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2006ANNUAL SESSION OF2008INTER-PARLIAMENTARY UNION EUROPEAN PARLIAMENT

ANNUAL SESSION

PARLIAMENTARY

CONFERENCE ON THE WTO

GENEVA, 11-12 SEPTEMBER 2008

9 789291 424009

Annual session of the Parliamentary Conference on the WTO

Geneva, 11-12 September 2008

Inter-Parliamentary Union and European Communities, 2008

All rights reserved. No part of this publication may be produced, stored in a retrieval system, ortransmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise,without the prior permission of the Inter-Parliamentary Union or the European Parliament.

This publication is circulated subject to the condition that it shall not by way of trade or otherwise,be lent, sold, hired out or otherwise circulated without the publisher’s prior consent in any form ofbinding or cover other than in which it is published and without a similar condition including thiscondition being imposed on the subsequent publisher.

Photographs : H. Salgado, 2008

ISBN 978-92-9142-400-9

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CONTENTS

ANNOTED AGENDA OF THE SESSION 5

PROGRAMME OF THE SESSION 7

INAUGURAL CEREMONYMr. Geert Versnick (Belgium), Member of the IPU Executive Committee, Coordinator of the IPU Delegation tothe Conference Steering Committee 9Mr. Manuel António dos Santos, Vice-President of theEuropean Parliament 11

OUTCOME DOCUMENT 14

HEARING WITH THE WTO DIRECTOR-GENERAL, MR. PASCAL LAMY

Introductory remarks 16Excerpts from the debate 18

DIALOGUE WITH SENIOR WTO NEGOTIATORSAmbassador Crawford Falconer (New Zealand),Chairperson of the WTO Special Session of theCommittee on Agriculture 24Ambassador Fernando de Mateo y Venturini (Mexico),Chairperson of the WTO Special Session of theCouncil for Trade in Services 25Excerpts from the debate 26

DEBATE ON SUBSTANTIVE THEME (A): LOOKING BEYOND DOHA

Discussion paper presented by Mr. Carlos Carnero González(European Parliament) 30Discussion paper presented by Mr. Benedict A. Martins,MP (South Africa) 34Introductory remarks by Mr. C. Carnero González 37Introductory remarks by Mr. B.A. Martins 39Introductory remarks by Mr. Stuart Harbinson,Senior Adviser to the UNCTAD Secretary-General 40Introductory remarks by Dame Billie A. Miller,former Minister of Foreign Affairs andForeign Trade (Barbados) 41Introductory remarks by Ms. Cristiana Muscardini(European Parliament) 43Excerpts from the debate 44

DEBATE ON SUBSTANTIVE THEME (B):CAN INTERNATIONAL TRADE HELP MITIGATE CLIMATECHANGE?

Discussion paper presented by Dr. Khunying Kalaya Sophonpanich(Thailand) 53Discussion paper presented by Mr. Paul Rübig andMr. Alain Lipietz (European Parliament) 56Introductory remarks by Senator Pikulkeaw Krairiksch(Thailand) 59Introductory remarks by Mr. P. Rübig 60Introductory remarks by Ms. Vesile Kulacoglu, Director of theTrade and Environment Division, WTO Secretariat 61

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CONTENTS

Introductory remarks by Ms. Elisa Ferreira(European Parliament) 63Excerpts from the debate 64

INTERACTIVE PANEL DISCUSSION. DEFUSING THE THREAT OFCONFLICTS OVER FOOD AND ENERGY THROUGH TRADE

Ms. Esperanza Duran, Executive Director, Agency for InternationalTrade Information and Cooperation 71Senator Luis Alberto Heber (Uruguay) 73Mr. Olivier De Schutter, Special Rapporteur on the right to food,United Nations 73Mr. Maximo Torero, Director, Division of Markets, Trade and Institutions, International Food Policy ResearchInstitute (USA) 76Excerpts from the discussion 78

INTERACTIVE PANEL DISCUSSION. TRADE IN THE ERA OF DIGITALREVOLUTION

Ms. Martine Julsaint-Kidane, Trade Negotiations andCommercial Diplomacy Branch, Division on InternationalTrade in Goods and Services and Commodities, UNCTAD 84Ms. Aarti Holla-Maini, Secretary General,European Satellite Operators Association 86Mr. Fredrik Erixon, Director of the European Centre forInternational Political Economy 87Excerpts from the discussion 88

GUIDELINES FOR RELATIONS BETWEEN GOVERNMENTSAND PARLIAMENTS ON INTERNATIONALTRADE ISSUES 92

RULES OF PROCEDURE OF THE PARLIAMENTARYCONFERENCE ON THE WTO, AS AMENDED ON12 SEPTEMBER 2008 93

PARTICIPATION 96

COMPOSITION OF THE STEERING COMMITTEE 97

ACRONYMS 98

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ANNOTED AGENDA OF THE SESSION

1. Adoption of the agenda

2. Dialogue with senior WTO negotiatorsThe annual session of the Parliamentary Conference on the WTO willbe taking place at a juncture when the future of the Doha Roundremains uncertain due to highly divergent positions of WTO memberson key issues including agriculture, non-agricultural market access,and services. Participants at the parliamentary session will have anopportunity to put questions to top WTO negotiators, receive first-hand information on the latest developments in WTO talks, andexchange views on possible ways forward.

3. Debate on substantive themes:

(a) Looking beyond Doha

Under this agenda item, delegates are expected to focus, from aparliamentary perspective, on the long-term consequences of aprotracted stalemate in WTO negotiations. What is the future of aWTO-centric multilateral trading system if the Doha Round fails todeliver on its development promise? Would a spaghetti-bowl ofbilateral agreements replace the multilateral system? Should therising tide of protectionism be seen as an impediment to theachievement of the Millennium Development Goals? Are WTOaccession rules and procedures sufficiently transparent? Amongother issues, delegates are invited to address the issue of effectivelegislative oversight of trade talks, including through theParliamentary Conference on the WTO.

(b) Can international trade help mitigate climate change?

Political leadership and public opinion have been alerted to theadverse impact of climate change on natural ecosystems, theeconomy and human health. The appropriate policies are yet to beput in place though, despite the known benefits of early action toreduce greenhouse gas emissions and put an end to irresponsibleproduction and consumption patterns. What kind of trade rules arerequired to limit climate change caused by trade-related activities?What can be done to amplify the capacity of international trade toattenuate negative environmental trends? Delegates are invited toexplore these avenues, bearing in mind the need for innovative andcost-effective solutions.

4. Panel discussions

(a) Defusing the threat of conflicts over food and energy through trade

For the first time in many years, food shortages and soaring energyprices are back in the spotlight of the international media and thediplomatic arena. This interactive session will focus on the role ofinternational trade as a means of adjusting supply and demand ina situation where countries are scrambling for markets amid fearsof diminishing returns. The debate should also cover the issue oftrade-distorting subsidies and tariffs, and the need to strengthenWTO rules.

(b) Trade in the era of digital revolution

One of the most visible examples of the way in which informationand communication technologies (ICT) contribute to economic growthis the advancement of e-business and e commerce throughout theworld, including in developing countries. Governments, parliaments,civil society and the private sector all have a vital stake in grasping

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ANNOTED AGENDA OF THE SESSION

the digital opportunity and putting ICT at the service of development.This interactive panel will focus on the role of parliaments in providingan enabling legal and regulatory environment for e-commerce, andon trade facilitation through relevant capacity-building measures.

5. Guidelines for relations between governments andparliaments on international trade issuesAs a follow-up to the initial exchange of views that took place duringthe Hong Kong session of the Parliamentary Conference on the WTOin December 2005, the Conference Steering Committee elaboratedthe enclosed draft Guidelines on the basis of two comparative studies,undertaken by the European Parliament and the French Senaterespectively. Participants at the parliamentary session will be calledupon to approve the text of draft Guidelines, with a view to itssubsequent circulation to all parliaments as a recommendation foraction.

6. Amendments to the Rules of Procedure of the ParliamentaryConference on the WTOThe current set of Rules of Procedure was adopted by theParliamentary Conference on the WTO at its session held in Brusselsin November 2004. On the request of a number of delegations, theConference Steering Committee prepared a series of amendments tothe Rules of Procedure with a view to establishing a mechanism forrotating the Steering Committee seats among different nationalparliaments. In accordance with Article 8 of the current Rules, theparticipants at the parliamentary session will be called upon toapprove the proposed amendments, it being understood that theSteering Committee has already established a timeframe for phasingin the regional rotation and drawn up a list of geographical regionsfor the purpose of rotation.

7. Adoption of the outcome documentAt the end of the session, the participants will be invited to considerand adopt an outcome document, the draft of which will be preparedby the Conference Steering Committee.

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PROGRAMMEOF THESESSION

Wednesday, 10 September10:00 - 19:00 Registration of participants (IPU Headquarters)17:30 - 20:00 Pre-Conference session of the Steering

Committee (in camera meeting, IPUHeadquarters)

Thursday, 11 September08:00 - 18:30 Registration of participants09:30 - 10:00 Inaugural session10:00 - 10:15 Adoption of the agenda and other organizational

issues

10:15 - 11:30 Debate on substantive themes

Substantive Looking beyond Dohatheme (a)

Rapporteurs

● Mr. Carlos Carnero González, Member of the European Parliament

● Mr. Benedict A. Martins, MP (South Africa)

Discussants

● Mr. Stuart Harbinson, Senior Adviser to the UNCTAD Secretary-General

● Dame Billie A. Miller, former Minister of Foreign Affairs and Foreign Trade (Barbados)

● Ms. Cristiana Muscardini, Member of the European Parliament

11:30 - 13:00 Hearing with the WTO Director-General, Mr. Pascal Lamy

13:00 - 14:30 Lunch break

14:30 - 16:30 Interactive panel discussion

Defusing the threat of conflicts over food andenergy through trade

Panellists● Senator Luis Alberto Heber (Uruguay)● Mr. Olivier De Schutter, Special Rapporteur on

the right to food, United Nations● Ms. Esperanza Duran, Executive Director,

Agency for International Trade Information and Cooperation

● Mr. Maximo Torero, Director, Division of Markets,Trade and Institutions, International Food Policy Research Institute (USA)

16:30 - 19:00 Continuation and end of the debate on substantivetheme (a), followed by

Substantive Can international trade help mitigate climatetheme (b) Change?

Rapporteurs● Senator Pikulkeaw Krairiksch (Thailand)● Mr. Alain Lipietz and Mr. Paul Rübig, Members

of the European Parliament

Discussants

● Ms. Vesile Kulacoglu, Director of the Trade and Environment Division, WTO Secretariat

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19:00 Reception

20:00 - 22:00 Steering Committee (in camera meeting, IPUHeadquarters)

Friday, 12 September08:00 - 17:00 Registration of participants09:30 - 10:30 Continuation of the debate on substantive

theme (b)10:30 - 12:00 Dialogue with senior WTO negotiators

● Ambassador Crawford Falconer (New Zealand),Chairperson of the WTO Special Session of theCommittee on Agriculture

● Ambassador Fernando de Mateo y Venturini (Mexico), Chairperson of the WTO Special Session of the Council for Trade in Services

12:00 - 13:00 Continuation and end of the debate on substantive theme (b)

13:00 - 14:30 Lunch break

14:30 - 16:30 Interactive panel discussion

Trade in the era of digital revolution

Panellists● Ms. Martine Julsaint-Kidane, Trade

Negotiations and Commercial Diplomacy Branch, Division on International Trade in Goods and Services and Commodities, UNCTAD

● Ms. Aarti Holla-Maini, Secretary General, European Satellite Operators Association

● Mr. Fredrik Erixon, Director of the European Centre for International Political Economy

16:30 - 15:45 Amendments to the Rules of Procedure of theParliamentary Conference on the WTO

followed by

Adoption of the Guidelines for relationsbetween governments and parliaments oninternational trade issues

16:45 - 17:00 Closing session

Adoption of the outcome document

PROGRAMMEOF THESESSION

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INAUGURAL CEREMONY

ADDRESS BY MR. GEERT VERSNICK (BELGIUM), MEMBER OF THE IPU EXECUTIVE COMMITTEE, COORDINATOR OF THE IPU DELEGATION TO THE CONFERENCE STEERING COMMITTEE

Geneva, 11 September 2008

Fellow parliamentarians, Representatives of governments and internationalorganizations, Ladies and gentlemen,

I have great pleasure in welcoming you to the annualsession of the Parliamentary Conference on the WTO.In its six years of existence, the Conference has provedto be an effective tool of parliamentary scrutiny ofinternational trade policies. It is a place wheremembers of parliament - elected representatives ofthe people - engage in debate and interaction withWTO officials and negotiators, renowned internationalexperts, and each other, of course.

Today’s meeting is the largest internationalparliamentary conference on trade ever organized.We have almost 100 parliaments represented at thismajor event. We are joined by members of diplomaticmissions in Geneva, officials of internationalorganizations, representatives of the academic andbusiness communities, NGOs and the mass media. Iextend a cordial welcome to all of you on behalf theIPU as the host of the session. I take this opportunityto convey to you the greetings of the IPU President,Mr. Pier Ferdinando Casini, who is unable to attendowing to important political commitments in hiscountry, Italy.

Our session is taking place at a critical moment forthe Doha Round of multilateral trade negotiationsand for the WTO as a whole. For the third summerin a row, attempts to reach a breakthrough in WTOtalks have ended in failure. Despite the repeatedcommitments by WTO members to conclude theRound by the end of 2008, the mini-ministerial

meetings held in late July fell short of an accordonce again.

In their initial reactions to the collapse of the mid-summer talks, governments refrained from the bitterblame-game that had marked similar breakdowns inthe past. And although the subsequent exchangeshave become somewhat harsher, everybody seemsto concur: the mini-ministerial meeting camesurprisingly close to an agreement.

Thus, there is hope. Or is there? This is what we shalltry to establish during our session, from aparliamentary perspective, but with the help ofexperts who are certainly the best-placed to knowbecause it is they who lead these negotiations.

The first among them is Mr. Pascal Lamy, the WTODirector-General, who will join us for a specialhearing. He repeated time and again after theministerial meeting that "no one is throwing in thetowel" yet. I personally find his words rathercomforting and look forward to what he has to tellus.

I am likewise encouraged by the attitude of the chairsof the Agriculture and NAMA NegotiatingCommittees who have declared their intention toproduce papers "capturing the work" done duringthe meeting. The chair of the Committee onAgriculture has kindly accepted our invitation toaddress the session. He will provide us with first-hand information on what to expect in this cruciallyimportant field of negotiation. He will be joined bythe chair of the special session for trade in services,which is another very important area indeed.

I have no doubt that you have many questions to askthem. Let's make good use of this opportunity - justas we do it in our own parliaments during hearingswith ministers and other government officials.

Whether the WTO members can pick up where theyleft off during the ministerial meeting remains tobe seen. Governments have made various pledgesand pleas to retain what is currently on the table.The truth is, however, that they have no obligationto honour such non-binding commitments offeredin the course of negotiations.

This is a situation where parliaments can help.Parliaments represent a political spectrum which isnaturally wider and more diverse than that ofgovernment. In multilateral trade negotiations, forexample, they can contribute to identifyingnegotiating opportunities in areas where governmentofficials would normally show reluctance. Membersof parliament are uniquely qualified to assist inbuilding consensus through compromise - a skill inwhich they are well versed.

Parliaments and the executive branch of governmenthave very different responsibilities in relation tointernational trade negotiations. Governmentsnegotiate rules and arrangements on behalf of States,while parliaments scrutinize government action,influence policies pursued in intergovernmentalnegotiations, ratify trade agreements, implementthem through appropriate legislation and budgetallocations, and finally oversee the implementationprocess as a whole.

We insist that trade negotiations must be subjectedto democratic parliamentary scrutiny, so as to avoidsituations where parliaments are faced with a faitaccompli and have to ratify the already negotiatedagreements as an indivisible package. This leads totensions, which are further worsened when WTO'sdispute settlement system is used to challengenational laws.

Not without some initial reticence, the WTO seemsto be responding to this pressure by enhancing itsrelations with actors beyond its formal membershipand in particular by engaging with those who haverepresentational mandates. This is a fundamentalparadigm shift. We welcome it as a step in the rightdirection, towards introducing greater democraticaccountability of the WTO.

Our commitment to an inclusive, equitable, robustand sustainable global economic agenda founded onthe rules-based multilateral trading system remainsunwavering. We are convinced that there is no viablealternative to multilateralism and that engaging in asplurge of bilateralism is not an option. It is for this

reason that we have decided that the session's agendashould be focused first of all on the reasons for theprotracted stalemate in WTO talks and on possibleparliamentary action to help overcome it.

At the same time, the session's agenda providesample opportunities to address other importanttrade-related problems, such as climate change, foodshortages and soaring energy prices. Indeed, tradecan be used as a means of adjusting supply anddemand and thus defusing the potential tensionsover energy and food. Or it can have the oppositeeffect. Likewise, international trade has the capacityto attenuate harmful environmental trends. But tradecan also be a negative factor of climate change.

The underlying choices are political, not technical.Parliaments alone will not save the world fromextinction by greenhouse gases. That can only be doneif the right partnerships are forged betweengovernments, legislators, civil society and the privatesector, putting the interests of the general publicbefore narrow concerns. What parliaments can do,however, is lay the political and legal foundations thatare absolutely necessary for such partnerships to work.

The closing sitting of our session, which will take placetomorrow afternoon, will be devoted to the adoptionof guidelines for relations between governments andparliaments on international trade issues, to amendingthe Conference Rules, and to the adoption of anoutcome document, the preliminary draft of which hasbeen prepared by the Conference Steering Committee.

The co-organizers have invested much time and energyin the preparation of this session. I address words ofwarm thanks to the leadership and staff of theEuropean Parliament - our partner in this exercise –and to the IPU staff for everything they have done tofacilitate this process. We hope that the session willbe crowned with success and look forward to a richand constructive debate, in true parliamentary tradition.

Let me conclude by recalling that today is also thesad anniversary of the tragic events that took placein New York on 9/11. May I suggest that we standtogether for a moment of silence?

While we remember the horror of that day and themany innocent victims, we should repeat forcefullythat peace and security are ultimately built on thefoundations of development, trade and social justiceand not just of military might. It is therefore moreurgent than ever that you, the negotiators, concludethe Doha Development Round.

With these words, let me officially declare the annual2008 Session of the Parliamentary Conference onthe WTO open.

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INAUGURAL CEREMONY

ADDRESS BY MR. MANUEL ANTÓNIO DOS SANTOS,VICE-PRESIDENT OF THE EUROPEAN PARLIAMENT

Geneva, 11 September 2008

Members of Parliament, Ambassadors, Delegates, Distinguished guests, Ladies and gentlemen,

It is an honour and a real pleasure for me to welcomeyou, on behalf of the President of the EuropeanParliament and on my own behalf, to what is alreadythe sixth annual session of the ParliamentaryConference on the WTO.

Allow me first of all to convey greetings from Mr.Hans-Gert Pöttering, President of the EuropeanParliament, who unfortunately cannot be with ustoday. He did, however, ask me to pass on his bestwishes for the success of this latest session, whichis organized jointly by the European Parliament andthe IPU.

I should like to express heartfelt thanks for thehospitality provided by the IPU, which for the thirdtime is hosting this important assembly, a body fordialogue and cooperation among parliamentariansspecializing in questions of international trade.

The very first formal meeting of legislators from WTOmember countries was held during the Third WTOMinisterial Conference in Seattle (United States) in1999. At a turbulent time, marked by widespread andsometimes violent demonstrations against the WTO,a small group of parliamentarians decided to meet,on the initiative of American Senator William V. Rothand Carlos Westendorp y Cabeza, who was thenchairman of the European Parliament's Committeeon Industry, External Trade, Research and Energy.

It was at this first informal meeting that questionsrelating to the democratic character of the WTO andthe transparency of its decision-making mechanismswere raised, giving rise to the idea that the electedrepresentatives of the peoples of the entire worldshould make their voices heard.

Parliamentarians met again at Doha (Qatar) in 2001,where, against a background of dangerousuncertainty at international level, WTO membersfinally succeeded in launching a new round of tradenegotiations known officially as the DohaDevelopment Agenda, with a wide-ranging andambitious programme focusing on developmentproblems and the concerns and needs of poorcountries.

The conclusion to the Doha Round multilateral tradenegotiations has been deferred on countlessoccasions.

It cannot be denied that many of us are disappointedand concerned at the failure of the WTO mini-ministerial meetings held in Geneva at the end ofJuly 2008.

It is true that adopting modalities for agricultureand NAMA could have been a major step towardsthe conclusion of the Doha Round.

Under these circumstances, the representatives ofthe peoples of WTO member countries have animportant role to play in making their respectivegovernments understand that these negotiationsneed to be concluded. In this respect, the holding ofthis conference is particularly timely.

Failure of the Doha Round and a shift towardsbilateral or regional agreements could shatter thecredibility of the multilateral trade system and mighteven cause it to collapse, resulting in a process ofuneven liberalization and development, whileexacerbating the imbalances between developed anddeveloping countries.

The European Parliament is also worried that the endof multilateral negotiations could result in an increasein trade disputes, as WTO members might seek toobtain through litigation what they could not achievethrough negotiation.

The WTO is important, for I am convinced that itplays in a central role as one of the multilateralorganizations contributing to international economicgovernance, more effective control of globalizationand a fairer distribution of its benefits.

The world needs a strong multilateral trade system,since this is the most effective way of developingand managing trade in the interests of all andprovides an ideal framework for settling disputes.

Trade is not the only answer, but the success of thisround of negotiations could ensure a genuineopening-up of markets and stricter multilateral rules,stimulate economic growth, development andemployment at global level and make an effectivecontribution to achieving the Millennium Goals forsustainable development and the integration ofdeveloping countries into the global economy.

WTO members must have the courage to press onwith the negotiations, give them a strong impetusand engage in a lively and constructive dialogue ina spirit of compromise.

In this regard, it is encouraging to note that, at theend of the July mini-ministerial meetings, the WTOmembers stated very clearly that the negotiationsmust not be abandoned since the results achievedwere too important to be allowed to lapse.

Indeed, solutions were found to countless problemswhich had been outstanding for many years, evenif the negotiations foundered on the question of theextent to which developing countries could increasecustoms duties to protect their farmers in the eventof a surge in imports, in the context of the SSM.

Nevertheless, as we are well aware, the WTO membersdecided that the Doha negotiations would be seenas part of a single undertaking. Given that the WTOoperates by consensus, this all or nothing approachmeans that sufficient progress has to be made on allkey questions. No trade agreement will be adoptedunless all outstanding issues have been resolved.

At the end of nine long days of negotiation, thereis a danger that the progress achieved could cometo nothing. This must give us pause for thought asto the pros and cons of the single undertaking.

We hope that the agreements reached during thenegotiations can be preserved and that the offersput forward in July on the various items on thenegotiating agenda will provide a suitable basis.

The fate of the Doha Development Agenda now liesin the hands of the members of the WTO.

We cannot take decisions on behalf of ourgovernments. We cannot impose a consensus. Wecannot break the deadlock when governments areproving inflexible. However, we are determined todo everything in our power to convince ourgovernments that the failure of the negotiationswould further exacerbate global economic andpolitical difficulties and would have economic,financial and social consequences.

As I told you in 2006, at the last annual session ofthe Parliamentary Conference on the WTO, in ourcapacity as the legitimate representatives of ourelectorates, we as parliamentarians have a threefoldrole to play in the field of international trade.

Our first role is as a "watchdog", monitoring theactions of our governments and ensuring they areaccountable to us. Secondly, we must examine andratify the international agreements put before us.Thirdly, we must draw up the laws to enforce andsupport these international agreements.

We can also help to explain to the public how thetrade system works and what its advantages are.We can help people to understand and come to gripswith the mysteries of globalization, raise awarenessand promote informed debate of questions relatingto international trade. In addition, as legitimaterepresentatives of the people, we provide a vitallink between populations, civil society andgovernments.

The most effective tool available to us in the fieldof international trade today is the WTO. It is the mostuniversal organization (bringing together 153countries) and the only one with the means toenforce international rules through its disputesettlement body.

At a time when multilateralism and internationalcooperation face challenges on many fronts, we asparliamentarians must reaffirm our commitment toa multilateral approach to trade policy and oursupport for the WTO as the guarantor of regulatedinternational trade.

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Nevertheless, we still need to make it more effective,more democratic and more transparent. In 2004,lengthy consideration was given to the future of theWTO and the institutional challenges facing it by theConsultative Board chaired by Peter Sutherland,although there has been no tangible follow-up toits findings.

In the light of recent developments, we feel it is morenecessary than ever to give renewed considerationto the decision-making process, mission, functioningand future of the WTO, with a view to possible reformof the organization to enhance both its efficiencyand legitimacy.

We parliamentarians have made substantial progresssince Doha.

Since 2003, the Parliamentary Conference on theWTO has been organized jointly by the EuropeanParliament and the IPU. At the beginning of myspeech I mentioned that this is already the sixthsession. After Geneva and Cancún in 2003, Brusselsin 2004, Hong Kong in 2005 and Geneva in 2006,we find ourselves here in Geneva once again.

Over the next two days we shall be addressing WTOnegotiations and the future of the multilateral trade

system, we shall be examining the links betweentrade and climate change, and we shall be lookingat how trade can help reduce the threat of conflictsover food and energy. Lastly, we shall discuss howICTs can help economic growth through thedevelopment of electronic trade worldwide.

Our final sitting will be devoted to the adoption of:

● guidelines for relations between governmentsand parliaments on matters relating tointernational trade;

● amendments to the Rules of Procedure of theParliamentary Conference on the WTO drawn upby the Steering Committee; and

● a final document, the preliminary draft of whichhas been drawn up by the Steering Committee.

As you see, there is no shortage of topics fordiscussion. I am sure that our dialogue will be fruitfuland am confident that our formal appeal will beheard.

On that note, I officially declare the 2008 annualsession of the Parliamentary Conference on the WTOopen, with the wish that all those taking part willderive great benefit from its work.

1. We, parliamentarians assembled in Geneva forthe annual session of the ParliamentaryConference on the WTO, are disappointed andconcerned about the failure of the WTOministerial meetings convened in Geneva at theend of July 2008. The establishment of modalitiesfor agriculture and NAMA could have been abreakthrough - albeit not perfect - towards theconclusion of the Doha Round.

2. We understand the difficulties of a singleundertaking, and we are encouraged thatsubstantial progress was made to reach thatgoal, bringing WTO members close to finalizingthe agreement. Solutions have been found to avery large number of problems which hadremained intractable for years, even though theintensive negotiations foundered on the extentto which developing countries would be able toraise tariffs to protect farmers from importsurges under the SSM, and some other issuesremained unsolved. We recognize that there aredifferences in views and that the right balancebetween the different interests has obviouslynot been struck; we call attention to the needto continue to give priority to the vital interestsof developing countries in keeping with thecommon commitment of all WTO members to a"development round".

3. We reaffirm our commitment to the multilateraltrading system embodied in the WTO, whichcontributes to enhanced security, transparencyand stability in international trade and to a bettermanagement of globalization through

multilateral rules and disciplines and the judicialsettlement of disputes. The world needs morethan ever a fair, equitable and transparentmultilateral trading system, which is the mosteffective means of expanding and managingtrade for the benefit of all, especially thedeveloping countries.

4. In the current context, characterized by thesoaring prices of raw materials and agriculturalproducts, a successful conclusion of the DohaRound could be the robust stabilizing factorneeded by a world increasingly worried aboutfinancial and economic crises and an importantparameter in stimulating worldwide economicgrowth, development and employment. This iseven more urgent in order to address new globalchallenges relating to food security, energy andclimate change. Furthermore, it would stronglycontribute to the Millennium Development Goalsand to the integration of developing countriesinto the global trading system.

5. The costs of failure of the WTO negotiationswould include: the loss of possible welfare gainsfrom new WTO reforms; the serious threat ofundermining the credibility of the internationaltrading system and the WTO; the risk ofexpanding trade protectionism and that WTOmembers replace multilateralism with bilateraland regional agreements. The poorest and weakestmembers, who benefit among others from astrong multilateral rules-based system, would bethe most disadvantaged.

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OUTCOME DOCUMENT

ADOPTED BY CONSENSUS ON 12 SEPTEMBER 2008

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6. We emphasize that the Doha Round shoulddeliver on development, including duty-freequota-free access by LDCs to all developedcountry markets - substantially reducingagricultural subsidies - aid for trade, tradefacilitation, and special and differential treatment,as well as better rules that allow for the necessarypolicy space to pursue sustainable developmentgoals. Developing countries would not be able toachieve these elements at the same level in theframework of fragmented regional and bilateraldeals. We believe that special attention must bepaid to the responsibility of the developedcountries to assist those developing countriesand LDCs which need support through trade-related technical assistance and capacity-building.

7. We encourage WTO members to preserve thepositive achievements made in all the areas ofthe talks, which should not be wasted, and torestart the negotiations as soon as possible onthe basis of what has been achieved so far,showing flexibility and readiness to beconstructive and positively engaged to find aresolution that is beneficial to all.

8. The WTO will need to engage in institutionalreform aimed at improving its functioning andenhancing its accountability and democraticlegitimacy. We reiterate that the negotiationsprocess should be based on a bottom-up,transparent and inclusive approach and thatconsensus must be preserved as a cornerstone ofWTO decision-making. Moreover, we call forgreater coherence between the objectives andrules of the WTO and the commitments madeunder other international conventions andagreements.

9. We underscore the importance of making theWTO a truly universal organization and call forthe removal of political barriers that stand in theway of ensuring its inclusiveness and universalmembership. Therefore, we invite all WTOmembers to facilitate and accelerate the accession

process for developing countries. These countriesshould not be obliged to accept concessions thatare incompatible with their level of developmentand that go beyond prevailing WTO rules. Inparticular, the accession process for LDCs shouldbe carried out in accordance with the Guidelinesfor the Accession of LDCs issued by the WTOGeneral Council.

10. We reiterate our commitment to provide a strongand effective parliamentary dimension to theWTO: the days when trade policy was theexclusive domain of the executive branch areover. The negotiation of future multilateral,regional and bilateral agreements must fullyinvolve parliaments in order to preservetransparency and parliamentary scrutiny inaccordance with the laws of each WTO member.

11. We believe it is crucial for parliaments to exerciseever more vigorously and effectively theirconstitutional functions of oversight and scrutinyof government action, notably in the area ofinternational trade. As parliamentarians, we arecommitted to play a far greater role than everbefore in overseeing WTO activities andpromoting the fairness of the trade liberalizationprocess. It remains our joint responsibility, asmembers of parliament representing the interestsof the people, to oversee government action inthe field of international trade and promotefairness of trade liberalization.

12. We remind government negotiators of thecommitments they made at the launch of theRound. What we now need is real leadership andcourage. We are committed to doing our part.We urge our government negotiators to close thedeal that has been on the table since July beforethe end of the year so that the DohaDevelopment Round can be concluded in 2009,with an outcome that gives real meaning todevelopment and secures a balance of benefitsto all members.

INTRODUCTORY REMARKS BY MR. PASCAL LAMY

Ladies and gentlemen,

This year I am the bearer of - how should I put it -"news that is not all that good!" You, theParliamentary Conference on the WTO, have beenfollowing our work, and in particular the DohaDevelopment Agenda, closely since its launch in 2001.The Doha Round which took almost 7 years ofnegotiations had been widely expected to bridge animportant "milestone" towards its conclusion at theMinisterial meeting convened this July.

The meeting was expected to adopt "modalities" foragricultural, and industrial goods, and to makeprogress in the services negotiations. In WTO jargon,"modalities" mean the parameters on whose basisMembers would establish their new commitments,whether in terms of lower tariffs, subsidies, or newdisciplines.

The meeting did not succeed. It collapsed to thedetriment of a world economy that is much in needof a bit of blue sky; to the detriment of the poorwho would have benefited the most from thelowering of prices that trade opening brings about;and to the detriment of the developing world whohas fought long and hard to bring greater equity tointernational rules, in particular to the field of itsgreatest comparative advantage; agriculture.

I often hear it said that one of the greatest flaws ofthe WTO is that it does not deal with inequality atthe national level. It opens markets, and then claims

that its role ends there, passing the bucket togovernments to deal with winners and losers. This,in my view, does not fully reflect reality.

Had the July package stabilized, much greater equitywould have been brought about. Few realize thatthrough the opening of markets, trade does more tomaking basic goods and services accessible to thepoor than many income redistribution policies.Throughout history, trade has enhanced thepurchasing power of the poor across the globe,enabling them with their limited dollars, to buy morefor less. Thanks to more open markets a basic T-shirtthat would have cost US$ 3 dollars behind a tariffwall, can today cost less than half or even a third ofthat price.

But, of course, as you Parliamentarians know verywell, those who gain from trade are seldom as loudin the political arena as those who lose. In fact, thosewho gain, are seldom aware that global trade rulesmay have had something to do with their gain. AT-shirt sold at a department store does not come

with a label saying: "This T-shirt comes to you witha 50 per cent reduction due to new WTO rules." Thatlabel is simply not present, and hence the missingawareness too.

Yet, the persons you hear from are those whosefactories are shutting down because they cannotsustain the competition; in other words they cannotoffer a T-shirt for US$ 1, but only for 2 or 3. Now,while consumers are made better off by trade,producers must also be assisted in adjusting to moreopen markets. Hence the need for accompanyingpolicies to trade, whether social, infrastructural,

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environmental or otherwise. It is only with suchaccompanying policies that domestic producers canbetter adapt to trade opening. Similarly, it is onlywith awareness raising that consumers can come tounderstand the full magnitude of the benefits theyreap. And, as we all know, producers are alsoconsumers — they're one and the same!

The package before Ministers in July had combinedall of the following: the reduction of unfairagricultural subsidies; the reduction of tariff wallson industrial and agricultural goods; the reductionof barriers to trade in critical services, such asbanking, insurance, energy, and environmentalservices; and beyond that a myriad of new traderules. Rules that would have made the multilateraltrading system fairer, in particular for the developingworld. To give you, but a few telling examples ofwhat was foregone in July, I would mention thereduction of the rich world's agriculture subsidieswhich would have been sliced by 70-80 per cent,and of their highest agricultural tariffs that wouldhave fallen by 70 per cent, not to mention thecommensurate effort that they would have madeon industrial goods. I hasten to add that all effortsin the Doha Round would have been made inaccordance with the principle of Less than FullReciprocity, with the developed world making twothirds of the contribution, and the emerging part ofthe developing world only one third.

But behind those headline catching numbers, was anew set of rules - which while the media paid scantattention to - were perhaps just as important as theheadline-grabbing figures I just cited. For example,the subsidies that the rich extend to agriculturewould have not only been reduced in an aggregatemanner, but new ceilings per product would havealso been established. Hence, players such as theUnited States, the European Union and Japan wouldhave no longer been allowed to concentrate the bulkof their support on only a few commodities. Do Ineed to spell out for you what this would have meantfor cotton! The litmus test for the developmentdimension of the Doha Round! It is indeed a greatshame that this package did not materialize at thattime.

To the Parliamentary Conference on the WTO, thetrading community owes an explanation. Whatexactly happened in July, how did such a packageslip through our fingers? What were the issues thatwere resolved, and which were left outstanding? Iwill try to respond to these questions as faithfullyas I can since I believe that greater accountabilitylends force to what we do, and that your voice willbe vital to re-energizing the negotiations.

WTO Members entered the July Mini-Ministeriallooking at agricultural subsidies, agricultural tariffs,industrial tariffs and services. In a short space oftime, they accomplished what some never thoughtthey would.

They found convergence on the issue of agriculturesubsidies, even if the specific extra reduction forcotton subsidies remained to be negotiated. Theywent a long way on the issue of agricultural tariffs.The same can be said about industrial tariffs, evenif a few issues remained for further clarification. Andthey had a promise before them of attractive servicesoffers, based on the Services Signalling Conferencethat had been held.

In agriculture, various elements of the Doha Packagehad been designed to address both the developedand the developing world's many sensitivities. In July,much progress was achieved on "sensitive products"for developed and developing countries, and on"special products" reserved exclusively for thedeveloping world — these are all products that wouldtake either a lower tariff reduction than the normor no reduction at all, to make trade opening moregradual. The flexibilities were intended to allow fora "tailor-made" package as opposed to a "one-size-fits-all".

But where the negotiations collapsed, was on thedetails of the Special Safeguard Mechanism foragriculture for the developing world. Countries couldnot agree on the circumstances in which thisSafeguard could be used - the extent of volumesurge, or price decline of imported products thatwould have to occur for it to be triggered. And norcould they agree on the extent of the remedy thatit would provide when set in motion - the magnitudeof the extra duty that would be imposed on importedgoods to protect the domestic market.

Efforts were made until the very last minute of themeeting to find a compromise over the SpecialSafeguard, but it eventually became clear that thisthorny issue would require more work to buildconvergence. It was not, in the end, as ripe as somethought it was. Because the negotiation stopped atthe Safeguard, negotiators never made it to othercritical issues, such as cotton. The Cotton-4, Benin,Burkina Faso, Chad and Mali - not to mention therest of Africa - walked away in extremedisappointment.

So, what now? Do we throw in the towel, and do wegive up? Most WTO Members have already said thatthis would be highly irresponsible. To let a 7-yearinternational effort to essentially "do good" collapsewould be a calamity. Who is ready to shoulder that

responsibility? Are we really willing to tell thetaxpayer who has funded us for this long that we'vewasted his/her money! Not only that, are we willingto tell producers and consumers alike that we blewaway in a single month their hope for more openmarkets, and a more equitable, and development-friendly, trading system? Are we willing to tell themthat topics that would have followed thesemodalities, such as trade facilitation for smallbusinesses, market opening for environmental goodsand services and the reduction of environmentally-harmful fisheries subsidies, are now off the tablewithout even a chance at a Ministerial discussion?

There is simply no way. Hence the stance taken byWTO Members, asking that we preserve the enormousprogress that had been achieved and to build on itfor a final agreement. August has been a very activemonth for the WTO family. A fair amount oftravelling and phone diplomacy has taken place tonot let this opportunity slip through our fingers. Mysense is that there is scope for renewed engagementover the coming weeks, as confirmed by the technicaldiscussions that have been held here in Geneva thesepast two days.

Today I ask you to help us close the July package.While it has now become clear that we cannotcomplete the Doha Round by the end of this year,let us at least aim to complete modalities in 2008,so as to conclude the Round in 2009.

In conclusion, let me add that completing the DohaRound is intimately linked to the themes that youhave chosen for this conference, food security andclimate change. The wave of rising food prices thatwe witnessed, would find at least a partial answerthrough the Doha Round, allowing increases in supplyto adjust to increases in demand in different cornersof our planet with much greater ease.

As for climate change, I must confess to you thatwhat has happened in the WTO in July has left mewith a bitter taste. If the international communitycannot find the courage to do what it has done manytimes before - which is to open markets collectivelythrough a trade round - will it have the courage totackle what has "never" yet been tackled! Not tomention that the Doha Round contained the first-ever environmental chapter of a trade round ofnegotiations. Does busting that chapter in any waypave the road to a post-Kyoto regime?

What we now need is a bit more leadership andcourage. You have shown both with your unwaveringsupport for the WTO. Please try to transmit this samespirit to your country's negotiators. Please conveythe message back home that, in view of the package

that is currently on the WTO table, the Doha Roundmust see the light of day. Further delays wouldweaken the multilateral trading system, our collectivecapacity to achieve the Millennium DevelopmentGoals, and endanger other major internationalnegotiations which are needed to stabilize our riskyplanet; such as the one on climate change.

EXCERPTS FROM THE DEBATE

Mr. K. Kiljunen (Finland)

Since the launch of the Doha Round, new challengeshave emerged to the international system. We cannotunderestimate the gravity of climate change. TheDoha Round comprises an environmental chapter,which is a new element. How specifically can climatechange be included in the agenda of the DohaRound?

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Mr. H. Khan (Pakistan)

The failure of the July mini-ministerial talksrepresents a setback for everyone. My understandingis that the G-7 ministers failed to reach agreementon the SSM. Is the SSM such a big issue that it canbe allowed to hold the whole Doha Round hostage,or is it just an excuse? Apparently senior G-7 officialsmet again on 10 September to assess each other’sposition. The Director-General’s role as an honestbroker deserves special appreciation. What are theprospects for the round today, in view of your recentvisits to the United States and India? Does earlyresumption of the talks increase the risk of failure?Are key players willing to give it another try? If so,within what timeline?

Mr. A. Riedl (Assemblée parlementaire de laFrancophonie)

Would it not be possible to call on other negotiatorswith more decision-making power, for example headsof State and government, who bear a greaterresponsibility towards humanity, especially asconcerns agriculture and food security?

Mr. Lamy (Director-General of the WTO)

The relationship between trade and environmentalissues is complex. From the technical point of view,the WTO has to make sure that trade opening worksfor sustainable development. This was spelled outwhen the WTO was constituted. Many WTOagreements already factor in questions ofenvironmental sustainability, one example being theSanitary and Phytosanitary Measures Agreement. In

addition, the jurisprudence of the WTO dispute-settlement mechanism, notably the Appellate Body,already recognizes environmental issues.

How can we move ahead? One part of the DohaRound is to agree to more open markets forenvironmentally friendly goods or services than forothers. Many countries are ready to open theirmarkets to environmental services, not just becausemarkets are then opened to them as well, but becausethey believe they need such services. Furthermore,let us assume that the post-Kyoto negotiations resultin a toolbox of policy measures that address climatechange seriously; it is not a prerequisite that suchmeasures be WTO compatible. Let the climate changenegotiators agree on the new set of rules needed,then the WTO system will adjust.

From the political point of view, the deal needed toaddress climate change is just not doable ifdeveloping countries, notably emerging countries,do not feel more ownership of the internationalsystem. Addressing climate change will require policychanges that are politically painful for domesticconstituencies, whether in the developed or thedeveloping countries. They will not accept this if theydo not feel that the international system is moreattuned to the geopolitics of today. The first testcase for them is the WTO. They have made the pointfor a decade now that the rules of the game ofinternational trade need to be changed in order toaddress what they see – I believe legitimately – asimbalances in the system in their disfavour. Theyhave chosen the Doha Round as the easiest path tochange. We have "done" trade negotiations for over50 years, we know how tough they are, but we havethe toolbox to do them. The failure of the DohaRound would therefore have political consequencesthat would probably go beyond the technicalimprovements and adjustments we can make.

The SSM is a big issue. The reason it has become sucha big issue is that it entails a set of positions thathave systemic consequences. Developing countriesasking for a safeguard clause want to be able to useit easily. Other countries, including many developingcountries, agree that there should be a safeguard ofthis kind, but they do not want it to be too user-friendly, so that it will not capture normal trade.Both points of view are valid. And it was on thisquestion – whether the SSM is an ambulance or ataxi – that the negotiations failed.

What are the prospects? The Doha Round can stillbe completed, because since the July flop most WTOmembers have been saying that most of the hardwork is done – let us finish it. Following mydiscussions in New Delhi and Washington a few

weeks ago, I can tell you that key players are willingto give it another try. Your attitude asparliamentarians, as opinion leaders, may make adifference.

I do not think it would make a difference to involveheads of State and government in the negotiations.Trade negotiators have instructions from theirsuperiors, and those instructions are always a mix ofpolitical and technical considerations. Heads of Stateand government think a deal would be good for theworld but have to convince their parliaments thatit would be good for their countries.

Mr. J. Bizet (France)

France truly hopes that a balanced agreement willbe reached soon. Failure today at the WTO would notbode well for the success of the forthcoming post-Kyoto climate negotiations. What new means canthe WTO deploy in the coming months? Do you thinkthat the negotiations can be concluded before thecurrent United States administration leaves office?

Ms. E. Ferreira (European Parliament)

Coming back to climate change, clearly this is aproblem no single country can solve and in whichthe emerging economies have to feel greaterownership. The European Parliament is in the processof materializing the global compromise associatedwith its leadership: a 20-per cent reduction inemissions by 2020. This represents a huge effort forthe industries involved. The European Parliamentconsiders that if the emerging economies are

reluctant to engage on a global compromise, it wouldprobably make sense to reach compromises at sectorlevel. This would mean that the benchmarks wouldbe negotiated worldwide. Do you feel this is the wayforward, or should it be abandoned?

Mr. J. Hussain (Bahrain)

How likely is it that the Doha Round will besuccessfully completed in 2009? I fear that as theDoha Round founders, more free trade agreementsand regional trade agreements are being negotiated.These agreements are essentially protectionist innature and undermine the true spirit of free trade.


The negotiations, as most of you know, function onthe basis of an extremely restrictive principle: onceagreement has been reached on the subjects to benegotiated, as was the case in 2001 in Doha, therecan be no agreement until everyone has agreed oneverything. The mini-ministerial meeting of July wasnot the finish line; it was a bridge on the long journeytowards the finish line. If the July package had beenadopted, the finish line would have been in sight,and the momentum would have picked up fornegotiations on hitherto untouched subjects suchas fisheries subsidies, environmental goods andservices, and trade facilitation for small and medium-sized enterprises. I believe we have to cross thebridge. Can we do this before the current UnitedStates administration leaves office? Yes, we can crossthe bridge, but not the finish line.

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There is an interesting parallel between climatechange negotiations and WTO negotiations in termsof sector agreements. The WTO’s approach is wellknown: agreement is reached on formulas forreducing tariffs before specific sector agreementsare negotiated. It is in this second round ofnegotiations that countries agree to go further. Thisconcept of a general endeavour that can be toppedup with a "sectoral plus" is therefore part of the WTOculture and could be applied to climate changenegotiations. To be frank, I think the sector approachcan only work as a top-up. I do not think sectoragreements on carbon emissions can replace a global,cross-cutting commitment by countries.

The Gulf Cooperation Council negotiations with theEuropean Union, which started in 1987, are anexcellent example of how free trade agreements maynot provide a quick fix when the WTO drags its feet.Indeed, they disprove the notion that bilateralnegotiations are easy while multilateral negotiationsare difficult.

Bilateral agreements in which two countries decideto contract vis-à-vis one another obligations goingbeyond their WTO multilateral commitments do notpose a problem, but many of the issues beingdiscussed in the Doha Round cannot be dealt withbilaterally (fisheries subsidies are one example).Bilateral agreements also raise the issue of fairness.The aim is to have a more development-friendlyinternational system, to rebalance the legacy andadjust to a more global but fairer system; but bilateralnegotiations are by their very nature more unfairthan multilateral negotiations. What chance does a

small country like Costa Rica stand across the tablefrom the United States or China, for example? Itschances are much better at the WTO table.

Ms. K. Sinnott (European Parliament)

The role of parliamentarians may be to sell the WTOdeal, but it must not be forgotten thatparliamentarians have two levels of representativity:as individuals they represent a particularconstituency, but they are also members of adelegation. At meetings like the ParliamentaryConference on the WTO, parliamentarians listen andwatch, they take on board recommendations. Whenthey go back, it is not to sell anything, it is to describewhat they have heard and seen. It is thereforeimportant not just that they take on board the dealbut that they provide input reflecting theirconstituents’ concerns and possibly even change thedeal.

Mr. R. Pal (India)

Will not new challenges such as climate change andfood insecurity only serve to complicate and dilutethe already complex Doha Development Agenda? Isthere not a move underfoot to redefine thedevelopment dimension, even at this late stage, andto ignore the element of unfairness?

Mr. T. Shinohara (Japan)

Environmental issues and food shortages are,understandably, affecting the Doha Round. Trade

liberalization is important, but food is not the sameas any other product. Staple foods such as rice aredifferent. Unfortunately, this aspect has not beentaken into account in the WTO negotiations, and thismay explain why the SSM was the root cause of theircollapse. For the Doha Round to be concludedsuccessfully, we need to take account of differentpoints of view.


Parliamentarians are accountable for their votesin parliament, they have to explain to theconstituents who elected them how their votestally with the reasons they were elected. I see nodistinction between listening, watching and voting– they are all part of the same activity.Parliamentarians will have to vote on the outcomeof seven years of complex negotiations duringwhich the negotiators will in most cases have beenunder the permanent scrutiny of parliaments andwill have factored in the concerns of domesticconstituencies as they are expressed byparliamentarians. The question is: is the packagecurrently on the table worth ratifying? All I cansay is that overall it reflects the political will of theWTO members who started the negotiations in 2001to go one stage further in opening markets and toensure that the rules framing that market openingare more development friendly. Of course, thepackage has to stand the test of member-by-member explanation. The case of the EuropeanUnion is even more complex, because it has to standthe test of the European Union balance of nationaland other interests.

Do new issues complicate the agenda? The technicalanswer is no, because under the single undertakingsystem the Member States cannot change theagenda as it was defined in 2001. This is a goodthing. It is true, however, that issues have arisenthat were not on the table in 2001 and that mightinfluence the political environment, notably thecapacity of parliamentarians to assess the cost-benefit ratio of a deal. But what will be their realimpact on the negotiations? Does climate changeneed to be negotiated at the WTO at this stage? No.The ongoing negotiations on environmental goodsand service suffice to meet the environmentalchallenge of today. Of course, if a global post-Kyotopackage emerges from the United Nations ClimateChange Conference to be held in Copenhagen inlate 2009, the WTO might have to make someadjustments. Does the current food crisis have anyimpact on current WTO agricultural negotiations?No. The current crisis has been brought about by a

shortfall in supply. The way to increase supply is tomake sure that those who have supply capacity –essentially developing countries whose farmingsystems have been damaged by obstacles to tradeor unfair subsidies – augment it. Thus, the DohaRound of negotiations is even more necessary andurgent than it was before.

Of course, some issues, for instance energy, willrequire further negotiation in the future.

The WTO has long known that producing food isnot the same as producing shirts. It is not of theview that it is going to erase all subsidies for allproducts for all time, including agriculturalproducts. Even if the Doha Round succeeds andlowers agricultural tariffs and subsidies to theextent intended, the average tariff worldwide onagricultural products will probably be five timesthe average tariff on industrial goods. The averageamount of the subsidies the United States and theEuropean Union pay, directly or indirectly, to farmerswill remain the same. The difference is that thesubsidies will be granted in ways that are less trade-distorting and in some cases will not distort tradeat all.

The development dimension is central to the DohaRound. Not only does every item being negotiatedhave its specific development dimension, thedeveloping countries will have to pay much less. TheLDCs will basically pay nothing, small and vulnerableeconomies will pay a bit and emerging countries willhave to pay something, but overall two thirds of thefinancial burden will be borne by the developedcountries.

Mr. G. Mitchell (European Parliament)

Parliamentarians have to do more than just listenand report back to their constituencies. They haveto show leadership. Their sole concern must not betheir own re-election.

What will be the effects of the current impasse onLDCs? Ireland, for example, has a recent history offamine and colonialism. The reason it is now dividedhas its origins in trade: the people in the north-eastwere given small property allocations on which theygrew goods for export, enabling them to earn capitaland invest in industry, whereas people in the southwere dependent on absentee landlords and had noproperty rights. I think it is important for the WTOto take an interest in the issues of food security andclimate, but it must also consider property rights.Until people can own land, they will not be able tobenefit from trade.

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Mr. R. Cullen (Canada)

I am of the school that believes that parliamentariansmust show leadership and sell their governments onthe idea of successfully concluding the Doha Round.Is a consensus now emerging on trade in services?Is this item now on the political radar?


The current impasse is having a negative impact ondeveloping countries, as the developing countriesthemselves are saying. The vast majority ofdeveloping countries have said they want to preservewhat was negotiated in July and indeed to completeit, not least because they can see exactly where thebenefits are: LDCs would obtain quasi duty-freequota-free market access to developed and a numberof developing country markets; emerging economieswould benefit from reductions in tariff peaks in theUnited States and in the European Union.

I am not sure that property rights come under theWTO’s remit. It has agreements on trade-relatedissues, such as trade-related intellectual propertyrights, and when a country joins the WTO itslegislation is reviewed to ensure that standardspertaining to property rights roughly match thoseof a market economy, but beyond that, propertyrights do not form part of trade negotiations.

As concerns services, what was very positive aboutthe July talks was that the notion that services wereoff the radar was dispelled. Services are a keycomponent of most economies today. Even indeveloping countries, the services sector accountsfor more than 50 per cent of the economy onaverage, although not all services have somethingto do with international trade.

Services are not negotiated in the same way asagricultural and industrial tariffs. There are no tariffson services. Consequently, the main changes innegotiations on services since the Uruguay Roundfifteen years ago are, first, that many developingcountries now have a comparative advantage inservices (India and the IT sector is one example),making the negotiations much more balanced thanin the past, when the comparative advantage laywith the developed countries, and second, thecountries involved believe that the technology trade-off inherent in trade in services is good for them inmore than just monetary terms.

In conclusion, the negotiations on services are backon the radar. If the ongoing talks are successful, thefinal round of negotiations on this point couldprobably be successfully concluded.

Ambassador Crawford Falconer (New Zealand)Chairperson of the WTO Special Session of theCommittee on Agriculture

I am pleased to have another opportunity to meetdirectly with parliamentarians. I am not suggestingthat ministerial representatives do not reflect theviews of parliamentarians, but it is sometimes usefulto get the feelings of members of parliament "in theraw"; the refined opinions of ministerialrepresentatives do not always reflect all views onboth sides of the aisle.

In July 2008, we came very close to concluding theDoha Round of trade negotiations, and that is nosmall achievement. Most people would have writtenthis process off anywhere up to three or fourmonths ago. The fact that we almost succeeded atthe end of July is testimony to how much peoplereally want the deal to happen. We also have torecognize, however, that close enough is not goodenough.

There are many reasonswe did not quitesucceed. I do not thinkpeople should be toosurprised. First, to someextent the negotiationsfailed because theministers had to cover somuch political ground inroughly 10 days.Secondly, the substanceof what they ultimatelytripped up over was not

a narrow technical issue. The SSM may sound obscureto some, but it reflects a question of overall balancein the negotiations. At the end of the day, the MemberStates had to make a political judgement on whetherthe right balance had been struck between, say,changes in domestic subsidies, market access todeveloped countries and market access to developingcountries. The crucial issue when it came to the SSMwas not the technical details of how it would workbut a difference in perception on whether the rightbalance had been struck between developed countryobligations and developing country obligations oncertain parts of agriculture vis-à-vis other parts ofthe negotiations. Because we were trying to calibratethat balance through one issue, that issue becamemuch more difficult to resolve – especially becauseat that point the ministers were exhausted.

The real question now is whether we have thepossibility, having come so far, to pick up where weleft off. Yes, of course we have the possibility.Whether we are ultimately successful, however, isalso a function of changed circumstances and time.There are other issues that still need to be resolved.Discussions of cotton, for example, will haveenormous economic and developmental impact, andthey have not yet even started.

My feeling is that there is a political readiness tohave another go at the highest level, because wehave realized that there is too much at stakedevelopmentally, economically and politically. At theend of the day, this is one part of an internationalmultilateral system that has so far functionedrelatively well in what is still a very unsafe world.

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Letting what the July talks achieved slide wouldrequire very serious political consideration in thepresent circumstances.

It is always difficult to come back to the negotiatingtable, but the Member States are trying. There wasa preliminary meeting of the G7 yesterday, at whichthey agreed to make a more protracted effort toresolve their differences next week. If they makeprogress, we could still find a way to close theremaining gaps, but in my view, this needs to happenvery quickly. The longer we stay away from an implicitdeal, the more difficult it will be to put it backtogether again. As parliamentarians you know alltoo well that it is easier to walk away from a baddeal than to work hard to close a good one, and thatit is more comfortable to make out of failure a virtuein the form of a tough negotiating stance.

We need to capitalize very quickly on the good willcurrently prevailing. The world needs to close outthese negotiations: a) because of the benefits, suchas a stable trading system in agriculture; and b)because the WTO Member States need to move onto a new agenda. The world has changed since theDoha Round started. You, as parliamentarians,probably understand that much better than manybureaucrats. The reality of food prices, the energycrisis and the more general economic downturnpresents us with an agenda that we really need totackle on a multilateral basis. That agenda is muchbroader than the one before us today, which I wouldcall relatively narrow.

We will find it virtually impossible to deal with thenew agenda if we still have the residue of unfinishednegotiations on our doorstep. Those of you who careabout a broader or more up-to-date agenda willunderstand that one of the reasons for completingthe Doha Agenda is to be able to get on with thenext agenda. This is not to diminish the intrinsicreasons for completing the negotiations, which arevery real – for West African cotton producers theyare a matter of life and death!

I do not believe we can simply say that the DohaRound has failed and we have to put it behind us.Politics is not like that – progress is made on theback of success, not on the corpse of failure.

Ambassador Fernando de Mateo y Venturini(Mexico)Chairperson of the WTO Special Session of theCouncil for Trade in Services

The Doha Round of negotiations started seven yearsago. More progress was made toward its successful

conclusion in the final days of July 2008 than duringthe entire previous seven years. We saw the light atthe end of the tunnel.

Services are an important aspect of the globaleconomy, of developed country economies and ofdeveloping country economies. They are anincreasingly important aspect of international trade,not because they comprise transportation butbecause they are needed for the efficient productionof industrial goods at steadily falling prices.

The fact that we came so close to success in Julydoes not mean we went far enough. What do wehave to do to reach the end of the tunnel? There isa difference between the way in which agricultureand NAMA are negotiated and the way in whichservices are negotiated.

Negotiations on agriculture and NAMA are akin toopening the starting gate for a downhill skier whogets to the bottom of the hill two minutes later. Thestarting gate has rusted, which is why we are still atthe top of the hill. Negotiations on services are muchcloser to cross-country skiing. They do not seek toestablish formulas; they consist in putting one footin front of the other in an ongoing effort tonegotiate, negotiate, negotiate.

In July 2008, the negotiations on services made hugeprogress by building on two earlier events: one wasa report by the Services Chair, the other a signallingconference at which each Member State indicatedwhat it was willing to offer in the coming monthsfor each service being negotiated. Indeed,negotiations on services generally require knowingwhat each country is willing to offer, i.e. how far itis willing to go towards opening its market. It is inthe absence of such offers that a signallingconference is needed.

The report by the Services Chair contained two keyelements. First, and very importantly for LDCs, theentire membership endorsed the possibility ofgranting them most favoured nation status inservices. Secondly, itproposed a deadline forfinal offers for services,said offers to consist ofthe elements raised atthe signallingconference.

What is missing toconclude thenegotiations? We haveto finalize thenegotiations onagriculture and NAMA,

and we have to obtain the final services offers. Whatconcessions is each of our countries willing to makein terms of services? The important thing is to ensurethat the Doha Round ends successfully. The round’scontribution to development and global wealth hasbeen a matter of much debate. What is clear is thatits successful conclusion would strengthen themultilateral trading system and would prevent theWTO from becoming simply a trade dispute-settlement body.

I am optimistic. I am sure that in 2008 we canconclude negotiations on the modalities for agricultureand NAMA and start to present offers for services,and that in 2009 we can conclude the Round.


Mr. J. Cardozo (Uruguay)

It is true that the negotiators had too manyresponsibilities. If we keep adding to the burden, ifwe keep incorporating new ideas, the negotiationswill become more complicated and take longer tofinalize. Unfortunately, the perfect is the enemy ofthe good, as the saying goes. By wanting the bestoutcome, by adding to the list of items to benegotiated, we lost sight of the Doha Round’sobjective and now run the risk of achieving neitherthe perfect nor the good! We have to focus on whatthe Doha Round is really intended to achieve.

Mr. N. Toure (Senegal)

As parliamentarians we are all concerned about thecollapse of the July mini-ministerial meeting. We arealso all convinced of the need to return to thenegotiating table, because failure poses clear dangers,especially for countries like Senegal. What can wedo now other than express the wish for thenegotiations to resume?

We had asked our government to stress certainpoints. To engage in trade you need sound industries,and our local industries are very fragile. We had askedour government to negotiate on the basis of supportfor local industries and maintain tariffs at a levelable to protect strategic products. We also asked itto ensure that the preferential tariffs granted toMember States not be compromised by non-tariffand residual tariff barriers. We underscored the needto recall the commitment made by the WTO MemberStates at Doha for duty-free quota-free access tomarkets for Member State products, a commitmentthat should be fulfilled as soon as possible.

The threat posed by preference margins for exportsis another important point. In the case of Senegal,this concerns certain exports to the European Union,such as frozen shrimp and fish fillets. Preventivesolutions have to be found so that countries like oursdo not find themselves faced with disagreeablesurprises. Where do we stand today on thesenegotiations?

Mr. R. Khuntia (India)

Unlike India, the developed countries have yet toliberalize their services trade regime. For instance,the United States has not moved at all on its Mode4 commitment. India’s interests in the service sectorhave to be addressed on a special footing, as Indiaand other developing countries are providingsubstantial new market access to the developedcountries in agriculture and NAMA. The questionnow is what to do about Mode 4, movement ofnatural persons providing services, and Mode 1, cross-border supply of services.

The negotiations have the potential to have a seriousimpact on the millions of people in India who dependon fishing and agriculture. If the European Unionand the United States do not cut their subsidies,what should India and other developing countriesdo to cope?

Mr. J. Bueno (Mexico)

What prevented agreement on the SSM, whichprotects the subsistence livelihoods of the poorest

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farmers in developing countries? As parliamentarianswe must urge you, the negotiators, to conclude theDoha Round successfully, so as to send a strong signalon the WTO’s ability to help reduce severe poverty.We know this will require political will and time. Wewant to believe that the political will is there, buthow much more time will the process take? We trustthat the steps to conclude the negotiations will berapidly taken.

Mr. F. de Matteo y Venturini (panellist)

I agree absolutely that no further items should beadded to the Doha Agenda. The WTO was given amandate that covered a number of topics. Addingto the list would simply lead the negotiations tocapsize. I also absolutely agree that the Doha Roundmust be successfully concluded as soon as possible,and I would welcome a declaration from thisParliamentary Conference on the WTO on theurgency of doing so.

Duty-free and quota-free access to markets by LDCsis currently being negotiated. It has been examinedand approved, but cannot be implemented until theDoha Round has been completed. Proposals for Mode4 and Mode 1 liberalization are also being discussed,but what is needed now are concrete offers fromMember States indicating exactly how far they arewilling to go along this road.

Mr. C. Falconer (panellist)

I do not think the Doha Round is in difficulty becausethe agenda is overloaded. The important thing nowis to conclude the round within the framework ofwhat was initially agreed at Doha. The multilateraltrade system needs to move on to a broader agenda,one that relates to climate change, but it cannot dothat until it has put the current negotiations behindit. Tackling both agendas as the same time wouldindeed be taking on too much. This is one morereason why those of you who have a stake in thenew agenda and want serious results from it shouldput pressure on your governments to conclude thepresent round.

On issues like strategic industries for developingcountries, preference erosion as it relates todeveloping countries and duty-free quota-free accessfor LDCs, agreement had essentially been reached inJuly 2008. If the round now fails, even on some otherissue, that agreement will be gone for the foreseeablefuture. This is why the leaders and ministers of certaindeveloping countries have realized that they have avested interest in concluding the Doha Round.

Where do we stand today? If, within the next fewweeks, material progress is made on the remainingdifferences - the SSM, tariff simplification and cotton– the modalities on agriculture and NAMA could beconcluded around the end of the year. The schedulesof concessions could then be drawn up in detail -this takes three to six months – and the negotiationsconcluded one or two months later.

If the remaining issues cannot be resolved and themodalities are not settled by the end of the year, itis hard to see when they would be. In that case, thenegotiations could take another year or two, duringwhich time the world will have undergone vastchange.

On the SSM specifically, the fundamental politicalquestion is: to what extent are some developedcountries willing to contemplate the possibility thatdeveloping country members would, in certaincircumstances, be able to step back from theirexisting obligations to deal with a real problem oflivelihood security for small farmers? The developedand the developing countries have to find the degreeof manoeuvrability between their respectivepositions, both of which are legitimate. If they fail,there will be no SSM, no limitations on the domesticsupport provided by the United States and theEuropean Union, no obligation to remove exportsubsidies, no duty-free quota-free treatment forLDCs, no agreement on tropical products. It seemsto me that it would be pretty unintelligent to allowthat to happen.

Mr. I. Guardans Cambó (European Parliament)

I would really like to understand why the negotiationshave stalled. Mr. Falconer has been quoted in thepress as saying that it would be futile to believe thatthe July mini-ministerial meeting failed because ofsome minor technical hitch in the proceedings.Apparently, a true political divide has existed since2005. How can a divide that has existed for so longbe bridged in the space of a few weeks or months?

The whole issue of cotton has never really beenseriously dealt with. If the stumbling block had notbeen the SSM, it would probably have been cotton.What would have happened if the meeting had goneso far as to discuss cotton?

Mr. D.H. Oliver (Canada)

A number of the countries represented at thisconference are donors of food aid. Where are thenegotiations as concerns the elimination of export

subsidies and tighter rules on export credit? We knowthat this can lead to improved market predictabilityand fairness, but certainly strengthening disciplineson food aid would help prevent such aid fromcontributing to commercial displacement and ensurethat it is provided in a way that meets humanitarianneeds.

What are the essential problems with the cottondebate and what are the key issues still to beresolved?

Lord Paul of Marylebone (United Kingdom)

Those attending the July mini-ministerial meetingcame to Geneva determined to succeed because theyknew that the consequences of failure would beterrible. Why, then, did they fail? And what haschanged today to bring them back to the negotiatingtable? Did the July talks break down for reasons ofpolitical brinkmanship or because of national politicalagendas?

Mr. A. Couriel (Uruguay)

In the current round, the caps on internal aidproposed by, for example, the United States (US$ 14.5 billion) are higher than its real subsidies(US$ 8 billion). Why is the SSM that important? Thedeveloping world wants to protect its rural producersfrom specific increases in imports. Is this not whatthe developed world has always done? What theEuropean Union and the United States are currentlydoing? Why can the developing world not do it?

Has the balance of power shifted? Is this not reflectedin the nature of the confrontation between emergingcountries like China and India, on the one hand, andthe United States, on the other?

We all want the Doha Round to be completed as soonas possible. Is it feasible to resume the negotiationsthis year, during the US presidential elections, or willthey inevitably be postponed until 2009?

Mr. J. Al Matrook (Bahrain)

We have heard much about the significant progressmade in July 2008. Were the developed countries inagreement on their agenda? The same can be askedof the developing countries. What were thedifferences between the two?

Mr. C. Falconer (panellist)

I think it would be a big mistake to think that theJuly mini-ministerial meeting stumbled over a narrowtechnical issue. The SSM is a fundamental politicalissue for the Member States concerned and will onlybe resolved if it is recognized that it matters to Indiaor China, for instance, as much or even more thanwhat happens to the green box1 matters to theEuropean Union.

Developing country members are bound to askthemselves why they should not have an SSM thatdeals with their livelihood security concerns – thedeveloped countries are not really cutting theirdomestic subsidies over their current expenditurelevels, they are managing access to their marketsin ways they find politically acceptable, they havea green box in which to accommodate vast amountsof expenditure. The developed countries, for theirpart, might well ask themselves why the developingcountries should be entitled to raise their existingbound rates for free - the developed countries arecutting their domestic support down vastly fromwhat they are entitled to, they are not gettingmuch, if any, market access from some developingcountry members, they are allowing the developingcountries an exemption from making any tariff cutson products that are of export interest to thedeveloped countries. The problem is one of politicalbalance. It will not be fixed by a purely technicalsolution.

Cotton has never been dealt with at ministerial level,but it has been discussed elsewhere. We do not knowhow far the United States would have been preparedto go in making reductions in its blue box2 and amberbox3-specific commitments as they relate to cotton.We do know what the European Union was preparedto do, but apparently it was not enough. I cannotgauge where the negotiations on cotton would haveled. I doubt that the United States came to themeeting in July unprepared to negotiate. Certainlycotton subsidies are the most demanding issue itfaces and the one on which it would find it politicallymost difficult to deliver. It therefore chose to playthat card last.

Clearly, if the negotiations had reached cotton, theresult would have had to reflect the mandate, i.e. abigger reduction in cotton subsidies than any other,to be implemented as a matter of priority. It shouldalso be borne in mind that Brazil has won a case at

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1 Domestic support for agriculture that is allowed without limits because it does not distort trade, or at most causes minimal distortion.2 Included in the blue box are any support payments that are not subject to the amber box reduction agreement because they are direct

payments under a production limiting programme.3 Agriculture's amber box, according to the WTO, is used for all domestic support measures considered to distort production and trade.

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the WTO against the United States on cotton. TheUnited States now has to implement that decision.

When it looked like the July negotiations would besuccessful, the members had agreed implicitly onhow to settle their few remaining differences onfood aid and export credits. If the rest of thenegotiations fall back into place, that deal could beimplemented.

Has anything changed since July? The answer mustsurely come from the politicians. Looking at how thenegotiations unfolded, I would say that too manypolitical concessions were held back in July until thelast minute. The WTO must reach its decisions byvirtual unanimity, and that makes brinkmanshipmuch more likely.

The differences are not necessarily always betweendeveloped and developing countries. The situationis much more complex than that, and this meansthat the WTO is not necessarily divided into strict,purely politicized groups.


Japan is faced with two serious issues in connectionwith minimal access. First, its rice imports in 2007were 6,000 tonnes short because of the drop insupply. It was therefore unable to meet its WTOminimum access commitment. Why did the WTOimpose a penalty? It should be responsible for findingan appropriate exporter. If the current shortagecontinues, Japan will be forced to abandon itsminimum access commitment. Do other countriesapply the minimum access rules as scrupulously asJapan?

Secondly, some of the rice Japan importedunfortunately contained amounts of pesticide thatexceeded permitted levels. The resulting cases offood poisoning raised food safety concerns amongJapanese consumers, who started to ask the JapaneseGovernment to stop importing tainted rice. What isthe WTO’s response in such cases?


In May, the Irish Farmers Association, Ireland’s largestfarm organization, asked the Irish Government toveto the WTO deal; in exchange, it would recommendapproval of the Lisbon Treaty. The Irish Governmentagreed. Subsequently, full-page ads appeared in allIrish national papers saying that the veto was secureand urging a "yes" vote for the Lisbon Treaty. Werethe WTO negotiators aware of this? Did the EuropeanUnion indicate that it would find it difficult to close

a deal because one of its members had guaranteeda veto? Did any Irish government minister mentionthis?

Mr. B. Ouattara (Burkina Faso)

The issue of cotton has been raised at several WTOministerial meetings. Why, then, was it not raised inJuly? Do the countries concerned think they cancome to an arrangement and then simply present itas a good thing for the African countries? Is it a goodthing that Africa is not represented on the G7?

Mr. Falconer (panellist)

Minimum access at the WTO is not a purchaserequirement. Minimum access commitments areintended to create an opportunity for a certainnumber of imports to enter the country, but thereis no obligation to import. The WTO does not requireany Member State to consume poisoned food, andevery Member State is absolutely entitled under theSanitary and Phytosanitary Measures Agreement toprotect animal and human life and health.

How the Irish Farmers Association viewed the Julymini-ministerial meeting and the Irish Government’sposition was fairly common knowledge. This beingsaid, the parties engaged in the negotiations areresponsible for selling whatever deal they reach backhome. The European Union is not in a fundamentallydifferent position, because at the end of the day allthe negotiating parties have to sell the deal to theirlegislatures.

There is no question that the issue of cotton cannotbe resolved by the G7. There could have been nodecision in July without the representatives of cottonproducers, i.e. Brazil, the United States, the EuropeanUnion and the Cotton 4.

LOOKING BEYOND DOHA

Discussion paper presented by Mr. Carlos Carnero González (European Parliament)

The multilateral trading system

The multilateral trading system embodied in the WTOcontributes to enhanced security, transparency andstability in international trade and to a bettermanagement of globalisation through multilateralrules and disciplines and the judicial settlement ofdisputes.

The world needs a strong multilateral trading system.It is the most effective means of expanding andmanaging trade for the benefit of all and providesa unique framework for dispute settlement.

The European Union has always been committed tothe Doha Development Round, whose central purposeis to promote a fairer and more pro-developmenttrade system based on multilateral rules.

The July 2008 WTO mini-ministerial meetings

Governments' latest attempt to salvage a deal in theDoha Round of trade talks broke down at the endof July 2008, as ministers acknowledged that theywere unable to reach a compromise on modalitiesafter nine days of mini-ministerial meetings inGeneva.

A very large number of problems which had remainedintractable for years had found solutions, eventhough the negotiations foundered on the extentto which developing countries would be able to raisetariffs to protect farmers from import surges undera 'special safeguard mechanism'. Differences overcuts to farm subsidies and industrial tariffs, whichhad long seemed virtually intractable, appeared to

be bridged to a significant extent and even thealways tricky issue of preference erosion wasreportedly close to being finalised.

EU negotiators were involved over the last days ofthe talks in trying to help broker an agreement onthe very area that led to the collapse. The EuropeanUnion negotiated openly and in good faith and dideverything it could to contribute to a successfulconclusion.

After the collapse of the talks, WTO Membersexpressed a desire not to abandon the negotiationsand to preserve the progress made in agriculture andNAMA and other areas of the talks, representingthousands of hours of negotiation and seriouspolitical investment by all the Members of the WTO,which should not be wasted.

Nevertheless, the path towards putting thenegotiations back on track is unclear.

Some Members suggested that there were some partsof the package that had almost been negotiated orwhere there was a consensus, which could moveforward. Other called to implement some actionsthat had already been agreed, such as duty-freequota-free market access for LDCs, aid for trade andthe "enhanced integrated framework" of assistanceto LDCs.

Nevertheless, choosing to move ahead in the talkson a disaggregated basis would require a consensusdecision among all WTO Members. That could provedifficult, given the varying degrees of importancethat different governments assign to particular issues.There would be resistance to dismantling the Doha

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Round package, given the institution's traditional'single undertaking' approach, under which 'nothingis agreed until everything is agreed'.

Benefits of a successful conclusion

A successful conclusion of the Doha Round, providingfor genuine further market opening and strongermultilateral rules, could be the robust stabilizingfactor needed by a world increasingly worried aboutfinancial and economic crises and an importantparameter in stimulating worldwide economic growth,development and employment and effectivelycontribute to the MDGs and to the integration ofdeveloping countries into the world economy.

All WTO Members would benefit significantly froma more open and fairer multilateral trading systemshould the DDA be finalised.

Prospective costs of failure of the Doha Round

The European Parliament is convinced that the costsof failure in the WTO negotiations would besubstantial. In fact, the alternative to a successfulRound is not the status quo but a serious degradationin the trading system.

The first loss would be the possible welfare gainsfrom new WTO reforms (with expected benefitsranging from about fifty to several hundred billiondollars).

The second cost would be systemic erosion. In fact,the credibility of the international trading systemand the WTO as an institution would be seriouslyundermined. The poorest and weakest members, whobenefit the most from a strong multilateral rules-based system, would be the most disadvantaged.Members still would adhere to obligations underexisting agreements, but there would be lessconfidence in using the WTO as a forum for tradenegotiations.

On the other hand, there would be more emphasison WTO litigation in the absence of an effectiveprocess to liberalise trade. WTO Members would makemore use of the dispute settlement process to"litigate" desired changes in the practices of othermembers, but big players would have less incentiveto comply with adverse rulings.

The third cost would be the risk that the internationaltrade system drifts into the doldrums of bilateralismand regionalism. Trust in the principles ofmultilateralism and in international cooperationwould be weakened. Major trading nations would

refocus their negotiating efforts on bilateral andregional trade agreements, and the number of suchinitiatives would proliferate.

The fourth cost would be increased protectionism.Multilateral trade negotiations act as a buffer againstprotectionist impulses since new trade barriers orsubsidies could disrupt ongoing negotiations.Protectionist measures could escalate in the futurein response to slower growth and risingunemployment as the global boom weakens amidhigh energy costs and associated inflation.

Fifth, the breakdown of the trade talks could causeadverse shocks in financial markets. Markets alreadyare sensitive to threats of new trade protectionismand their effects on capital flows.

Finally, the cost of not being able to use multilateraltrade negotiations to catalyze domestic economicreform.

Bilateral and regional trade agreements

Bilateral and regional trade agreements (RTAs) arechanging the world trade landscape. The number ofagreements in force now surpasses 200 and about afurther 70 are under negotiation or consideration.The number of bilateral agreements as well as theworld share of preferential trade has been steadilyincreasing.

As agreements proliferate, a single country oftenbecomes a member of several different agreements.Each agreement has different rules of origin, tariffschedules, periods of implementation, and togetherthey complicate customs administration and createcomplex rules for economic operators. Somecountries place bilateralism at the heart of their tradepolicy. Major players are also increasingly turningtowards bilateralism, which may shift the focus fromthe multilateral level. This can be both a cause anda consequence of reduced ambition and commitmentin the WTO talks.

The existing provisions of the WTO require RTAs tobe recognized as an exception to MFN treatmentand non-discrimination. However, they do not workas a brake on the formation of RTAs.

The relationship between the multilateral tradingsystem and bilateral agreements as analternative/complementary policy tool is a complexone. Many argue that the overlapping, complex,diverse and unpredictable RTAs are inherentlydiscriminatory and contribute to a fragmented worldtrade system, also undermining the WTO and its basicprinciples. Others claim that pursuing trade

liberalisation through bilateral deals is a usefulcomplement to the multilateral level.

RTAs can build on WTO and other international rulesby going further and faster in promoting opennessand integration, by tackling issues which are notready for multilateral discussion and by preparingthe ground for the next level of multilateralliberalisation. RTAs can have a harmonising role andmay complement and strengthen the multilateralsystem.

But RTAs can also carry risks for the multilateraltrading system. The drawbacks seem to outweigh theadvantages and there are important economic andpolitical costs associated with slow progress or failureat multilateral level and the proliferation of RTAs.Bilateral deals weaken the multilateral system. Theycan complicate trade, erode the principle of non-discrimination and exclude the weakest economies.

The WTO system is more transparent and morepredictable than the "spaghetti bowl" created by thehundreds of overlapping RTAs that generateuncertainty for exporters. Very often, RTAs maypenalise countries with limited bargaining powerand multilateral liberalization has a greater positiveimpact on development.

Furthermore, RTAs and parallel negotiations atmultilateral, regional and bilateral levels strain theinstitutional capacity of governments. RTAs arecomplex to negotiate and especially developingcountries' capacity is very limited to cope withongoing parallel negotiations.

The future of the WTO

An important analysis of the future of the WTO andthe institutional challenges it faces was carried outin 2004 by the Advisory Board chaired by PeterSutherland. However, no practical action was takenwith regard to the recommendations set out in thereport delivered in January 2005.

The debate on the decision-making process, mandate,functioning and future of the WTO should be resumedin the light of the latest developments, with a viewto increasing both its effectiveness and its legitimacy.

The European Parliament considers that some aspectsdeserve our attention:

● the appropriateness of the institutional structureof the WTO;

● the need to ensure consistency and coordinationwith the action being taken by other internationalorganisations;

● the importance of the parliamentary dimensionof the WTO in order to enhance the democraticlegitimacy and transparency of WTO negotiations;

● equal and effective participation by all members,particularly LDCs;

● the importance of capacity building and technicalassistance for developing countries;

● the introduction of a more democratic system ofdecision-making at the WTO that takes intoaccount the views of the entire membership,which comprises countries at varying levels ofdevelopment;

● the need to examine various methods andprocedures with a view to facilitating, on a case-by-case basis, the emergence of consensus;

● a plurilateral approach with opt-in or opt-outagreements, for certain groups of countries orcertain sectors, in cases where a consensus cannotbe reached;

● the limits of the formula of the "Rounds" ofnegotiations involving all WTO members on avery wide range of subjects;

● the redefinition of the role and the format of theMinisterial Conferences;

● the need to disconnect as much as possiblemultilateral negotiations from the nationalpolitical situation of the different WTO Members;

● strengthening the role of the WTO Secretariat,enabling it to take initiatives and suggestcompromises;

● the possibility of examining proposals andcompromises prepared by independent panels ofexperts;

● the issues of external and active transparency;

● the involvement of the civil society;

● the reform of the dispute settlement system;

● etc. etc.

Conclusions

The multilateral negotiations now face an even moreuncertain future, despite considerable headwaytowards an accord.

Nevertheless, the European Parliament attaches theutmost importance to safeguarding what has so farbeen achieved by the multilateral trade system andremains firmly committed to the success of the DohaRound.

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The collapse of the mini-ministerial meetings of July2008 should not stop but, on the contrary, animatethe reflection on the multilateral trading system, thefuture of the WTO and the way forward. It is truethat an agreement based on the consensus of allWTO members is long and costly to negotiate.However, the Doha Round should deliver ondevelopment, including free access of LDCs to alldeveloped country markets, substantially reducingagricultural subsidies that hurt the producers of theSouth, aid for trade, trade facilitation, special anddifferential treatment justified by development

reasons, as well as better rules. Developing countrieswould not be able to achieve these elements in theframework of fragmented regional and bilateral deals.

Therefore, it is necessary to continue to promote aregulated multilateral system, which gives priorityto development and incorporates non-tradedimensions (environment, health, povertyeradication, social standards, and respect of decentwork norms).

We believe that a successful conclusion of the DohaRound must remain our objective.

LOOKING BEYOND DOHA

Discussion paper presented by Mr. Benedict A. Martins (South Africa)

There is justified concern that multilateralism, towhich most developing and developed countriesstrongly subscribe, has suffered another setback withthe failure to conclude the important modalitiesphase of the Doha Development Round ofnegotiations held in Geneva from 21 to 29 July 2008.

Notwithstanding marathon trade talks the Roundhas ground to a halt again. The proximate cause ofthe latest failure was rules governing agriculturaltrade. The stand-off over the special safeguardmechanism for small-scale agricultural producers inthe developing world proved irreconcilable; but evenif it had been resolved, other, more complex issuesstood in the way, such as addressing the concernsof cotton producers in the developing world,industrial tariff reduction commitments and rulesof trade in services.

Our view is that behind the immediate issues at stakelurks a broader challenge of recovering thedevelopmental content of the Doha Round. Itremains a serious source of concern that thedevelopmental principles that WTO members agreedto in Doha in 2001 appear not to be sufficientlyinforming the detailed negotiations now under way.Developing countries thus have valid concerns overthe future of the Doha negotiating mandate andwhether it will be possible to preserve its coredevelopmental objectives.

Furthermore, the potential gains that may be lostshould also not be underestimated, as these haveimportant systemic implications for development,particularly with respect to agriculture. These wouldinclude among others, the elimination of export

subsidies, lowering ceilings for trade distortingsupport, new disciplines for product support,reduction of subsidies on cotton, duty-free quota-free market access for LDCs, new provisions fordeveloping countries to protect agricultural productsfor food security and rural development reasons(special products), and a new trade remedy to protectdeveloping countries from surges in subsidizedagricultural imports (special safeguard mechanism).

However, ensuring that trade becomes a true forceof development means going far beyond simplyimproving developing countries’ access to themarkets of developed countries. It requires thepromotion of trade as an effective instrument forthe effective and beneficial integration of developingcountries into the international trading system.

Enabling a fairer trade regime for developingcountries also entails a coherent policy approach topromote the creation of productive resources, skillsand capacities within developing countries, as acrucial complement to trade liberalization. The focusof trade liberalization must be on more thanachieving an open, non-discriminatory, predictableand rules-based multilateral trading system; it mustalso be able to deliver on the promise of developmentif it is to be sustainable.

Furthermore, in striving to enhance the multilateraltrading system, it remains necessary for the WTO tocontinue to reflect on the aspirations and needs ofall its members. China, India and Brazil are emergingas significant players on the world economic scene.As the economic and political influence of thesecountries increases, both individually and collectively,

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the trading system will have to reach anaccommodation with them politically as well aseconomically. The emergence of a multipolar globaleconomy, one in which the United States, theEuropean Union and Japan are no longer the onlymajor players, must therefore be addressed if thecontinued viability of the trading system is to beassured. Similarly, the nature, scope and objectivesof the WTO need to be resolved. In this regard WTOmembers need to decide what they want theirorganization to be and do. Again, any such decisionmust properly reflect the priorities of the wholemembership and not just of the powerful few. Thiswill reduce the imperative for nations to seeksolutions outside of the multilateral trading system.There is no doubt that the governance arrangementsfor world trade need to be updated to reflect newcircumstances and new economic and politicalrealities.

The following challenges, which are distinct yet oftenrelated, need to be met if the multilateral traderegime is to succeed:

● Counter growing opposition to furthermultilateral trade liberalization in industrializedcountries. This tendency threatens to renderfurther reciprocal opening of markets undulylimited and to weaken a valuable instrument ofinternational economic cooperation;

● Ensure that this evolving dispensation - movingfrom the bipolar global trade regime dominatedprimarily by the United States and WesternEurope to a multipolar alternative - does notlapse into a longer-term stalemate ordisengagement;

● In this changing environment, forge a broad-based agreement among the members about theWTO’s objectives and functions;

● Ensure that the WTO’s many agreements andprocedures result in benefits for its weakestmembers. This requires that the membershipaddresses the relationships between current traderules and fairness, justice, and development; and

● Identify what steps can be taken to ensure thatthe considerable momentum behind theproliferation of preferential trading agreementscan be eventually channelled to advance thelong-standing principles of non-discriminationand transparency in international commerce.

Sustaining the WTO is the collective responsibilityof all its members, in particular both the long-standing and the new poles of power and influencein the world economy.

There is thus a need to lead the world to a morerepresentative global architecture to reflect theongoing shifts in financial wealth, commodity powerand trade flows. This must give the dynamicemerging economies a greater say in shaping therules of the system while ensuring that they takegreater responsibility for it as larger stakeholders.This would entail increasing their role in theInternational Monetary Fund, the World Bank, andthe World Trade Organization, as well as enlargingparticipation in the Group of Eight (G8) industrializedcountries. There are thus major historic challengesbefore the leadership of the European Union andUnited States and the enormity of these and the fateof the Doha Round rest in their ability to rise to thesechallenges. The WTO remains important in terms ofimplementing the Uruguay Round outcomes,providing oversight for the global trading systemand settling trade disputes. However, the failure toconclude the Doha Development Round is likely tosee the impetus for trade integration shift to regionaland bilateral efforts. Despite this reality, the keychallenge for contemporary global economicgovernance will remain the ability to reconcile tradeand development under dynamic conditions ofglobalization.

Unlike the breakdown in previous Ministerialmeetings (Seattle, Cancún), the Doha DevelopmentRound breakdown has not been occasioned byacrimony and recrimination. Most members haveindicated an interest in resuming the process as soonas possible. Two questions are therefore pertinent:when and on what basis could the resumption occur?On timing, despite some calls for an early resumption,the general view is that this may not be feasible fora year, given the upcoming elections in the US andIndia, as well as changes in the European Commissionin mid-2009.

On the second question regarding the basis forresumption, a key question will be how to preserveand build on work previously done whilesimultaneously recognizing that in the end therewas not consensus on the Geneva package developedin July. Consultations over the coming months maybegin to provide some answers as to when and howsubstantive negotiations could be re-started.

If the Doha Development Agenda is to live up to itsname, the fact that country priorities and capacitiesdiffer enormously will need to be addressed. Thechallenge of special and differential treatment is todevelop an approach that defines clear and concreterights and obligations for all members, while at thesame time recognizing that the development needsof members are varied and call for differentiated

responses. This is a different task, but shunning itwill ensure that special and differential treatmentremains an issue of political contention that carriesboth systemic and developmental costs, theconsequences of which weigh on the WTO as aninstitution and its entire membership.

In conclusion, parliamentary scrutiny of trade policiesmust remain an important responsibility of members

of parliament, as they have the duty to overseegovernment action in the field of international tradeand promote fairness of trade liberalization.

The multilateral rules-based system under the WorldTrade Organization remains the most effective andlegitimate means of managing and expanding tradeand as such, needs the solid commitment of allmembers as it is a positive force in the world.

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SUBSTANTIVE THEME (A)

“LOOKING BEYOND DOHA”

INTRODUCTORY REMARKS

Mr. Carlos Carnero González (European Parliament)

Globalization has to be governed by representativemultilateral institutions that are strong, effective andable to maximize its advantages and minimize itsdisadvantages. This is even truer in a world strugglingto cope with such fundamental challenges asovercoming underdevelopment, reducing poverty andfighting climate change, amid an economic crisis thatthreatens growth and employment in all countries.

We can disagree on other points, but it is hard notto agree that increased trade through multilateralismis a basic component of growth, development andpoverty reduction.

In this context, the existence of the WTO is wonderfulnews. In spite of its youth, the WTO represents aparadigm for multilateralism, a model forinternational cooperation and an excellentinstrument for regulating economic globalization.

First, because the WTO takes decisions by consensus,the strongest countries cannot impose their will onthe weakest – this is the opposite of what happensat, for example, the IMF. Secondly, the WTO’s abilityto establish binding rules makes it possible toliberalize trade in order to promote growth anddevelopment. Thirdly, the impartial dispute settlementmechanism guarantees the equality of WTO members,no matter what their weight and influence.

The WTO is therefore the ideal forum for negotiatingmultilateral trade liberalization on the basis of the

key principles of non-discrimination, reciprocity andtransparency. It institutionalizes cooperation betweensovereign States that are equal before the law whenit comes to establishing rules and procedures fornegotiation and dispute settlement, strengthens thevoice of the weakest and facilitates the formationof coalitions and the linkage of various sectors inthe negotiations, thereby encouraging countries tomake reciprocal concessions and limitingprotectionism. At the same time, the singleundertaking prevents integration from taking placeat various speeds. Lastly, the WTO has proven to bea potent means of consolidating the reform processin many developing economies.

In a context that has revealed the waning influenceof the Bretton Woods institutions, the WTO, whichwas established just 13 years ago, has an institutionaldesign that outdoes not just the IMF and the WorldBank, but even bodies such as the United Nations.This being so, how is it that the WTO has notmanaged to conclude even one major global tradeagreement since its inception and has sufferedrepeated setbacks, most recently the Doha Roundnegotiations of July 2008?

I sincerely believe that we must avoid pointing anaccusing finger at one or another country or groupof States on specific subjects (be they as relevant asthe SSM, bananas, cotton and appellation of origin),even though it may be legitimate to ask (as manyanalysts do) whether the July talks did not failbecause the agreements being discussed were clearlytoo far removed from the development objective setin 2001, because the anticipated advantages obtained

by the developing countries would have really beentoo small, because there would have been little oronly moderate access to the American and Europeanagricultural markets respectively, and because thereductions in bound tariffs – especially for industrialproducts – would have required those States todamage or dismantle their domestic industries andbrought about a calamitous drop in customsrevenues, which in some cases account for more than50 per cent of the public purse.

There are at least six main reasons the talks failed:the use of different paradigms – development andmarket access – that are often contradictory;objective economic differences that go beyond theclassic division between developed andunderdeveloped countries and include a newcategory of States – the emerging economies; thepolitical obstacles derived from an election contextwhich, in a democracy, legitimately reflects citizendecisions; the commercial interests of the variousparties; the WTO’s functional problems; lack ofpolitical will, as always, on the part of thegovernments.

All these problems should and indeed can beovercome. The paradigms of development and marketaccess have to be rendered compatible, in keepingwith the true spirit of the Doha Round. Economicdifferences have to be overcome on the basis of thekey concepts of equality, progressivity, positivediscrimination, solidarity and complimentarity.Obviously, we are not identical: the World Bankcalculates that the agreement discussed in Genevawould have increased the GDP of the poor countriesby a mere 0.16 per cent, and UNCTAD estimates thatit would have resulted in a drop of US$ 60 millionin developing countries’ tariff revenues. In this sense,the LDCs should logically benefit from free accessto all developed country markets, trade assistance,trade facilities and specific treatment for reasonsrelating to development.

The political obstacles need to be tackled withproactive and positive messages to the people – letus put an end to fear, let us tell the truth withoutcreating myths – that have nothing to do withpopulism and short-term gain. The commercialinterests are compatible in the medium and longterm if we all share the goal of sustainabledevelopment.

Given the WTO’s functional problems, we shouldrevisit the Sutherland Report and apply and adoptmany of the measures it recommends. The report ismore topical than ever, yet it has apparently beenrelegated to the backroom.

The lack of political will must give way to clearawareness of the opportunity cost we are payingfor this situation. The European Union – with thebacking of the European Parliament – negotiatedopenly and in good faith. It remains committed tothe satisfactory finalization of the DohaDevelopment Round as soon as possible. Thebenefits would be enormous for everyone. Thesuccessful conclusion of the Doha Round, providingfor further genuine market opening and strongermultilateral rules, could be the robust stabilizingfactor needed by a world increasingly shaken byfinancial and economic crises, and an importantparameter in stimulating worldwide economicgrowth, development and employment; it couldmake an effective contribution to the MDGs andto the integration of developing countries into theglobal economy. On the other hand, failure toconclude the Doha Round would entail huge losses,for the alternative to a successful round is not thestatus quo but rather a serious deterioration in thetrading system. Let us consider the costs of such afailure:

● billions of euros would no longer enter theinternational economy;

● the credibility of the international trade systemand of the WTO as an institution would beseriously undermined: the poorest and weakestmembers, those who draw the greatest benefitfrom a strong multilateral rules-based system,stand to lose the most; the States would continueto meet their obligations under existingagreements, but would be less confident aboutusing the WTO as a forum for trade negotiations;

● there would be greater emphasis on WTOlitigation, for want of an effective process forliberalizing trade: WTO members wouldincreasingly turn to the dispute-settlementprocess to "litigate" desired changes in thepractices of other members, but the major playerswould have less incentive to abide by adverserulings;

● the international trade system runs the risk ofdrifting into the doldrums of bilateralism andregionalism: trust in the principles ofmultilateralism and in international cooperationwould be eroded; the chief trading nations wouldrefocus their negotiating efforts on bilateral andregional trade agreements and the number ofsuch initiatives would rise rapidly; the developingcountries would clearly not obtain as muchthrough regional or bilateral agreements as ifthey were to use the multilateral system;

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● greater protectionism: multilateral tradenegotiations act as a buffer against protectionistimpulses, since new trade barriers or subsidiescould disrupt ongoing negotiations; protectionistmeasures could escalate in future in response toslower growth and rising unemployment;

● the financial markets would suffer;

● multilateral trade negotiations would not haveenough influence to trigger domestic economicreform.

Bilateral and regional trade agreements cannot beconsidered an alternative to the Doha Round inparticular or to the multilateral system embodied bythe WTO in general. This is why we have to makesure that the multilateral system works effectivelyand that bilateral and regional trade agreementspromote trade liberalization and act to harmonize,complement and strengthen the multilateral system.

Political will is indispensable to bringing the DohaRound to a successful conclusion and ensuring thatthe WTO is fully effective. But at the European Unionwe know that good instruments and decision-makingprocedures help channel the political will in the rightdirection.

It is in this sense that the debate on WTO reformshould be resumed. A report approved by theEuropean Parliament in April of this year underscoresa number of points. The WTO must ensure consistencyand coordination with the action being taken byother international organizations, first and foremostILO. This conference should function as a consultativeassembly for the WTO. All members, especially LDCs,must be able to participate equally and effectively.Capacity-building and technical assistance activitiesmust be undertaken for developing countries.Decision-making procedures must be improved soas to ensure that the principle of a single undertakingdoes not preclude the possibility of concludingmultilateral and sectorwide agreements.

To conclude, worldwide sustainable developmentrequires the regulated, negotiated and responsibleexpansion of trade. This means that the Doha Roundmust be successfully concluded as soon as possible,with due regard for national political calendars. Thenegotiations must resume on the basis of what hasbeen agreed to date, which must in no case besquandered. We need the WTO as a means of actingon globalization and improving people’s lives.Improvements must be made to the way in whichthe organization functions, without undermining itsfoundations. The political will of the Member Statesis key to concluding the Doha Round andstrengthening the WTO. This parliamentary assembly

should be a genuine deliberative and consultativeoffshoot of the WTO.

Mr. Benedict A. Martins (South Africa)

Multilateralism, to which most developing anddeveloped countries subscribe, has suffered anothersetback with the failure to conclude the modalitiesphase of the Doha Development Round ofnegotiations. On the one hand, the stand-off overthe SSM for small-scale agricultural producers in thedeveloping world proved irreconcilable. On the otherhand, more complex issues stood in the way, such asthe concerns of cotton producers in the developingworld, industrial tariff reduction commitments andrules of trade in services.

The potential gains that may be lost should not beunderestimated. They have important systemicimplications for development, particularly withrespect to agriculture. These include the eliminationof export subsidies, lower ceilings for trade distortingsupport, new disciplines for product support,reduction of subsidies on cotton, duty-free quota-free market access for LDCs, new provisions fordeveloping countries to protect agricultural productsfor food security and rural development reasons, anda new trade remedy to protect developing countriesfrom surges in subsidized agricultural imports.

Ensuring that trade becomes a true force fordevelopment means going far beyond simplyimproving developing countries’ access to developedcountry markets. It means promoting trade as ameaningful instrument for the effective and

beneficial integration of developing countries intothe international trading system. Enabling a fairertrade regime for developing countries also entails acoherent policy approach to promote the creationof productive resources, skills and capacities withindeveloping countries, as a crucial complement totrade liberalization.

In striving to enhance the multilateral trading system,the WTO must continue to reflect on the aspirationsand needs of all its members. The emergence of amultipolar global economy must be addressed if thecontinued viability of the trading system is to beassured. Similarly, the nature, scope and objectivesof the WTO need to be resolved.

The numbers of challenges need to be met if themultilateral trade regime is to succeed, namely:

● counter growing opposition to furthermultilateral trade liberalization in industrializedcountries;

● ensure that this evolving dispensation does notlapse into a longer-term stalemate ordisengagement;

● forge a broad-based agreement among themembers about the WTO’s objectives andfunctions;

● ensure that the WTO’s many agreements andprocedures result in benefits for its weakestmembers;

● identify what steps can be taken to ensure thatthe considerable momentum behind theproliferation of preferential trading agreementscan eventually be channelled to advance thelong-standing principles of non-discriminationand transparency in international commerce.

There is a need to lead the world to a morerepresentative global architecture that reflects theongoing shifts in financial wealth, commodity powerand trade flows. The dynamic emerging economiesmust be given a greater say in shaping the rules ofthe system but must also take greater responsibilityfor it as larger stakeholders.

The breakdown of the Doha Round has not beenoccasioned by acrimony and recrimination. Mostmembers have indicated an interest in resuming theprocess as soon as possible.

If the Doha Development Agenda is to live up to itsname, the fact that country priorities and capacitiesdiffer enormously will need to be addressed. Thechallenge of special and differential treatment is todevelop an approach that defines clear and concreterights and obligations for all members, while at the

same time recognizing that the development needsof members are varied and call for differentresponses. This is a difficult task, but shunning it willensure that special and differential treatment remainsan issue of political contention that carries bothsystemic and developmental costs, the consequencesof which weigh on the WTO as an institution and itsentire membership.

Mr. Stuart Harbinson (Senior Adviser to theUNCTAD Secretary-General)

The label "Doha Development Agenda" gives theimpression that the aim from the outset was todesign a development agenda. This is not so. In fact,it was the developed countries that were the mainproponents of the round’s launch. In doing this, theysaid that the round would be good for developmentbut naturally also had their own agenda.Nevertheless, the Doha Declaration contains manyvery important references to development, andclearly the round seeks to place development at theheart of the WTO work programme.

Right from the outset, therefore, the purpose of theround was somewhat ambiguous. Indeed, the forceof the development argument sometimes seems tohave foundered on the rock of hard commercialrealities in the developed countries. In my view, giventhe current crises relating to food and energy prices,this ambiguity has to be resolved in favour ofdevelopment.

As concerns institutional reform, I believe it is wrongto think that there is a magic procedural solution

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that will unlock the negotiations in the WTO. Thevariety of interests involved and the complexity ofthe subjects make that very difficult. It is also fairto say that the WTO has done much to reform itselfin terms of transparency and legitimacy since itsestablishment in 1995. Who can deny, for example,that the Group of LDCs, the African Group, the G20,the G33, the ACP Group and small and vulnerableeconomies have not had a pivotal influence on thenegotiations today? They have transformed thenature of the WTO through much dedication andhard work. Of course, the WTO is not perfect, but itis improving. We need to keep up the effort.

The complexity means that the negotiations are verydifficult to organize and carry forward. Now wouldbe a good time to start reflecting in a serious wayon possible institutional and procedural reforms inthe WTO. Such matters are talked about informallybetween delegates, but the reform needs to be moresystemic. The WTO should establish a standingcommittee on institutional and procedural mattersthat would be empowered to engage in dialoguewith other interested stakeholders. The SutherlandReport could be a useful initial input for that exercise.

Beyond Doha, what is it realistic to expect from theWTO?

As others have said, it is wrong to believe that areasonably liberal international economic order canonly be constructed by international organizationsand intergovernmental negotiations. In fact, muchrecent trade liberalization has taken place unilaterally,as countries realize that it is in their interests to godown that road if they want to derive benefits fromglobalization. China is perhaps the best-known recentexample.

We also need to bear in mind the mind-bogglingcomplexity of multilateral negotiations in the WTO.In agriculture, the text on modalities comprises 116pages – and it is not the final outcome of thenegotiations, and agriculture is only one subject.

Can we go on like this? Common sense would suggestprobably not. The so-called built-in agendanegotiations on agriculture and services alone didnot work in 2000 and 2001, when they werelaunched. That was in fact one of the main reasonsthat Doha, with its more comprehensive agenda, waslaunched.

The WTO needs to investigate the possibility of amore gradual, incremental and yet still balancedagenda after Doha. Expectations of economic gainsfrom WTO negotiations may need to be downsized.But even if the WTO can initially just turn unilateralliberalization into a binding multilateral commitment,

that would be well worth doing. The inevitable resultwould be better rules, because liberalization requiresregulation, and that is an important role for the WTO.

By taking smaller steps in future, we may in the longrun be able to go further with less anguish and in agreater spirit of international cooperation.

Dame Billie A. Miller (Barbados)Former Minister of Foreign Affairs and Foreign Trade

The Doha Development Round is the ninth round oftrade negotiations. The eighth round – the UruguayRound – ran from 1986 to 1993 and included a two-year hiatus. Why, then, are we assuming that theDoha Development Round, with many more countriesaround the table, many more, very complex issueson the agenda, and developing countries andcoalitions of developing countries fully engaged onall issues, will not take longer and be morechallenging?

This may not be the most propitious time forcontinuing the negotiations. The United Statespresidential election campaign has moved into topgear, against a backdrop of spiralling food and oilprices accompanied by fears of global recession andeconomic slowdown. Yet it may also be the best time,if there is an overarching multilateral imperative forthe membership of the WTO to conclude the roundat this time.

A period of reflection that includes a review of someprocess issues might be helpful. Indeed, one body ofopinion holds that the Green Room process needsto be rethought. One member is believed to havevolunteered to give up its place to another in orderto bring new ideas and perhaps a differentperspective to presently intractable positions.Certainly, the deal-breaking SSM will arise in anynew discussions of agriculture, in which event the

case for including the coordinator of the G33 in theG7 will need to be made formally.

At times like these, new ways are needed of dealingwith old and even new matters. A number of issuesthat are of importance in particular to the developingcountries remain outstanding and need to be fast-tracked. The WTO Director-General’s appeal for re-affirmation of the commitment to the multilateraltrading round, not only for the sake of trade but alsoin the wider interests of multilateralism, must inspirefresh momentum.

The failure of the Doha Round would be the strawthat broke the camel’s back. The developing worldhas lived with many broken promises. In 2000 theUnited Nations General Assembly adopted the MDGs,meant to reduce poverty by 2015. Goal 8 speaks ofpartnership for development, which cannot beachieved without the Doha Development Round. In2002, at the International Conference on Financingfor Development in Monterrey, commitments weremade to help provide financing for the developmentpriorities of poor countries. Later that year, at theSustainable Development Summit in Johannesburg,an action plan was established to ensure sustainableglobal development. Official development aid wasovertaken long ago by developed country subsidies.

The WTO must ensure that there will be no renegingon the development agenda of the Doha Round.There has been little or no progress on importantsubjects of major concern to the developingcountries. The issue of cotton subsidies, for example,which is of urgent economic importance to four poorAfrican countries in particular – the C4 – has neverbeen negotiated despite repeated calls from thegroup’s coordinator and despite the fact that theWTO Hong Kong Ministerial Declaration provided in2005 that cotton subsidies were to be cut deeperand faster than other domestic agricultural subsidies.

The aid-for-trade mandate needs to be fullyimplemented, with less long talk about aid given inthe past and a sharper focus on new aid to be deliveredin the near future. The objective of special anddifferential treatment must also be re-affirmed duringthese negotiations: it has been eroded as a legitimate,evidence-based right of developing countries.

The developing countries cannot contemplate failureof the development dimension of the DohaDevelopment Agenda. The role played by the small,vulnerable economies, the ACP and the G33 is a fineexample of the growing cooperation between thebroad spectrum of developing countries. The small,vulnerable economies have been participatingactively in the Doha negotiations and have frequently

indicated that, although their miniscule share ofworld trade means that any concessions they offercould have no impact on international trade, theycontinue to be willing to contribute to thenegotiations in a manner commensurate with theircapabilities and development needs. Theirorganizational methodology – issue-specific priorities,evidence-based arguments, inter- and intraregionalcollaboration – can be a useful template for howsmall countries can be effective in international tradenegotiations.

In both the developed and the developing world,bilateral and regional trade agreements haveproliferated since the turn of the century. For themost part, they tend to be loaded against theinterests of developing countries. A stronger,multilateral, predictable and sure rules-based systemis of obvious benefit to the international traderegime, as is access to the WTO dispute-settlementmechanism and technical assistance component.Indeed, a multilateral arrangement is the preferredoption of the developing countries, the small andvulnerable economies in particular.

That being said, regional trade agreements areimportant components of the international tradesystem and they will likely continue to be ever morewidely used as trade policy initiatives. One exampleis the Caribbean Community, with its single marketand single economy. There are increasing numbersof cross-border regional trade agreements and freetrade agreements which seek to strengthen economicrelations for strategic or economic reasons, or acombination of both. There are customs unions,which seek arrangements with other customs unionsor with individual countries. The primary mandateof some regional trade agreements is to lower tariffs,while others aim to incorporate non-WTO issues, andothers yet to garner greater market access.

What this shows is that a balance must be foundbetween regional and multilateral interests. The WTOshould seek to ensure coherence between the rulesnegotiated at the multilateral level and thosenegotiated regionally, subregionally andextraregionally.

Parliamentarians, for their part, have a responsibilityto maintain constant dialogue with domestic andregional constituents, with the private sector andwider civil society, and with their colleagues fromother countries. They can play a helpful rolesupporting the work of trade negotiators, brokeringcompromises, including with political opponents,and creating environments that are conducive toagreement in the national, regional or internationalinterest.

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Ms. Cristiana Muscardini (European Parliament)

The economic crisis must be fought with sure rulesthat combat old and new poverty and eliminateglobal disparities.

I would like to outline some of the recommendationsmade in the report, "Towards a reform of the WorldTrade Organization", adopted by the EuropeanParliament in April 2008. The report is very aptlytitled, as it represents the European Parliament’scommitment to the need to make certainmodifications to the way in which the WTO operates,with a viewing to making the organization moreeffective and democratic at a very difficult time forit.

The list of suggestions contained in the reportencompasses a number of points I believe aresignificant and relevant to our discussion at thisconference.

First of all, we must examine the various proceduresthat serve to facilitate, on a case-by-case basis,consensus on a unanimous basis. This is and mustremain the rule by which decisions are made – byconsensus and unanimously. The limits to the presentformula for the ministerial cycles, which involvesthe members of the WTO on a broad range of subjectsand which very often makes it difficult to reach anagreement, as occurred at the July mini-ministerialtalks – are not all organized and modulated in thelight of current necessities. Perhaps a multilateralapproach by subject or sector would be a moreappropriate formula that could be used especiallyin cases in which a consensus initially appearsimpossible.

Another suggestion is the creation of a system whichwould foster more incisive participation on the partof all member countries, through the criteria ofgeographical representation or according to levelsof development or levels of interest. I know this is adifficult problem and that on some issues it is hardto reach an immediate consensus. However, we – theelected representatives of the people - must becandid about this. We cannot put countries that havea strong economic and industrial capacity – such asIndia and China - on the same footing at the WTOas countries that are still struggling to overcomepoverty and to develop. We cannot, within the WTO,merely distinguish between developed and lessdeveloped countries. We need a third category. Ibelieve that is the problem we as parliamentariansmust resolve. We must have the courage to makethe WTO a model for harmonious progress. The WTOmust not be just the means by which some countriesbecome more powerful.

The parliamentary dimension of the WTO instrengthening the democratic legitimacy andtransparency of WTO negotiations is another matterwe must tackle, as is guaranteeing technicalassistance to less developed countries. From this pointof view it would be good to think about a moreappropriate division between developing countries,one that takes better account of the new globaleconomic situation.

The WTO Secretariat needs to be reinforced so thatit can take initiatives and suggest compromisesolutions. The role and format of the WTO ministerialconference must be redefined, because at present itdoes not furnish acceptable, speedy or usefulsolutions.

Lastly, the WTO’s actions need to be coordinated andbrought into conformity with the principles anddecisions of other international organizations, inparticular ILO. ILO has repeatedly pointed to the needto define rules that guarantee basic labour principles.The WTO could establish a specific committee alongthe lines of the Environment Committee, saidcommittee to take account of ILO decisions.

This is a complex debate, given the reluctance ofsome countries to move in this direction. But I believethat meetings like this provide us with theopportunity to talk about thorny issues. There areother forums in which we can talk about easymatters. Parliamentarians are the electedrepresentatives of the people, and it is not our jobto solve easy problems. We must meet the hopes ofthose who have elected us and tackle the difficultissues.

The European Parliament considers that labourquestions are crucial to the economy, productionand trade, all of which are topical issues. I believethat in order to create a harmonious society we needto understand each other better, even when we mightnot agree. If we talk, we get to know each other andwe make slow and steady progress towards a bettersituation for all.


Mr. X. MU (China)

The aim of the Doha Round is to establishmultilateralism in trade, to prevent protectionism,to reduce trade distortions, to gradually open upmarkets and thereby to facilitate the achievementof the MDGs. This has not been an easy process. Themini-ministerial conference held in July 2008represented an attempt by the main members of theWTO to reach agreement on agricultural and non-agricultural issues. The negotiations made progresson many fronts. China played a unique role anddemonstrated constructiveness and flexibility.Regrettably, however, because of the conflictingpositions of two countries on the SSM, thenegotiations collapsed.

To push for an early conclusion to the Doha Roundis vital to international trade and the global economy.According to WTO statistics, if the Doha Round issuccessful there will be a reduction in dutiesworldwide of over US$ 110 billion and the globaleconomy will benefit to the tune of US$ 50 to 100 billion. At the same time, a stable, reasonableand healthy multilateral trade mechanism can playa unique and significant role in creating a more stableinternational economic development environment.

After the negotiations failed, the WTO Director-General said he would call a meeting of the mainplayers in order to achieve a breakthrough onagricultural products. China appreciates that effort.

Mr. R. Leon (Chile)

Parliamentarians cannot simply keep saying that theyregret the failure of the July mini-ministerial meeting.As the President of the European Commission hassaid, progress has to be made on the Doha Round,in the interests of the developing countries. Do theparliamentarians here agree? Our role asparliamentarians is to oversee and exert pressure ongovernments. The meeting should set criteriaenabling it to make a positive and concrete

contribution. The world’s current food crisis obligesus to have a policy position on this subject.

Mr. K.R. Rana (India)

The world today is more closely interconnected thanbefore. Collective challenges such as climate changecannot be addressed by one country or even onegroup of countries alone; they require globalsolutions. International trade is no different.

For this reason, the leaders of all countries committedthemselves to the successful conclusion of the DohaDevelopment Agenda, an essential prerequisite forprogress towards development. Trade underpinseconomic growth and greater prosperity, therebycreating the resources needed to achieve the MDGs.Developed countries represent the biggest potentialmarket for developing country exports, but south-south trade has been growing even faster. It istherefore important for emerging economies in aposition to do so to carry a share of the burden.

According to the WTO Director-General, the DohaRound could result, in agriculture alone, in savingsof over US$ 150 billion, with two thirds of the benefitflowing to developing countries. The July mini-ministerial meeting foundered on the issue of theSSM. We cannot allow this single issue, importantthough it is to some countries, to let the bigger prizeslip from our grasp. I welcome the dialogue betweenthe parties that have it within their power to find away out of the current impasse.

Mr. J.-C. Martinez (European Parliament)

We are endeavouring to reconcile two conflictingbut equally necessary requirements - free trade andthe protection of national markets – without fallingback on protectionism. Since 1947, free trade hasmeant the reduction and eventual elimination oftariff barriers. The protection of national markets,however, has not always been given dueconsideration. Hence the current impasse in thenegotiations, which is not only political but alsotechnical: it has not proven easy to lower customsduties. Only one channel has been used to break theimpasse, and that is political negotiation.

Those studying tariffs have, however, come up witha new approach that solves the problem: deductiblecustoms duties. Under this approach, the customsduties paid by the exporter is transformed into acustoms credit that the exporter can deduct fromits purchases from the importing country’s economy.The customs credit, which equals the amount of the

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customs duty, is redeemable, negotiable andaugmentable. It can be redeemed by the exporter inthe form of a "drawing right" on the importingeconomy. Should the exporter not wish to purchaseanything from the importing economy, the customscredit is negotiable on the stock market or the creditmarket. If the exchange takes place betweencountries of unequal economic strength, such asZimbabwe and a rich country, the customs credit canbe augmented, i.e. Zimbabwe will benefit from acredit of 110 or more per cent.

It is this customs credit that reconciles the protectionof national markets with free trade.

Ms. T. Bootong (Thailand)

It is high time for parliamentarians to examine theirrole of oversight in international trade. Trade isindispensable to economic growth and development,and an important means of reducing poverty andimproving food security and sustainable livelihoodsin the developing world.

The success of the Doha Development Round dependson the progress made in the negotiations onagriculture. Close attention must also be paid,however, to other issues of interest to developingcountries and LDCs. In the context of the MDGs, forexample, Task Force 9, on open, rule-based tradingsystems, makes a strong case for a multilateraltrading system that is more supportive of economicgrowth and poverty alleviation in developingcountries. It has put forward a set of goals for theongoing Doha Round and long-term objectives forthe trading system.

Trade imbalances derive from different levels ofeconomic development. They are the result of trade-distorting measures such as domestic and exportsubsidies that enable developed countries to competemore effectively, especially in an area on which mostdeveloping world economies are dependent, namelyagriculture.

Mr. A.A. Atiyah (Yemen)

Forty-three countries are still not members of theWTO. Some of them, including Yemen, are LDCs. Thispoint was raised at the 2006 Annual Session of theInter-Parliamentary Conference on the WTO, whichagreed, in a joint statement issued by the co-Chairs,that the whole question of WTO membership wouldbe on the agenda of this session.

Paragraph 8 of the draft outcome documentaddresses this question, but not others. We suggestthat the outcome document include a paragraph onaccession to the WTO by LDCs in particular.

Mr. M. Mechahouri (Morocco)

The single undertaking prompts two considerations.First, a positive link is needed between the differentareas being negotiated, in order to make progress.But that positive link should not, in my view, makeconcessions by some countries in certain areas,particularly more complex ones, conditional onconcessions by other countries in other areas. Thiswill allow us to preserve what has been accomplishedso far.

Secondly, to break the impasse, some results shouldbe adopted soon, no matter how minimal, on certainpriority points. This would be a way of sending astrong signal and bolstering confidence in the DohaRound of negotiations, in particular amongdeveloping countries and the LDCs. Indeed, it appearsto me that the major economic powers negotiatingat the WTO do not truly take account of the latter’sinterests. It is these economic powers – the developedcountries themselves – that introduced the conceptof development into the Doha Round, but, as wehave observed every day, they negotiate much morein favour of their own development than in favourof that of the developing countries.

Mr. A.H. Musa (Sudan)

We need to look at the social, economic anddevelopment gaps between countries. The developingcountries wanted a link between their economiesand the developed economies so as to improve thewell-being of their populations. They wanted helpfrom the WTO so that they could break intointernational markets. The failure of the July mini-ministerial meeting should not keep the WTO fromachieving specific results for the countries concerned.

The conditions that applied to poor countriesacceding to the WTO in the 1990s should apply toall countries.

Mr. A. Sugandi (Indonesia)

All countries have accepted the Doha DevelopmentAgenda as the means of infusing development into

trade negotiations. This political investment has never,however, been easy to translate into the negotiatingprocess, and the Doha Round has therefore brokendown several times. In July 2008, the most recentexample, the major players failed to forge aconsensus on the modalities for the NAMAnegotiations.

This is a disappointment to all of us. The currentdeadlock poses a serious threat to the credibility ofthe multilateral rule-based trading system we adhereto and may lead to more bilateral and regional tradeagreements. This would be most to the disadvantageof the poorest and weakest members, who stand tobenefit the most from a strong multilateral rule-based system.

We are encouraged by calls for the Doha Roundnegotiations to resume, and think they should restartsoon. In that respect, we must emphasize that theSSM was not the only unresolved issue. Other issues,such as cotton, tariff quotas and tariff simplification,also warrant attention. The negotiations should bebased on a bottom-up, transparent and inclusiveapproach and benefit from the genuine political willof WTO members to find a solution.

Mr. I. Ichikawa (Japan)

Clearly, agriculture, which is one of the points onwhich WTO negotiations focus, cannot be judged interms of economic rationality alone. Every State hasa responsibility to ensure a stable supply of food forits people. Indeed, the High-Level Conference onWorld Food Security held by FAO in June 2008confirmed that food security is "a matter ofpermanent national policy". Japan’s basic philosophyin this respect is that various forms of agriculturemust be able to coexist; it therefore underscores theimportance of establishing balanced and pragmatictrade rules. This is in keeping with Article 20 of theWTO Agreement on Agriculture, which stipulatesthat negotiations on agriculture should also takeaccount of non-trade concerns. It is all the morerelevant in that agriculture has a positive impact onthe natural, social and economic environments.Efforts should therefore be made to maintain anddevelop it in each country.

At the WTO mini-ministerial conference in July, Japanadamantly opposed the introduction of tariff capsand argued that there should be flexibility withregard to sensitive products and that it should bepossible to establish new tariff quotas. As a resultof the recent instability in food supply and demand,many countries have begun imposing exportrestrictions on agricultural products. Food-importing

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countries have to protect their agriculture sector ifthey are to ensure a stable supply of food for theirpeople. There can be no concessions on this point.

Mr. M. El Saied (Egypt)

I wish to emphasize what is stated in the draftoutcome document: "the world needs more thanever a fair, equitable and transparent multilateraltrade system". The implication of this statement isthat the existing WTO rules and practices need to bechanged and supplemented. The question now iswhat changes are needed. Responsibility in this casefalls to the developed rich countries. They have toaccept rules that make the distribution of thebenefits of trade more biased in favour of thedeveloping and needy countries.

Consideration must also be given to the fact thatdifferences of interest exist not only betweendeveloping and developed countries, but within thosegroups as well. It will take a huge effort to findcompromises. The core question is not agriculturalsubsidies, services or market access for non-agricultural products. The most important questionis how to help developing countries industrialize andcompete effectively without resorting to a high levelof protection.


The Doha Round has lasted seven years so far. Ofcourse, with over 150 countries negotiating andalmost 20 items on the Doha Agenda, it is not easyto come to an early conclusion. We must not forget,however, that the developing countries are spendinglarge amounts; I fear that they will not be able tosustain their interest forever.

The negotiations may not result in a perfectagreement: compromise agreements are neverperfect. Everyone has to make sacrifices, butunfortunately some of the parties are not yet readyto do this. A good outline, especially on agricultureand industrial goods, already exists. The time hasnow come to close the remaining gaps and concludethe round. The current trade rules are not fair fordeveloping countries, whose exporters bear at leastfour times more duties than those of developedcountries and whose farmers cannot compete withhighly subsidized farmers in the rich countries. Wemust change the unfair rules.

I urge all my fellow parliamentarians to put pressureon those few countries that are holding up progressin this crucial round.

Mr. M.J. Sircar (Bangladesh)

Development is at the heart of the Doha Round.Special and differential treatment for developingcountries, in particular LDCs, is a must. Otherwise,those countries will not be able to integrate into themultilateral trading system. In order to integrate,the LDCs need duty-free quota-free market accessfor their agricultural and non-agricultural products,and special priority for their services sector. Theyalso need technical assistance (aid for trade): becauseof their supply-side limitations, they cannot takeadvantage of market-access opportunities.

The progress made at the July mini-ministerialconference must be preserved. Commerciallymeaningful market access for LDCs is part of thesolution to their current problems. The MDGs mustbe achieved, and the WTO has to ensure that tradecan eliminate poverty and provide a better standardof living.

Members of parliament must exercise theirconstitutional function of oversight and scrutiny ofgovernment action, notably as concerns internationaltrade. They must play a far greater role than everbefore in overseeing WTO activities and promotingfairness in the trade liberalization process.


There is no such thing as free trade, because thedeveloped countries adopted measures that affectthe underdeveloped world (subsidies for agriculturalexports, internal aids, contingent quotas). When itcomes to non-manufactured goods, tariff peaks andtariff escalation undoubtedly affect theunderdeveloped world’s export possibilities.

The problems relating to the SSM were not resolvedbecause the developed countries did not accept theargument of food security or the position ofproducers faced with surges in imports - yet do theynot act in exactly the same way? Does the developedworld not defend its rural producers throughsubsidies and internal aids? From this point of view,it is harder to understand why the SSM should leadthe Doha Round to fail.

In the real world we must have a consensus, and thatmeans that certain issues will inevitably have to beput on the table. There are elections in the UnitedStates, but no fast-track; there is a financial crisis.It will be very difficult to make rapid progress. Wecan only hope that political change will allow someheadway to be made in 2009 on the Doha Roundand on multilateralism in defence of theunderdeveloped countries.

Mr. S. Dedjel (Algeria)

Algeria, like the other developing countries andLDCs, has to meet excessive requirements in theprocess of accession to the WTO. Theserequirements, set by the member countries, exceedour development capacities and go beyond WTOrules. Parliamentarians should exhort WTO MemberStates to facilitate developing country accessionin conformity with the rules in force at the WTO.Only thus will this multilateral organization becomeuniversal.

In this respect, Algeria endorses Yemen’s proposal toinsert a separate paragraph on WTO accession by thedeveloping countries and the LDCs in the draftoutcome document.

Mr. M. Sawadogo (Assemblée parlementaire de laFrancophonie)

Mr. Carnero González suggested that theParliamentary Conference on the WTO should be adeliberative and consultative WTO body. What doesthis mean in practical terms? For Mr. Martins, theinterests of both the developing and the developedcountries must be given equal weight. What is thebest means of doing this: regulation orliberalization?

At the beginning of the negotiations, culturalproperty was exempted on the grounds of itsspecific nature. Should agriculture not benefit froma similar exception, since it is not just an economicactivity but above all a way of life for much ofhumanity?

Mr. S. Jackou (Niger)

It is imperative for Algeria to be a member of theWTO. It is one of the first five countries in Africafrom the point of view of size, population, wealth,participation in international trade and GDP.

Niger attaches great importance to the WTO. It hasa university chair and a parliamentary network onthe WTO. It wants the WTO to be an organizationlike all the United Nations agencies, not a bodywithout direction. It wants the main partiesconcerned – China, India, Brazil and the United States– to explain why the July mini-ministerial meetingfailed.

Niger is in favour of liberalizing trade, but the WTOshould not be obsessed with liberalization. Liberalismtoday prevents the State from managing theeconomy. In Niger, for example, the State has nocontrol over the economy. The Government recentlyremoved the value-added tax on certain productsto fight inflation, but unfortunately the businesscommunity ignored that move and continued to takein profits. Only business profits from liberalism. Howis Africa to train its managers and officials if peopleof all trades and professions are allowed in?Liberalism should not be unfettered, it has to belimited and managed in Africa’s interests.

Ms. L. Molise (Lesotho)

Negotiations in the stalled Doha Development Roundshould be resumed at the earliest opportunity. Theyshould continue to focus on development as reflectedin special and differential treatment. They should

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remain multilateral, for they have ground to a halteach time they have been left in the hands of a small,exclusive club – witness the G-7 impasse in July.

The time is ripe for a new multilateral trading system.The status quo is stale and out of line with reality.It cannot, and should not, continue.

Once the LDCs have achieved market access, theyhave to have something to trade. Their current narrowexport base and the shallow value added or shortvalue chain of their products make it a top priorityto remove these and other supply-side constraintsand develop sounder production bases. Aid for tradeand an integrated framework are not part of the Dohasingle undertaking, and work in these areas shouldtherefore be expedited. The difficulties of the netfood and net oil-importing developing countries,especially LDCs, have been compounded by the foodcrisis and high oil prices. The world should join handsto help them overcome those difficulties.

Mr. G. Laourou (Benin)

Sustainable development requires a responsibleexpansion of international trade. Parliamentariansare being called on to play an increasingly importantrole in encouraging their governments to resumenegotiations in the Doha Round. On what basis andhow soon will the negotiations resume? I think theyshould resume immediately, so that the round cancontinue in 2009. Parliamentarians should beassociated in the negotiations, to give them a betterunderstanding of the agreements reached and toenable them to act in the interests of their respectiveconstituencies.

Mr. K.R. Rana (India)

Progress on the Doha Development Round has beenpainfully slow, in particular on the issues that mattermost to the developing countries. We must work tofind a rapid way out of the current impasse on allissues, but especially those of significance todeveloping countries, such as agriculture, services,fisheries subsidies, trade-related intellectual propertyrights, and public health and Convention onBiological Diversity disclosure.

The Doha Development Agenda covers all pointsrequiring negotiation, and no attempt should bemade to bring in new issues. When the negotiationsresume on the modalities for agricultural and non-agricultural market access, the top priority must bespecial and differential treatment for developingcountries, including the SSM. An operational and

effective SSM is needed to shield against global pricedips and import surges; it must be easier to use andmore flexible than the existing mechanism, which isavailable mainly to developed countries. There shouldbe a substantial and effective reduction in thedeveloped countries’ domestic support and tariffsfor agriculture, and developing countries must beable to protect and promote the interests of theirpoor and vulnerable farmers. The developingcountries must be allowed to make use of flexiblearrangements for non-agricultural market access inorder to promote their domestic industrialdevelopment, and the developed countries mustcommit to eliminating or significantly reducing theirindustrial tariff peaks and non-tariff barriers.

Mr. M.T. Babikir (Sudan)

Countries that are providing agricultural subsidiesdo not want to eliminate them, but it is difficult fordeveloping countries to be competitive if suchsubsidies are maintained. Africa was the mainexporter to the United States until that country’scotton subsidies led to a drop in its exports.

The most important countries in the WTO are theindustrialized countries. In the 1990s, small countriestrying to join the WTO encountered many barriers.Sudan has been trying to join for many years. Itmeets the requirements, but non-technical and otherbarriers have prevented it from becoming a fullmember. We agree with Algeria and Yemen on thispoint; the WTO risks remaining in the service of thelarge industrialized countries to the detriment ofthe small developing countries.

Mr. A. Kahlil Mitra (Philippines)

We must fully appreciate the potential positive linkbetween trade liberalization and development,particularly in agriculture. Agricultural trade is ofdirect benefit to developing country farmers, andincreases financial and investment flows todeveloping countries. A genuine developmentround will improve agricultural market access,reduce trade-distorting support and provideemergency protection from unexpected importsurges or price volatility arising from externalfactors.

Parliamentary oversight in trade negotiations is ofvital importance. It is a fundamental responsibilityof parliamentarians and their irrevocable duty aselected representatives of the people.

Many countries, including the Philippines, havedrifted towards regional and bilateral tradenegotiations, a trend that is likely to gain strengthas the Doha Round falters. The Philippinesnevertheless remains steadfast in its belief in theopenness, efficiency and welfare-enhancing potentialof the multilateral approach.

Lord Taylor of Warwick (United Kingdom)

Some people argue that the WTO should widen itsagenda, while others – more wisely – warn againstagenda overload. How could the WTO adjust tomeet the new challenges beyond Doha? It could,for example, use more accessible language andterminology. We must remember that we asparliamentarians are trying to improve the dailylives of ordinary people, and that we are oftencriticized for using words that form a barrierbetween us and them.

The United States should once again attend thisconference. I understand the historical reasons forits absence (it is not a member of the IPU), but itis a major player in global trade and has enormouspolitical influence. Its presence at this level wouldenhance the WTO. Future member involvement mustalso be considered. The question of Russia is sureto become an active issue at some stage in thefuture.

The Internet should be more extensively used toinvolve the business and trading community, topromote the WTO’s causes, to encourage greaterdialogue and even to negotiate. E-commerce is agrowing reality, and discussions on issues such ascotton - a major stumbling block - could beresurrected using the Internet.

Mr. J.J. Ekindi (Cameroon)

Not enough attention has perhaps been paid to theway in which food prices are decided. The prices ofbasic foodstuffs such as rice and sugar have beenaffected to a great extent by changes in supply anddemand. In the past, when there was a surplus, pricesfell; when there was a shortfall, they went up. Nowthe futures market has opened the door tospeculation. When speculators invest in foodproducts, the price of those products skyrockets.When sovereign funds decided to speculate on wheat,the price of wheat doubled or tripled, an increasethat was passed on to the consumer. It did not matterto the funds whether the consumers concerned werepoor, because wheat is an imported product thatthey can afford at its current price.

It is therefore up to us parliamentarians and the WTOto find a way of shielding consumers from suddenfluctuations in price that have nothing to do withproduction capacity. The SSM is essential, for itappears to be out of the question to bar stockmarkets from speculating on basic necessities. RuralAfrica has so far been spared the most serious affectsof globalization, but once those effects are felt, thephenomenon will have to be taken into account.

Mr. C. Carnero González (rapporteur)

We are all committed to finalizing the DohaDevelopment Round in the light of its overarchingprinciple: sustainable development. This, however,implies agreement between countries that are notequals, each of which must contribute to the round’sfinalization in terms of its wealth and its economic,productive and trade capacity. We must maintainthe criterion of asymmetry. We cannot say: I will giveonly what I receive in return. It would beoutrageously unfair for the United States, theEuropean Union, Japan and other major industrialand economic players to see the round in that light.Not only would they be betraying its underlyingprinciple, they would be acting against their ownlong, medium and even short-term interests.

Another reason for concluding the Doha Round isthe economic crisis affecting all countries. The crisisand its impact on unemployment is a matter ofintense discussion in the European Union, forexample, but public opinion is barely aware of thepotential positive impact of trade expansion on thisand other major challenges such as climate change.

A change of language would certainly help. Languagethat can be understood would enable people todemand accountability, not from the technicians,

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but from the politicians who have a tendency tohide, whether intentionally or not, behind jargon.

We should choose our words carefully. "Liberalization"can have very negative connotations for hugeswathes of the population in developed anddeveloping countries. What we are trying to do hereis to give renewed impetus to trade expansion, whichis not the same thing. We do not need the WTO toliberalize trade, but rather to correct the manydefects in the international economic system asembodied by the Bretton Woods institutions.

The WTO must keep improving the way in which itfunctions. In July we reached agreement on manyissues, and we would be stupid to turn our backs onthat achievement. The Parliamentary Conference onthe WTO – perhaps the future Parliamentary Assemblyof the WTO – has a key role to play in this respect,because it allows parliaments of countries that arenot yet WTO members to make their voices heard.

Parliaments have a dual responsibility. Nationalparliaments and the European Parliament need tooversee trade negotiations ex ante, while they arebeing conducted, and ex post. We can do thisseparately or together. It is not logical for us to try tomaintain a global parliamentary vision on global issuesrather than focusing on overseeing the actions of aparticular government whose hands may well bebound by the domestic political situation. Parliamentscan sometimes represent a boarder vision thangovernments, and they can call governments to task.

Mr. B.A. Martins (rapporteur)

How are we to balance the interests of developedand developing countries? The objective reality isthat developed and developing countries are not onthe same economic footing. Ideally, we should seekto balance the interests of all members as equitablyas possible within the current WTO framework.Country priorities and capacities differ enormously,however, and this will need to be addressed on anongoing basis. The challenge of special anddifferential treatment is to develop an approach thatdefines clear and concrete rights and obligations forall members while at the same recognizing that thedevelopment needs of members are varied and callfor differentiated responses.

Dame B.A. Miller (discussant)

The WTO should establish a standing committee onprocedural and institutional reform, whose workshould be highly consultative, and adopt a moregradual agenda for implementation.

The time has also come for further categorizationof WTO member countries. The reality is that thereis a broad spectrum of developing countries.Barbados, on the one hand, has a small, vulnerableeconomy. Its only natural resources are sun, sandand sea. Its future, and that of many similar countries,lies in services and the human capital it has built upover the years. Brazil, on the other hand, is one ofthe world’s biggest countries and is richly endowedwith resources. By no stretch of the imagination canBarbados be compared to Brazil, and yet at the WTOit is. It would be impossible for all the small,vulnerable economies that are members of the WTO

to distort another country’s economy, even as agroup, because their percentage of world trade is sominuscule. They would form a perfect third categoryof countries, as would the highly industrializeddeveloping countries.

Increasingly, objections to the positions put forwardby middle-income countries are coming from otherdeveloping countries. The SSM is but one example.

Ms. C. Muscardini (discussant)

The WTO could become a potent force for the future,with international trade a means and not a problem.E-commerce is interesting in this respect, because itis governed by no rules and may fall prey tospeculation and poor quality control. It is a matterthe WTO should look into. The process for accessionto the WTO should be streamlined, and additionalcategories of countries would be useful in thisrespect.

Mr. S. Harbinson (discussant)

The agreements reached so far under the Doha Roundmay not be perfect, but they have remained true tothe basic principle of development. Let us not makethe perfect the enemy of the good. Let us concludethe negotiations as soon as we can. This meansconcluding talks on the modalities in 2008, andconcluding the round proper in 2009.

The risks of not concluding the Doha Round soonmay be quite serious. Failure to conclude would notbe a death blow to the WTO as a whole, which wouldretain its dispute settlement functions and continueto review trade policy and monitor existingagreements. It would, however, be a blow to thecredibility of the WTO as a negotiating forum.

The real risk is that the Doha Development Agendacould unravel. The world is not getting any simpler.New issues are cropping up – related to labourstandards, to the environment – that may need tobe put on the agenda at some point in the future.This cannot be done until the old issues – of equity- have been dealt with. The status quo is just notacceptable, but if the Doha Development Agenda isnot completed that is what we will be left with.

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It is an honour for me to address a topic that isbecoming an immediate concern for all of us. In thepast few years, we have all witnessed dramaticclimate change and grave disasters around the planet.

But first let me tell you something about what hashappened in my country, Thailand.

Thailand is an agriculture-based country. It is one ofthe six top food-producing and exporting countriesin the world. Traditionally, we grew rice, fruits, herbsand vegetables mainly to satisfy local demand andexport some surplus. Gradually, our food productionbecame export-orientated. After the Second WorldWar, more land was made available for irrigation andgradually we embraced the so-called "GreenRevolution", where the practice of monoculture, thecultivation of field crops such as corn, sugarcane,and cassava became increasingly popular andlucrative.

Roads were constructed to open up the country andto link the hinterland to global market.

The farmers earned a good income and the countryearned foreign exchange to pay for infrastructureinvestment. With increasing prosperity, not manywere concerned that expanding areas of cultivationwas destroying forests and watersheds. In the past,70 per cent of our land was covered with forests.Today, that figure has dwindled to about 26 per cent.

We also embraced industrialization about 50 yearsago; it was the trend of the day. We made efforts toattract foreign investment by offering tax incentives,tariff reductions (monopolistic licenses), industrialestates and many other benefits. These new industries

also created a greater need for more infrastructuresuch as dams, power plants, transportation andcommunication networks, etc. Therefore, more forestswere destroyed.

Not many people were aware of the consequences,such as pollution, carbon emission, slums and soilerosion, so we were destroying our environment aswe raced towards economic growth. We took fromthe land but we did not conserve it.

It is due to the deterioration of our forests that I wasinspired to initiate a reforestation project under theRajapruek Institute Foundation, of which I amSecretary. The sole objective of the Foundation is toincrease forest areas in the country, while at thesame time heightening environmental or greenawareness in the hearts and minds of all Thai people.The motto which we use to guide our work is: "Eachand every Thai hand can help make our land greenagain".

Throughout the past 21 years, the Foundation hasdevoted itself to increasing public awareness of ourcollective responsibility to our natural environmentand has promoted the planting of perennial orevergreen trees in the country in cooperation withThai citizens from all walks of life to give back whatwe owe to our land. Through various projects wehave been able to plant more than 20 million trees.

One of the projects of which I and the Foundationare most proud of is the reforestation projecthonouring His Majesty the King of Thailand on theoccasion of the 50th anniversary of His Majesty’scoronation in 1996.

CAN INTERNATIONAL TRADE HELPMITIGATE CLIMATE CHANGE?

Discussion paper presented by Dr. Khunying Kalaya Sophonpanich (Thailand)

In 1994, the then coalition government led by theDemocratic Party initiated a reforestation project invarious watershed areas in Thailand. The aim was toplant about 2 million acres of forest in ten years tocommemorate the 50th anniversary of His Majesty’saccession to the throne. The government requestedthe cooperation of public corporations, the leadingprivate companies, banks, civil servants, as well asthe general public to help realize this reforestationproject in honor of His Majesty. Because the King isrevered in Thailand, Her Majesty the Queen made apublic appeal to the people and the government,and the leading institutions in Thailand have thusfar contributed about US$ 500 million over a 15-year period.

For the first time in Thailand’s history, we were ableto reverse the steady trend of deforestation. We wereable to increase our forest areas by 10 per cent tothe current level of 26 per cent.

It was only logical that the Foundation shouldbecome a contractor of the leading companies inthe reforestation endeavour as it had alreadycompleted several reforestation projects from thedonations it had received. From 1994 to this date,the Foundation has planted and nurtured more than10 million trees in watershed areas on about 33,000 acres of land under the royal project.

We engaged local villagers to plant the trees andnurture them. The villages planted the seedlings,nurtured them and took care of the trees. As thetrees grew they saw the benefits of forests again.The birds, the animals and the crabs returned. Theland became moist and fertile again. Water becameplentiful and cleaner. The forests also provided herbsand medicines. After three years, the forests werehanded over to the Forestry Department and we wereable to arrange for the villages to continue to lookafter the forests.

It was a win-win solution! Thailand was able toreclaim much land for forests. The local villages werepaid for rebuilding their environment. They did nothave to leave their land to work in the cities oroverseas. Some people who were working in citiescame back. They also learned to appreciate the valueand importance of these forests to the environmentand the meaning of sustainable development. Inother words, trees are the answer.

Allow me to return to a very brief history ofThailand’s economic growth over the past 50 years.Our history has shown us that trade, and especiallyinternational trade, affect negatively the environmentand the climate. Trade does bring more materialwealth and more income, but each country has to

understand the possible effect on its society, cultures,environment and climate. In short, we shouldunderstand the benefit to the people, the possibleadverse effects and the structure and policies thatwe have to implement to reduce the possible adverseeffects to an acceptable level.

Too often we forget that benefits to the people haveto come first and that sustainable development is aclose second, otherwise any benefit will be short-lived.

Let me give you an example. We have a veryattractive island in southern Thailand called KohLanta. It has a population of about 20,000inhabitants. It has become a popular destination forScandinavians during the winter months becausethe climate - albeit cool - is warmer thanScandinavian summers. It has lovely beaches. Thepeople are friendly, helpful and charming. Two ferrytrips were needed to reach so there were not manytourists. The Scandinavians came with their familiesand stayed for many months during the winter.

The central government built a road around theisland to cater for the tourist trade and soon manyhotels and guest houses were built by foreigninvestors along the beaches. As many did notunderstand the need for conservation and the needfor a proper sewerage system, very soon thewaterways became blocked. The garbage dumpbecame too small for the increase in rubbish. Theforest area was reduced by more than half. The localsfound that their cost of living had increased whiletheir income from their traditional fishing activitiesdid not. The better jobs for the growing touristindustry were filled by more sophisticated and bettereducated mainlanders from other parts of thecountry. Only recently, a junior high school was addedto the primary school.

Soon, we will no longer have a tropical paradise. Thetourists will no longer find the island attractive andwe will have social discontent. So even without majorfactories and toxic waste, we can destroy our preciousenvironment.

Nevertheless, from my past political experience, asa member of parliament, I have discovered that tradeand investment have and will continue to becomemore globalized, and in an increasingly intensivemanner, both through multilateral and bilateralmeans.

I believe that the multilateral trading system underthe World Trade Organization can play a vital role inmitigating climate change. The current Doha Roundof trade negotiations in which one of the main goalsis to considerably reduce trade-distorting agricultural

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subsidies, mostly meted out in rich countries, couldpotentially have a very positive effect on reducingthe stress on the environment and our climate.Achieving this goal of overhauling trade-distortingagricultural subsidies would mean increasedopportunities for countries, especially in thedeveloping world, to compete on food productionon a level playing field where world prices are notdistorted by subsidies. There would then be a higherincentive to engage in sustainable agriculture, as wasour traditional mode of production in agriculturalpractice. In addition, under the Doha Round, WTOmembers are negotiating the liberalization ofenvironmental goods and services, the result of whichcould help to further facilitate and widen the scopeof market access for these goods and services, andas a result help to indirectly mitigate climate change.It is also important to mention that under the currentDoha Round, there are several other negotiations thatcould be very beneficial to the environment as awhole, such as the negotiations to reduce fishsubsidies to mitigate the problem of overfishing anddepletion of natural resources.

Nevertheless, it would still be difficult to answer thequestion Can international trade help mitigate

climate change? unless the following vital issues areproperly addressed: transparent processes, publicaccountability, public participation, and transparency.

The most important factor is to have a clearunderstanding of which economic activities underthe trade and investment realm should or should notbe undertaken, or what are the parameters underwhich they should be undertaken, for example, theconstruction of large dams, etc. These are all problemswhich essentially need political decisions, based onadequate knowledge and information. These arecrucial challenges that developing countries arefacing and will continue to face in the future.

I am certain many countries share experiences similarto that of Thailand. Today we have greater awarenessand knowledge of the effect of economic growthand trade on climate change and the environment.We also have the recommendations and guidelinescontained in the United Nations FrameworkConvention on Climate Change (UNFCCC) and theIntergovernmental Panel on Climate Change (IPCC)and a wealth of knowledge and experts for guidance.We need to track, monitor and protect our worldand our heritage.

CAN INTERNATIONAL TRADE HELPMITIGATE CLIMATE CHANGE?

Discussion paper presented by Mr. Paul Rübig and Mr. Alain Lipietz (European Parliament)

A common fight against climate change

The temperature of our planet has risen by 0.7°Csince 1800. The Intergovernmental Panel on ClimateChange (IPCC) scenario limiting future globalwarming to between +2 and +2.4°C assumes thatgreenhouse gas emissions will have decreased by 25-40% by 2020 in all the developed countries andby 80% in 2050. If the early deadlines are not met,global warming will inexorably exceed 3°C, at a costthat the Stern report estimates at €5 trillion.

1. Common but differentiated responsibilities

Obviously, responsibilities and costs differ fromcountry to country.

Although the Northern countries are responsible formost of the carbon dioxide gas in the atmosphere,they have (with the exception of the United Statesof America) begun a process of reducing emissions(though there is still a long way to go).

On the other hand, the developing countries remainfor the most part below the threshold of what theearth’s ecosystem can absorb per inhabitant. However,the ‘emerging’ countries are on the way to exceedingthis threshold. Although the countries that extractfossil fuels have already gone beyond this limit, itwould actually be legitimate to count local emissionscaused by the extraction process or primarytransformation of fossil fuels in the ‘ecologicalfootprint’ of the countries that consume them.

Because agriculture plays a more important role inthe Southern countries, they are the particularly

exposed to climate change, while their limitedresources make it more difficult for them to adapt.

To sum up, those principally responsible for pastclimate change are in the North, and increasinglythe emerging countries, while the principal victimsare also the poor countries in the South. That is whythe Earth Summit in Rio and the Convention onClimate Change (CCC, 1992) speak of ‘common butdifferentiated responsibilities and respectivecapabilities’. Accordingly, the developed countries(Parties) should take the lead in combating climatechange and the adverse effects thereof. All policiesmust be permeated with this common objective.

2. International trade and the greenhouse effect

For the last 20 years, international trade has grownmore than twice as fast as global production. Thisreflects an international redistribution of work tooptimise payroll and tax costs, yet transport costsdo not include the cost of the resulting greenhousegas emissions. Furthermore, for products thatgenerate large greenhouse gas emissions (such ascement), relocation of industry sometimes providesan escape from national climate protectionregulations. There is therefore a need for a globalagreement to prevent this type of movement("carbon leakage") and establish a level playing field.

In certain cases the international distribution of workhas positive effects: it is essential for the productionof raw materials where geography determines thelocation.

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The cost of transport in terms of greenhouse gasemissions should be reduced, the "climate cost"should be integrated into the price, and intermodalplatforms should be built for forms of transport thatproduce low greenhouse gas emissions (sea, river andrail transport).

However, transport is just one source of greenhousegas emissions. Emissions should be evaluated overthe entire chain, from the subcontractors to the finalproducer, and from the producer to the consumers.It is therefore the greenhouse gas emissionsassociated with a product, rather than the distanceit has travelled, that needs to be evaluated. From aneducational point of view, it would be desirable forconsumers to know the amount of these emissionswhich can be translated into costs.

3. Appropriate policies

In order to promote a courageous fight againstclimate change, decision makers should seek directall policies, including trade policy, towards this aim.

This requires diplomatic efforts to encourage all theAnnex B countries to ratify the Kyoto Protocol, andall the countries in the world to ratify a post-Kyotoprotocol from 2013.

In addition to this multilateral effort, countries canact bilaterally and unilaterally. Those countries thatare quick to invest in clean technology and energy-efficient production, transport and buildingtechnology are likely to gain an importantcompetitive advantage. However, can we rule outthe possibility of a few large greenhouse gas-producing countries still refusing after 2012 tocommit themselves to this common effort ofhumanity?

To make trade policy work for the environment andagainst climate change, positive measures should bepreferred to negative ones. Examples of positivediscrimination have already been given by the WTOin article 31 of the Doha Declaration (additionalliberalisation for environmentally friendly goods andservices) and by the EU in its GSP plus scheme.Negative discrimination (higher tariffs, importrestrictions etc.) would encourage trade policyinstruments to be used for protectionist purposes,which would ultimately undermine the credibilityof trade and environmental policies.

4. Seeking a global agreement

There is a broad scientific and political consensus onthe seriousness of climate change. The ideal would

be to secure a long-term agreement involving everycountry on the planet, following the Bali Conferencewhere all countries, including the United States,made a commitment to reach a comprehensive andambitious post-Kyoto agreement.

It would be necessary to bring the other multilateralagreements (WTO, International Civil AviationOrganization, World Intellectual PropertyOrganization) into conformity with the post-Kyotoagreement, which would require some adjustments.

Close cooperation between the WTO and the UnitedNations Environment Programme (UNEP) and theClimate Change Convention will be needed.

It will also be important to promote swift progressin updating the WTO’s definition of environmentalgoods and services, in order to reduce or remove tariffand non-tariff barriers to ‘green goods and services’.

5. Regional trade agreements

Regional and inter-regional trading arrangementsmust include the climate dimension, in accordancewith the letter and the spirit of the CCC. The samegoes for the lending policies of regional andmultinational financial institutions, which shouldgrant loans taking into account the targets to combatclimate change defined by the IPCC’s ‘+2°C’ scenario,which would imply phasing out support for fossilfuel-based projects. The same guidelines should beapplied by national export credit and directinvestment agencies.

Many developing countries, whether or not they arethemselves producers of fossil fuels or biofuels, areamong the first victims of climate change. It wouldbe undesirable to contribute ever larger amounts tosolidarity funds that might be required to fundadaptation to climate change under the ‘cooperation’heading of the association agreements if the tradeheading of these same association agreements werehelping to make the greenhouse effect worse andnot better.

6. Promoting an autonomous policy to combatclimate change

Unilaterally, major trading powers should concedea zero tariff on ‘clean’ products (very low energybulbs etc.), following the rules laid down by the WTO.At the same time, and in line with the CCC, theyshould make clean technologies available at‘concessionary rates’, taking inspiration from the‘compulsory licence’ principles adopted in Doha formedicines.

Furthermore, WTO Members could ban the importof exotic timbers where this contributes to climatechange through their transportation or the reductionof greenhouse gas absorbing ecosystems. The ForestLaw Enforcement, Governance and Trade agreementsgoverning this problem should be made compulsory.

Ideally, the targets a country or customs union setsitself should be based not on the emissions causedby its manufacturers, but on the mass of productsit consumes (known as the ‘ecological footprint’).But this is very difficult to do at present. The mosteffective way of controlling emissions is by actingat the time of production and by using emissionstrading schemes.

The European decision to include aviation in theEuropean quota scheme, including for aircraft comingfrom third countries unless these countries have anequivalent scheme, is a first step towards includingthe total carbon emissions cost in the price of goodsand services at destination.

In case a post Kyoto agreement is not accepted byall significant greenhouse gas producers, signatoriesto the post-Kyoto agreement may need to considerintroducing measures that would ensure faircompetition between firms subject to limits on theirgreenhouse gas emissions and those producing incountries that are outside the agreement and whichwould otherwise enjoy a competitive advantage.

Investment in industry must also be optimised toprevent unnecessary transportation as far as possible.Multimodal platforms, providing access to waterwaysand the rail network, would encourage the mostenvironmentally friendly forms of transport.Industrialised countries should cooperate withdeveloping countries concerning the selection andfinancing of such ‘clean’ intermodal systems.

As regards standards of operation for consumer goods(vehicles, domestic appliances), all WTO Members arefree to impose ambitious standards for energyefficiency on their domestic markets, provided theyfollow the WTO’s ‘domestic product’ rule (i.e. thesame standards apply regardless of where the productoriginates).

Within this perspective, we should remember thatparagraph 17 of the European Parliament’s resolutionof 31 January 2008 on the outcome of the BaliConference on Climate Change (COP 13 andCOP/MOP 3), ‘welcomes the decision to launch astrategic programme to scale up the level ofinvestment for the development, transfer anddeployment of both the mitigation and adaptationtechnologies to developing countries, as well as theallocation to the Expert Group on TechnologyTransfer of the task of assessing the gaps in andbarriers to the use of, and access to, financialresources’.

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INTRODUCTORY REMARKS

Ms. Pikulkeaw Krairiksh (Senator, Thailand)

After the Second World War, Thailand’s economygrew rapidly. The country developed its agricultureand constructed roads to link the hinterland toexternal trade. We destroyed forests to do this. Wealso embraced industrialization. The new industriescreated a greater need for infrastructure such asdams, power plants and roads. More forests weredestroyed.

We have only recently realized the adverse sideeffects of economic development. We weredestroying our environment in the rush for economicgrowth. We took from the land but did not give backto the land.

Our priority should have been benefits for the people.Instead, the priority of national development planswas always economic development. The result is greatinequality. About one million Thais can no longermake a living in their homeland, either on their farmsor in industry, and have to work oversees as migrantworkers. International trade allowed us to achieveeconomic growth, but we failed to protect ourselvesfrom the adverse side effects.

We have to accept that our economic growth wasbased on cheap fossil fuels. In the future, energycosts will only increase. We will have to change ourmode of production to one based on expensiveenergy. Most people are acutely aware of the newreality, but do not know how to change. Secondly,we need to protect our environment and make surethat only development that meets strictenvironmental criteria is allowed. Otherwise we willnot be able to attract both tourists and good foreigninvestment, or to have clean air, clean roads, cleanwater, clean garbage dumps and a congenialenvironment with many trees and forests for ourown children.

Third, we need to invest more in human developmentand only allow development that will directly benefitour people in a way that we can see and nurture,and not only improve our national economicstatistics.

SUBSTANTIVE THEME (B)

“CAN INTERNATIONAL TRADE HELP MITIGATE CLIMATE CHANGE?”

The world has achieved economic success becauseof cheap and abundant fossil fuels. We need tochange quickly by improving our living standardswithout destroying our future.

Let me give you an example. In 1986 a reforestationproject was launched under the name RajapruekInstitute Foundation. It engaged local villagers toplant and nurture trees. It was a win-win solution.Thailand was able to reclaim much land for forests.The local villagers were paid to rebuild theirenvironment. They did not have to leave their landto work in the cities or overseas. Some people whowere working in cities came back. They also learnedto appreciate the value and importance of forestsand most importantly the meaning of sustainabledevelopment. In other words, trees are the answer.

My political experience as a member of parliamenthas taught me that trade and investment have andwill continue to become more intensive andinterdependent. I believe that the multilateral tradingsystem under the WTO can play a vital role inmitigating climate change. The current Doha Roundof trade negotiations, in which one of the main goalsis to considerably reduce trade-distorting agriculturalsubsidies, which are given out mostly in developedcountries, could potentially have a very positive effect,reducing stress on the environment and our climate.

Under the Doha Round, WTO members arenegotiating the liberalization of environmental goodsand services, which could help to further facilitatemarket access for these goods and services, andthereby indirectly mitigate climate change. It is alsoimportant to mention that several other mattersbeing negotiated under the current Doha Roundcould be very beneficial to the environment as awhole, such as the negotiations to reduce fisherysubsidies and alleviate the problem of overfishingand depletion of natural resources.

It would still be difficult to gauge whetherinternational trade helps mitigate climate changeunless the following vital issues are properlyaddressed: transparent processes, publicaccountability and public participation. The mostimportant thing is to have a clear understanding ofwhich economic activities in the trade andinvestment realm, for example, the construction oflarge dams, should or should not be undertaken, andunder what parameters.

Mr. Paul Rübig (Member of the EuropeanParliament)

The temperature of our planet has risen by 0.7°Csince 1800. UN experts forecast an average changeover the next 100 years of 1.8 to 4°C. On the onehand, we should be prepared for a changing world;on the other, we should think about what we cando to hinder the negative effects of global warmingand what the impact is of our political efforts toobtain a sustainable environment.

We are all familiar with the Stern Review,4 whichtold us that if we do nothing the cost of the damageto the environment will amount to 5 trillion euros.It is therefore very important to think about whatcan be done. I am very glad to see that theParliamentary Conference on the WTO is for the firsttime taking steps to do something.

Yesterday, the European Parliament voted on theemissions trading scheme. This is very importantbecause Europe wants to go forward, it wants to setan example. It has drawn up the proper legalinstruments for this. Of course, the scheme is thesubject of much debate and quarrelling, but as inany democracy the majority gets its way.

Yesterday the European Parliament also voted on therenewable energy directive. The WTO will be pleasedto learn that a strong majority of European membersof parliament voted for free trade in this field. We

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4 Nicholas Stern, The Stern Review: The Economics of Climate Change, Cabinet Office, HM Treasury, January 2007.

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know that some years ago the United Statesliberalized climate-friendly goods. We think thatdoes not go far enough. We have to look at whatareas require greater international cooperation withinthe WTO frame for a sustainable future.

The European Council has proposed a 20 per centreduction in CO2 emissions – an ambitious target.The top level in the European Union is now startingto act, not only working to reduce greenhouse gasemissions, but also to increase efficiency in energyproduction and consumption. To that end, theEuropean Parliament has in the last two years hostedthe Energy Globe Awards, rewarding the best andsimplest out of over 800 ideas from at least 60countries for what people can do every day to saveenergy. This year the ceremony was attended by KofiAnnan, Mikhail Gorbachov, José Manual Barroso andHans-Gert Pöttering, and broadcast worldwide.

Best practice is a very important means by which wecan learn from each other.

The European Parliament, in discussing the emissionstrading scheme, came out in favour of the CleanDevelopment Mechanism and joint implementation,which means that 50 per cent of the 60 billion eurosearned at auction should be given to LDCs and enablethem to enhance their consumption patterns.

The developing countries nevertheless remain forthe most part below the threshold of what the earth’secosystem can absorb per inhabitant. However, theemerging countries are on the way to exceeding thisthreshold, as are those that extract fossil fuels. Itwould actually be legitimate to count local emissionscaused by the extraction process or primarytransformation of fossil fuels in the ecologicalfootprint of the countries that consume them. Action,we can see, is required in all parts of the world.

Agriculture has also changed hugely, because of thegrowing demand for food and feed. Some parts ofthe world are very good at producing, but they needto give careful consideration to water managementand sustainable growing practices. They must takecare not to waste energy. It was in this respect thatthe 1992 Earth Summit in Rio de Janeiro and theUNFCCC referred to common but differentiatedresponsibilities and capabilities.

International trade is also responsible for thegreenhouse effect. In the past 20 years, trade hasgrown more than twice as fast as global production.Europe and the United States together runapproximately 450 million cars, whereas China atpresent drives about 50 million cars. If developmentin China goes the same way as in Europe and theUnited States, the possibilities for getting the right

cars and the right gasoline will very quickly dry up.New approaches are needed, as well as investmentin new ideas.

This is why the European Parliament, in the courseof the debate on the 2009 budget, is consideringdoubling the amount allocated for research onclimate change. It has also established thecompetition and innovation programme (4 billioneuros), one section of which deals with "intelligentenergy". This is one of the most important avenuesfor greater efficiency.

Efficiency also means looking at climate costs andintegrating them into the prices of goods andservices. In the area of transportation as well, lessgreenhouse gases should be produced andconsideration given to river, rail and sea transports.ICTs are key here.

Appropriate policies also require diplomatic efforts.All Annex B countries should be encouraged to ratifythe Kyoto Protocol, and all countries worldwide toratify a post-Kyoto protocol, hopefully next year. Itis becoming increasingly important to ensure thatcountries act not just bilaterally, but also unilaterally.

We have to look at countries that are quick to investin clean technologies and energy-efficient productionmethods and which have efficient transport systemsand building technologies. Small and medium-sizedcompanies play a crucial role here; family businessesin particular should be more heavily promotedbecause they set the pace for learning in the homeand for getting connected with knowledge sources.

The WTO’s definition of environmental goods andservices must be updated in order to reduce orremove tariff and non-tariff barriers to green goodsand services. The WTO should consider how thelending policies of regional and multinationalfinancial institutions could do more in terms of homecredit and guaranteed schemes. In short,consumption is the target, and we should look wherewe can change consumption patterns.

Ms. Vesile Kulacoglu (Director of the Trade andEnvironment Division, WTO Secretariat)

Both climate change and trade figure high on theinternational agenda today, along with the food crisisand the credit crunch. Intensive negotiations aretaking place to conclude an international agreementon climate change in Copenhagen in 2009. On thetrade side, there is a well-established internationalsystem with a 60-year history of negotiations andrule-making.

This has fostered growing debate on the impact oftrade on climate change and the impact of climatechange on trade policies. Basically, trade is seen inthis debate as a challenge and as an opportunity inthe fight against climate change. The challengescome in a number of areas where trade and climatechange interact. These relate mainly to theproliferation of domestic measures to mitigateclimate change. Another important challenge fortrade is the effect of climate change measures oncompetitiveness and the growing tendency to usetrade measures to avoid carbon leakage. At the sametime, the Doha Round provides a unique opportunityto harness trade to facilitate access to climate-friendly goods and services.

What are the effects of trade on climate change?Some people argue that trade openings cancontribute to rising greenhouse gas emissions asmore fossil fuels are used in the process of producing,transporting and consuming traded goods andservices. This is intuitively right. But the overall impactof trade on greenhouse gas emissions cannot bedetermined intuitively and a priori. We need studieson the CO2 embedded in trade. One concern aboutthe contribution of trade to greenhouse gas emissionsis linked to transportation services. This is a goodexample of an area that needs more study.

According to International Energy Agency estimates,different modes of transport account for varyingamounts of CO2 emissions. Maritime transportationaccounts for 3 per cent of CO2 emissions, yet 90 percent of traded goods are transported by sea. It istherefore easy to calculate the carbon footprint oftransporting traded goods.

In terms of domestic policies, in the past ten yearsmany countries – from the United States to Chinaand a number of developing countries - either havedeveloped or are in the process of developing a hostof adaptation and mitigation measures and nationalprogrammes to combat climate change. Regulatoryactivities are being carried out principally on threefronts.

First, regulatory steps have been taken to increaseenergy efficiency and reduce carbon emissions. Thisis not new. It is not the first time that regulationshave been used to control pollution. Second,measures have been introduced that set a price oncarbon emissions. This is new. It comprises a wholenew series of measures. Thirdly, measures have beenadopted to promote innovation in clean technologiesand their development.

The regulatory measures taken to increase energyefficiency and reduce carbon emissions have beenused to pursue all manner of other environmentalobjectives in the past. In terms of climate change,they have been commonplace for some time. Theyaim to reduce the CO2 emissions of cars and of theproduction process, for example, of cement.

Debate has flared on carbon taxes, a form of price-based measure. Energy taxes have been used in manycountries, and carbon taxes have been appliedbasically in the Nordic countries. This process hasaccelerated under the Kyoto Protocol, and moresophisticated instruments in the form of market-based mechanisms have been introduced, oneexample being the European emissions tradingscheme. Norway has a similar scheme, and NewZealand and Australia are in the process of finalizingtheirs. The climate change bill currently working itsway through the United States Congress hasgenerated the most talk, however.

Lastly, climate-friendly technologies are promotedthrough government support in the form of subsidies,for instance in the renewable energy sector and forbiofuels.

The primary objective of climate change measuresshould be to protect the environment and combatclimate change. However, all these different typesof measures are essentially economic. They alterproduction and consumption patterns and thereforehave an impact on conditions of competitionbetween domestic and foreign producers. This iswhere trade kicks in.

What are the trade measures being envisaged? AsMr. Rübig said, the WTO and the European Parliamentshould work more closely to see what impact theinternational trading system could have on the fight

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against climate change. But not all the signals arepositive, because some people would like to see thetrading system offset any disadvantage they sufferbecause of climate change mitigation measures. Morespecifically, they would like to impose an economiccost on imported products at their borders equivalentto the cost incurred by domestic producers in curbingtheir own emissions. In other words, they want theplaying field to be levelled, on the basis of theimporting country’s perception of how this shouldbe done.

It is also argued that climate change measures giverise to environmental efficiency concerns, becausethere is a risk of carbon leakage. It is argued thatcarbon leakage can undermine some of theenvironmental efficiency gains resulting fromreduced emissions. This is a particular application ofthe pollution haven effect: that the environmentalpolicy differences between countries may lead torelocation of industries. Here again, my personal viewis that the true risk of carbon leakage needs to bestudied in greater depth.

Negotiations are currently being conducted at theWTO on access to environmentally friendly goodsand services. These negotiations are importantbecause they dovetail with current internationaldiscussions on climate change. When consideringwhat international trade can do for climate change,this matter should top the list. As you know, however,the negotiations have been stalled.

Ms. Elisa Ferreira (Member of the EuropeanParliament)

It is important for parliamentarians from around theworld to concentrate today on the discussion of howmuch they can do for climate change control. Thisis a problem that affects everyone and that cannotbe solved by one country alone. It is also a fact,however, that any solution always has winners andlosers, costs and benefits. This is why it is importantto engage in frank and open dialogue and to raisepublic awareness, so that public awareness willgenerate the political will to move from words toaction.

Having said this, I would like to compliment SenatorKrairiksh for giving practical examples ofreforestation, of how to prevent environmentaldestruction and of the positive and negative impacttourism can have on the environment. All these issuescould benefit from the exchange of experiences.

Today I would like to tell you what the EuropeanParliament is trying to do in this context. It can be

argued, of course, that the European Union is notreally a leader in terms of pollution, although itcertainly tries to play a leading role in the fightagainst climate change. In fact, the European Uniononly accounts for about 14 per cent of polluting gasemissions. It nevertheless believes that because it isa political and not just an economic institution, ithas to address issues that have an impact on humanbeings and the quality of life.

We believe that technology has a paramount role toplay in combating climate change. If we invest nowin technologies, knowledge and good practices, weare bound to create our own competitive advantagelater on. This is another question we should allexamine: in what direction is the world moving interms of sources of comparative advantage andcompetition?

Because this is such a critical and complex issue, theEuropean Parliament has established an ad hoc groupof parliamentarians from various political groupsand technical commissions to discuss cross-cuttingthemes of climate change control. This ad hoc group,of which Mr. Rübig and I are members, representsthe rationale for everything being done across theEuropean Parliament on this issue.

The environment is one area in which most decisionscannot be taken just by national governments; theyhave to listen to the European Parliament, andagreements on environmental matters have to bereached within the European Commission, theEuropean Council and the European Parliament.

In January 2008, the European Commission and theEuropean Council set a clear agenda for Europe. The

European Union has adopted the following bindingtargets: to reduce CO2 emissions by 20 per cent by2020, to use 20 per cent less energy by 2020, and toensure that 20 per cent of energy comes fromrenewables (wind, sun sea) and that 10 per cent of allfuels used are biofuels. It will go even further, and cutCO2 emissions by 30 per cent, if all its major partnersworldwide agree to make a similar, balanced effort.

All these efforts come at a high cost and requiregreat commitment. Two things have to be borne inmind. First, the developed countries have to take thefirst steps, but the emerging countries, although theymay not be able to reduce their total emissions,should be able to propose a new balance betweengrowth and emissions. They can also agree on sectorbenchmarks and sectoral compromises in sectors inwhich they have a huge comparative advantage,such as steel and cement. Second, we know thatmost of the costs will be borne by countries thathave contributed little to the problem. It is thereforealso our responsibility to contribute 50 per cent ormore of the proceeds from the market-basedmechanism to help less-endowed countries improveclimate conditions and adapt to climate change.


Ms. E. Papademetriou (Greece)

We were probably all very disappointed to hear theWTO Director-General admit that the Doha Roundwould not be completed by the end of the year. Thisis a serious setback for efforts to mitigate climate

change. Climate change remains a serious and urgentproblem, one whose causes and consequences areboth global. Climate and trade issues have largelyevolved separately, despite their mutually supportingobjectives and potential synergies. Only the KyotoProtocol provides opportunities for aligningdevelopment and energy policies in such a way thatthey could stimulate production, trade andinvestment in cleaner technology options.

The WTO trade negotiations must resumeimmediately. Trade is the most important channelfor the spread of climate mitigation technologiesand goods. Only a small number of countries possessthe domestic capacity and know-how to producewhat they need. For developing countries, it isparticularly true that trade liberalization can furnishrapid access to key technologies. Whether throughnegotiations at the WTO or elsewhere, the costs ofenvironmental goods can be lowered by allowingconsumers (industries or households) to purchasethem at world market prices.

We must distribute low-carbon goods andtechnologies through an open multilateral systemof trade. We must also sit down and decide whatand how to liberalize.

Mrs. X. Chen (China)

Climate change is a major global issue. The UNFCCCand its Kyoto Protocol, the international community’sresponse to climate change, identify the principle ofcommon but differentiated responsibilities. Inaddressing climate change, the international

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community should adhere to the framework andprinciples laid down in the UNFCCC.

The conclusions of the IPCC Third and FourthAssessment Reports point to the causal link betweenclimate change and the use of fossil fuels. They alsoidentify who should be held accountable for climatechange.

As a responsible developing country, China upholdsthe scientific concept of development and is activelyaddressing climate change. It is willing to strengthenits cooperation with the international communityin this regard.

Indeed, environmental problems require concertedefforts by all countries. The Doha Round is intended,to the extent possible, to help solve globalenvironmental problems and promote sustainabledevelopment. Trade and development policies shouldbe mutually supportive, not antagonistic, anddeveloped and developing countries should shouldercommon but differentiated responsibilities.


We have to reduce the CO2 emissions caused byunnecessary transportation. In Japan the slogan,"produce locally, consume locally - produceseasonally, consume seasonally", has prevailed rapidlythroughout the country. Japanese consumers aremore likely to select agricultural products producedby nearby farmers.

We have also introduced the criterion of "foodmileage" to measure the distance between farm andtable. One of our consumer groups plans to labelfood with the food mileage, in addition to additivesand place of origin. As expected, Japan has thehighest per capita food mileage. The result is highCO2 emissions and abandoned farmland at home. Itcan thus be said that excessive trade liberalizationof food products has had a negative impact in thecase of Japan.

The idea of "goods mileage" is diametrically opposedto the concept of international competitiveadvantage. However, we are all obliged to promotean environmentally friendly way of life by reducingtransportation of goods as far as possible. I hope theWTO will discuss new ideas like this in the foreseeablefuture.

Mr. R. Pal (India)

Climate change is a matter of grave concern to theinternational community. The UNFCCC recognizes

that countries have common but differentiatedresponsibilities, and various capabilities and socialand economic conditions. It sets an overall frameworkfor the reduction of greenhouse gas emissions.Developing countries like India have a greatresponsibility: to reduce poverty. The internationalcommunity has to take into account the fact thatdeveloping countries and LDCs face particularproblems of that kind.

I believe that climate change issues are best dealtwith within the UNFCCC, not within the WTO, at leastnot in the near future. The availability of cleantechnology on conditional and preferential terms isone of the main ideas to be pursued. There areproblems in areas like dual-use environmental goods,intellectual property rights pertaining to cleantechnology and the establishment of venture capitalfirms that enable developing and poor countries tohave access to funds and technology.


Ms. Krairiksh said that the multilateral trading systemunder the WTO can play a vital role in mitigatingclimate change, but in what ways? What actionshould parliamentarians take in relation thereto?

The current international climate change negotiationsare to be concluded in Copenhagen in December2009. Canada strongly opposes any measures thatwould re-impose by other means higher tariffs thanthose negotiated at the WTO. When countries engagein climate change negotiations, are they forgettingtheir obligations under the WTO? What shouldparliamentarians be doing to maintain the delicate

balance between WTO obligations and therequirements of climate change mitigation?

Mr. C. Kakoma (Zambia)

Developing countries like Zambia are not seriouscontributors to pollution, but they feel the effectsof climate change: the consequent floods anddroughts destroy the crops of small-scale farmers,resulting in food insecurity. The internationalcommunity has responded by providing food aid, awelcome and necessary measure in the short termbut in no way a long-term solution. The lastingsolution lies in providing agricultural inputs inaddition to food aid, enabling people to grow theirown food in the wake of a disaster. It also lies inproviding trees to plant.

The provision of free food appears to be the solutionmost favoured by developed countries and otherdonors, as it is considered to be a form of agriculturalsubsidy. I submit that assisting vulnerable smallfarmers with inputs is an investment. Small farmersneed fertilizer, seed, pesticides and agriculturalimplements such as ox-drawn ploughs. They alsoneed infrastructure such as dams. This would allowthem to ensure their own food security. Suchassistance is not a "subsidy" that would distortinternational trade.

Ms. T. Boontong (Thailand)

Thailand established the Thailand Greenhouse GasManagement Organization in 2007 in order to meetthe Kyoto Protocol’s objective to combat climate

change by reducing greenhouse gas emissions. Itbelieves that the Protocol’s Clean DevelopmentMechanism will also help achieve that goal.

The WTO can play a role in ensuring that internationaltrade helps mitigate climate change, directly andindirectly. The Doha Round could considerably reducethe strain on climate directly, by minimizing trade-distorting agricultural subsidies and thereby levellingthe playing field for developing countries. Prices wouldnot be unfairly distorted by subsidies, and sustainableas opposed to intensive forms of agriculturalproduction would therefore be more viable. Theliberalization of environmental goods and services,many of which are relevant to air pollution control,would promote efforts to mitigate climate changeindirectly. Climate-friendly goods and services needto be more widely disseminated.

In short, whether or not international trade can helpmitigate climate change depends on developmentsin green technology and whether such technologyis transferred to other nations, especially developingcountries. It also depends on whether we can ensurethat international trade is conducted as resource-efficiently and fairly as possible. A robust and swiftconclusion to the Doha Round would be a big stepin the right direction.

Mr. J. Kawanga (Uganda)

The LDCs face a particular predicament. For example,Uganda is a founder member of the WTO, to whichit is committed. But certain pending issues remainunresolved. In the meantime, the people in thevillages face famine – they are unaware of thedecisions taken at the WTO at ministerial level yetthey suffer from the effects. The LDCs cannot evenattend meetings such as this. I therefore ask the WTOto make sure that it reaches out to the LDCs andhelps people understand what is going on.

Uganda has now struck oil. The situation will change.How will the change affect agriculture?

Ms. E. Ferreira (discussant)

This raises the need to address problems ofadaptation, especially in LDCs, which must figurehigh on our agenda. Another issue is the transfer oftechnology. Climate change is probably the maindriver for new technology and research. It is veryimportant to find mechanisms for transferring andspreading the benefits of technology.

It is true that the international community has tocomplete the Doha Round before moving on to

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another stage of discussions, which will includeclimate change. We must nevertheless bear in mindthat we cannot create systems now that will standin contradiction to what we want to do in terms ofliberalized trade worldwide. We have to do thingsstep by step, but we also have to work for coherence,and articulate the positive connections betweenenvironmental constraints and trade. We have toconsider the sustainability criteria for biofuels. Wemust all work on sector-by-sector benchmarks forthe most energy-intensive industries. This is the onlyto introduce a minimum level playing field andextend the emissions trading scheme internationally.If we do not do this, we are bound to create seriousdisadvantages, which will have to be compensatedby barriers to trade. The WTO’s objectives have to bemade compatible with climate and environmentalobjectives.


Le Monde of 11 September 2008 contains a briefarticle on the impact of biofuels in Latin Americaas assessed by Friends of the Earth. Friends of theEarth calculates that the investment plans for thecoming three years will result in the production of4 million tonnes of biodiesel. To do this, 9 millionhectares of land will have to be converted orcleared, the equivalent of 60 per cent of the surfacearea currently used to grow soya. This is an exampleof how the shift to biofuels destroys theenvironment.

Can international trade help mitigate climatechange? Of course it can, on condition that everycountry, every region, every continent becomes awareof climate change and has the political will andmeans required to combat it. On the other hand,international trade may not be able to help mitigateclimate change in today’s world, given the growthin population worldwide.


Indonesia has experienced many climate change-related disasters, and protecting its population fromthe dangerous effects of climate change is thereforea critical issue. It recognizes trade as an importantmeans of securing the resources needed forenvironmental protection, which also requires largefinancial and technology transfers, especially fromdeveloped to developing countries. Tradeliberalization is therefore fundamental to helpingdeveloping countries achieve sustainabledevelopment. Indonesia believes that a balanced

conclusion to the Doha Development Round,combined with a package to facilitate the transferof low-carbon or environmentally friendly technologyto developing countries, capacity-building andtechnical assistance, will lead to sustainable economicgrowth in a win-win situation for trade, theenvironment and development.

There is a potential conflict between trade,development and climate change objectives andpolicies. The linkages between them must be properlyunderstood and analysed, or the measures taken tomitigate climate change may result in distortions ininternational trade flows or excessive costs. This isnot in the developing countries’ interests.

At the United Nations Climate Change Conferenceheld in Bali in December 2007, Trade Ministersdiscussed how trade could best help mitigate climatechange. The ideas mooted include managing carbonfootprints, reducing barriers to environmental goodsand services, and transferring technology todeveloping countries.

Mr. R. Leon (Chile)

The evidence for climate change is more intensedroughts, torrential rainfall, extremes of cold andheat, more frequent hurricanes and typhoons, andthe rapid melting of glaciers and polar ice. We haveto take account of the varying extents to whichdeveloped and developing countries contribute toclimate change, as brought to light by per capita asopposed to absolute values. Indeed, we tend to thinkthat global warming is chiefly the "fault" of Chinaand India, whereas, according to the HumanDevelopment Report 2006, the average American isresponsible for producing six times as muchgreenhouse gases as the average Chinese or LatinAmerican citizen, and 16 times as much as theaverage Indian.

Trade liberalization on its own has not managed toconsolidate sustained and even economic growthfor all peoples. If the current trends are notreversed, the poorest and least developed countrieswill suffer the worst consequences. The DohaDevelopment Agenda aims to liberalize trade in theenvironmental goods and services that can helpcontrol climate change, but unfortunately thenegotiations seem to focus more often oncommercial aspects instead of the environmentaland/or development benefits.

In some circumstances, fighting climate change willrequire trade restrictions. The Montreal Protocol onSubstances that Deplete the Ozone Layer, for

example, limits trade in certain products. We arenot suggesting that trade in certain goods belimited, or that such measures are the solution toall environmental problems; rather, we wish to recallthat multilateral decisions have to be coherent.

Mr. M. El Saied (Egypt)

The threat of climate change is not receiving theattention it deserves from the internationalcommunity. It is closely linked to the nature of eachcountry’s economic growth, type ofindustrialization, the technology it uses and theconsumption patterns of its population.International trade is a means of enhancingeconomic growth. It therefore has an importantrole to play in promoting the kind of growth thatcan help mitigate the negative effects of climatechange, for example by reducing trade-distortingsubsidies, liberalizing environmental goods andservices and encouraging negotiations on matterspertaining to climate change mitigation, such asfishery subsidies and transportation.

As parliamentarians, we have a duty to urge ourgovernments to adopt policies for growth andinternational trade that are consistent with this goal.In Egypt we are aware of this responsibility and acteffectively to meet it.

Mr. A. Maouche (Algeria)

One thing is certain: climate change attenuates thepositive effects of international trade. The currentfood crisis, which is in large part due to climateconditions, is evidence of this: it has led to exportrestrictions on foodstuffs and higher prices, blockinginternational trade.

Prices are also affected by speculation. In a pureliberal economy, prices are established by demandand supply; today, however, speculation has led tofluctuations in the price of oil that have upset theprice structure of agricultural products.

These "external" factors – climate change andspeculation - have restricted the WTO’s role, all themore so since the developed and developingMember States do not always share the sameobjectives. For the developed countries, the priorityis to mitigate climate change; for the developingcountries, especially the poor countries, the priorityis food security for their peoples, which climatechange is making harder to guarantee. I feel it isthis that is blocking the successful outcome of theDoha Round.


How sure are we that the climate change of the pasttwo decades is the result primarily of greenhousegas emissions, and not of a natural process? Whatare we to do in the face of mounting concern thatreplacing fossil fuels by biofuels will not help theenvironment, as some biofuels are more pollutingthan fossil fuels?

Pakistan faces a serious energy crisis. Its natural gasreserves are dwindling and 50 per cent of its energycomes from fossil fuels. The answer lies in nuclearenergy. Unfortunately, Pakistan cannot import thenuclear technology required to generate powerbecause of international sanctions. I urge my fellowparliamentarians to help Pakistan achieve its energygoals and import nuclear technology.

Mr. M. Soubar (Jordan)

Climate change is influencing the way of life ofpeople everywhere, and may give rise to considerableeconomic and social problems (lack of drinking waterand arable land, desertification and drought, thespread of disease). The wealthy industrializedcountries have to shoulder their responsibilities inthis area. The world’s States should unite to enactlaws that would put an end to the greenhouse gasemissions produced by the factories of theindustrialized world. This should also be a key concernof the WTO’s Member States.

Environmental protection and access to the requisiteinformation are also priorities. The United States’2008 initiative on greenhouse gases could be usefulin this respect, but countries nevertheless need toheed their undertakings under the Kyoto Protocol.

Mr. M.T. Babikir (Sudan)

Climate change, which is caused by theindustrialized countries, has an impact worldwide,including in the developing countries. Thesecountries are trying to attract investment so thatthey can improve their economies. They have tomonitor foreign direct investment within theirborders to ensure that it respects environmentallegislation.

I am surprised that no one has mentioned the moraland social responsibility of multinationalcorporations, whose activities should not causeclimate change. Indeed, the developing countrieshave to impose regulations on such corporations toprevent them from affecting climate. Suchregulations could also cover rich and industrialized

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countries, but should not be imposed on poorercountries. Countries should adopt environmentallegislation and regulations that promote energysources that respect the environment.

We must also strive to put an end to deforestation,especially in places like Niger, where land is beingcleared to grow biofuel crops.


Global warming has an impact on agriculture. Sinceagriculture plays an important role in the countriesof the south, the developed countries should takethe lead in combating climate change. The idealpolicy would be to reach a long-term post-Kyotoagreement with all countries.

Bangladesh, which suffers calamities such as stormsand cyclones, needs help in the aftermath. One fifthof its territory risks disappearing under the sea,destroying crops, housing and livestock, and causingserious unemployment. Those affected will needfood and medical care to survive, and many willhave to migrate to developed countries. Thedeveloped countries must stand ready to take themin, in keeping with the human rights set out in theMDGs.


Climate change could cause development to fail ifwe do not take the requisite measures. Steps haveto be taken to reduce greenhouse gas emissions.Scientists have confirmed that arid and semi-aridregions of Africa risk suffering even more fromdrought, while other parts of the continent willexperience heavier rainfall and floods. We believewe are going to lose large drinking water reserves,observe large-scale land erosion, watch the spreadof pollution and disease and be unable to grow cropsas in the past. The United States, the European Unionand the Russian Federation must shoulder theirresponsibilities in this respect.

Mr. H. Masala Loka Mutombo (Democratic Republicof the Congo)

Climate change is causing problems for humanity,and countries with large swaths of forest have a roleto play in maintaining climate stability. In the lightof the concerns expressed today, the WTO should beinvolved in raising funds to enable such countriesto stop destroying the forests and turn to alternativemeans of wealth production.

Ms. I. Akimova (Ukraine)

It is important to draw a clear line between thereduction of environmental pollution and the fightagainst climate change. We might be able to reducepollution, but we are unlikely to be able to stopclimate change because human activity is veryprobably not the most important factor of globalwarming.

At the same time, many economists are pointing outthat substantial reductions in carbon emissions in thedeveloped world may well have little impact on climatechange but might have prohibitive economic costs.

Has the time therefore come to shift the focus inthe environmental debate from the fight againstclimate change to the struggle to adapt to a changedclimate? It might be wise to think about newinternational mechanisms that could providefinancial support for adaptation measures, especiallyin countries that bear the brunt of climate change.

Mr. C.B. Hamilton (Sweden)

As concerns carbon leakage, I find it unfortunatethat the European Parliament is considering slappingcountervailing duties on imports from countries thatdo not have carbon taxes or emission trading systems.First, it would be counterproductive to introducesuch duties. How could Europe negotiate anagreement in Copenhagen in 2009 with the verycountries – India, China - on which it has imposedsuch duties? Secondly, the disadvantage of carbontaxes is enormously exaggerated. Sweden has veryhigh carbon taxes yet its steel industry is flourishing.

We must also be alert to the risk of the CommonAgricultural Policy being "kidnapped" for biofuels.The support traditionally provided for foodproduction is being transformed into subsidies forbiofuel production.

Ms. P. Krairiksh (rapporteur)

Environmental goods can make a positivecontribution to the fight against climate change.Reducing or eliminating the tariff and non-tariffbarriers applied to such goods will lower their pricesand make them more accessible. The same logicapplies to the liberalization of environmental services.

The annual Parliamentary Conference on the WTOcould consider introducing a mechanism, perhaps inthe form of a small ad hoc group, for looking indepth at environmental aspects of trade.

Ms. V. Kulacoglu (discussant)

Climate change is the paramount sustainabledevelopment issue. Framed that way, any discussions,be it within the WTO or on the UNFCCC, will followcoherently.

The issue of food mileage is related to the carbonfootprint of international transportation and is verycomplex. Companies such as WalMart and Marks andSpencer are now using various schemes to includetransportation on product labels. However, whenlooking at the transport of food products, we shouldconsider the total amount of energy used from

production to plate. What is the life cycle analysis?How do Kenya’s agricultural constituencies react tothe debate in Europe about flowers flown in by airand the barriers that might be imposed on theirimport? We need to analyse whether flowers grownin greenhouses in Europe have a larger carbonfootprint than flowers flown in from Kenya.

The WTO has two means of fighting climate change.First, it has its toolbox of rules that can be appliedwhenever a climate change-related trade matterarises. It also has the negotiations on environmentalgoods and services.

Mr. P. Rübig (rapporteur)

Our discussion has shown that none of us has acomplete answer to the issue of climate change. Oneof the most important things is to use the positivediscrimination set out, for example, in Article 31 ofthe Doha Declaration, which speaks of additionalliberalization of environmentally friendly goods andservices.

We should not take the road of negativediscrimination – we have all suffered from highertariffs and input restrictions. It is more important tohave incentives. For the past two years the EuropeanParliament has invited the best researchers fromaround the world to post their reports on issues suchas water, energy production, food and forestry onits website. Part of the solution is on the table, butmore meetings are needed for everyone to learn fromeach other.

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Ms. Esperanza Duran (Executive Director, Agencyfor International Trade Information andCooperation)

The world markets for food and energy are both incrisis. Over the past two years, but particularly inrecent months, prices have soared to unprecedentedheights after at least two decades of price stabilityat lower levels. Although the record peaks of earlyJuly 2008 have since eased, crude oil prices are likelyto stay relatively high and risk increasing again inthe short and medium term, whereas food andcommodity prices, although not as simple to gaugeas the price of crude oil, do not seem to have fallen

as sharply. In short, price volatility in both sectorsseems to indicate that high prices for both food andenergy are here to stay in the foreseeable future.

How can trade defuse the threat of conflict overfood and energy? I will tackle this thorny questionfrom three points of view: first, the causes of therecent price hikes and the close links between thesetwo, apparently dissimilar sectors; second, howinternational trade rules contribute, if at all, todefusing the price crisis in these two essentialcomponents of livelihoods in both rich and poorcountries; and third, the areas in which the WTOcould defuse the time bomb of food and energyprices.

The food and energy price crises have multiple roots,many of which are common to both sectors. Steepincreases in consumption in developing countries,in emerging economies in particular, have raiseddemand and set world markets on an upwards spiral.Other causes are underinvestment in research anddevelopment in agriculture, and the failure toincrease oil exploration during decades of low prices.These omissions have resulted in reduced productivitygains and have narrowed our options today.Consequently, the supply of agriculture products –or of fossil fuels – has not kept pace with demand,triggering the current record prices in both sectors.

Making up for lost time will not be easy, becausetoday’s efforts may not immediately bear fruit.Indeed, changes in marketing and production in bothsectors require long-term investment which will notsee immediate returns.

PANEL DISCUSSION

“DEFUSING THE THREAT OF CONFLICTS OVER FOOD AND ENERGY THROUGH TRADE”

Food price increases were to some extent triggeredby the energy price crisis. These two sectors cannotbe dissociated. Fertilizers and chemicals, of whichoil is an important input, have made it moreexpensive to produce food. This has been aggravatedby the fact that, as with any other activity, higherenergy costs have made storage and transportationof food more costly. The remedy – replacing oil withbiofuels – has paradoxically helped push the cost offood higher. The pernicious effects of divertingcereals from world food markets to ease energy costshave been illustrated by the numerous riots to protestrising food prices in developing countries. At present,one quarter of the annual maize harvest of theUnited States – the world’s largest producer – isbeing used to produce biofuels.

What role do international trade rules play? Highfood and energy prices are threatening internationaltrade flows. In a number of food-exporting countries,governments have taken the political decision tolevy heavy taxes on agricultural exports, in order tokeep food prices at home at affordable levels. Highenergy prices lead to significant increases in the costof transport, eroding the competitiveness of foodproduction in distant areas. For example, the UnitedStates imported 6 per cent less from Europe and Asiain the years immediately following the 1973 oil shock,but almost 6 per cent more from its close neighbours.

High food and energy prices are an additionalchallenge for many developing countries, whoseeconomic growth they are likely to slow, withnegative impacts on poverty reduction strategies.Increased levels of poverty and hunger create fertilebreeding grounds for conflict.

Can international trade, and hence the WTO, play arole in defusing such threats? The WTO is one of anumber of international organizations that couldhelp find long-term solutions. Short-term fixes suchas food assistance, subsidies, stock management andso on, should be worked out elsewhere.

Having insisted on the similarities between the foodand energy price crises, let me highlight one crucialdifference between these two sectors. Fossil fuelproducts such as oil, diesel and gas are among themost heavily traded commodities on world markets.Countries holding less than one third of worldreserves consume two thirds of all oil and gasproduction. To put it differently, the level of fossil-fuel self- sufficiency of most countries is very low.This is particularly true of most developed countries,whose economic model has been built on theexistence of cheap fossil fuels. Maybe the time hascome to change the model.

In contrast, food self-sufficiency has been at theheart of most economic development modelsaround the world, since subsistence farmingremains accessible even to those countries leastendowed by nature. As a result, trade in foodcommodities remains marginal. For example, in2006 only 20 per cent of the world production ofwheat was traded internationally. The proportionis 13 per cent for maize, 8 per cent for meat and7 per cent for rice.

This difference between food and energy matters,since the relative importance of trade in the foodand energy sectors means that the potential impactof the WTO and its rules will not be the same.

What about the role of the WTO, Doha and theaccession negotiations? Historically, the WTO and itspredecessor, the GATT, have been mainly concernedwith restrictions to imports (quotas, tariffs, etc.) andnot with exports. The traditional reason for notdealing with exports was that the harm a countrydid to its economy by penalizing its own exports wasself-inflicted. Most barriers to imports in the formof tariffs have been drastically reduced. The mainobstacles to trade are export restrictions, or theproduction quotas, in the case of energy, imposedby the OPEC cartel.

Current WTO rules are ill-suited to deal with suchsituations. Attempts during the Uruguay and DohaRounds to address some of the practices of exportingcountries, such as double pricing systems, very lowprices at home, high prices for exports, exportrestrictions and taxes, and export monopolies, haveso far not been very successful. But this does notmean that more cannot be done in the WTO to helpease the current tensions in the food and energymarkets.

The WTO’s possible contributions are to be found inseveral main areas.

● The trade facilitation agreement that wouldresult if the Doha Round is concludedsuccessfully would have the greatest practicaland short-term impact on trade in anddistribution of farm and energy products.Because trade facilitation would help reducetransaction costs, developing countries wouldderive a disproportionate benefit, as they havethe highest such costs.

● Discipline in farm subsidies would stimulate thedevelopment of domestic farming in manydeveloping countries that have suffered fromdumped imports. It would also lead to lowersubsidies for the production of biofuels.

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● The accession to the WTO of the RussianFederation and Kazakhstan, two major producersof cereals and energy products, and of oil-producing countries such as Algeria, the IslamicRepublic of Iran, Iraq and Libya could have asignificant impact on supply in both sectors andcontribute to more efficient worldwide allocationof these resources.

● Negotiation on trade in services within the DohaRound could help make distribution and transportservices, whether for food or energy, morecompetitive around the world. This could helpimporting countries reduce the risk of highcommodity prices for their populations.

● Previous attempts to discipline export bans,restrictions and taxes have failed. WTO rules inthis domain would certainly provide greatersecurity to international markets and muchneeded relief to countries that are neither energynor food self-sufficient. However, such disciplineis not likely to be accepted in the current roundof negotiations.

I think we need time to reflect. There are no easyanswers to our question today. The conclusion of theDoha negotiations has been pushed forward to 2009.This may not be an entirely bad thing. Thenegotiations should be guided by what governmentsand parliaments want from the WTO. This issomething that has become less, not more, clear inrecent years.

Senator Luis Alberto Heber (Uruguay)

The first thing we have to do is identify the threats.The paramount concern today for the developedand above all the developing world is the increasein food prices, which threatens the food sovereigntyof many countries. Superficial consideration of thatconcern might lead one to conclude that food-producing countries like Uruguay benefit fromhigher food prices. We do not believe this. Higherfood prices hurt everyone, especially developingcountries. We have not forgotten that 50 millionpeople in Latin America do not have enough food.In the developing world, the rise in food pricesgenerates a much more dire situation that is moredifficult to remedy.

What are the causes of this? Many people say thatprices have risen because of shortfalls in the supplyof food. Those of us who come from food-producingcountries do not think this is the reason. Nor do webelieve that food prices have risen because ofgrowing demand in emerging countries like China

and India. Quite the opposite. We believe that morethan 50 years of food subsidies in the developedcountries furnish much of the explanation for risingfood prices. The world market has speculated on rawmaterials, on energy and on food. The productionfigures for our countries do not reveal huge profitmargins. Indeed, energy costs have done away withsubstantial profit margins.

We must continue to speak of market protection, ofthe unfair competition that is the root cause of priceincreases.

How does this relate to the WTO? The WTO Director-General asked whether the SSM was a taxi or anambulance. I believe the SSM is an ambulance. It isthere to help those who cannot walk, not to helpthose who can walk to run. It is there to provide helpto those who are not in a position to compete.

As the Executive Director of the United Nations WorldFood Programme said, we have been hit by a silenttsunami of hunger. We hope that ultimately thisgiant wave will serve to bring all of us closer to thecoast, not just a privileged few while the rest founderoffshore.

Mr. Olivier De Schutter (Special Rapporteur on theright to food, United Nations)

There is a consensus on the causes of the recentsurge in food commodity prices. We are discoveringthat the policies pursued since the 1980s are failing.These policies led to artificially low prices oninternational markets, as a result of which a numberof developing countries became addicted to cheap

prices and the farming sector was destroyed incountries that could not support it. The crisis todayis the result of dumping of agricultural productsby many OECD countries and the consequentabsence of investment in agriculture, particularlyin sub-Saharan Africa.

What we have is not a tsunami, but rather a man-made disaster resulting from policies that needrevising. The crisis has illustrated the failure of thefood and agriculture system as it has beenfunctioning. It has revealed two things: the dangersof net food-importing countries being dependenton cheap food dumped on international markets,and the unfortunate inability for producers in certaindeveloping countries, particularly in Africa, torespond to price signals by increasing the supply offood on international markets as a result of the lackof investment in the agricultural sector for the pastgeneration.

In order to reverse those policies, the specific natureof food has to be recognized. Food is not acommodity like any other. First, it corresponds to ahuman right, like water, health and education. Accessto food is essential for the enjoyment of humanrights. States have the obligation to respect, protectand fulfil this right, and to ensure that all personsunder their jurisdiction have enough food ofsufficient quality. Second, agriculture is more thanjust another economic sector. In my country, Belgium,3 per cent of the population lives off agriculture; inmany developing countries the figure is 60, 70 oreven 90 per cent. As a result, we must consideragriculture not just as a means of putting food onthe market, but also as a means of providing a large

segment of the population with an income.Agriculture is a way of life. It is the livelihood offarmers in developing countries and the foundationof whole social structures.

What role can international trade play in revitalizingagriculture, particularly in sub-Saharan Africa, whereproductivity growth in agriculture is potentially muchhigher than in places where productivity per hectarehas reached a ceiling?

There are those who say we should return to self-sufficiency, to having each country provide for itself.As much as food security is desirable, self-sufficiencyis probably unrealistic given the difference in eachcountry’s endowment. Indeed, the InternationalCovenant on Economic, Social and Cultural Rights,on which my mandate as United Nations SpecialRapporteur on the right to food is based, containsan explicit reference to the need to take account ofthe concerns of both food-importing and food-exporting countries. International trade in foodcommodities is but one means of ensuring theobjective of food security.

Others consider that food sovereignty should beensured by developing regional markets that canprotect themselves from dumping from abroad whileproviding sufficiently remunerative prices toproducers. The model for this is the original EuropeanUnion Common Agricultural Policy; it is beingpursued by West Africa, for example, in the form ofthe West African Agricultural Policy (ECOWAP).

The third view is to pursue the reform programmeunder the WTO, improving market access andlowering domestic supports and export subsidiesto the extent that they have market-distortingconsequences. This reform programme, which theDoha Round of trade negotiations seeks toimplement further, should be discussed in the lightof the fact that 900 million people go hungry intoday’s world, not because not enough food is beingproduced – there is enough food – but becausefood must be not just available, but alsoeconomically accessible, affordable, for the hungry.Even if more free trade resulted in betterspecialization and more food on the market, thiswould not help those who do not have thepurchasing power to acquire the food. We wouldfall short of our objective if we focused exclusivelyon how to produce more and did not ask the realquestion: for the benefit of whom?

Free trade is a desirable objective in that it leads togains in productivity, but it also has dangers. It putscountries with very different purchasing powers incompetition for certain commodities. It has producers

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from different countries with highly divergentproductivity competing with each other. Therefore,free trade is absolutely desirable, provided certainsafeguards exist that allow countries to protectagricultural producers from being ruined by dumpingand import surges, and to protect consumers fromprice increases that might result in balance-of-payment problems and create unsustainablesituations for households.

I am currently preparing a report on the impact ofWTO agreements on the right to adequate food, andam therefore trying to assess what risks the WTOreform programme and the current round of tradenegotiations entail. This is a difficult assessment tomake, for four reasons.

● Many of the problems I have mentioned –dumping, ruin of the agricultural sector in manydeveloping countries, hunger as a result ofagriculture being destroyed by distortedcompetition – are not the result of free trade butrather of distorted markets. Within the HumanRights Council there are those who challenge theexisting distortions and those who challenge theidea of free trade itself.

● To a large extent, the vulnerability of countriesto import surges is not an outcome of a WTOagreement. It is the outcome of the structuraladjustment programmes imposed on developingcountries in the 1980s and 1990s. Manydeveloping countries do not use the flexibilitiesthey have under the WTO agreements. They havelowered import tariffs below what the WTOrequires. This has put them in their currentvulnerable situation.

● What matters from the point of view of humanrights is not just equity between countries, or afair international trading system. What mattersalso is equity within each country betweendifferent segments of the population. Sometimesthese objectives conflict. For example, for Brazil,which has a very clear natural competitiveadvantage in agriculture, better access to high-value markets, the lowering of domestic supportin OECD countries and the abolition of exportsubsidies would be an excellent thing. It wouldimprove access to OECD markets for Brazilianproducers. But the result would also be higherprices for Brazilian consumers. There would beboth winners and losers. The same applies to afood-importing country, which, as a result of thereform process, would witness an increase inprices and would have to develop social safetynets to insulate the population from the impactof higher prices. It would be a serious mistake

not to ask what means the State concerned hasto redistribute the costs and the benefits of thereform programme.

● We have to consider the situation from thedynamic perspective. There will always bewinners and losers, but producers may adaptand consumers may adapt. There will beinvestment in agriculture. Some food-importingcountries might become food-exportingcountries if the distortions are removed. Do weevaluate the short or the long-termconsequences? Human rights are there to makesure we do not always think in aggregate terms,in terms of the country as a whole rather thanof the various sectors of the population. Theymake sure we take into account not only thelong-term objective of undistorted markets butalso the short-term losses and victims of thereform process. Human rights are there, not toprescribe a specific trade regime, but to definethe outer limits that those negotiating tradeagreements have to keep in mind and thatnational policymakers should hew close to whenthey develop policies to cushion the impact ofthe reform process.

When the Uruguay Round was being completed, thefear was that improved market access and lowerdomestic support and export subsidies would leadto higher prices on international markets. As a result,the agreement establishing the WTO included theMarrakesh Ministerial Decision on measuresconcerning the possible negative effects on LDCsand net food-importing developing countries. TheDecision’s objective was to protect food-importingcountries from the risks of price increases. It hasbeen dormant, for a well-known reason: instead ofbeing too high, prices were artificially depressed bythe dumping practices of OECD countries. Things arechanging now. In the future, we will have to dealwith a world of higher, more volatile prices. TheDecision must therefore be revitalized. The four toolsit includes - food aid, compensatory IMF financingfacilities, agricultural export credits, technicalassistance - are not satisfactory. The current foodcrisis has shown how ineffective the protection forfood-importing countries is.

We need to work on making the MarrakeshMinisterial Decision operational, because I suspectthat in the future net food-importing countries inthe developing world that do not have the meansof protecting their population from price increaseswill have to be helped in the short term, until theiragriculture is revived by the removal of tradedistortions.

Mr. Maximo Torero (Director, Markets, Trade andInstitutions Division, International Food PolicyResearch Institute) (USA)

The sharp increase in food prices observed in the pastfew years has raised serious concerns about the foodand nutrition situation of people around the world,especially the poor in developing countries, aboutinflation, and in some countries also about civil unrest.The triple link between energy security risks, politicalsecurity risks and food security risks has forged whathas been called a "silent tsunami". I would prefer tocall it a "challenge", because it presents bothopportunities and risks, especially for the poor.

Rising food prices have sparked mass protests in morethan 50 countries, including19 low-income and 15low-middle-income countries, since January 2007.The poorest suffer most and do so silently. Thenumber of protests has risen sharply since February2008, peaking in May 2008 at 29.

What exactly has happened to food prices? Wheatprices have doubled. The price of rice has jumped tounprecedented levels, doubling in the past fourmonths alone. Dairy products, meat, poultry, palmoil and cassava, among other agriculturalcommodities, have also experienced price hikes.Between January 2000 and January 2008, the priceof a nominal tonne of wheat in US$ rose 240 percent; the price of a real tonne rose 172 per cent, andthe price in euros rose 134 per cent.

What really matters for the poor, however, is theeffect this has on their purchasing power. One sucheffect is the declining ratio of wages for unskilledlabour to food prices.

I wish to focus on two main issues: biofuels and aspecific policy response, namely the exportrestrictions some countries have imposed.

Energy prices have always affected agricultural pricesthrough inputs such as fertilizer, pesticides, irrigationand transportation. Now the formula has changed.Energy prices also affect agricultural output viaopportunity costs: there is stiff competition for landand water.

One key factor in the rise of food prices is the muchincreased price of energy. Energy and agriculturalprices have become increasingly intertwined. Oilprices reached an all-time high of more than US$120 per barrel in May 2008, and the United StatesGovernment and the European Union are subsidizingagriculture-based energy, prompting farmers to movemassively into crops for biofuel.

In the United States, as much as one third of thecorn crop is used to produce ethanol, up from 5 percent a decade ago, and biofuel subsidies rangebetween US$ 11 and 13 billion each year. The largesubsidies in developed countries have also longdistorted markets and eroded the competitiveadvantage of developing country farmers.

The growth in new biofuels such as ethanol andbiodiesel has a strong effect on prices, since biofuelproduction largely draws on agricultural products. Theincreased biofuel demand between 2000 and 2007 isestimated to account for 30 per cent of the weightedaverage increase in cereal prices. Incorporating newdevelopments in supply and demand as well as actualbiofuel investment plans, IFPRI’s IMPACT modelprojects that the real prices of maize and oilseed in2020 will be 26 and 18 per cent higher compared toa scenario that keeps biofuel production at 2007 levels.These are conservative estimates. We know that priceshave fallen in the past few months, but basically theyare down from the huge spike of three months ago.The trend will continue to be positive.

At the same time, high energy prices have madeagricultural production more expensive by raisingthe cost of inputs like fertilizers, irrigation andtransportation of inputs and produce. We have seenhuge increases in fertilizer inputs: around 300 percent. While the share of energy in the cost of cropproduction is around 4 per cent in most developingcountries, it is between 8 and 20 per cent in somelarge countries such as Brazil, China and India.

The important thing to understand is that biofuelswill hardly contribute to energy security. The shareof biofuels in road transportation will be only 3 to4 per cent in 2030, so essentially subsidies for biofuelsare like a regressive tax on the poor.

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Many countries are taking ad hoc steps, introducingexport restrictions and price controls, to mitigatethe crisis and minimize the impact of higher priceson their populations. These steps can add up to policyfailures. As of April 2008, 15 countries, includingmajor producers, have imposed export restrictionson agricultural commodities, thereby narrowing theglobal market. These are very concentrated markets:net food-exporting countries control the productionof cereal commodities, and a restriction by any oneof them spurs an immediate response in terms ofprices, as we have seen. The most serious example isrice, the price of which skyrocketed in early 2008.In addition, export bans stimulate the formation ofcartels, undermine trust in trade and encourageprotectionism.

Other countries, however, have contributed to theexpansion of global demand for food. Some netfood-importing developing countries, for example,have reduced import barriers – in principle a welcomemove toward more open trade, but adding to theupward pressure on prices.

Policy responses such as export bans or high exporttariffs can reduce the risks of food shortages in theshort term for the country concerned, but they arelikely to backfire by making the international marketsmaller and more volatile. At the country level, pricecontrols rob farmers of the incentive to producemore food and divert resources away from those whoneed them most. Export restrictions have harmfuleffects on import-dependent trading partners. Forexample, Indian export restrictions on rice affectBangladeshi consumers adversely and also dampenthe incentive for rice farmers in India to invest inagriculture, which is a long-term driver of growth.

The restrictive national agricultural trade policiesadopted by several developing countries alsoundermine the benefits of global integration, as theyadd to the distortions already created by thelongstanding trade policies of rich countries.Agricultural globalization is put in "reverse gear",with adverse effects for the poorest nations. TheDoha Round still needs to be completed, and it wouldbe a shame if the current crisis were to divertattention from that goal. Rule-based fair and freeinternational trade is particularly needed in times ofcrisis, as the export ban problems underline.

What is needed to defuse the threat of conflict overfood and energy through trade? First, we musteliminate agricultural export bans. A new trade policytheatre has been created by the export bans ofdeveloping countries. Let us have no illusions aboutthis: this problem cannot be addressed country bycountry, as governments have a legitimate interest

in caring for their citizens first. The new wave ofexport restrictions requires urgent internationalattention. It should not be added to the Doha Round.Instead, it should be addressed by an ad hocconsortium of global players with a code of conductand mutual trust-building in political negotiations.As a minimum, export trade for humanitarianpurposes should be resumed now.

The elimination of export bans will stabilize currentprice fluctuations, reduce price levels by as much as30 per cent (we have simulated all the effects ofexport bans using our general model, called MIRAGE,and found that 30 per cent of the changes in pricesin the early part of this year were due to exportrestrictions), and enhance the efficiency ofagricultural production.

Secondly, it is crucial to complete the Doha Round.This is even more relevant in times of high foodprices, in order to strengthen rule-based trade. Aworld short in supply and facing regional andcountry-specific fluctuations needs to have moretrade options, not less.

It should be easier for countries to agree to loweragricultural tariffs when market prices, especially ofsensitive commodities, are high. With high globalfood prices there may not be a need to providesubstantial domestic support to farmers in developedcountries, or for any export subsidies. The EuropeanUnion has already eliminated its applied tariffs oncereals, but it has not yet decreased its bound tariffs,which means there is no certainty about their levelsin the long term. In the United States, farmers areholding tight to low loan rates and counter-cyclicalpayment programmes, despite the fact that they areprojected to benefit little from them in the comingyears. This means that policymakers in developedcountries want to keep their options open in caseprices fall. The current food situation should beviewed as an opportunity to introduce major changesin the agricultural negotiations pertaining to marketaccess, domestic support and export subsidies.

What can we expect from these measures? If theseopportunities are realized, they will lead to fairerand more open trade and help enhance efficiencyin resource use as well as improving the welfare ofpeople in developing countries. They will also havea stabilizing effect on agricultural prices and play arole in preventing future crises.

Lastly, the benefits LDCs can draw from multilateraltrade reform as designed by the modalities madepublic in May 2008 are negligible, and some countriesmay even suffer adverse effects. WTO negotiatorsshould make a supplementary effort in favour of the

poorest countries. The duty-free quota-free initiativeis a move in the right direction, but it should beextended not only from a product point of view, witha 100, not 97 per cent application, but also in termsof geographic coverage. This initiative has to besupported both by the OECD and by Brazil, India andChina. It is in the interests of Asian LDCs to prioritizethe full opening of OECD markets (a 100 per centduty-free quote-free regime) and full access to theUnited States market in particular, while Africancountries will draw greater benefit from ageographical extension of this regime to Brazil, Indiaand China.

EXCERPTS FROM THE DISCUSSION


In tackling the food crisis, we cannot ignore themillions of poor farmers in the developing countries,who are mostly net consumers – soaring food pricesdo not necessarily benefit them. In addition, up to80 per cent of the labour force in developingcountries is employed in the agriculture sector.Unfortunately, most of them live below thesubsistence level.

The distortion in the world agricultural marketwrought by huge developed country subsidies hasharmed poor farmers; merely opening markets wouldprobably only do further harm, which is why we needspecial products. By the same token, sudden importsurges or price declines are also harmful forvulnerable farmers, especially in the absence of socialsafety nets. This is why we need the SSM.

We believe the WTO can and should play a pivotalrole in any endeavour to tackle the food crisis.Indonesia stands ready to re-engage for thesuccessful conclusion of the Doha Round.

Ms. M. Okawara (Japan)

Japan is the world’s largest net importer of agriculturalproducts. Food security and trade are matters of greatinterest to its people. Recent events have heightenedpublic uncertainty about food safety.

Trade negotiations are the exclusive domain ofgovernments and trade experts. Parliaments are leftto deliberate on trade agreements that have alreadybeen negotiated by governments as a package. Eventhough international trade policy may reflect theopinions of producer organizations and industrialcircles, the voices of the public and consumers are

not really heard. For example, the WTO hasregulations relating to quantities of agriculturalproducts, but none relating to quality. It would beimportant to establish a global quality assurancesystem that makes it obligatory to trade onlyagricultural products grown in conformity withcertain environmental and agricultural standards.

Trade rules should be adopted that free all peoplefrom hunger. The sharp rise in the price of cereals iscausing food anxiety in developing countries. TheG-8 Summit held in Japan in July called forstimulating world food production. Unfortunately,however, the issues of food security and strongerdiscipline on export regulations received almost noconsideration at the WTO mini-ministerial meetingin July.

Mr. R. Cullen (Canada)

Are any benefits accruing to small-scale farmers inpoor countries as a result of higher food prices? Whatare the constraints currently limiting expansion ofthe supply of food in terms of agriculture land? Towhat extent are higher energy costs already pricedinto higher food costs?

Mr. Torero’s model projects substantial medium andlong-term increases in the price of food. What doesthis mean in terms of Mr. de Schutter’s statementon economically accessible food for all? How longwill it take to bring food prices back into equilibrium,even if it is a new equilibrium? And how will we dealwith that new equilibrium?

One would think that the food price crisis would giveadded impetus to efforts to complete the DohaRound and deal with trade-distorting practices. Hasthere been any evidence of this in the negotiations?

Mr. R. Khuntia (India)

Trade can play an important role in addressing thechallenges of high foodgrain prices and food security.The mandate of the Doha Development Round issubstantially to reduce the trade-distorting subsidiesof some developed countries. Such support hasdepressed foodgrain prices in the internationalmarket, robbing developing country famers of theincentive to improve foodgrain productivity and ofthe ability to compete with developed countryfarmers. If the current bound levels of trade-distorting subsidies are not substantially lowered,foodgrain prices might be further depressed.

Market access opportunities for developing countrieswould be considerably improved if developed

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countries reduced their tariff protections. Otherelements of the trade negotiations – maximumliberalization for tropical products, tariffsimplification, tariff capping, and so on – would alsohelp farmers increase their earnings through greatermarket access. The two measures being negotiated,special products and the SSM, are key to addressingfood security, livelihood security and ruraldevelopment concerns in developing countries andto protecting poor and vulnerable farmers indeveloping countries from the shock of import surgesor declining import prices.

The recent frequent fluctuations in internationalcrude and gas prices have affected economies acrossthe globe. In developing countries, the slightestdisruption in supplies has massive ramifications forgrowth and the welfare of the people. Energy securityrests on two principles: to use as little energy aspossible in providing services, and to secure accessto all sources of energy.

Mr. G. Mitchell (European Parliament)

The European Parliament recently issued a draftregulation that involves taking one billion euros fromagricultural price support for European farmers andspending them in the developing world. The draftregulation is controversial because fertilizer priceshave already increased by 300 per cent, and certainEuropean lawmakers are fearful that it will cause afurther increase. Are we indeed adding to theproblem?

If the draft regulation is adopted, where should theexpenditure be targeted? Sixty countries have askedfor aid, leaving each country with a relatively smallamount. What targets should the EuropeanParliament set for the spending?

Mrs. P. Krairiksh (Thailand)

Recent soaring energy prices have forced us to turnto renewable energies. Biofuel would lower ourdependency on imported fossil fuels and provide anenvironmental benefit in the form of "cleaner" fuel.However, increased production of biofuel crops hasbeen linked to rising food prices: greater economicincentives to grow biofuel crops have led to theplanting of palm and sugarcane on large areas ofarable land that would otherwise have been used togrow food crops. This has had a profound effect onglobal food prices and food security, especially innet food-importing developing countries.

The need to minimize market and price distortions

for agricultural products has never been greater.Trade is key to achieving food security, but only if ittakes place in a fair and market-oriented world tradesystem. The efforts of WTO members to ensure robusttariff reductions and meaningful market access willhelp facilitate unhindered international trade inagriculture and contribute to greater food security.

Mr. O. Bilorus (Ukraine)

I have a problem with the traditional approach tothe problems we face. The current situation isextraordinary, and calls for innovative strategies andpolicies, new methods and approaches. I proposethat we create a global food reserve bank for allcountries. Such a bank would allow us to balancethe rise in food and other prices.

Mr. C. Kakoma (Zambia)

The granting of improved market access shouldtrigger increased exports from LDC agriculture,industrial and service industries. This is not a matterof balancing trade flows, but rather of drawing theline between life and death.

Any outcome of the Doha negotiations that doesnot secure the current and future interests of ourpeople in terms of guaranteeing commerciallymeaningful market access for our exports in amanner that will stimulate increased production andinvestment flows, lead to the re-industrialization ofour economies, create jobs and raise the standard ofliving will be deemed to fall short of the round’saspirations. For any improved market access totranslate into tangible benefits for us, the currentdistortions and technical barriers must be addressed.What we observed at the talks in July 2008 was aweak response to achieving those objectives.

Africa, as a stakeholder in the WTO negotiations, isnot sufficiently involved in the Doha Round. As aparliamentarian, I find it awkward that mygovernment will soon be asking me to ratify a WTOagreement which it was not actively involved innegotiating. The current agenda does not adequatelyaddress the supply constraints facing agriculture inAfrica. For example, fertilizer prices have shot up by300 per cent in one year, but the WTO negotiationsdo not appear to address such supply-side constraints.

Mr. J. Hussain (Bahrain)

There seems to be a strong correlation between risingfood and energy prices, on the one hand, and

inflationary pressure in many parts of the world, onthe other. It is therefore wrong for the WTO tomaintain its practice of not including oil in itsdiscussions, on the pretext that oil is a strategicproduct. High oil prices have caused food prices torise.

There is evidence that some food-producing countriesthat are also oil-importing countries are restrictingexports in order to cause prices to increase. There isalso evidence that countries like Saudi Arabia andthe United Arab Emirates are now buying farmlandin places like Sudan, Pakistan and Turkey to ensuresupply. Bahrain is buying farmland in Thailand andthe Philippines. The issue now is supply, rather thanprice.

The time has come for the WTO to show leadershipon the issues of oil and food, or its credibility willbe further undermined by this trend.


The WTO does not deal with food security, which isnevertheless affected by negotiations on agriculture.Reduced subsidies will increase food prices. The LDCsthat are net food importers will be vulnerable whenthey import food.

The Uruguay Round resulted in a decision on netfood-importing developing countries that consideredthe food security issue as a short-term dilemma andattempted to resolve it by increasing the supply offood. Food aid accounts for 2.3 per cent of total foodconsumption in net food-importing developingcountries, but destroys production capacity in thelong term unless the countries receive technical andfinancial assistance to enhance productivity. No LDChas as yet received support to enhance productivity.If subsidies are granted to increase productivity, theLDCs will soon be self-sufficient. Otherwise, heavilypopulated, relatively small countries like Bangladeshwill never achieve higher standards of living.

Mr. C. Yilmaz (Turkey)

Globalization should be more inclusive, it shouldpromote greater equity worldwide. If the Doha Roundis completed with a strong sustainable developmentagenda, the world will be a more equitable, moreinclusive place.

In terms of crisis management, what we arediscussing are reactions to crisis. The crisis exists, andwe are talking about how to react to it. Can we alsoincrease our capacity to predict and be moreproactive about global crises? Of course, in the

current crisis we can promote trade, increaseproductivity and supply, spread technology for betterproduction and transportation, but these are allreactions. We need to intensify dialogue betweeninternational organizations and countries so as tobe more proactive.

Mr. J. AL Matrook (Bahrain)

Parliamentarians need to define their exact role inthe trade negotiations. They are not on thenegotiating teams, but they can influencegovernments. What is their role from the humanrights perspective? What direct responsibility do theybear?

What does the future hold for the WTO if thenegotiations fail? What should parliamentarians doin that case?

Mr. M.A. Al-Wajih (Yemen)

The world is in the throes of a serious crisis. It is verydifficult for countries to reach agreement within theDoha context. As the representatives of the people,parliamentarians should take part in the multilateralnegotiations.

The Doha Round has failed to find solutions. Will weachieve the round’s goals? What can we do tostabilize rising food prices? Food security isfundamental. All developing countries find it difficultto ensure adequate supplies of food for their people,especially of basic commodities such as rice and corn.We have to prevent a reoccurrence of the situationby adopting clear measures within the Dohaframework.


There are many reasons why food prices haveincreased: the depreciation of the dollar, greaterdemand in countries like China and India, subsidiesfor biofuel crops in the United States that propelcereal prices upwards, and the rise in speculativeinvestment from US$ 5 to 260 billion.

Speculation has also paid a role in the rise in theprice of oil, as has the political and militaryuncertainty that has prevailed since the invasion ofIraq.

Food is part of the broader issue of globaldevelopment. Today financial investment takesprecedence over productive and social investment.Both the WTO and the IMF share responsibility here.

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The structural adjustment plans of the 1990s affectedthe underdeveloped countries. Are the IMF, the WorldBank and the WTO truly working in favour of thepoor countries? And let us not forget ILO’s proposalsfor employment. Once the employment problems ofthe underdeveloped world are solved, there willprobably be no more hunger and no more foodproblems.


We all agree that trade can be a factor of growthand development. However, the internal conflictsbeing waged today in many parts of the world arehaving a serious impact on the production andexchange of foodstuffs and energy products. Therecan be no trade or production in a climate ofinsecurity. The liberalism in food trade imposed bythe WTO and the Bretton Woods institutes has alsodangerously exacerbated the food situation inAfrica.

The subsidies granted by the United States and theEuropean Union, for example, cannot be comparedto those that exist in Africa, which subsidizes thepurchase of agricultural inputs, certain foodstuffsand domestic production. What else can Africancountries do when their people riot because they arehungry?

Why have prices increased so much? Because theWorld Bank and the IMF have obliged the poorcountries to pay their debts rather than buy theirdomestic products. The solution must come fromthose institutions.

Mr. H. Masala Loka Mutombo (Democratic Republicof the Congo)

Climate conditions pay an important role in foodproduction. The Democratic Republic of the Congo,with its extensive forest cover, is one of the world’slungs. It should receive compensation for preservingrather than exploiting its forests.

The Democratic Republic of the Congo produces foodin rural areas, but often lacks the means oftransporting it to urban markets. City dwellerstherefore tend to rely on imports. This aspect shouldalso be considered.

Mr. A. Bencheïkh El-Houceïn (Algeria)

How can the WTO influence energy prices, given thatenergy is not covered by WTO rules?


FAO estimates that there are over 850 millionchronically undernourished people in the world, afigure that is likely to increase this year. Why is thatnumber increasing rather than decreasing? Oneobvious reason is that investment in agriculturehas been falling for many years. Another is that thetrade rules governing agriculture are greatlydistorted. In addition, foodstuffs are being used toproduce ethanol for energy purposes. What is notknown is that developed countries discouragedeveloping nations, which have a natural advantagein the production of ethanol, from exporting it toother markets. A case in point is Pakistan, whichhas a comparative advantage in ethanol productionusing cane molasses. Pakistan was the largestexporter of ethanol to the European Union whensuch exports were duty-free. But then the EuropeanUnion not only slapped a high duty on Pakistan, itimposed an anti-dumping duty as well. As a result,a substantial part of Pakistan’s ethanol industryshut down.

In conclusion, much needed staple food items suchas corn should not be converted into ethanol; instead,developing countries should be allowed to converttheir surplus raw materials, like cane molasses, intoethanol.

Mr. M. Torero (panellist)

Smallholders do not necessarily immediately benefitfrom changes in international food prices, becausethey face significant transaction and higher inputcosts. In some countries, smallholders benefit byless than 70 per cent from any increase in theinternational price, depending on how disconnectedthey are from the main markets. This points to theneed to reduce transaction and transportation costs.

Biofuels and food production are competing for twomajor resources: land and water. In a competitivemarket, the most competitive product would edgethe others out. Unfortunately, however, biofuels arebeing produced using inefficient technologies thatrequire subsidies. For example, the cost of producing100 litres of corn-based biofuel in the United Statesis 39.47 euros (if subsidies are included, that costdrops to 24 euros), but it costs only 14.48 euros toproduce 100 litres of sugar cane-based ethanol inBrazil. The problem is not the biofuels themselves,but rather that the market is not being allowed tocompete.

Biofuels produced using cereals do not necessarilybenefit the environment, nor, I repeat, will they

reduce our dependency on oil. The subsidies appliedtherefore have to be rethought, especially since theycontinue to be paid at times like this, when pricesare high.

Growing demand in China and India has often beenmentioned as the cause of rising food prices. In fact,the problem is not so much increased demand –demand from China and India has been growing forseveral years - but that food reserves are nowdwindling.

The one billion euros recently voted by the EuropeanParliament would best be linked to productivity. Ifthe money is split between 60 or 70 countries, eachcountry would receive a relatively small amount,with the consequent loss in economies of scale. TheIFPRI is not in favour of creating physical foodreserves: it is inefficient to store and transport them.Rather, it proposes a virtual reserve that usesfinancial resources to give positive signals to themarket and stop speculation. Development domainsare another idea. In sub-Saharan Africa, forexample, what are the major development domainsand where do they overlap with infrastructure needsto maximize returns from value chains? The ideahere is not to focus on each country, but rather onregional issues.

Mr. L.A. Heber (panellist)

The one billion euros recently voted by the EuropeanParliament will certainly be helpful, but there canbe no greater aid than the elimination of 80 per centof subsidies, as established by the Doha Round. Thatwould mean that developing country producerswould no longer be competing with the treasurydepartments of the developed countries, but ratherwith producers in those countries. The developingcountries do not necessarily want aid, they want faircompetition.

Employment is another key factor, as is its corollary,migration. The developed world needs no remindingon this score. Employment issues are part and parcelof the negotiations on what I would term fair trade.

The G7 set up at the July mini-ministerial meetingdid not, it is true, comprise representatives of allcountries, but countries that did not attend wererepresented in some way, as Chile was by Brazil. TheG7 should not set a precedent for future meetings,but I find it was an intelligent means of bringingtogether a number of countries to find a solution tothe problems that had arisen – albeit, unfortunately,to no avail.

Mr. O. De Schutter (panellist)

Before the trade negotiations are taken any furtherand any agreements are ratified, it is absolutelycrucial for national parliaments to ask theirgovernments to conduct impact assessments of thepotential losers and winners. It is extraordinary tosee that many national parliaments ratify agreementswithout being aware of the consequences, yet theyare the guardians of social justice in their respectivecountries. Even though a country may benefit as awhole from a particular agreement, even though thefriends of those in office may benefit, there may alsobe losers. It is therefore each national parliament’sduty as a minimum to inform itself about theconsequences of any agreement and insist on theadoption of compensatory measures and nationalaction plans so that all segments of the populationbenefit, in particular the poorest.

One might think that the current increases in foodprices – from the historical perspective, in manyways a return to a more "normal" situation – wouldnecessarily benefit all producers, including thesmallholders who make up the majority of thehungry in the world today. Some may indeedbenefit, but it must be remembered that most poorsmallholders are net food buyers and face highercosts as fertilizers and pesticides become moreexpensive. In a country like China, smallholders maybenefit from higher prices because they are well-connected to markets and because the gap betweenfarmgate and consumer prices is narrower. This isnot the case in Africa, where the gap betweenfarmgate and consumer prices is large and evenwidening.

How much more food can the system produce forthe world’s population? Agronomists differ widelyon their estimates. Some say that the land areabeing cultivated could be expanded by 70 per cent.However, much of the land that is not beingcultivated now is poor or is being used bypastoralists or indigenous people. The cost ofstarting to cultivate it might be very high for certaingroups of the population. Other agronomists saythat climate change, desertification, salt depletionand the growing scarcity of water will actuallyreduce the amount of land available. What needsto be done is to develop methods of agriculturalproduction that are sustainable from theenvironmental point of view. It does not sufficesimply to produce more.

It is estimated that average food prices will continueto be higher than in the past. Adapting to this newsituation means providing adequate social safetynets for net food buyers (food-for-work programmes,

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social programmes). However, many countries arereluctant to develop such social safety nets becausethey fear the fiscal consequences of sudden priceincreases. I have therefore proposed, in a report tothe Human Rights Council5, a global reinsurance fundthat would insure countries against the fiscalconsequences of sudden price surges on internationalmarkets. Affirmative action must be taken to ensurethat smallholders benefit from price increases as well.

As to the one billion euros voted by the EuropeanParliament, they should be spent in accordance withnational priorities, not with outside diktats. Theyshould also benefit smallholders. The "greenrevolution" in Asia and Mexico, for example, is nowcriticized for having rendered agricultural producersdependent on expensive foreign inputs and thereforebenefiting only large-scale producers.

Ms. E. Duran (panellist)

What to do with the one billion euros voted by theEuropean Parliament is indeed a fascinating question.I would certainly agree that the most important thingis to take into consideration national developmentplans. The money should also be spent in line withnational poverty reduction strategies and in the lightof the principal goals of the European Union. Is thepriority food security, to invest in sustainableagricultural production in very poor areas wherereturns may be lower, or to help countries achieveexport-led growth?

It is certainly true that Africa’s participation in theJuly negotiations did not extend to small groups suchas the G7, but African representatives were present

in the Green Room, for example. In addition, one ofthe round’s main issues, cotton, was brought to thetable by four African LDCs, raising awareness of howsubsidies in rich countries can affect the livelihoodsof farmers in poor countries. The African Group hasalso made huge strides forward in understandingand in defending its interests.

Parliament’s role is basically to follow the deals beingnegotiated by the government more closely and togauge how they will affect the population. Inparticular, developed country parliaments shouldobserve how development aid is effectively spentand hold the government accountable for taxpayers’money. In countries receiving aid, parliaments shouldmonitor how the assistance is being used – is itreaching the people who are most in need?

While it is true that energy is not one of the areascovered by the WTO, the accession of countries suchas the Russian Federation and Kazakhstan, which areimportant players on the energy scene, would obligethem to adapt to WTO rules. Trade facilitation mayalso help lower transaction costs for energy productsas well as for foodstuffs.

We should not stake the WTO’s future on the successof the Doha Round. The WTO has worked for manyyears to create a stable framework of internationallyagreed and respected rules. It needs to beconsolidated independently of the Doha Round. Inshort, the WTO’s credibility depends not only on thesuccessful outcome of the Doha Round, but onwhether it can continue to provide a forum for thesmall countries to take on the rich and formultilateralism to work in defence of the weak.

5 Report of the Special Rapporteur on the right to food, "Building resilience: a human rights framework for world food and nutritionsecurity", A/HRC/9/23, 8 September 2008 (http://www2.ohchr.org/english/bodies/hrcouncil/docs/9session/A.HRC.9.23.doc).

PANEL DISCUSSION

“TRADE IN THE ERA OF DIGITAL REVOLUTION”

Ms. Martine Julsaint-Kidane (Trade Negotiationsand Commercial Diplomacy Branch, Division onInternational Trade in Goods and Services andCommodities, UNCTAD)

I would like to speak about how countries can reapthe development benefits of new digitalopportunities, in particular through outsourcing.

The Accra Accord, the declaration adopted byUNCTAD XII earlier this year, recalls that ICTs areparticularly useful in helping to drive globalizationby lifting enterprises into the knowledge basedeconomy and contributing to the fragmentation ofadded value chains. It goes on to say that access to

low-cost ICTs is therefore crucial to the developmentof a competitive business sector, particularly indeveloping countries and particularly in activitiestraditionally of importance to them, such as tourism.The Accord gives UNCTAD a mandate to undertakeresearch and analysis, technical assistance andcapacity-building in a number of related areas.

The 2004 World Investment Report alreadyunderscored the shift in foreign direct investmenttowards services, essentially towards firms that wereengaged in business process outsourcing. Ithighlighted the importance of business processoutsourcing as a development opportunity fordeveloping countries in particular, and listed thetypes of services that are typically offshored (thosethat require no face-to-face interaction, have a highinformation content, are telecommutable, benefitfrom a high wage differential between countries, orhave low set-up barriers and low social networkingrequirements).

The 2005 Expert Meeting on Trade and DevelopmentAspects of Professional Services and RegulatoryFrameworks highlighted that outsourcing todayconcerns not just IT but also IT-enabled services, andthat more and more professional services (health,telediagnosis, accounting, legal, management) arebeing traded across borders.

UNCTAD, together with a number of otherinternational organizations, is involved in measuringthe information society. We know that in the areaof services, and services trade more particularly, oneof the main problems is that it is very difficult tomeasure services being provided over the Internet.

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How are we to know exactly how much is beingtraded in this manner? We know that services canbe provided when a person, like a doctor, temporarilymoves abroad, but how do we measure that service?Developing countries in particular are putting a greatdeal of effort into increasing their capability tomeasure services and the information society as inputfor their national policymaking process.

The literature on outsourcing generally suggests thatit is a win-win phenomenon. Both the outsourcingand the destination country can benefit when acompany moves part of its operations to a locationin another country that has lower wages, a largepool of qualified workers or a favourable regulatoryenvironment. This allows the outsourcing companyto lower its costs and provide more efficient services.In some cases, companies take advantage of time-zone differences to provide around-the-clockservices.

A new trend in the outsourcing business is socialresponsibility. Because of the concerns thatoutsourcing has raised in developed and developingcountries, the companies involved are under growingpressure to engage in socially responsible outsourcing.This means that the outsourcing company has toensure that the companies it works with elsewhereabide by ethical standards, contribute to thecommunities in which they are established, work toimprove the environment and expand career andemployee training opportunities. It also means thatthe sending country cannot escape its socialresponsibilities and must ensure that the receivingcompany applies the same standards and procedures.

Outsourcing has sparked a number of concerns. Inthe sending countries, these have to do mainly withloss of jobs (especially as other, possibly more vocal,categories of workers, such as white collar employees,are being affected) and consumer protection (datasecurity, privacy). In the main market for outsourcing,the United States, these concerns have led to abacklash against the practice and prompted somestates to adopt legislation restricting it.

The host countries are concerned about footloosebehaviour on the part of investors. Investment inservices like call centres may be less stable thaninvestment in manufacturing, as it is easier to movethe call centre to a second country when wages startrising in the first. The host countries wonder aboutthe linkages between the mother company and itsoutsourcing partners and whether they contributeto positive spillover between established and localfirms. They have also realized that the establishmentof new local firms leads to stiffer competition forskills.

What are the links between trade and outsourcing?The GATS is the agreement that has a direct bearingon IT-enabled services. In the Doha Round ofnegotiations, WTO Member States are engaged inliberalizing their services in a manner that will havean impact on outsourcing. I refer here to Mode 1and Mode 2 supply of services, or liberalization ofcross-border supply of services (Mode 1), whereby acountry allows a foreign firm to provide its nationalswith a service via the Internet or the telephone, andconsumption abroad (Mode 2), where the country’snationals travel abroad to consume a service. It canbe difficult to distinguish between the two – to tellwhether a national is consuming a service on theInternet or the service coming to the national – andin that sense Mode 1 and Mode 2 can overlap.

Liberalization of services has been approached fromtwo different angles within the WTO. Under the broadhorizontal approach, countries are willing to liberalizeMode 1 and Mode 2 for all service sectors so as topromote practices such as outsourcing and e-commerce. Under the narrower approach, they targetspecific sectors and allow outsourcing only inaccounting, for example; they then liberalize Mode1 and Mode 2 for that specific sector.

In addition, a plurilateral request for liberalizationof the cross-border supply of services as it pertainsto the outsourcing market has been put forward bya group of countries coordinated by India, which isat present the largest provider of outsourced services.The request targets about 15 developed anddeveloping countries (United States, European Union,Malaysia, the Philippines, South Africa Canada),which were asked to allow outsourcing to take place.

The liberalization of cross-border supply of serviceswas discussed at a meeting in July 2008. A numberof countries signalled an interest in liberalizing thismode, but they have not yet circulated their finaloffers. The developing countries are waiting to seewhat they will be offered in terms of Mode 4(movement of persons) and Mode 1.

Governments can adopt a variety of policies tofurther outsourcing. In the home countries, the roleof government is to minimize the adjustment costof a number of jobs going abroad. This involvestaking measures relating to unemployment insuranceand job retraining, and implementing programmesthat encourage education and training in servicesthat require physical interaction.

In the host countries, governments can promoteknowledge creation and the spread of technologyby adopting measures relating to subsidies,intellectual property rights and human capital

development. We have seen that countries that havemanaged to enter the outsourcing market, such asIndia, the Philippines, South Africa and Ghana, havea qualified work force, good infrastructure and goodregulations.

Outsourcing is an inevitable trend. The potentialgains for developed and developing countries arehuge, but not automatic. Outsourcing is a win-winphenomenon at the macroeconomic level, but it doeshave adjustment costs. Governments need to focuson helping the sectors of the economy that need toadapt. They need to take action not just nationally,but also internationally, and provide technicalassistance to help developing countries improve theirinfrastructure, upgrade their workers’ qualificationsand enhance their understanding of how best to useICTs.

Ms. Aarti Holla-Maini (Secretary General, EuropeanSatellite Operators Association)

I would like to give you some insight into theexperience of European satellite companies in tradenegotiations.

Satellite services are part of the widertelecommunication sector, even though the part theyplay in that bigger sector is very small. Althoughtremendous progress has been made in liberalizingand opening markets in this sector in general,unfortunately the same cannot be said of the specificfield of satellite communication services. This isprobably because of the complex technical issuesthose services involve.

Satellite operators, at least the members of theEuropean Satellite Operators Association, find thatthey make greater headway in gaining market accessif they engage in direct dialogue with theadministrations and regulators of the countries inwhich they seek access rather than depending on amulti- or bilateral political negotiating process.Indeed, even though some of the world’s largestmarkets are still closed to foreign satellite services,some satellite operators are able to be active in thosemarkets, thanks to their ability to negotiateagreements and conditions for access directly withthe administrations concerned.

Even though satellite communications are part of avery competitive commercial sector –telecommunications – they are also, and perhaps moreimportantly, part of the space sector, which, likedefence, is a strategic sector for every country activein this field. Satellite communications are thereforeoften associated with national pride and prestige, andcountries around the world are investing in their ownsatellites, building, launching and operating them toprovide services for the country. Countries that havemade such strategic investments then go one stepfurther and close their markets to foreign operatorsin order to nurture their new national industry. Whilethis is understandable in the short term, the citizensof all countries stand to benefit in the long term whenopen markets, competition and non-discriminatoryaccess are fostered and encouraged.

In seeking access to national markets, satellitecommunication services often encounter securityconcerns. This is by no means an illegitimate concern:it is raised by many countries and has blocked manydiscussions to open markets to satellitecommunication services. This is another area in whichindividual satellite operators have engaged in directdialogue with the administrations of the countriesconcerned and have been able to obtain a clearerunderstanding of where the concern lies (forexample, the ability to intercept signals). They haveworked to introduce innovative solutions that givethe countries raising such concerns a good level ofcomfort. Indeed, there are many success stories thatillustrate that innovative solutions can be found tosecurity concerns and that markets do not need tobe closed to satellite services. Parliamentarians shouldconsider this: if security is a concern when it comesto opening a national market, they should engagein dialogue to see whether that concern can beaddressed. If it can, they will be making it possiblefor a host of other benefits of satellitecommunications to be delivered to the citizens oftheir country.

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In the European context at least, satellitecommunication services are perhaps not givenappropriate priority in trade negotiations. They maybe only a small part of the wider telecommunicationsector, but they are nevertheless uniquely placedtechnologically to deliver on key public policyobjectives such as climate change, development, thedigital divide, security and emergencycommunications and disaster response. Governmentsworldwide face these challenges, and satellites areuniquely able to address them because of their globalreach (one satellite can cover a third of the earth’ssurface) and because they are based in space andtherefore not susceptible to terrestrial vulnerabilities(manmade and natural disasters). In fact, it isunfortunately only when disaster strikes that peopleeverywhere are suddenly made aware of the abilityof satellite communications to reach people anywhere.

Satellites are an invisible infrastructure that is presentin all of our lives – witness the recent coverage ofthe Olympic Games.

Mr. Fredrik Erixon (Director of the European Centrefor International Political Economy)

I am pleased to see that the interest ofparliamentarians in world trade issues isundiminished, for trade policy begins at home. Tradepolicy is today largely a matter of domestic policy,and it is therefore very difficult to negotiate ininternational forums if countries do not have properdomestic policies.

Digital trade has to be discussed in the context oftrade facilitation and facilitation of trade. This isparticularly relevant when talking about the WTO,which, like its predecessor the GATT, is primarily seenas a tariff-cutting body occupied principally withmanufactured goods.

A recent World Bank study on trade facilitation6

suggests that raising the capacity in trade facilitationof 75 countries halfway to the global average wouldincrease world trade by US$377 billion, an increaseof about 9.7 percent in global trade. The welfaregains to be made through trade facilitation are huge- higher than the welfare gains that are going toemerge from tariff-cutting and trade liberalizationmeasures.

Trade facilitation is an important area, but it tendsto be neglected. What exactly is trade facilitation?One area that is of tremendous importance to the

facilitation of trade concerns the distribution chainsof goods, or retail sectors on world markets. The past20 years have seen incredible disinflation and fallingconsumer prices worldwide, in the countries thathave participated in the global division of labour, soto speak. Several studies point to the benefits broughtabout, not only by reducing trade barriers, but alsoby heightening competition within retail sectors,improving the way goods are distributed toconsumers and enhancing competition betweenmarketplaces and different sorts of distributionchains.

This is an area that is often overlooked. A recentstudy of food prices in the United States shows thatthe expansion of WalMart’s market share alone hashad a greater influence on the falling price of foodthan all other tariff-liberalizing measures. This is notto suggest that trade liberalization is not important,but it does demonstrate the importance of the retailsector and of more competition in the facilitationof trade.

One of the most interesting patterns to emerge inrecent years is competition between marketplaces:where is business done? This brings me to e-commerce, or online commerce, one of the greatestfacilitators of trade in the past ten years. E-commercehas helped revolutionize the retail sectors in mostof the countries participating in one way or anotherin globalization, and led to greater competition andfalling prices.

6 J. S. Wilson, K.L. Mann and T. Otsuki, "Assessing the Benefits of Trade Facilitation: A Global Perspective", World Bank Policy ResearchWorking Paper 3224, 2005.

Online commerce is a global business. In 2007 eBayhad revenues of roughly US$ 10 billion. Google hadrevenues of US$ 5.19 billion in the first quarter of2008. The earnings forecast for iTunes in 2008 is inthe region of US$ 2 billion. Half of EMI’s record salesnow take place through iTunes. Two thirds ofMicrosoft’s sales are currently online. Particularly inthe professional services, much of the business beingdone today is based on e-commerce. There are threeaspects to consider in this regard.

First, historical trade patterns clearly show that thetrue explosion in trade came with the rise of intra-industry trade, when firms started to delocalize andtrade with their sister companies in other parts ofthe world. This is exactly what is going to happenwith e-commerce as well.

Second, online commerce helps countries, firms andpeople exploit comparative advantages. It lowerstransaction costs. It reduces the cost of doingbusiness, for example thanks to outsourcing. I cameacross an interesting figure recently: by 2010, Southand South-east Asia will be able to screen 600,000x-rays per day, or the equivalent, in market value,of roughly ten Microsofts. This is a good example ofhow online commerce helps slice up the added valuechain in services and use the comparative advantageof other countries to provide better and moreaffordable services.

Lastly, technology is going to be spread much morerapidly. Other trade agreements pertaining toinformation technology have had a tremendousimpact on the speed at which new technologies likecomputers and the Internet are propagated. The samewill happen with online commerce: technology willmake it possible to reach new consumers at anunprecedented rate.

Several existing WTO agreements have implicationsfor online commerce, notably the traditional GATT(a goods agreement) and the GATS (a servicesagreement). There are important differences betweenthe two. The GATS is generally a much weakeragreement than the GATT; it has lower coverage andfewer participating countries. Both agreements haveone shortcoming, however. It must not be forgottenthat online commerce often involves establishingthe marketplace, rather than trade in goods orservices per se. Today there is great competitionbetween marketplaces, and the marketplace can bea telephone, a TV set or a search engine. This impliesmaking investments and obtaining market access inother countries. With e-commerce, it is not tariffsand other traditional barriers that tend to be aproblem as much as the regulations and non-tariffbarriers in force.

A second problem is the actual flow of data. About40 countries presently try to control their citizens’access to websites that combine commercialingredients with freedom-of-speech considerations,such as YouTube. When governments shut down suchwebsites in their entirety, they also erode theplatform for commerce. Because online commercenow represents so much value, this is tantamountto a highly discriminatory trade barrier. No WTOagreement really addresses this problem.

EXCERPTS FROM THE DISCUSSION

Mr. G.L. Peiris (Sri Lanka)

Sri Lanka is an example of a developing country thatis making extensive use of ICTs for the purposes ofsocial upliftment. It is not an LDC – its per capitaincome is too high – but it does have significantincome and resource distribution problems. It is usingICTs to alleviate these problems and work towardssocial equity in three main areas: education,agriculture (IT is used to make available to farmersthe information they need to access markets withouthaving to resort to middlemen) and the legal system.

Mr. N. Toure (Senegal)

The digital divide exists not only between developedand developing countries, but also within developingcountries. In the face of this problem, Senegal putforward the concept of digital solidarity as embodied

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in the Global Digital Solidarity Fund. One of theFund’s first contributors was the city of Geneva,followed by Senegal – charity begins in the home –France and other countries. The idea is to volunteer1 per cent of the revenue generated by any digitalproduct. Is this of interest to the WTO?

IT is obviously very useful, but it also opens the doorto cybercrime. What measures have to be taken inthis regard?

Ms. T. Boontong (Thailand)

E-commerce is the corollary of the digital revolution.In recent decades it has become a means of tradefor multinational corporations and an enabling toolfor small and medium-sized enterprises. At any timeof the day, people around the world can sell or buyproducts and services by a simple "click". Services,including the ensuing payments and transfers,increasingly take place online.

The developing countries still have to overcome anumber of challenges to benefit fully from thesedevelopments. In Thailand, for example, manyconsumers and end users still regard transactionsconducted electronically with distrust, despite theexistence of a comprehensive package of e-commercelaws. Inadequate legislation is therefore not the issue.

Trade is multijurisdictional by nature. National e-commerce laws cannot offer the degree ofinternational protection the consumer desires.Without international coordination and cooperation,the questions of standards, civil liability, fraud, privacyand security will never be properly addressed. Iencourage my fellow parliamentarians to think aboutthis. We need an international legal instrument thatfacilitates and guarantees international electronictransactions. Such a law would encourage moreproductive and wider use of e-commerce, particularlyin developing countries.

Mr. R. Pal (India)

How can international trade be extended to covereffective use of ICTs? This is a matter of capacity-building: education, training and access at low-levelcost. The biggest hurdle is the digital divide. Anumber of countries need capacity-building supportif they are to benefit from e-commerce. We have yetto hear from certain quarters how the poor countriesare to bolster their capacity to access ICTs.

A global consensus is needed. How can internationalorganizations like UNCTAD and the WTO help bridgethe digital divide as soon as possible?


What are the chances that Internet neutrality willsurvive the digital market and greater regulation?


E-commerce needs the help of the internationalcommunity and the developed countries. Manydeveloping countries do not have a developedbanking system, and their intellectual property lawsalso have serious shortcomings. They need technicalassistance to help them handle the new technology.

Mr. K. Sasi (Parliamentary Assembly of the Councilof Europe)

The Internet is a freedom driver. We all know,however, how difficult it is to control. Can trade rulesbe applied to the Internet world? Does any countrytry to apply trade rules to online purchases of music?Anyone selling services within the European Unionhas to register and pay value-added tax. Largecompanies do this, but not necessarily smallcompanies and individuals. Would companies bewilling to register for and abide by worldwide traderules in respect of e-commerce?


Protection of personal data and privacy are importantissues, because we as parliamentarians have anobligation to protect the rights of the people whoelected us. How do the GATT and the GATS apply topersonal data and privacy? What shouldparliamentarians be recommending at home, andwhat multilateral approaches should they consider?

Mr. F. Erixon (panellist)

We must remember that the WTO is not an aidorganization. Aid issues are dealt with by its MemberStates and other organizations. The Doha Round’said-for trade discussion has shown that some tradeagreements can cover financial assistance or aidbetween countries, but not to the same extent asmultilateral donor organizations. The WTO can helpwith knowledge, expertise and capacity-building,but investment in physical infrastructure of the kindneeded to bridge the digital gap is outside its remit.

We must be careful not to overemphasize the roleof aid and donor investments in telecommunicationswhen we talk about the digital divide and tradefacilitation measures that give access to online

commerce. There has already been a high level ofinvestment, but it has not necessarily borne fruit.This implies that the problem lies elsewhere, perhapsin how the domestic telecommunication market isorganized.

Internet neutrality can be defined in various ways.It depends for the most part on investment ininfrastructure capacity. If investment is insufficientat a time when the total volume of digital contentis increasing at a tremendous pace, the ambition tohave as neutral a system as possible will bedisappointed. Both public and private mechanisms– pricing, regulations – will interfere.

As concerns privacy, the WTO has a working partyon online commerce that also deals with rules andregulations applying to privacy. However, the workingparty has yet to come up with material everyone canagree to. It is not sure what form that material shouldtake: an annex, like IT, or a separate agreement? Itwill be difficult to find an approach that satisfies allthe parties. More than just online commerce, this isa problem relating to cross-border e-communicationin general.

Ms. A. Holla-Maini (panellist)

Even closed economies fostering their own nationalsatellite industries have huge digital divide issues. Theyremain closed to satellite communications becausethey fail to see the development benefits of satellites(tele-education, telemedicine), and use their systemsonly to broadcast television programming.

The Global Digital Solidarity Fund views satelliteoperators as huge companies that do not need aid.It overlooks the unique ability of satellites to reachpeople everywhere. Unfortunately, most of the fundsmade available for aid are directed at research orpilot projects; they are not used to help those projectsbecome sustainable.

Satellites are primarily associated with broadcastingand television; development practitioners tend tothink that people need food first, not television. Yetmany case studies of countries around the world,notably in Africa, reveal other aspects of satellitecommunications. Malawi, for example, uses them tomake its banking system work and to runmicrofinance programmes. Satellite communicationsare also part of early-warning systems that alertpeople to the risks of drought, locusts, floods, etc.When Mozambique was hit by devastating floods,for example, Save the Children used satellitecommunications to coordinate distributions of foodand clothing.

Satellite operators provide the "tube" through whichsignals are transmitted. They can secure those signalsto an extent that inspires confidence even in themilitary sector.

Ms. M. Julsaint-Kidane (panellist)

What is the WTO’s role in respect of the digitaldivide? In principle, the WTO deals with marketaccess, not cooperation issues. We know, though,that countries are not on a level playing field.Therefore, while it is important to negotiate marketaccess within the WTO, it is first and foremost supplycapacity that has to be addressed. What is the pointof negotiating market access if the country doesnot have the capacity to supply the market? Supplycapacity-building is dealt with by otherorganizations, by bilateral donors and in regionalforums. UNCTAD, for its part, is researching andanalysing what some countries are doing right todevelop their ICTs and the industries based on them,and how their experiences can be replicated byother countries.

Measurement and data are key. Each country has tostart by establishing the indicators it uses to defineits domestic situation, before it can move on topolicymaking. UNCTAD is working with otherorganizations on this aspect as well.

WTO trade rules already apply to one small area ofe-commerce. Under the GATS, countries must allowcross-border supply of services. Because the GATSapproach is sector-based, however, each country candecide sector by sector where the rules apply.

In terms of privacy, it might be interesting forparliamentarians to follow the services negotiations.Under the GATS, countries retain the right toregulate. This means they can regulate to ensure dataprotection and privacy. However, the WTO is alsonegotiating disciplines so that the regulationsadopted are not more burdensome than necessary.The idea is to prevent countries from using what maybe legitimate policy concerns to restrict tradeunnecessarily. Currently, the only requirement ofcountries is that they must apply any measuresaffecting their commitments under the GATSimpartially and transparently.

At present, therefore, countries are free to regulateprivacy and data protection matters. The concernmay now be whether national companies that followsuch regulations at home require the companies theyoutsource work to to follow them as well. Onecountry’s regulations do not apply in another country,of course, but companies do have the responsibility

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to ensure that when they outsource work theyrequest their partners to comply with minimumstandards.

Indeed, it is in the interest of the companies vyingfor outsourcing business to implement such

standards: their reputations are at stake, andinformation travels fast. Indian companies, forexample, swiftly realized that it was in their intereststo meet international data protection standards, andthis helped them get the business they wanted.

GUIDELINES FOR RELATIONS BETWEEN GOVERNMENTSAND PARLIAMENTS ON INTERNATIONAL TRADE ISSUES

ADOPTED BY CONSENSUS ON 12 SEPTEMBER 2008

The purpose of the adoption of guidelines forrelations between governments and parliaments ininternational trade issues is to provide all the nationalparliaments with the opportunity to scrutinise andhave an influence on governments' trade policy.These guidelines apply to international tradenegotiations in the broader sense, i.e. both tomultilateral and bilateral frameworks. It is up to eachparliament to decide the extent to which theguidelines should be implemented.

Three elements in relations between government andparliament can be pointed out which will help toensure that the national parliaments gain aninfluence on trade policy.

These three elements are the quantity and qualityof information to the parliament, the timing ofinformation exchange, and finally the opportunitiesthat the parliament has to use the information ithas received to gain an influence on trade policy.

The following basic principles can be recommendedon the basis of the above:

● The parliament shall receive relevant informationon trade initiatives from the government in goodtime so that the parliament has an opportunityto take them into consideration before decisionsare made;

● The parliament shall have a real opportunity touse the information received to gain an influenceon its own country's trade policy;

● The parliament shall have an opportunity tofollow up on its government's decisions.

Recommendations on general guidelines

The following general guidelines can be recommendedon the basis of the basic principles above:

1. A country's government should ensure that theparliament has easy access to all informationregarding legislation and other trade initiativesas soon as it becomes available. This rule shouldapply to all international trade negotiations;

2. The government should provide the originaldocuments and prepare easily accessible, clearlyworded material on draft trade agreement,legislation, etc., for the parliaments;

3. Opportunities should be provided for meetingswith ministers in the parliamentary Committeeswell in advance of international trade meetingssuch as the WTO meetings but also of regionalor bilateral trade negotiations. The governmentshould give an up-to-date account of the currentposition and its attitude to the different proposalsat such meetings;

4. The parliament should be informed by thegovernment well in advance as regards positionsin the negotiations and decisions to be made atinternational trade organisations. Regarding theWTO, this concerns particularly ordinary meetingsof the WTO General Council, WTO MinisterialConferences, and, if necessary, meetings of WTONegotiating Committees or Groups. Theparliaments should also subsequently be informedof any new decision;

5. Members of parliament specialising ininternational trade should be included, as amatter of rule, in their country's official nationaldelegations to international trade eventsincluding WTO Ministerial Conferences.

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RULES OF PROCEDURE

ADOPTED ON 26 NOVEMBER 2004, AMENDED ON 12 SEPTEMBER 2008

The days when foreign policy, and more specificallytrade policy was the exclusive domain of theexecutive branch are over. The WTO is rapidlybecoming more than a trade organisation, havingan ever growing impact on domestic policies andthe daily life of citizens.

The Inter-Parliamentary Union and the EuropeanParliament are therefore jointly organising aParliamentary Conference on the WTO (hereinafterthe Conference) that will meet at least once a yearand on the occasion of WTO Ministerial Conferences.The Conference is an official parliamentary eventthat is open to the public.

ARTICLE 1 - Objectives

1.1 The Conference is a forum for the exchange ofopinions, information and experience, as wellas for the promotion of common action ontopics related to the role of parliaments and theorganisation of parliamentary functions in thearea of international trade issues.

1.2 The Conference seeks to promote free and fairtrade that benefits people everywhere, enhancesdevelopment and reduces poverty.

1.3 The Conference will provide a parliamentarydimension to the WTO by:

(a) overseeing WTO activities and promotingtheir effectiveness and fairness – keeping inmind the original objectives of the WTO setin Marrakech;

(b) promoting the transparency of WTOprocedures and improving the dialoguebetween governments, parliaments and civilsociety; and

(c) building capacity in parliaments in mattersof international trade and exerting influenceon the direction of discussions within the WTO.

ARTICLE 2 - Composition

2.1 Participants in the Conference are

● delegations designated by parliaments ofsovereign States that are members of the WTO;

● delegations designated by IPU MemberParliaments from countries that are notrepresented in the WTO; and

● delegations designated by the EuropeanParliament, the Parliamentary Assembly of theCouncil of Europe, the CommonwealthParliamentary Association and the Assembléeparlementaire de la Francophonie.

2.2 Observers to the Conference will be

● Representatives of international organisationsand others who are concerned by issues ofinternational trade and specifically invited bythe Steering Committee on the basis of a listthat has been approved jointly by the co-organisers; and

● representatives of governments of sovereignStates that are members of the WTO.

2.3 The event will also be open to other personswith a specific interest in international tradequestions. These persons may follow the workof the Conference without intervening in itsproceedings and will have no speaking rights.They will be issued a security badge bearingtheir name only. They will not receive an officialinvitation or be accredited to the event.

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ARTICLE 3 - Presidency

3.1 The Conference is presided over jointly by thePresident of the Inter-Parliamentary Union andthe President of the European Parliament, ortheir substitutes.

3.2 The Presidents shall open, suspend and close thesittings, direct the work of the Conference, seethat the Rules are observed, call upon speakers,put questions for decision, make known theresults of decisions and declare the Conferenceclosed. The decisions of the Presidents on thesematters shall be final and shall be acceptedwithout debate.

3.3 The Presidents shall decide on all matters notcovered by these Rules, if necessary after havingtaken the advice of the Steering Committee.

ARTICLE 4 - Steering Committee and Secretariat

4.1 The Steering Committee is jointly established bythe Inter-Parliamentary Union and the EuropeanParliament and is composed of representativesof parliaments of sovereign States, of the IPUand the European Parliament as the Conferenceco-organizers, of selected other regional andinternational parliamentary assemblies andstructures, and of the WTO Secretariat.

4.2 The Steering Committee is responsible for allmatters relating to the organisation of theConference and shall take decisions on the basisof consensus. All decisions taken by the SteeringCommittee shall, as appropriate, be circulatedin writing and approved before the end of eachmeeting.

4.3 Membership in the Steering Committee shall beinstitutional, with every parliament ororganization having the right to choose itsrepresentative(s). In the interest of consistencyin the work of the Steering Committee,parliaments and organizations shall endeavourto ensure that, as far as possible, the person(s)who represented them in previous sessions ofthe Committee continue to take part insubsequent sessions.

4.4 When more than one representative of anational parliament takes part in a session ofthe Steering Committee, only one member ofparliament per delegation shall be part of thedecision-making process.

4.5 Changes in the composition of the SteeringCommittee shall be proposed jointly by the IPU

and the European Parliament, as the Conferenceco-organizers, subject to approval by theSteering Committee as a whole. Where possible,equitable geographical distribution shall betaken into consideration.

4.6 National parliaments shall hold a seat on theSteering Committee for a period of four years.However, the Steering Committee may invite agiven parliament to hold its seat on the SteeringCommittee for another term. The rotation shallbe scheduled in such a way that no more thanhalf of the parliaments representing a givengeographical region shall be replaced at anyone time.

4.7 The definition of geographical regions for thepurpose of rotation shall be established by theSteering Committee.

4.8. The Conference and the Steering Committeeare assisted in their activities by the secretariatsof the Inter-Parliamentary Union and theEuropean Parliament.

ARTICLE 5 - Agenda

5.1 The Conference decides on its agenda on thebasis of a proposal from the Steering Committee,which shall be communicated to the participantsat least one month before the opening of eachplenary session.

ARTICLE 6 - Speaking rights and decisions

6.1 Participants and observers have the samespeaking rights.

6.2 Priority to speak shall be given to participantswishing to make a procedural motion whichshall have priority over the substantivequestions.

6.3 The Conference shall take all decisions byconsensus of the delegations of participants.Conference decisions shall be taken after duenotice has been given by the President.

ARTICLE 7 - Outcome of the Conference

7.1 The draft outcome document of the Conferenceshall be prepared by the Steering Committeewith the assistance of one or more rapporteursand communicated to the participantssufficiently in advance.

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7.2 Amendments to the draft outcome documentshall be presented by the delegations as definedin Article 2.1 or by rapporteurs in English or inFrench with the amended parts clearly marked.Amendments shall relate directly to the textwhich they seek to amend. They may only callfor an addition, a deletion or an alteration withregard to the initial draft, without having theeffect of changing its scope or nature.Amendments shall be submitted before thedeadline set by the Steering Committee. TheSteering Committee shall decide on theadmissibility of amendments.

ARTICLE 8 – Adoption and amendment to theRules

8.1 The Conference shall adopt and amend theRules.

8.2 Any proposal to amend the Rules of theConference shall be formulated in writing andsent to the Secretariat of the Conference atleast three months before the next meeting ofthe Conference. The Secretariat shallimmediately communicate such proposals tothe members of the Steering Committee as wellas to the delegations of the Conference. It shallalso communicate any proposal for sub-amendments at least one month before the nextmeeting of the Conference.

8.3 The Conference shall decide on any proposal toamend the Rules after hearing the opinion ofthe Steering Committee, including on theiradmissibility.

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PARTICIPANTS

Parliamentary delegations

Afghanistan, Algeria, Angola, Austria, Bahrain,Bangladesh, Belgium, Benin, Bolivia, Bosnia andHerzegovina, Brazil, Bulgaria, Burkina Faso, Burundi,Cameroon, Canada, Chile, China, Croatia, Cyprus,Czech Republic, Democratic Republic of the Congo,Denmark, Dominican Republic, Egypt, El Salvador,Estonia, Finland, France, Germany, Ghana, Greece,Guinea, Hungary, India, Indonesia, Iran (IslamicRepublic of), Ireland, Italy, Jamaica, Japan, Jordan,Kazakhstan, Kenya, Lesotho, Lithuania, Luxembourg,Madagascar, Mauritius, Mexico, Morocco, Namibia,Niger, Nigeria, Norway, Pakistan, Philippines, Poland,Portugal, Qatar, Republic of Korea, Republic ofMoldova, Romania, Russian Federation, Rwanda,Saudi Arabia, Senegal, Serbia, Slovenia, South Africa,Spain, Sri Lanka, Sudan, Suriname, Sweden,Switzerland, Syrian Arab Republic, Tajikistan, Thailand,The former Yugoslav Republic of Macedonia, Togo,Turkey, Uganda, Ukraine, United Arab Emirates,United Kingdom, Uruguay, Yemen, Zambia.

European Parliament, Assemblée parlementaire dela Francophonie, Commonwealth ParliamentaryAssociation (CPA), Pan-African Parliament,Parliamentary Assembly of the Black Sea EconomicCo-operation (PABSEC), Parliamentary Assembly ofthe Council of Europe (PACE).

OBSERVERS

Governments of sovereign States members of WTO

Afghanistan, Austria, Belgium, Brazil, Bulgaria,Burundi, Cambodia, Canada, Chile, Croatia, Cyprus,Denmark, Dominican Republic, Estonia, France,Germany, Israel, Italy, Kenya, Latvia, Lithuania,Madagascar, Niger, Philippines, Republic of Korea,Republic of Moldova, Romania, Slovakia, Sri Lanka,Sweden, Thailand, Tunisia, Ukraine, Venezuela, VietNam.

Intergovernmental Organizations

Agency for International Trade Information andCooperation (AITIC), European Commission, Food andAgriculture Organization of the United Nations (FAO),International Monetary Fund (IMF), United NationsConference on Trade and Development (UNCTAD),World Bank, World Trade Organization (WTO),International Trade Center.

Parliamentary Associations and Assemblies

Assembly of the Western European Union, EFTAParliamentary Committee, Inter-ParliamentaryAssembly of the Eurasian Economic Community.

PARTICIPATION

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The Steering Committee of the Conference is currently composed of representatives of the followingparliaments and international organizations:

Belgium, Canada, China, Egypt, Finland, France, Germany, India, Iran (Islamic Republic of), Japan, Kenya,Mauritius, Mexico, Morocco, Namibia, Niger, Nigeria, South Africa, Thailand, United Kingdom, United Statesof America, Uruguay, Commonwealth Parliamentary Association, European Parliament, Inter-ParliamentaryUnion, Parliamentary Assembly of the Council of Europe, World Trade Organization

COMPOSITION OF THE STEERING COMMITTEE

ACRONYMS

ACP African, Caribbean and PacificGDP Gross Domestic ProductFAO Food and Agriculture Organization of the United NationsGATS General Agreement on Trade in ServicesGATT General Agreement on Tariffs and TradeG33 Group of developing countries G7 Group of seven leading industrial countries: Canada, France, Germany, Italy, Japan, United

Kingdom, United StatesICT Information and communication technologyILO International Labour OrganizationIMF International Monetary FundIPCC Intergovernmental Panel on Climate ChangeIPU Inter-Parliamentary UnionIT Information technologyLDC Least developed countriesMDG Millennium Development GoalsNAMA Non-agricultural market accessNGO Non-governmental organizationOECD Organization for Economic Co-operation and DevelopmentSSM Special safeguard mechanismUNCTAD United Nations Conference on Trade and DevelopmentUNFCCC United Nations Framework Convention on Climate ChangeWTO World Trade Organization

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2006ANNUAL SESSION OF2008INTER-PARLIAMENTARY UNION EUROPEAN PARLIAMENT

ANNUAL SESSION

PARLIAMENTARY

CONFERENCE ON THE WTO

GENEVA, 11-12 SEPTEMBER 2008

9 789291 424009

conference on the wtoa, 11-12 september 2008 annual...

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