Challenges facing the Doha Development Round Trade Negotiations

1
Challenges facing the Doha Development Round
Trade Negotiations

• Accomodating Non-Trade Concerns
• Rolf Moehler

2
What means non-trade concerns ?

• Is it Pandoras box?
• Or a miraculous cure for the ills of
  globalisation?
• Or a vicious attempt by devloped countries to
  obtain  special and differential   treatment?
• There are a number of non-trade concerns e.g.
• food security, multifunctionality,
• vitality of rural areas, alleviation of rural
  poverty,
• protection of the environment
• They are legitimate concerns that have in common
  to sit uncomfortably with trade liberalisation

3
A Main Non-Trade ConcernFood Security

• Food security is a traditional non-trade concern.
• It is the only one that played a role in the
  Uruguay Round
• It is still a major concern of developing
  countries but has lost some of its shine to rural
  development

4
A Main Non-Trade ConcernMultifunctionality

• Will multifunctionality be the nail to the coffin
  of free trade in agriculture?
• OECD Agriculture Ministers agreed in 1998 that
• agriculture is more than producing food and fiber
  and that agriculture can
• shape the landscape
• provide environmental benefits
• contribute to the socio-economic viability of
  rural areas

5
A Main Non-Trade ConcernVitality of Rural Areas

• Development of rural areas is an off-spring of
  multifunctionality
• But it is much more popular than its parent with
  developed and developing countries alike
• Even the Cairns group have succumbed to its charm
  although for developing countries only
• But it is hard to deny its justification for
  developed countries, too.

6
Main Non-Trade ConcernsAlleviation of Rural
Poverty

• Alleviation of rural poverty is a major concern
  of developing countries
• Alleviation of rural poverty raises the question
  of the impact international trade has on the
  reduction of poverty
• This impact depends much on the local situation
  and the policy of the country concerned

7
Main Non-Trade ConcernsProtection of the
Environment

• Since the Doha Declaration the multilateral
  trading system and the protection of the
  environment must be mutually supportive
• The way to bring this about remains unclear
• But it gives the non-trade concern about the
  environment a new quality

8
Main Non-Trade ConcernsFood Safety

• The EU proposes to clarify the application of the
  precautionary principle
• As nobody wants to re-negotiate the SPS Agreement
  the chances for acceptance of this proposal are
  slim
• Therefore, food safety is unlikely to play a
  major role in the negotiations

9
Main Non-Trade ConcernsConsumer Concerns

• The EU proposes to make mandatory labelling of
  production and processing methods possible even
  if they are not product related
• This proposal has not met with much sympathy
• As the international trading system is supposed
  to meet consumer needs and demands mandatory
  labelling of production and processing can hardly
  remain taboo
• However, the need for changing the rules is not
  obvious

10
Main Non-Trade ConcernsAnimal Welfare

• Animal welfare is a concern of many people in
  Europe and elsewhere
• The EU proposes to deal with animal welfare in
  three ways
• Multilateral agreements on animal welfare
• Appropriate labelling rules
• Support to compensate for additional costs to
  meet high animal welfare standards to be covered
  by the  green box 

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How to Deal with Non-Trade Concerns?

• Four approaches are on offer
• to limit reduction of support and protection to
  meet non-trade concerns
•  green box  measures
• labelling
•  special and differerntial  treatment of
  developing countries

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How to Deal with non-Trade Concerns?

• Non-trade concerns have to be seen in the context
  of the Agreement on Agricultures longterm
  objective of substantial progressive reduction of
  support and protection
• Non-trade concerns must not thwart this objective

13
How to Deal with Non-Trade Concerns

•  Green box  measures are well suited to deal
  with non-trade concerns
• Modifications of the  green box  to meet
  non-trade concerns should not be ruled out
• Animal welfare is a good candidate if support is
  limited to covering extra costs
• Such support would hardly be more trade
  distorting than other support covered by the
   green box .

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How to Deal With Non-Trade Concerns

• The choice of meeting certain non-trade concerns
  could be left with the consumer
• To make his choice the consumer needs to be
  informed
• One way of doing it is labelling that may cover
  also production and processing methods
• Article III GATT and the TBT Agreement should not
  be an obstacle if domestic and imported products
  are being treated alike

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How to Deal with Non-Trade Concerns

• Should non-trade concerns be the privilege of
  developing countries?
• Under the Agreement on Agriculture developing
  countries have room to use domestic support to
  meet their non-trade concerns
• As they lack the financial means border
  protection could be justified to meet their
  non-trade concerns in certain cases
• This must not become a general exception from the
  commitments of the Agreement
• Poor transition economies should be treated in
  the same way

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Conclusions

• Non-trade concerns cannot and should not be
  ignored
• They should be handled with care
• Non-trade concerns must not put into jeopardy the
  achievement of substantial progressive reduction
  in support and protection
•  Green box measurs and labelling are well
  suited to meet non-trade concerns
• In principle, border protection should not be
  used to meet non-trade concerns. For developing
  countries and poor transition economies limited
  exceptions may be acceptable