The 11th Ministerial meeting of the World Trade Organization (WTO) will be held in Buenos Aires, Argentina on December 10-13, 2017.Bangladesh and other LDCs must be prepared well to deal with traditional agendas as well as new issues apart from Duty-Free Quota-Free (DFQF) market access, service waiver, fisheries subsidies and domestic support in public stockholding of food are already considered as possible deliverables, news issues like e-commerce and Micro, Small and Medium Enterprises (MSMEs) etc.
Duty-free and quota-free market access for LDCs
LDCs' proposal on DFQF market access sought that developed country Members that yet do not provide DFQF market access for at least 97 per cent of all products originating in LDCs shall do so by a certain date. This 97 per cent target enhanced and commercially-meaningful market access be ensured for all LDCs and due care be taken not to diminish the existing market access enjoyed by any LDC at present.
WTO should ensure 100 percent Duty Free, Quota Free market access for LDCs' exports; simplification of the Rules of Origin that define how much of the value of a product has to be produced in the country to qualify for reduced-tariff benefits.
USA and allies have designed a borderless, digitized global economy in which major technology, financial, logistics. The rule if adapted the corporations like Amazon, FedEx, Visa and Google can move labor, capital, inputs, and data seamlessly across time and space without restriction including dislocation of local businesses and labor markets.
Key provisions of the proposals including no prohibiting requirements to hold data locally or even have a local presence in the country, no localization requirement. It proposes to limit local regulation and no border taxes on digital products. This would be a special preferential treatment awarded to giant digital companies to locate their data centers wherever they want,
It also has serious implications for both data privacy and consumer protection. Big corporate such as googles collect data since these are most valuable resource; that's why markets highly value companies that give away their services to consumers for "free" and benefitting from economies of scale.
At present ESMEs in LDCs are doing the job already and in a position to sell their products online. but new possible WTO rule of free access of giant companies will take over their business. MSMEs in LDCs cannot compete with multinationals due to these procedures and capabilities such as benefits of scale, historic subsidies, technological advances, strong state-sponsored infrastructure, and a system of trade rules written by their lawyers.
The dominance of retail platforms by big companies shall give unfavorable deals to MSMEs. MSMEs shall have one option to work on one platform decided by big corporation and shall fall be open to exploitation.The proposed integration of MSMEs into global trade and investment facilitation will lead to taking over MSMEs in LDCs by big companies offering higher price and better work advantages and subsequently developing a monopoly market. Tech giants would consolidate their monopoly power.WTO members do not currently have a mandate to write new global rules on "e-commerce," and they should not obtain one in Buenos Aires.
Agricultural Rules and Food Security
Developing countries are subject to policy dictates of the IMF and the WB - many things including abandoning investments in agriculture while opening their markets to imports - left them subject to growing import bills and food insecurity.
Developed countries currently still subsidize agriculture under WTO rules - even in ways that distort trade and harm other countries' domestic producers - because countries are still allowed to subsidize at the levels they were giving when they entered the WTO. For the United States and EU, that means USD $19.1 billion and €72.2 billion a year, respectively. These subsidies encourage overproduction and artificially depress world prices, wiping out farmers' livelihoods in LDCs and developing countries that should be benefitting from global agricultural trade.
Bangladesh may support idea to reduce the amount of subsidies under the "domestic support" negotiations without impact on price in other countries and supporting farmers' livelihoods in own country, ensuring food security, and promoting rural development is the policy of "public stockholding," in which governments guarantee farmers a minimum price for their production, and distribute that food to hungry people within their own borders.
Bangladesh should give priority for a genuine development agenda would be transforming the current rules on agriculture. There are two key aspects: making the rules more flexible so that countries can feed their people, and reining in the subsidies for products entering the global marketplace.
The MC 11 will have a tough negotiation on prohibitions of subsidies that lead to "overfishing and overcapacity". Not only that the agreement will be restricted to subsidies to maritime fishing and will exclude subsidies granted for inland fishing. It will contain so-called appropriate special and differential treatment of different regions.
Fish is important to every country for a number of reasons. In Small Island and some Least Developed Countries (LDCs) including Bangladesh, it represents over 50 percent of animal protein intake.The most recent estimates FAO indicate that 56.6 million people were engaged in the primary sector of capture fisheries and aquaculture in 2014 with the largest group in Asia.
Unfortunately, some of the WTO proposals appear to place extra burdens on developing countries with limited regulatory capacity, while exempting fossil fuel subsidies to large fleets - which would lead to increasing market share of the big fishing operators. It calls for a prohibition on subsidies that increase the marine fishing capacity, that support the construction or importation of fishing vessels, subsidies for the transfer of fishing vessel to another country and subsidies that benefit an operator engaged in Illegal, Unreported, and Unregulated (IUU) fishing.
There may be restriction on subsidies provided to large scale commercial fishing activities particularly those carried out outside of their domestic jurisdiction (i.e. in the high seas or in the exclusive economic zones of a third country) but maintains the right of developing countries and LDCs to support coastal fishing activities related to artisanal, small scale and subsistence fishing, fishing targeting stocks whose range are exclusively confined to the country's own economic zone.
The issue of 'special and differential' treatment has been one of the most congested areas of negotiations at the WTO. Within the demand for differential treatments, the approach of all developing countries, LDCs and Small, vulnerable economies (SVEs) have not been the same. There are different visions as to how the 'special and differential' treatment provisions be structured, their coverage, their approach, the exceptions and overall implementation.
The SGD Goal 14.6 specifically aims to, "by 2020 prohibit certain forms of fisheries subsidies which contribute to overcapacity and overfishing, eliminate subsidies that contribute to illegal, unreported and unregulated fishing and refrain from introducing new such subsidies, recognizing that appropriate and effective special and differential treatment for developing and least developed countries should be an integral part of the World Trade Organization fisheries subsidies negotiation." There is also universal recognition now that fisheries subsidies result in overfishing and overexploitation of resources, thereby threatening the ecological balance.
The Nairobi Ministerial Declaration 2015 section 31 committing for three pillars of agriculture, namely domestic support, market access and export competition should be taken into consideration with special safeguard mechanism, domestic support for agriculture.
Bangladesh has been classified as lower-middle income country; it is aspiring to graduate from the LDC status within a decade. Therefore, Bangladesh's interest on the multilateral trade negotiation is no longer confined to LDCs issues. The country needs to think beyond LDC perspective in view of its own position in post-LDC stage when existing preferences will be eroded significantly. At the same time, there is no way to compromise the common or shared interests of the LDCs or being indifferent to unity of the group.
Bangladesh needs to keep pressure on developed countries for ensuring 100 per cent duty-free, quota-free (DFQF) market access. Moreover, it also needs to push for implementing the relaxed rules of origin agreed in the Nairobi Ministerial two years back. Without relaxed rules of origin, 100 per cent DFQF would not be meaningful.
Regarding DFQF market access, Bangladesh has some differences of opinion with the African LDCs. These countries have already been enjoying tariff-free access into the US market while Bangladesh along with Nepal and Cambodia are the only LDCs who are yet to get such treatment.
Regarding new issues like e-commerce and MSMEs, Bangladesh may keep strong alliance with other LDCs and push for keeping the LDCs out of the any binding decision for a time frame of 10 years, at the very least. It is critical as LDCs and developing countries are yet to be prepared to abide by multilateral trade rules on e-commerce and MSMEs. In a similar vein, investment facilitation is not an issue for Bangladesh at this moment. The LDC services waiver offered to developed countries to provide market access in services for LDCs without offering reciprocal access to other countries.
WTO should ensure 100 percent Duty Free, Quota Free market access for LDCs' exports; simplification of the Rules of Origin that define how much of the value of a product has to be produced in the country to qualify for reduced-tariff benefits. It also includes mandated reductions in the subsidies that the US and the EU provide to agricultural products.
Bangladesh will support agricultural subsidy for export advantage but support subsidy for fair price for farmers and also buffer stock of food grain to feed vulnerable section and stabilization of food price in the domestic market. The right of fishing in own jurisdiction and right to protein should be ensure as fish is the protein support to about 50% of the population in LDCs.
The writer is a Legal Economist. E-mail: email@example.com
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