Rashid s. kaukab

1. Emerging issues and the multilateral trading systemsome issues and implications for developing countriesWTO Geneva weekCUTS International, Geneva Session Geneva, 12 December 2012 Rashid s. kaukab

2. outline • Some emerging issues: brief implications for developing countries • Emerging issues and the multilateral trading system: a development perspective • Way forward: some suggestions for developing countries

3. I. Some emerging issues • World is changing but that is nothing new: what is new is the pace and complexity of changes • Power balance and politics: emerging economies; RTAs • Economics and finance: Euro debt crisis; exchange rates • Resources gaps: food, water, and energy • Interplay of issues: climate change • Business and markets: global supply chains • Driving force and opportunity: innovation and technology

4. I. Emerging economies: Some Implications • Alternative and growing markets for other developing countries • Diversified power balance in the WTO • Can they provide finance, technology, and markets for value-added products? • Can they bring more equal distribution of power in the WTO?

5. I. Rise of RTA: some implications Challenges: • Rules on new issues and deeper disciplines on issues covered in the WTO (WTO+) thus setting precedents e.g. on IPRs, investor-state dispute settlement • Diverting attention and resources from the MTS • Creating web of overlapping and conflicting rules • Marginalisation of smaller developing countries

6. I. Rise of RTA: some implications Opportunities: • Larger economic spaces for smaller developing countries • Testing new rules and new issues • Building negotiating experience and skills • Basis for alliances in the MTS

7. I. Access to resources: some implications • Growing demand: global population growth; Chain and India factor; expanding global middle class; inefficient use • Growing demand for not only energy but for raw materials, water and land • Impact on long term prices: increase and volatility • Rise in disputes including at the WTO • More export restrictions

8. I. Access to resources: some implications Resource-rich countries • Urgent need to use gains from commodity/resource price boom for diversification and structural transformation of economies • Sustainable management of natural resources Resource-poor countries • Stable access, e.g. to food and energy resources • Development of appropriate MTS disciplines on export restrictions General • Investing in renewables • Regional arrangements • Negotiating better agreements

9. I. Climate change: some implications • Will induce changes in what is produced where and how, and what is traded and how • Will increase frequency of shocks to production, productivity, and hence trade flows • Some countries may be tempted to use trade policy measures to deal with “carbon leakage”, e.g. through border tax adjustments

10. I. Climate change: some implications • Dealing with private standards: convergence or equivalence; need for technical and financial resources • Dealing with new “regulations”: negotiations, disputes, adoption • WTO: using the existing agreements and provisions; negotiations on environmental goods and services

11. I. global value chains: some implications • Innovation/conception-production-marketing networks spread across countries, firms, and goods and services • Lengthening of supply chains with greater fragmentation of tasks: growing trade in intermediate goods and services • Inducing changes in the way trade flows are measured • Participation in global value chains as an opportunity to trade out of under-development and poverty

12. I. Global value chains: some implications Where in the Value Chain Matters

13. I. Global value chains: some implications • Impact on multilateral trade negotiations: “re-think” of trade flows and their origins as trade in tasks with incremental values being added at each stage, located in different countries • Governance of private standards: e.g. for agro-industrial value chains where compliance is costly and is a constraint for SMEs

14. I. innovation and technology: some implications • Current gap between developed and developing countries • A key determinant of productivity enhancement • Contribution to economic growth and development • Importance of technology transfer • In-built flexibility in the MTS to adapt to technological developments to maximise their contribution to trade and development

15. II. Emerging issues and multilateral trading system: a development perspective Performance of the MTS: Current • Regular functions: reasonable though limited developing country participation • Negotiations: Doha Round stalled but important developments must be preserved • Dispute settlement: reasonable though very limited developing country participation • Discussions: increasing but remain limited • Development: gap between rhetoric and reality

16. II. Emerging issues and multilateral trading system: a development perspective Performance of the MTS: Emerging Issues • Dealing with emerging issues: whether and how (mandate and manner) • New negotiations: mandate needed which should be based on the core competence of the WTO and the interests of all its Members • Doha Round and regular WTO work: some issues can be addressed • Dispute settlement: may become the default option • Discussions: expect and prepare for more

17. II. Emerging issues and multilateral trading system: a development perspective International Trading System

18. II. Emerging issues and multilateral trading system: a development perspective • Strengthening vertical links: MTS should reflect grassroots' aspirations and concerns, and aim for development outcomes • Finding horizontal links: MTS is only a part of the system of global economic governance and hence should let specialised institutions deal with issues under their respective mandates/competences while collaborating as appropriate

19. iii. Way forward: some suggestions for developing countries Objectives • An equitable and well functioning system of global economic governance with a development-oriented MTS • Strengthening vertical links and finding and implementing suitable horizontal links • Coordinated and strategic actions at the national, regional, ACP and multilateral levels

20. iii. Way forward: some suggestions for developing countries Actions at the National Level • Technical, human and institutional capacity building • Regular and systematic Inter-ministerial coordination and multi-stakeholder consultations • Investing in human resources development, renewables, and innovation • Strategic relationships with regional partners, emerging economies, and developed countries • Sustainable management of natural resources, including through better negotiations

21. iii. Way forward: some suggestions for developing countries Actions at the Regional Level • Enlarging regional economic spaces through own FRTAs • Common strategies to deal with emerging issues • Developing new and development-friendly rules to deal with emerging issues • Preparing for better participation in the MTS • Careful and coordinated negotiation of RTAs with developed countries and emerging economies

22. iii. Way forward: some suggestions for developing countries Actions at the MTS Preserving useful gains of Doha Round • SP and SSM (food security) • Hybrid approach to environmental goods and services (environment and climate change) • Commitments for technical and financial assistance • Measures to deal with preference-erosion • Situation-based approaches to commitments, e.g. paragraph 6 in NAMA, differentiated commitments by SVEs, RACs, etc.

23. iii. Way forward: some suggestions for developing countries Actions at the MTS Improving participation in Regular Bodies • Sectoral Councils and Committees (e.g. CTG, CTE, CTD, CTS, TRIPS): brining up emerging issues of interest and safeguarding against entry of emerging issues from the back door • Technical Committees (e.g. SPS, TBT): raising and dealing with technical issues related to emerging issues where needed • TPRB: making strategic use of the opportunity • All Bodies: monitoring for the implementation of the existing commitments by trading partners

24. iii. Way forward: some suggestions for developing countries Actions at the MTS Safeguarding interests through DSU • Monitoring developments: on-going consultations, cases, outcomes and their implications • Strategic participation: as third parties and as complainants • Reform: participation in DSU review negotiations

25. iii. Way forward: some suggestions for developing countries Actions at the MTS Initiating and responding to discussions • Making use of Regular Bodies • Organisation of dedicated seminars and workshops on selected emerging issues • Joint events with other relevant international organisations • Working with like-minded and development-friendly NGOs

26. Thank you. Questions and comments are welcome