic. Some say NAMA would threaten the textile industry of Bangladesh, jeopardising their women workers. The Bangladeshi government must address such concerns. The Doha Development Agenda was formed to help developing countries in their economic growth through market liberalisation; however, recent negotiations show a disparity between the original ideals of the DDA and its practices, as devel-
oped countries move towards protecting their benefits and backing away from making any concessions.
Though the DDA may not solve all of a country's economic problems, reaching an agreement will benefit the global market. The liberalisation of trade will encourage developed countries to reform their economic and industrial structure. All WTO members should thus think twice about the true purpose of the DDA.
M. Zakir Hossain is Trade Policy Expert and Chief Executive of Young Consultants 4 Kazuaki Nohara, Intern from Hitotsubashi University, Japan.