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WTO members conclude landmark $1.3 trillion IT trade deal
World Trade Organisation members representing major exporters of information technology products agreed on 16 December at the WTO’s Tenth Ministerial Conference, in Nairobi, on the timetable for implementing a landmark deal to eliminate tariffs on 201 IT products valued at over $1.3 trillion per year.
Negotiations were conducted by 53 WTO members, including both developed and developing countries, which account for approximately 90 per cent of world trade in these products. However, all 162 WTO members will benefit from the agreement, as they will all enjoy duty-free market access to the markets of the members eliminating tariffs on these products. The list of 201 products was originally agreed by the ITA participants in July 2015.
“I am delighted to mark this breakthrough here today at the Ministerial Conference,” said WTO Director General Roberto Azevêdo. “This is a very significant achievement. Annual trade in these 201 products is valued at $1.3 trillion per year, and accounts for approximately 10% of total global trade. Eliminating tariffs on trade of this magnitude will have a huge impact. It will support lower prices – including in many other sectors that use IT products as inputs – it will create jobs and it will help to boost GDP growth around the world”.
This breakthrough follows months of intensive negotiations among the ITA participants. Their review of “draft schedules” involved a process whereby each of them indicated over what timeframe and how they intended to implement the elimination of duties on these products.
For every product on the list, ITA participants have negotiated the level of reductions and over how many years it will fully eliminate the tariffs. As a result of these negotiations, approximately 65% of tariff lines will be fully eliminated by 1 July 2016. Most of the remaining tariff lines will be completely phased out in four stages over three years. This means that by 2019 almost all imports of the relevant products will be duty free.
The WTO Director General said: “This agreement is the first major tariff-cutting deal at the WTO since 1996 – and it comes fast on the heels of the historic Bali Package. We now have two deals in two years which deliver real, economically significant results. I hope that this success will serve to inspire progress elsewhere in our work.”
Among the products covered in this agreement are new-generation semi-conductors, GPS navigation systems, medical products which include magnetic resonance imaging machines, machine tools for manufacturing printed circuits, telecommunications satellites and touch screens.
The agreement also contains a commitment to work to tackle non-tariff barriers in the IT sector, and to keep the list of products covered under review to determine whether further expansion may be needed to reflect future technological developments.
The agreement is an expansion of the 1996 Information Technology Agreement which involves 82 members. In 2012, members recognized that technological innovation had advanced to such an extent that many new categories of IT products were not covered by the existing agreement. Negotiations began in 2012 to expand the coverage of the accord.
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African countries export just 0.3 per cent of world’s high-tech products
UNCTAD’s Technology and Innovation Report 2015 says more can be done to make innovation policy in Africa work for development
Although developing countries as a whole accounted for 52 per cent of global exports of high technology products in 2014 – an 18 percentage point rise since 2000 – African countries are lagging behind, representing just 0.3 per cent of this total, the UNCTAD Technology and Innovation Report 2015 has found. The report, subtitled Fostering Innovation Policies for Industrial Development, examines how Africa’s Governments can better implement science, technology and innovation policies, and coordinate them with industrial policies and industrial development plans.
The report found that, mainly because of difficulties in coordinating those two policy frameworks, even African countries that spend more on research and development as a proportion of gross domestic product (GDP) do not manage to export more high- and medium-technology products.
To shed light on this picture, the report provides in depth analyses of industrial and science, technology and innovation policies in Ethiopia, Nigeria and the United Republic of Tanzania, along with regional trends and initiatives in policies in other African countries. The report shows that patterns of policy conceptualization, design, planning and implementation are critical to the success of companies and hold the key to making technology work for business.
According to UNCTAD, recent studies have shown that it is not enough to just have a policy emphasis on technology-led growth. Instead, the success of policies depends on how policy processes work to facilitate collaboration and cooperation between policy agencies, companies, businesses and research. Moreover, policymakers need to formulate industrial policies not as a standalone framework but in coherence with other policies, for example innovation policy.
As subjects of the study, the Ethiopia, Nigeria and the United Republic of Tanzania were chosen for their differing economic profiles: while Nigeria is an oil-rich developing country, Ethiopia is a least developed country with a resource-concentration in agriculture, mainly coffee. These countries are juxtaposed with the United Republic of Tanzania, which has a mix of resource-based activities and other sectors. Thus, each country serves to illustrate a developmental challenge in the realm of coordination of industrial and innovation policies for developmental outcomes.
Each country also has national vision documents, new industrial development strategies and science, technology and innovation policies that embody the aspiration of their Governments to transform the nations into middle-income economies within the next two to three decades.
In addition, all three countries had relatively impressive GDP growth rates over the past decade, if not longer, and increased research and development expenditure as a percentage of GDP in the 2000s. Despite this, they have faced difficulties in focusing those investments into greater technological learning, particularly in firms, as demonstrated by the lack of medium- and higher-technology products in their exports.
Almost all countries in Africa, including the three countries that were studied, and more generally in the developing world, are currently at a developmental stage where industrial development through technological change should be a central, if not the most important, priority. Not only is there a policy transition in that direction, the field surveys showed the extensive degree of political commitment to enacting elaborate industrial policy frameworks and revising science, technology and innovation policies towards innovation.
Notably, the report finds that there are overlaps between industrial and innovation policies. While industrial policy aims at facilitating structural transformation by promoting certain economic activities, sectors and technologies with development potential, innovation policy aims at promoting technological learning and adaptation. Industrial policy has an extensive framework that also includes aspects of innovation policy, as structural transformations are possible when they facilitate capabilities for knowledge accumulation and transfer within and across firms and sectors. These two policies often use similar incentives and instruments.
The report highlights six points on innovation and industrial development that are highly relevant for African countries:
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Innovation policies are quite new to African countries and thus often not well implemented
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Innovation systems in African suffer from many shortcomings, many of which inhibit their effectiveness
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Industrial policies in many African countries followed in the past did not have much emphasis on promoting technological learning
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Even if industrial development policies had a technological change focus they were not properly coordinated with science, technology and innovation policies
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Most firms, which are family-owned and operate on a small scale, often face financial constraints and capacity problems in acquiring new technologies; moreover, lack of skilled human resources, “brain drain” effects and governance problems in technology transfer hinder innovation in these economies
To stimulate sustainable industrial development in the region, firms need a more coherent policy environment.
The report also finds that existing policies do not always correspond to the reality of the situation on the ground. The private sector in the African region (particularly in sub-Saharan Africa) is in dire need of greater support and, therefore, taking on board on-the-ground realities of businesses is critical, the report argues. Policymakers in developing countries need to establish an inclusive policy process that assembles stakeholders from different sectors of the economy, including ministries, public sector institutions, private sector companies, universities and research institutes. This would allow incentives for local firms, such as research and development grants and loans, tax credits and governmental procurement, to be relevant to local needs and effective as incentive tools.
UNCTAD’s Technology and Innovation Report 2015: It can be done
Despite identifying significant science, technology and innovation policy gaps in Africa, the report found positive examples of collaboration which support its recommendations.
In the United Republic of Tanzania, for example, there is a family-owned company that began producing 200 kilograms per year of dried fruits and vegetables, such as dried mango, pineapple and banana. With the coordinated assistance of various partners, though, it has expanded annual output to 5–7 tons. Relying on cost-efficient sun-drying methods since it began trading in 2002, the firm developed its drying facility in phases. First, the company received support in the form of machinery and know-how from a German partner; then the Department of Chemical and Process Engineering of the University of Dar-es-Salaam and the Tanzania Traditional Energy Development Organization offered their expertise. The firm has also received support from the Government of the Plurinational State of Bolivia. Later expansion plans include the installation of an electric dryer.
The report also underscores a positive case in Ethiopia, with respect to institution-building, where the Food, Beverages and Pharmaceuticals Industry Development Institute was recently founded by the Ministry of Industry. The institute acts as a one-stop shop to assist the food processing and the pharmaceuticals sectors, and it has proved critical to boosting the capacity of the two sectors, particularly when it comes to upgrading production facilities. It also provides research, laboratory and testing services. The initiative is a first of its kind in Ethiopia, and its future success will largely depend on infrastructure and manpower. When the report was being written, the agency was limited by funding and weaknesses in human skills and infrastructure that policymakers have acknowledged and which were expected to be addressed soon.
Distribution of world exports, by technology intensity and development status in 2000 and 2014
(Percentage)
Source: UNCTAD.
Note: The 2014 figures are estimates.
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New ILO figures show 150 million migrants in the global workforce
A new ILO statistical study provides estimates on labour migration, including regions and industries where international migrant workers are established and a special focus on migrants in domestic work.
Migrant workers account for 150.3 million of the world’s approximately 232 million international migrants, according to a new study by the International Labour Organization (ILO).
The report, ILO Global Estimates on Migrant Workers, shows migrant workers account for 72.7 per cent of the 206.6 million working age migrant population (15 years and over). The majority – 83.7 million – are men, with 66.6 million women migrant workers.
Commenting on the report, ILO Director-General Guy Ryder said: “This analysis represents a significant contribution by the ILO in supporting member States to deliver the 2030 Agenda for Sustainable Development, particularly in respect to targets within Goal 8 on protecting all workers, including migrant workers, and goal 10 on the implementation of well managed migration policies. Decision makers will now have real data on which to base their policies.”
Labour migration is a phenomenon that concerns all regions of the world, however almost half (48.5 per cent) of migrant workers are concentrated in two broad regions: Northern America, and Northern, Southern and Western Europe. The Arab States have the highest proportion of migrant workers as a share of all workers with 35.6 per cent.
The study also examines the distribution of the migrant workforce in broad industry groupings. The vast majority of migrant workers are in the services sectors, with 106.8 million workers accounting for 71.1 per cent of the total, followed by industry, including manufacturing and construction, with 26.7 million (17.8 per cent) and agriculture with 16.7 million (11.1 per cent). Among all migrant workers, 7.7 per cent are domestic workers.
“This estimate study shows that the vast majority of migrants migrate in search of better job opportunities. By applying a robust methodology we believe it will add significantly to our knowledge base on migration and provide a strong foundation for the development of effective migration policies,” said Manuela Tomei, Director of the ILO’s Conditions of Work and Equality Department (WORKQUALITY).
High migrant workers labour force participation rates
In general, migrants are more likely to be in the workforce than their national counterparts. These higher labour force participation rates are essentially associated with the higher proportion of migrant women in the workforce.
What is the likelihood of migrant men and women to be in the labour force?
The data used to calculate estimates in the report refer to migrant workers in the country of destination and measure the migrant numbers in 2013. Data from 176 countries and territories representing 99.8 per cent of the world working age population (15 years old and over) have been included in the study.
Where are migrants more likely to be in the labour force than non-migrants?
A special focus on migrant domestic workers
The report also highlights the significant global numbers of migrant domestic workers and the marked gender disparities in this sector.
Domestic work is one of the least regulated sectors of the economy and, as such, is of particular concern to the ILO. Due to the concentration of migrant women workers and relatively low visibility of the workforce in this sector multiple forms of discrimination often intersect.
Of the estimated 67.1 million domestic workers in the world, 11.5 million, or 17.2 per cent are international migrants. About 73.4 per cent (or around 8.5 million) of all migrant domestic workers are women. South-Eastern Asia and the Pacific host the largest share, with 24.0 per cent of the global number of female migrant domestic workers, followed by Northern, Southern and Western Europe, with 22.1 per cent of the total, and the Arab States with 19.0.
With the aging of societies and other demographic and socioeconomic changes, migrant domestic workers are likely to continue moving internationally in great numbers to fill in care and household services’ needs.
“In many ways the migration issue is centre stage in the 2030 Development Agenda for Sustainable Development. Migrants need work but it’s equally certain that in coming years many destination economies will need new workers. The world will need more and better data and indicators to track these flows and this report sets a new standard in the quest to have sound global figures to guide policy makers,” concluded Rafael Diez de Medina, Director of the ILO Department of Statistics.
The report comes as the ILO marks the 40th anniversary of Convention 143, the Convention concerning Migrations in Abusive Conditions and the Promotion of Equality of Opportunity and Treatment of Migrant Workers adopted by the International Labour Conference of 1975.
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Operationalizing green growth in Mozambique: AfDB report highlights recommendations for action
The African Development Bank has launched the report, “Transition towards Green Growth in Mozambique: Policy review and recommendations for action,” which summarizes the development process of the Green Economy Action Plan (GEAP) prepared to operationalize the ambitious goals of the country’s Green Economy Roadmap – a plan that outlines the country’s path to become an inclusive middle income country by 2030 through sustainable infrastructure, efficient and sustainable use of natural resources, and the strengthening of resilience and adaptive capacity to socio-economic shocks and climate variability.
The Republic of Mozambique has grown at an impressive average rate of 7.2 percent during the last decade, driven by foreign direct investment, agricultural growth and infrastructure investment. To the detriment of the more than half the population living below the poverty line however, the country has a poor record of transforming fast economic growth, driven by capital-intensive mega projects, into sustained poverty reduction.
In an effort to reverse this trend, the Government of Mozambique, in conjunction with the AfDB and the World Wildlife Fund (WWF), launched the country’s Green Economy Roadmap in Brazil on the sidelines of the RIO+20 conference in June 2012. The report highlights the necessity of cross-ministerial cooperation, comprehensive analytical review, and most of all, pragmatic priority setting. The GEAP was a key document in the design of the new medium-term governmental program, Plano Quinquenal de Governo 2015-2019, and the Government’s nascent national Natural Capital Programme, which aims to integrate the value of natural capital in national planning and investment decisions.
On September 26, 2015, during the UN Sustainable Development Summit in New York, Mozambique’s Minister of Land, Environment and Rural Development met with AfDB Vice-President Aly Abou-Sabaa, and the President of WWF International to consider how to support implementation of the Natural Capital Programme through 2019. The parties agreed to formalize collaboration arrangements in early 2016.
Speaking about the report, AfDB Resident Representative in Mozambique Joseph M. Ribeiro said the report will serve in the design and prioritization of investments efforts both for in public and private sectors. He further highlighted also that “as one of the first countries on the continent to engage in a major effort to incorporate green growth principles into the country’s national policy planning, Mozambique’s experience will be relevant to other development practitioners, policy makers and experts interested in green growth both in and outside the AfDB. This report shares the country’s experience and valuable lessons which may be applied elsewhere on the continent.”
The GEAP marked the Bank’s first official engagement in green growth, which is a key part of the Bank’s Strategy 2013-2022. Although challenges lie ahead for implementation, the GEAP refers to a growing body of evidence from leading international institutions indicating that there are opportunities inherent to the green economy model, such as job creation, new business sectors, equitable benefits, public security and sustainability of resource.
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Ministerial Meeting of the Group of Landlocked Developing Countries: Nairobi, December 2015
Ministerial Communiqué
We, the Ministers of Landlocked Developing Countries (LLDCs), having met on 16th December 2015 in Nairobi, Kenya, during the 10h Ministerial Conference of the World Trade Organization, reiterate the strong commitment of the Group of LLDCs to the Multilateral Trading System, especially on the framework of the negotiations of the Doha Development Agenda,
Recalling the Asuncion Platform for the Doha Development Round, adopted at the Meeting of Ministers of Landlocked Developing Countries Responsible for Trade on 10 August 2005 in Asuncion, Paraguay which articulates the common position of the Landlocked Developing countries for the ongoing negotiations of the Doha Development Round,
Recalling the Ministerial Meeting of the Group of LLDCs at the margin of the 9th Ministerial Conference of the WTO held in Bali, Indonesia, on 6 December 2013, in which LLDC’s Ministers adopted a Ministerial Communiqué that raised outstanding issues concerning the participation of LLDCs in the multilateral trading system.
Recalling the Vienna Programme of Action for Landlocked Developing Countries for the Decade 2014-2024, adopted in December 2014, which provides a comprehensive plan of action for the next decade to address the special challenges and needs of landlocked developing countries. We affirm our political commitment to implement this programme for sustainable development of our countries, with the support of development partners and transit countries, in the spirit of partnership and solidarity.
Recalling the meeting of Heads of State and Government and High Representatives of the 32 Landlocked Developing Countries, held in New York, on 28 September 2015, under the theme: “Linking Landlocked Developing Countries to Global Opportunities”, during the 70th Session of the United Nations General Assembly, and following the adoption of the 2030 Agenda for Sustainable Development at the 2015 United Nations Summit on the post-2015 development agenda.
Have adopted the following Ministerial Communiqué:
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We call upon the WTO membership to strengthen the negotiation function of WTO and to reinvigorate work towards a successful conclusion of the Doha Development Round, with meaningful outcomes for developing countries and least developing countries. We insist that the post Nairobi scheme should be ambitious and development-centered.
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In the celebration of the 20th anniversary of the World Trade Organization (WTO), we reaffirm our commitment to the Multilateral Trading System. International trade can play a major role in the promotion of economic development and the alleviation of poverty, especially through increasing market access and diminishing trade distortive measures.
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In view of the continued hardships in international trade suffered by the landlocked developing countries, we stress the importance to have a specific Work Programme for LLDCs by the 11th Ministerial Conference. This Work Programme will address the special needs, challenges and vulnerabilities of LLDCs in order to increase their participation in the Multilateral Trading System. Key areas of work could be Trade Facilitation, Aid for Trade, Services, and Accession.
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We call upon for a rapid ratification and implementation of the Trade Facilitation Agreement. We urge members to continue to provide technical, financial and capacity building assistance to LLDCs, on a sustainable basis, for the effective implementation of the future Agreement. We also call upon the constructive cooperation of transit countries for the effective and early application of disciplines that contribute to reducing transit time and costs, simplifying procedures and enhancing certainty in trans-border trade.
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We emphasize the critical importance of Agriculture to the LLDCs economies. In this context, we attach importance to the continuation of the reform process in order to promote market access; reduction of distortive domestic support measures, especially in developed countries; the total elimination of all forms of export subsidies; and the promotion of fair rules for the cotton-sector will constitute an important tool for the promotion of economic activities and food security in developing countries.
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We reiterate our request that development assistance provided in the context of the Aid for Trade initiative should consider the special needs and requirements of LLDCs. In that sense, we consider that future Aid for Trade work programmes should take into consideration the areas already targeted by the Vienna Programme of Action, emphasizing, among others, fundamental transit policy issues, infrastructure development and maintenance, and Regional Integration.
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We stress the importance of ensuring close cooperation in the fundamental trade and transit issues between the LLDCs and the transit countries in line with the provisions of the WTO Agreements, including the Trade Facilitation Agreement.
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We call for enhanced partnerships between the LLDCs and the transit countries, in cooperation with UN Agencies, international and regional financial organizations as well as the private and innovative finance mechanisms wherever appropriate, in matters related to raising the trade efficiency of LLDCs through construction and improvement of multi-modal transport connectivity.
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We reiterate the necessity to mainstream the Vienna Programme of Action in the international, regional and national planning processes by ensuring adequate means commensurate with the development needs of the LLDCs.
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We reiterate that the principle of Special and Differential (S&D) treatment represents one of the cornerstones of the WTO Agreements. We believe that the reaffirmation of this principle should be an integral part of any package and of the work of the organization. Therefore, we call for the strengthening of the provisions that implement the principle in order to make it more precise, effective and operational.
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We also urge Members to take into account the special needs and problems caused by the geographical disadvantage of being landlocked that during the accession process of LLDCs to the WTO. As such, the accession process for LLDCs should be further simplified and these countries should be provided with adequate technical and financial assistance.
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We recognize the significant contribution to the strengthening of the multilateral trading system of the LLDCs that acceded under Article XII of the Marrakesh Agreement Establishing the WTO. For a balanced outcome of trade liberalization negotiations, we stress the need to take into account the extensive commitments undertaken by the Article XII Members upon their accession to the WTO.
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We welcome the recent accession of Kazakhstan to the WTO, which will be participating in the MC10 as a Member for the first time, as well as the completion of WTO accession negotiations of Afghanistan.
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We call on and encourage all LLDCs to ratify the Multilateral Agreement for the Establishment of an International Think Tank for Landlocked Developing Countries, in order to bring it into full operation for the benefit of all LLDC members.
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We express our sincere appreciation to the government of Kenya and its people for their warm hospitality and for hosting the 10th WTO Ministerial Conference in Nairobi successfully.
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UN GA Second Committee unanimously approves 18 Resolutions: Sustainable development, poverty eradication at centre of agreed texts
Concluding its work for the main part of the General Assembly’s seventieth session on 14 December 2015, the Second Committee (Economic and Financial) unanimously approved 18 draft resolutions on topics ranging from international financial systems to women in development and beyond.
Keeping in theme with the newly adopted 2030 Agenda for Sustainable Development, many of the texts underscored the importance of eradicating poverty and taking into account economic, social and environmental considerations in their implementation.
Along those lines, the Committee approved a draft resolution titled, “International financial system and development”, by which it would have the Assembly emphasize that that system should bolster sustained, inclusive and equitable economic growth, sustainable development and job creation. Also by its terms, the Assembly would reiterate the need to act decisively to tackle the challenges confronting the global economy in order to ensure balanced, sustained, inclusive and equitable global growth.
A draft resolution, titled, “International trade and development”, was among those approved texts that referenced the 2030 Agenda and the Addis Ababa Action Agenda of the Third International Conference on Financing for Development. By its terms, the Assembly would reaffirm the commitments made through the adoption of the Addis Ababa outcome in international trade as an important action area for sustainable development.
Delivering a statement that would be repeated several times throughout the morning session, the representative of Canada, also speaking on behalf of Australia and the United States, expressed concern that that resolution had been submitted past the Committee’s deadline. The delays had resulted in a shorter schedule with insufficient time to consult with capitals. Therefore, the three countries had decided not to engage in negotiations on the text.
By the terms of a draft resolution titled, “Financial inclusion for sustainable development”, the Assembly would decide to give consideration to financial inclusion in the follow-up and review framework of the 2030 Agenda and in the follow-up process of the Addis Ababa Action Agenda.
Also approved was a draft resolution titled, “Women in development”, by which the Assembly would recognize the mutually reinforcing links between gender equality and the empowerment of all women and girls and poverty eradication. It would further emphasize the need to connect policies on economic, social and environmental development to ensure that all people – in particular women and children living in poverty and in vulnerable situations – benefitted from inclusive economic growth and development.
The representative of Rwanda expressed support for the text, saying it was the only resolution before the Committee which made the link between women and development.
Other texts approved on Monday touched on issues such as external debt, science and technology, disaster risk reduction and harmony with nature, among others.
In concluding remarks, several delegates underscored the Committee’s vital role in supporting the implementation of the 2030 Agenda, which would make a “huge impact” in bridging global economic disparities and inequalities. In that vein, the representative of Maldives, speaking on behalf of the Alliance of Small Island Developing States, said that, following a “triumphant year for multilateralism”, the next step – implementation – would be the hardest.
A discussion also emerged about the Committee’s agenda and working methods, which would be reviewed in 2016. In that connection, Liechtenstein’s representative, who also spoke on behalf of New Zealand, said the Committee’s work this session had been “highly problematic” due to a lack of respect for deadlines and a lack of transparency in proceedings. She hoped the Committee would continue to reflect the universal nature of the General Assembly and not turn into a “platform for exchange among major groups only”.
Committee Chair Angrej Logar (Slovenia) said that, in the years to come, the body should continue to contribute to the implementation of the newly adopted development agenda. The Committee must continue to review its working methods, he said, announcing that it would commence informal consultations on those and other matters in January 2016.
Also speaking as action was taken on the draft texts were the representatives of the United States, Bolivia, Australia, Turkey, Azerbaijan, Colombia and the European Union.
Also delivering closing statements were the delegates of South Africa (on behalf of the “Group of 77” developing countries and China), Japan (also speaking on behalf of Australia, United States, Canada and Mexico), Venezuela, Russian Federation and Bangladesh (on behalf of the Group of Least Developed Countries).
Thomas Gaas, Assistant Secretary-General for Policy Coordination and Inter-Agency Affairs, also made a statement.
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World Bank publishes 2016 edition of International Debt Statistics
The 2016 edition of International Debt Statistics was published on 16 December 2015, and provides comprehensive data on the debt of low- and middle-income countries, and quarterly external and public sector debt statistics for high income economies.
The International Debt Statistics 2016 provides users with comprehensive stock and flow data on the external debt of individual low- and middle-income countries and for regional and analytical groupings and data on aggregate net capital flows (debt and equity) in 2014. In addition, International Debt Statistics (IDS) showcases other debt data collected and compiled by the World Bank. These include the high-frequency, quarterly data for high-income and low- and middle-income countries reported to the joint World Bank-International Monetary Fund (IMF) Quarterly External Debt Statistics (QEDS) and to the Public Sector Debt (PSD).
The main messages from the 2014 data are:
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Net debt flows to low- and middle-income countries were $464 billion in 2014, a decrease of 18 percent from the comparable figure for 2013. The decline was driven down by a precipitous fall in net short-term debt flows that fell 60 percent to $72 billion ($188 billion in 2013).
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Net equity inflows, $668 billion, were 7 percent higher than the 2013 level propelled by a 4 percent increase in net foreign direct investment and robust portfolio equity flows, which were up 29 percent. Aggregate net financial flows totaled $1,132 billion, 5 percent lower than 2013, but stable when measured relative to low- and middle-income countries’ gross national income (GNI) at 5 percent.
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External debt burdens in low- and middle-income countries remained moderate. The ratio of external debt to GNI averaged 22 percent in 2014, and the ratio of external debt to exports averaged 79 percent. International reserves stood at 114 percent of external debt stocks.
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Countries reporting to the QEDS and PSD confirm that external debt levels in high-income countries are, on average, much higher than those of low- and middle-income countries, but that government debt-to-GDP ratios moderated in 2014.
Highlights: Sub-Saharan Africa
Net debt inflows offset the decline in net equity flows
Net financial flows to Sub-Saharan Africa rose 10 percent in 2014, to $78 billion, with a 20 percent drop in net equity flows, more than offset by a 48 percent rise in net debt flows. The decline in net equity flows was driven in large measure by the $3.9 billion outflow of foreign direct investment from Angola and much lower net inflows of portfolio equity to Nigeria. Net debt inflows rose to $47 billion ($31 billion in 2013) of which 64 percent were accounted for by private creditors. Around 26 percent of net debt flows to the region went to South Africa: its share of comparable debt flows in 2013 was 11 percent. Net financial inflows to the region, excluding South Africa, fell 3 percent in 2014 with a 23 percent rise in net debt inflows, to $34 billion ($28 billion in 2013), not enough to offset the 23 percent drop in net equity flows.
Long-term debt inflows rise 34 percent with private creditors dominant
External borrowing by countries in the region, excluding South Africa, has risen rapidly and been marked by a distinct change in borrowing patterns and creditor composition. Disbursements of long-term debt increased 34 percent in 2014 (to $54 billion), triple the comparable figures for other low- and middle-income countries, with private creditors accounting for 60 percent (50 percent in 2013). Disbursements from private creditors have also become more diversified. In 2010, all long-term private debt was attributable to banks and other private creditors, whereas in 2014, 27 percent was accounted for by bond issuance. Borrowing patterns have also changed with disbursements from private creditors now going primarily to nonguaranteed private-sector borrowers. Disbursements from official creditors (excluding the IMF) rose 30 percent between 2010 and 2013. The momentum continued in 2014 when they rose a further 8 percent to $21.5 billion. This increase was largely attributable to a 14 percent rise in disbursements by multilateral creditors, notably those from the World Bank. Disbursements from IDA, $5 billion in 2014, were unchanged from their 2013 level, but IDA remained by far the single largest multilateral creditor. China was again the continent’s most important bilateral creditor.
Bond issuance booms
Historically, bond issuance in Sub-Saharan Africa was confined to South Africa, but following Ghana’s debut issue in 2007, sovereign bond issuance by countries in the region, including those that benefited from HIPC and MDRI debt relief, has been a rapidly rising phenomenon. Benign global market conditions and the investor desire for higher returns have facilitated access to international capital markets. Sovereign borrowers, excluding South Africa, issued $6 billion in 2014, equivalent to 29 percent of disbursements from official creditors and 25 percent of foreign direct investment inflows. The debut sovereign bonds issued by Ethiopia ($1 billion) and Kenya ($2 billion) were massively over-subscribed, and the same applied for countries returning to the market, such as Ghana and Zambia. Proceeds of sovereign bonds are used to benchmark for future government and corporate bond markets issues, to manage the public debt portfolio, and for infrastructure financing. In Ethiopia, the 10-year, 6.625 percent Eurobond issued in December, 2014, is earmarked for development of sugarcane plantations, a hydropower dam, and amelioration and extension of the railway network.
International Debt Statistics 2016 and detailed debt statistics can be viewed, visualized, and downloaded here: http://datatopics.worldbank.org/debt/ids.
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President Kenyatta hails approval by ministers of Liberia’s WTO membership
President Kenyatta welcomed the formal approval by ministers of Liberia’s WTO membership terms at a special ceremony on 16 December held at the WTO’s Tenth Ministerial Conference in Nairobi. Liberia’s President, Ellen Johnson Sirleaf, said the country’s “accession to the WTO marks another turning point in our history” and an important step towards meeting Liberia’s “aspirations for the growth and development of our people”.
Trade ministers unanimously welcomed Liberia’s WTO membership deal, which was approved at a ceremony attended by Kenya’s President, Uhuru Kenyatta, Liberia’s President, Ellen Johnson Sirleaf, and Director-General Roberto Azevêdo. Ministers commended President Sirleaf for the considerable progress Liberia has made as a least-developed country (LDC) and for its significant achievement in completing its WTO accession process. Following ratification of the membership deal, Liberia would become the 35th LDC WTO member and the eighth LDC to accede to the WTO since 1995. LDCs represent a fifth of the WTO membership.
The Protocol of Accession was officially signed by DG Azevêdo and President Sirleaf at the end of the ceremony.
Liberia will have until 15 June 2016 to ratify the membership deal and would become a full-fledged WTO member 30 days after it notifies the acceptance of its Protocol of Accession to the WTO Director-General.
Kenya’s President Kenyatta congratulated Liberia for this achievement. He said: “I am pleased that this decision was taken here in Nairobi, on African soil, at the WTO’s Tenth Ministerial Conference. Without a doubt, WTO membership carries considerable gains and benefits. Liberia’s Accession Package provides a platform for continuing domestic reforms and should inspire other African countries in their domestic measures.”
President Sirleaf said: “Liberia’s accession to the WTO marks another turning point in our history, particularly in our journey of economic transformation for inclusive growth. Our transformation can neither be done alone, nor in isolation, but by forging partnerships. We appreciate the collective efforts of our partners who have made this accession a resounding success. We fully subscribe to the African common position on strengthening the rules-based multilateral trading system to create the Africa that we want.”
In his welcoming speech, DG Azevêdo paid tribute to the “engagement and leadership” of the President of Liberia. “It is particularly appropriate that, at this first Ministerial Conference in Africa, we are welcoming a new African member,” he said. “I hope that this achievement here today will help Liberia to continue on the path of hope, progress and development. WTO membership can have a big impact. It announces to the world that you are open for business. I think that this is an historic day for Liberia. It takes many pairs of hands to build a vibrant multilateral trading system. I am sure that Liberia’s contribution will help to strengthen the system for the benefit of all.” His full speech is here.
Ambassador Joakim Reiter (Sweden), Working Party Chairperson for the Accession of Liberia, paid tribute to WTO members and to the Government of Liberia for “having reached a high quality Accession Package, especially as Liberia is an LDC. Liberia is far advanced in implementing WTO-consistent legislation. Its WTO membership will contribute to strengthening the rules-based multilateral system and will provide a long-term basis for sustained legislative reforms.”
Liberia applied for WTO membership in 2007 and members of the Working Party concluded the negotiations on 6 October 2015.
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tralac’s Daily News selection: 16 December 2015
The selection: Wednesday, 16 December
MC10 updates: WTO's 'Latest News' feature, Bridges Daily Update 2
Experts ponder CFTA's human rights impacts (UNECA)
A side-event titled 'A human rights perspective on the CFTA' was co-organised by the African Trade Policy Centre of the Economic Commission for Africa and the Friedrich-Ebert-Stiftung on the margins of the WTO Tenth Ministerial Conference. The event addressed the questions of transparency and participation that participants agreed, are the key human rights principles and generally also good rules of thumb that can transform a trade negotiation from “a secret, exclusive process to an open, inclusive one that is acceptable to a wide range of stakeholders.” By early 2016, a first scoping study of the assessment will be published. At this side-event, some of the study’s analyses and recommendations were presented to the public for the first time.
Cairns Group: ministerial statement (WTO)
Extract: We express our strong disappointment that, despite continued efforts by Members and by the Cairns Group in particular, it has not been possible to achieve convergence around outcomes in the areas of agricultural market access and agricultural domestic support ahead of MC10. We stress the fundamental need to address these major unresolved issues as a priority post-Nairobi, in the interests of all Members. We affirm our willingness to continue working with all WTO Members to explore any and all constructive, practical and pragmatic negotiating approaches to find solutions to these issues. We affirm the Cairns Group's willingness and capacity to play a leading role in this. We note that protectionist pressures continue to pose a threat to our shared objective of fair and market-oriented agricultural trade, and call on all WTO Members to put this goal foremost in future negotiations, as well as the ongoing need to ensure compliance with current rules in WTO.
Group of Small, Vulnerable Economies: statement
Extract: Call for the priorities of SVEs to be duly addressed in all areas of the negotiations and regular work. Reaffirm the need for special consideration and targeted assistance to be given to SVEs, inter alia, in the areas of Aid for Trade, Trade and Transfer of Technology; Trade Facilitation, Trade Finance and Development Assistance which are priorities for special consideration by the WTO and anticipate the appropriate attention to be paid to these issues in the on-going work of the WTO.
African Group, China, Ecuador, India and Venezuela: statement
Extract: Further we recognize that a comprehensive conclusion of the DDA with economically meaningful and balanced outcomes will provide impetus to global trade liberalization and facilitation, correct the development deficit in the rules resulting from the previous rounds of multilateral trade negotiations and improve the trading prospects of developing Members, and enhance the primary role of the WTO in global trade governance. We need to redouble our efforts to enable us to proceed towards the full, successful and multilateral conclusion of the negotiations pursuant to paragraphs 45, 47 and 48 of the Doha Ministerial Declaration in fulfilment of the commitments we took at Doha.
India, 46 others issue joint ministerial statement for continuation of Doha round (The Hindu)
WTO members urged to crown successful year of multilateral diplomacy with Nairobi deal(WTO)
WTO: China to blame for delayed tariffs deal on IT products (The East African)
Poor countries urged to look elsewhere for food security deal (Business Daily)
WTO talks agenda favours rich nations, protesting South Korean farmers say (Daily Nation)
ITC, EAC launch new project to boost African Trade (EAC)
Specifically the project aims to boost the competitiveness of EAC-based small and medium-sized enterprises, enabling them to step up intra-and inter-regional trade. The project will have a strong focus on women’s economic empowerment, and will also support wider private-sector development in the EAC to spur deeper economic integration, including in agriculture, information and communication technologies, and tourism. “Regional integration led by the private sector is a powerful vehicle for boosting growth, creating jobs and promoting economic development”, Ms González said. “Enabling the private sector and policymakers to take advantage of trade opportunities is at the heart of what ITC does. We are looking forward to doing this in collaboration with the EAC, and to ensuring sustainable growth for East African countries and their SMEs”.
Kenya registers Sh2b drop in exports to Uganda (Daily Nation)
The value of exports to the East African country touched a record high in July at Sh9.45 billion. Analysts have attributed the drop in trade between Kenya and Uganda to the implementation of the single customs territory (SCT) that has made it possible for Uganda to make direct imports, and geopolitics that has restricted entry of some Kenyan goods to the neighbouring market. [For the data see Table 13(a): major destinations of domestic exports, in, Leading Economic Indicators October 2015]
South Sudan devalues currency by 84% as dollar peg abandoned (Bloomberg)
India: Merchandise exports fall for 12th straight month in November (Livemint)
Indian exports fell by 24.4% in November, dropping to $20bn mainly on account of a sharp fall in shipments of petroleum products, engineering products, gems and jewellery and oil meals. Exports had contracted by 17.5% the previous month. Imports also fell sharply by 30% in November to $29.7bn, led by a fall in both oil and non-oil imports. Almost all categories of imported items, excluding pulses, fruits and vegetables and electronic goods, saw a contraction in November. [Ministry of Commerce statement]
Facilitating the participation of Landlocked Developing Countries in commodity value chains (UNCTAD)
Primary commodities accounted for more than half of the exports of 27 out of 32 LLDCs in 2011–2013, and resource-based goods, that is to say, primary goods and resource-based manufactures, accounted for some three quarters of all exports of goods and services of LLDCs as a group. During the same period, the median share of exports represented by primary commodities among those countries stood at 84.7%. From 1995 to 1997, the same figure was 83.2 per cent. Hence, over time, the degree and extent of commodity dependence has increased in those countries with little or no sign of diversification of exports. Further, they seem to be more commodity dependent than transit developing countries and other developing countries: the median share in 2011–2014 among transit countries was 76.7%, compared with 66.2% among other developing countries. The question is, to what extent does the state of being landlocked keep LLDCs in the production and export of primary commodities?
Global private participation in infrastructure: update (World Bank)
Total private infrastructure investments for the energy, transport, and water sectors in 139 emerging economies dropped by more than half, from $53 billion in first six months of 2014 to $25 billion in the first six months of 2015, mainly due to a decline in the number of projects in Brazil, China, and India. Investments in other countries remained steady. The top countries by private investment totals were South Africa, Colombia, Mexico, Chile, and Brazil. These five countries together attracted $11.9 billion, representing 47 percent of global commitments in the developing world in the first half of 2015. Regionally, Latin America and the Caribbean region continued to lead, followed by Sub-Saharan Africa, Europe and Central Asia, East Asia and Pacific, South Asia, and the Middle East and North Africa.
Sub-Saharan Africa: Sub-Saharan Africa jumped from last place to second place as the region successfully closed on US$4.1 billion in 17 projects, for 16% of the global total. Investment was driven mainly by South Africa’s REIPPP, which had 16 of the region’s 17 projects. Half the deals were solar projects totaling US$2.4 billion. The largest deal was the US$900 million Xina Solar One CSP in the Northern Cape Province, designed to power 90,000 households with clean energy. The only non-South African project was Senegal’s 54MW Cap des Biches heavy fuel oil-fired combined-cycle thermal power generation facility. The US$134 million BOO greenfield deal was sponsored by ContourGlobal, which signed a 20-year power purchase agreement with the with Senegalese national utility company, Société Nationale d’Electricité du Sénégal (SENELEC). The top five deals in Sub-Saharan Africa are all in South Africa. [Download]
Djibouti: Article IV Consultation (IMF)
The government of Djibouti has launched an ambitious debt-financed investment program that would spur economic growth but also exacerbate fiscal and external debt vulnerabilities when there is already a high risk of debt distress. The authorities consider that this program is the only path towards reducing widespread poverty and unemployment; Djibouti remains critically dependent on port services and lacks natural resources and a viable agricultural sector. They concur with staff that strong growth and fiscal reform are essential to generate the substantial revenues required to service the public debt and realize the benefits of their investment plans.
Missing the boat?: the cost of postponing the Lomé maritime summit (ISS)
The Lomé summit was supposed to provide a progress update on implementing regional measures to combat illicit activities at sea, with a focus on the 2009 Djibouti and 2013 Yaoundé codes of conduct, adopted primarily to tackle piracy along the Somali coast and in the Gulf of Guinea. West and Central African heads of state had agreed that the Yaoundé code of conduct would be binding as of June 2016. Lomé would have been a decisive step before the next meeting on this code.
Illicit trade sectoral studies: request for consultants (AfDB): wildlife and wildlife products, illicit fisheries and the illicit trade in marine resources, illicit trade in timber and non-timber forest products
Announcement: The Global African Investment Summit 2016 - Transforming African economies for global competitiveness
ECOWAS Commission: end of year remarks by President Ouedraogo
EU appeals ECJ annulment of EU-Morocco Free Trade deal (WSRW)
Action Plan of the Human Rights Strategy for Africa: update on transitional justice issues (AU)
For first time, selection of next UN Secretary-General will include input from all Member States (UN)
World Summit on the Information Society: update (UN)
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WTO members urged to crown successful year of multilateral diplomacy with Nairobi deal
WTO members were urged at the opening session of the WTO’s Tenth Ministerial Conference in Nairobi on 15 December to crown a successful year of multilateral diplomacy by delivering on a package of trade deals that would benefit the world’s poorest and spur global economic growth.
In his welcoming speech to the Conference, Kenyan President Uhuru Kenyatta noted that 2015 has been a year “in which we displayed unparalleled cooperation in agreeing on a number of approaches to some of the most pressing problems facing humanity.” The adoption in September of the 2030 Agenda for Sustainable Development and the conclusion in Paris on 12 December of an historic agreement to address climate change have demonstrated a spirit of achievement which should inspire negotiators in Nairobi, he said.
“My earnest encouragement to all negotiating teams represented here today is to seize this moment, reach for a mutually beneficial compromise, and allow yourselves no result except success,” President Kenyatta declared.
WTO Director-General Roberto Azevêdo urged WTO members to make every effort to secure agreements that will benefit the organization’s members, and least-developed countries (LDCs) in particular. “We have seen the power of the world acting as one,” DG Azevêdo said in reference to the climate agreement in Paris. “We should be inspired by that breakthrough here in Nairobi. We should be inspired to lift our sights – to reach further– to aim higher and use trade for the common good,” he declared.
The Director-General said Kenya’s commitment to the Nairobi Conference “has been total” and “mirrors their commitment to trade itself as a force for growth and development. Kenya has set the stage,” he added. “Now it is time for us to deliver.”
WTO members will be seeking to secure “deliverables” during their four-day meeting in areas such as agriculture, transparency measures, steps on special and differential treatment for developing countries and LDCs, and some other specific issues for LDCs.
Kenya is hosting the first WTO ministerial conference on African soil. The meeting comes more than 20 years after the conclusion of the Marrakesh Agreement in Morocco which led to the creation of the WTO in January 1995. WTO delegates were welcomed by a colourful opening ceremony which included traditional songs and dances by local performers, demonstrating the warm tradition of “karibuni” (welcome) typical of Kenya and the African continent.
President Kenyatta stressed the importance of the WTO and trade for Africa in promoting economic growth and development. “A global trade system that allows us to seize opportunities is a fundamental part of our drive to solve challenges such as poverty, insecurity and environmental destruction,” he declared.
President Kenyatta and the Director-General were joined at the opening ceremony by President Ellen Johnson Sirleaf of Liberia, whose country will formally conclude negotiations on accession to the WTO on 16 December, and Kenya’s Cabinet Secretary for Foreign Affairs and International Trade and Chair of the Conference, Ms Amina Mohamed, who said the world needs a message that the WTO can deliver and remains relevant.
The centrality of the WTO to international trade relations “cannot be substituted”, declared Ms Mohamed. She urged delegations to compromise in order to secure a successful Nairobi deal, noting that apart from a weak global economy, WTO members are faced with a risk of economic fragmentation through preferential trade agreements which, while useful complements, cannot replace the multilateral trading system. Her remarks at the opening press conference are available here.
Ms Mohamed will lead the negotiating process on a Nairobi package in close cooperation with the Director-General and has asked several ministers to assist her in this process as “facilitators” on specific issues. The plenary session of the Conference formally kicks off on 16 December with ministers from the WTO’s 162 members given the opportunity to deliver prepared statements.
Special sessions will be held on 16 December for the formal acceptance of WTO accession terms for Liberia and on 17 December for the accession terms of Afghanistan.
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Facilitating the participation of landlocked developing countries in commodity value chains
Landlocked developing countries (LLDCs) face multiple trade and development challenges. In addition to their geographical predicaments and remoteness from international markets, most of these countries are commodity dependent.
Primary commodities accounted for more than half of the exports of 27 out of 32 LLDCs in 2011-2013, and resource-based goods, that is to say, primary goods and resource-based manufactures, accounted for some three quarters of all exports of goods and services of LLDCs as a group.
During the same period, the median share of exports represented by primary commodities among those countries stood at 84.7 per cent. From 1995 to 1997, the same figure was 83.2 per cent. Hence, over time, the degree and extent of commodity dependence has increased in those countries with little or no sign of diversification of exports.
Further, they seem to be more commodity dependent than transit developing countries and other developing countries: the median share in 2011-2014 among transit countries was 76.7 per cent, compared with 66.2 per cent among other developing countries.
The question is, to what extent does the state of being landlocked keep LLDCs in the production and export of primary commodities? According to work undertaken by UNCTAD, including in the context of the present study, although geographical isolation and remoteness from international markets can pose formidable challenges to those countries, these are not insurmountable.
The present study argues that despite the challenges, the case for diversification and structural economic transformation remains more persuasive for LLDCs today than ever before. Empirical and historical evidence suggests that diversification, value addition and retention are key to attaining overall development objectives.
The study also underscores the importance of joining regional and global commodity value chains and the urgency for those countries to take advantage of their natural resources wealth by enacting sound development polices and strategies that put productive capacities and structural economic transformation at the centre.
The findings, conclusions and policy recommendations contained herein are expected to highlight the plight of commodity-dependent LLDCs during the forthcoming global summits and conferences, including the fourteenth session of the United Nations Conference on Trade and Development.
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At high-level forum, top UN officials urge bridging digital divide to ‘power’ sustainable development
Citing remarkable achievement of the information and communication technologies (ICT) for development, United Nations Secretary-General Ban Ki-moon said on Tuesday that the focus now lies on bridging the digital divide to facilitate inclusive Internet access for all in order to enable the implementation of Agenda 2030 for Sustainable Development.
“Information and communication technologies (ICT) have reached into every walk of life. They have sparked innovation and entrepreneurship. They have created new forms of public engagement and economic activity that would have been unimaginable just a few years ago.
They help people connect, organize and act towards common purpose,” said Mr. Ban in his remarks at the High-Level meeting to review the outcomes of the World Summit on the Information Society, also called WSIS, held 10 years ago.
Delegates from Member States and observer entities began meeting today at UN Headquarters for the two-day event, known as WSIS+10 High-Level Meeting, plan to adopt an that identifies emerging trends, fresh priorities and innovations for advancing information and communications technologies.
Highlighting the reach of ICT, Mr. Ban told all the attendees to aid in maximizing the benefits of ICT for people everywhere.
“This High-Level review is timely coming just three months after the adoption of the 2030 Agenda for Sustainable Development. ICTs can be an engine for achieving the Sustainable Development Goals (SDGs). They can power this global undertaking,” said the Secretary-General.
However, the UN chief noted that despite the remarkable achievements of the ICT there is a prominent digital divide prevalent, including gender digital divide.
“Today, more than 80 per cent of households in developed countries have Internet access. Meanwhile, two out of three households in developing countries do not. Women are half the global population – yet 200 million fewer women than men have access to the Internet,” said Mr. Ban, adding that mobile technologies and digital currencies also present huge potential to reach the two billion women and men who are still unbanked around the world.
He stressed the need to encourage innovation in financial technology to help promote financial inclusion, enlarge opportunities and grow productive economies.
Looking ahead, Mr. Ban said work must be undertaken collectively to strengthen trust and promote a global culture of cybersecurity, by enhancing a shared commitment and action by all partners to protect and enhance human rights, while fighting cybercrime and cyber-attacks.
“By 2020, it is anticipated that there will be six times as many devices connected on the Internet as people. We must cooperate to consider the implications of this and ensure that the Internet evolves into an inclusive space for the public good. Therefore let us intensify our work to build an open, reliable, safe, secure, stable and inclusive Internet,” the Secretary-General added.
Lastly, he stressed that ICTs and the Internet must help in achieving the targets set by the UN and the Member States this year, including climate action, sustainability, prosperity for all nations and communities sharing one planet.
“Let us ensure that the results of this High-level Meeting will help us reach our shared destination – a sustainable, equitable and connected world for everyone, everywhere,” Mr. Ban concluded.
In an opening statement, Mogens Lykketoft, the President of the General Assembly, said ICT has played an increasingly important role in promoting economic and social development, such as enhancing productivity, facilitating trade, creating quality jobs, providing ICT-based services such as e-health and e-learning, and improving governance.
“While recognizing these achievements and this great potential, we must not lose sight of the remaining challenges,” he said, echoing the Secretary-General’s concern that various forms of digital divides still exist within and among countries. Moreover, new challenges have emerged relating to Internet stability and security, data ownership and exercise of human rights online.
“[The] outcome document [set to be adopted tomorrow] recognizes many of these challenges and the work that lies ahead. It recognizes also the linkages between ICTs and the 2030 Agenda for Sustainable Development,” Mr. Lykketoft stated.
“The adoption of the outcome document from this meeting will mark the conclusion of the WSIS+10 review process. But it will also mark the beginning of a new phase of the journey – a journey that seeks to fully harness the power of ICT to realize the SDGs and to leave no one behind,” he said.
The two-day meeting, convened by Assembly President Lykketoft, in close collaboration with ITU and other UN agencies and programmes such as the UN Education, Scientific and Cultural Organization (UNESCO), the UN Conference on Trade and Development (UNCTAD) and the UN Development Programme (UNDP), is expected to result in a road map for efforts to put ICTs at the heart of new development strategies.
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WTO negotiating function under scrutiny as Ministerial begins
Trade ministers continued to disagree over the future of the WTO’s negotiating function, as talks for the organisation’s Tenth Ministerial Conference (MC10) kicked off in Nairobi, Kenya, on Tuesday.
Though the formal action has only just begun at the Kenyatta International Conference Centre, the past two days have already seen a flurry of activity, with ministers gathering in various bilateral and group configurations to prepare for all-night negotiating sessions.
While the mood in the corridors ranged from gloom to ambition to see a possible resolution on both the WTO’s future work, as well as what substantive outcomes might emerge as Nairobi deliverables, key officials publicly pledged to do their utmost to achieve a successful result.
“I don’t think any of us is ready to give up today, we’re not ready to give up tomorrow, we’re not ready to give up on the 17th, nor are we ready to give up on the 18th,” said Amina Mohamed, Kenya’s Cabinet Secretary on Foreign Affairs and Trade and chair of the conference.
Azevêdo, Kenyatta: Paris, Bali as inspiration
The Nairobi trade talks follow hot on the heels of a historic multilateral emissions-cutting agreement, clinched last week in Paris, France, with various officials and stakeholders on the first day citing the climate negotiations’ success at bridging strong divergences.
“2015 is a year in which we have displayed unparalleled cooperation in agreeing on a number of collective approaches to some of the most pressing problems facing humanity,” said Kenyan President Uhuru Kenyatta during Tuesday’s opening plenary, referring both to the Paris talks and the UN’s new Sustainable Development Goals (SDGs).
“The spirit that has followed us to come together and achieve measures that many thought impossible should also be present at this year’s Tenth WTO Ministerial Conference,” he continued, noting the body’s contribution to global growth, increased international trade, orderly dispute settlement, and integrating poorer countries into the global marketplace.
The memory of the 2013 Bali ministerial conference was recalled by other speakers during the opening plenary, given its success in inking the WTO’s first global trade deal in its history. WTO Director-General Roberto Azevêdo on Tuesday echoed a quote from Nelson Mandela that he had used on that occasion – “it always seems impossible until it is done” – as a potential source of inspiration in the days ahead.
Froman: Doha is “at the end of the line”
The cautiously optimistic statements in plenary stood in contrast, though, with the mood and dynamics among trade negotiators.
US Trade Representative Michael Froman called on WTO members to acknowledge that the Doha talks were “at the end of the line,” in an op-ed in the Financial Times on 13 December. “It is time for the world to free itself from the strictures of Doha,” he said.
The US stance seemed directly at odds with the position taken by India and numerous other developing countries, many of which have argued that the long-running talks need to be concluded before moving on to new issues.
A joint ministerial statement from the African Group, China, Ecuador, India, and Venezuela issued on Tuesday called for a redoubling of efforts to “proceed towards the full, successful, and multilateral conclusion of the negotiations,” referring to the Doha mandate.
Although not referring specifically to the position taken by Froman, the group highlighted the various benefits they say would come from a successful, “comprehensive” conclusion of the Round with “economically meaningful and balanced outcomes.”
EU Commissioners Cecilia Malmström and Phil Hogan – responsible for trade and agriculture, respectively – joined the fray in a joint public statement, saying that they were “concerned by the deep persisting differences” between governments on the post-Nairobi WTO agenda. While the organisation should “keep working on” the outstanding Doha issues, it should also start to address other issues that are important for today’s global trade, the Commissioners argued.
Separate statements from both the least developed country (LDC) and small, vulnerable economies (SVE) trade ministers issued going into the conference also called for a successful conclusion to the Doha Round trade talks. Sources indicate that African ministers of trade are expected to adopt a similar declaration on Wednesday.
Meanwhile, experts and ministers attending side events on Tuesday at a Trade and Development Symposium reflected over the WTO’s potential future if faced with negotiating stasis in Nairobi, with many noting the shifting realities of trade flows and policymaking. Questions teemed on how to make sure new regional or plurilateral trade agreements remain compatible with the multilateral system and how to tackle emerging issues such as the digital economy.
Agriculture: negotiating groups set out their stands
The Cairns Group of agricultural exporting countries issued a statement calling for the abolition of agricultural subsidies at the ministerial, as well as new disciplines on other agricultural trade policies that have export subsidy-like effects. The conference should also address developing countries’ concerns on cotton, they said.
Another communiqué from the G-33 group of developing countries reiterated the importance of a safeguard to raise tariffs temporarily in the event of sudden import surges or price depressions, as well as a “permanent solution” to difficulties the group’s members say they face in buying food at administered prices for public stocks, under the WTO’s existing farm subsidy rules.
However, the declaration also indicated that the group would be “open to explore future cooperation on other areas in WTO agriculture negotiations where group members see common interests and shared objectives.” The G-33 includes China, India, and Indonesia, as well as numerous smaller developing countries.
Like the Cairns Group countries, the EU commissioners’ statement also argued in favour of an outcome on all forms of export subsidies.
Rules, LDC issues
Outcomes on fisheries have been slated as another potential deliverable from the Doha mandate for MC10, which sources say has started to gain more traction among some groups in recent days, particularly with an eye on demonstrating the WTO can also deliver positive outcomes for a wider sustainability agenda. Mohamed, the conference chair, published an op-ed last Saturday on the importance of tackling the issue at the global trade body.
On LDC issues – also under negotiation in Nairobi – sources say informal consultations on preferential Rules of Origin (RoO) took place on Tuesday. A draft decision seen by Bridges was circulated to delegations by Chair Steffen Smidt of Denmark beforehand in an attempt to suggest compromise language on certain outstanding issues. If adopted, the decision would be an addendum to the 2013 Bali decision.
Sources say that the Danish ambassador has been consulting with several delegations in recent days and preferred to submit a clean text without brackets in an attempt toward reaching convergence.
The draft decision outlines a set of multilaterally agreed guidelines to help make it easier for LDC exports to qualify for preferential market access, detailing specific obligations for preference-granting countries in areas such as the determination of substantial transformation, cumulation, simplification of documentary requirements and implementation, flexibilities, and transparency.
At press time, it appeared that discussion on language regarding the use of terms such as “aim to” versus “consider to” in one section of the draft decision involving how to define the threshold level of value addition to qualify for preferential treatment is proving divisive.
“Rules of origin could very well be a deliverable during this ministerial conference. Discussions on this issue has been so far very constructive,” said a developed country delegate, whose words were echoed by an African official.
EIF: US$90 million pledged
On the eve of the ministerial conference, 15 countries pledged almost US$90 million for the second phase of the Enhanced Integrated Framework (EIF) – the only global aid for trade programme with an exclusive focus on least developed countries.
The EIF is a multi-donor programme which supports LDCs to be more active players in the global trading system by helping them tackle supply-side constraints to trade. The new phase of the Enhanced Integrated Framework was launched over the summer and is expected to run from 2016 to 2022.
“We are marking a new and exciting chapter for the EIF partnership today,” said Azevêdo, who explained that the will to deliver outcomes for the world’s poorest nation is “real” and that a successful pledging conference would be an important part of that effort.
During the conference, trade officials from Australia, Denmark, Estonia, the EU, Finland, France, Germany, Korea, Luxembourg, Norway, Saudi Arabia, Sweden, Switzerland and the United Kingdom reaffirmed their strong support for this Aid-for-Trade programme, while the Netherlands joined as a new donor.
The amount of funding needed to run the programme in the next seven years has been estimated at between US$274-320 million.
Most donors have indicated that owing to budgeting cycles they were not in a position to commit for more than two years, while noting that further contributions would be made available in this second EIF phase. Some stressed that progress was needed towards more effectiveness and ownership of the funds allocated.
Some developed country delegates suggested that the amount pledged constituted a “very strong basis,” given the pressures many core donors face due to humanitarian emergencies and a difficult economic context. One LDC delegate said, however, that more was expected as US$90 million was not even half of the funding required.
ITA waiting game
At press time, it remained unclear whether the group of WTO members involved in the negotiations to expand the Information Technology Agreement (ITA) will have a completed deal to announce this week, though sources indicated potential signs of progress. Azevêdo told reporters on Tuesday morning that he was confident of there being an ITA result.
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Despite $28 billion drop in global private infrastructure investment in energy, transport, and water, strong showing of renewable energy projects
Despite a sharp decline in private investment in energy, transport, and water infrastructure in developing countries in the first six months of 2015, investment in renewable energy projects, mainly solar, rose to nearly half of the total investment – the highest level ever as a share of total investment, according to an update released on 15 December 2015 by the World Bank Group’s Private Participation in Infrastructure Database.
Total private infrastructure investments for the energy, transport, and water sectors in 139 emerging economies dropped by more than half, from $53 billion in first six months of 2014 to $25 billion in the first six months of 2015, mainly due to a decline in the number of projects in Brazil, China, and India. Investments in other countries remained steady.
The top countries by private investment totals were South Africa, Colombia, Mexico, Chile, and Brazil. These five countries together attracted $11.9 billion, representing 47 percent of global commitments in the developing world in the first half of 2015. Regionally, Latin America and the Caribbean region continued to lead, followed by Sub-Saharan Africa, Europe and Central Asia, East Asia and Pacific, South Asia, and the Middle East and North Africa.
The total number of projects stayed relatively stable at 124 (from 132 the year before), with a focus on investments in renewable energy projects – energy generated from natural resources such as sunlight, wind, rain, tides and geothermal heat. Unlike the first half of 2014, when transport dominated global investment, this year saw all forms of energy projects capturing 64 percent of the total investments while transport captured 32 percent and water 4 percent, according to the updated database.
“Renewable energy projects alone accounted for an impressive 59 percent of total projects with 74 out of 124 projects in the first half of this year,” said Clive Harris, practice manager, Public-Private Partnerships, World Bank Group. “Solar alone comprised over one-third of all energy investment, while coal made up only 6 percent. Also despite the headline drop in investment commitments, activity in countries outside of Brazil, China, and India remain at levels similar to recent years.”
Indeed, partly driven by South Africa’s renewable energy program, investment commitments in green energy hit its highest share ever of global private investment at 49 percent – $12.4 billion of $25.3 billion. South Africa alone secured 16 renewable deals totaling $4 billion, while Chile, Morocco, Pakistan, Jordan, and Brazil closed an additional 26 renewable projects worth $5.3 billion.
In addition to the high investment in renewables, the data show a trend toward smaller projects that reverses a decade-long tendency toward increasingly larger projects. The average deal size in the first half of 2015 fell to $205 million, roughly half the average size in the first half of 2014. This trend coincides with an exceptional number of renewable projects – which tend to be smaller – as well as a notable absence of megaprojects.
Covering the period from 1990 to the first half of 2015, the database reviews more than 8,000 projects across 139 low- and middle-income economies and provides a rich source of data on private infrastructure investment in emerging markets.
The World Bank Group’s Private Participation in Infrastructure Database is the leading global source of data on trends in the developing world, covering infrastructure projects in the energy, transport, and water and sewerage sectors.
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Declaration of Ministers of the Group of Small, Vulnerable Economies (SVEs) to the Tenth Session of the World Trade Organization Ministerial Conference
We, the Ministers and Heads of Delegation of the Group of Small, Vulnerable Economies (SVEs), having met on 15th December 2015 in Nairobi, Kenya, on the margins of the Tenth Session of the World Trade Organization Ministerial Conference:
Reiterate the importance of preserving a fair, inclusive and transparent, rules-based multilateral trading system, and underscore the centrality of the World Trade Organization (WTO) in this regard.
Emphasize that effective special and differential treatment, a key principle of multilateralism, must not be undermined.
Reaffirm the importance of the Work Programme on Small Economies contained in Paragraph 35 of the Doha Ministerial Declaration and Paragraph 41 of the Hong Kong Ministerial Declaration. In this regard, we strongly urge that the required support is provided to implement the Work Programme.
Note the progress achieved on SVE priorities, especially the work conducted in the CTD’s Dedicated Session on the challenges and opportunities experienced by Small Economies when linking into global value chains in trade in goods and services, and look forward for the future work on the Work Programme, including the discussions on the challenges that small and vulnerable economies experience in their efforts to reduce trade costs, particularly in the area of trade facilitation.
Recognize that economic recovery still remains one of the challenges affecting the world economic environment. Thus, a successful conclusion of the Doha Development Agenda (DDA) can contribute to the economic growth and development of the small and most vulnerable.
Urge Members to exercise the requisite political will to reinvigorate and successfully conclude the Doha Development Agenda (DDA) negotiations with priority given to the areas of interest and modalities in favor of the SVEs.
Urge Members to exercise caution and ensure that the bodies of the WTO are not used to promote a system of plurilateralism at the expense of the multilateral trading system (MTS).
Reiterate the need for the preservation of development-centered negotiations and the continued safeguard of the principle of the Single Undertaking for the achievement of a balanced and development oriented outcome in the negotiations that is sensitive to the development objectives of SVEs.
Further reiterate the need for Members to continue to address in a substantive and meaningful manner, the needs of small, vulnerable economies, and to adopt specific measures that will facilitate their fuller integration into the multilateral trading system.
Urge Members to commit to preserve the flexibilities that have already been identified and stabilized in the process of the trade negotiations including in Agriculture and NAMA, and provide enhanced flexibilities for SVEs in other negotiating areas in view of their special needs and circumstances, as part of any future outcome.
Call for the priorities of SVEs to be duly addressed in all areas of the negotiations and regular work.
Reaffirm the need for special consideration and targeted assistance to be given to SVEs, inter alia, in the areas of Aid for Trade, Trade and Transfer of Technology; Trade Facilitation, Trade Finance and Development Assistance which are priorities for special consideration by the WTO and anticipate the appropriate attention to be paid to these issues in the on-going work of the WTO.
Emphasize the necessity for the continued and further inclusion of SVEs as an integral part of the discussions on, and consultations within the regular bodies and work programmes of the WTO as we seek to become more fully integrated into the multilateral trading system.
Stress the importance of continuing the constructive engagement to find concrete and appropriate solutions to respond to the trade-related issues of Small, Vulnerable Economies.
Express appreciation to the Government and people of Kenya for their warm and generous hospitality and for their contribution to a successful Tenth Session of the World Trade Organization Ministerial Conference.
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tralac’s Daily News selection: 15 December 2015
The selection: Tuesday, 15 December
Trudi Hartzenberg: Africa free-trade bloc implementation date may be too optimistic (Bloomberg)
A 2017 implementation date set for creating a free-trade zone in Africa, a region with a combined economy worth more than $2 trillion, may be too optimistic, according to trade experts. Talks to establish a working free-trade zone will go beyond 2017, Trudi Hartzenberg, director of the Stellenbosch-based Tralac Trade Law Centre, said in an interview in the Kenyan capital, Nairobi on Tuesday. “The indicative date is really a political decision, but realistically the negotiations will take much longer,” said Hartzenberg, who is in Nairobi for the World Trade Organization’s 10th ministerial conference. “What may be possible is some kind of framework agreement by 2017, and then the more detailed provisions on specific substantive issues will take much longer.”
Carlos Lopes: Africa and the Human Development Report 2015
The theme of the report, “Work for Human Development”, speaks to the key priority of the African continent, namely structural transformation that would allow for job creation and inclusive development. The report recognizes tremendous progress, albeit uneven across regions, translated into improvement in life expectancy, education, access to clean water and basic sanitation as well as increase in per capita income. This progress is also biased for all regions towards men as corroborated by the gender inequality index. Africa in general, and the Sub-Saharan region in particular, registered an annual Human Development Index growth of 1.08% on average for the period 1990-2014, positioning the region as the third best performer after South and East Asia and the Pacific. The Report also highlights the remaining challenges which include a range of issues from persistent poverty, rising inequalities, vulnerabilities to shocks and risks and climate change. All of these issues are extremely relevant and in sync with Africa’s own Agenda 2063. Please allow me to highlight three key areas that demonstrate the linkages.
HDR 2015: Greater inclusion of women and youth in work will spur human development in Sub-Saharan Africa
Africa is rising!: But are people better off? (World Bank Blogs)
Scrutinizing the data to find out how much African livelihoods improved is what the team of the “Poverty in A Rising Africa” report set out to do. The results are encouraging and sobering. The poverty rate has come down substantially and plausibly even more so than the available poverty estimates have led us to believe. That said, more people are poor today than in 1990 and the human development challenges remain enormous. As expectations are rising and the world gears up towards eradicating extreme poverty by 2030, Africa is bound to be increasingly at the center of this global poverty agenda. According to the latest World Bank estimates, the share of people living on less than $1.90 a day fell from 57% in 1990 to 43% in 2012. But only 27 out of the 48 countries had two or more comparable surveys during this period to estimate this trend—as shown in the map below. [The authors: Kathleen Beegle, Luc Christiaensen]
MC10 Nairobi updates:
Profiled tweets: @WTODGAZEVEDO: Multilateral deal in Paris should inspire ministers at WTO conference in Nairobi this week. A pro-development trade deal is possible; @MLexGeneva: Unsuccessful MC10 would means WTO may "get rid of the negotiating function, because it’s not working for us," Mohamed says.
Toward 21st century trade governance for Africa: tralac's session, today, at the Trade and Development Symposium
The CFTA is Africa’s most ambitious integration initiative; and an opportunity to shape a 21st century integration agenda for the continent. The AU Summit decisions of June 2015 to launch the negotiations to expeditiously establish the CFTA will be considered. tralac will motivate very strongly for new thinking about Africa’s broader integration agenda, and propose new approaches to negotiations in areas such as trade in services and trade facilitation. We will emphasise that, to assure rules based trade governance, effective dispute resolution is essential for the CFTA. [Download the four briefs prepared for the session]
Related TDS sessions: The CFTA in the context of the mega-regionals and future of the multilateral trading system, TradeMark East Africa sessions
Uhuru opens Fourth China Roundtable: calls for strengthening of WTO (The Star)
The President called for "collective reflection and concrete action" among African countries, which he said should diversify their economies, re-establish their manufacturing base and integrate into value chains. He noted that although the continent has registered robust growth, manufacturing was failing and the industrial process weak, adding that African countries must make and implement the right policy choices. "National, regional and multilateral policy choices that we make will matter. The choices and positions we take will have consequences," he said. "The primary responsibility to industrialize is with Africa. We need to deepen and sustain domestic economic, legal, institutional and structural reforms."
China signs agreement to support Least Developed Countries at WTO (Xinhua)
Can’t declare the Doha Round ‘dead’ yet: Rob Davies (Livemint)
The United States tries to euthanize the Doha round (Washington Post)
Frank Matsaert: 'Empowering female traders in east Africa will boost growth – and fight poverty' (The Guardian)
By placing empowerment of women at the centre of this week’s trade discussions in Nairobi, we can contribute towards furthering trade as a key driver of growth, employment and poverty reduction. This is an investment worth making to give thousands of women the opportunity of leading east Africa’s growth and development.
LDC trade ministers: ministerial declaration
Hereby we highlight the importance of the following position in the context of the forthcoming Tenth WTO Ministerial Conference and of implementation of the specific areas mentioned below:
We call upon the Members to fully and faithfully implement all the LDC-specific provisions contained in the existing WTO Agreements, Ministerial Decisions and Declarations. We call upon the Members to reaffirm the Declarations and Decisions we adopted at Doha and at the Ministerial Conferences we have held since then and give effect to them. We further call upon the Members to strongly commit to addressing the marginalization of LDCs in international trade and to improve their effective participation in the multilateral system. Towards this end, Members are urged to ensure that all issues of specific interest to Least Developed Countries are pursued on a priority basis with a view to achieving commercially meaningful and legally binding outcomes.
G-33: ministerial communiqué
We are of the view that WTO Members shall continue seeking a comprehensive conclusion of the DDA after Nairobi. We underline that the special and differential treatment for developing country Members including LDCs and SVEs in the agriculture negotiations must be operationally effective to enable them to effectively take account of their development needs.
Selected MC10 commentaries: A time for reflection in Nairobi on the future of global trade (Bridges/ICTSD), Divides run deep as Ministers arrive at Nairobi WTO meet (Bridges/ICTSD), Hopes of a global trade deal remain low as WTO meets in Nairobi (The Guardian)
Ethiopia: blending top-down federalism with bottom-up engagement to reduce inequality (World Bank)
Donors increasingly fund interventions to counteract inequality in developing countries, where they fear it can foment instability and undermine nation-building efforts. To succeed, aid relies on the principle of upward accountability to donors. But federalism shifts the accountability of subnational officials downward to regional and local voters. What happens when aid agencies fund anti-inequality programs in federal countries? Does federalism undermine aid? Does aid undermine federalism? Or can the political and fiscal relations that define a federal system resolve the contradiction internally? This study explores this paradox via the Promotion of Basic Services program in Ethiopia, the largest donor-financed investment program in the world.
US Chamber launches US-Africa Business Centre (Financial)
The USABC will enhance investment opportunities for US businesses by furthering the Chamber’s existing MOUs with several regional economic communities and governing bodies, including ECOWAS and the Ghana Investment Promotion Centre. MOUs with SADC and the East African Community are expected to be formalized soon, according to the US Chamber of Commerce.
Malawi: IMF concludes 2015 Article IV Consultation (IMF)
Real GDP growth is projected to fall by 2.7% points to 3% in 2015 due in large part to heavy floods in early 2015 followed by drought which resulted in an estimated decline of about 30 percent in the maize harvest (the main staple). As a result, an estimated 2.8 million persons remain at risk of food insecurity. Growth is projected to rise gradually to about 5.5 percent over the medium term.
Export processing zones: enhancing their contribution to the Sustainable Development Goals (UNCTAD)
Although some EPZs are making the transition to more of a sustainable development orientation (demonstrating proof of concept), an UNCTAD survey of 100 EPZs undertaken as part of this report suggests that most EPZs are not promoting prominent environmental and social features. Given changes to conventional means of attracting investment into EPZs, this lack of engagement with corporate sustainability could become a missed opportunity for both sustainable development and for EPZ investment promotion.
Using trade and investment as vehicles for achieving the sustainable development goals (UNEP)
The Hub aims to enhance the capacity of countries to design and implement trade policies that foster environmental sustainability and human well-being; to assist countries in the realization of trade opportunities arising from a transition to greener economies; to strengthen the sustainability aspects of cross-border trade and investment agreements in negotiations; and to realize a shift of trade practices and trends to more sustainable pathways. The Hub offers:
TAZARA: statement by Board of Directors
We noted that the operational performance of the Authority has fallen to record low levels of less than 90,000 tons of freight per year in the Financial Year 2014/2015 from 208,538 tons recorded in the Financial Year 2013/2014. It is with concern that the Authority has continued to underperform and depend on subventions from the shareholding Governments despite the directives that the Authority should strive to be self-sustaining in its operations. Both Governments find it difficult to justify the continuation of any subventions to TAZARA, which is otherwise a potentially viable company, and insist that the Authority must stand on its own going forward. In this regard, the Board directed the management to:
SGR: Kenyans lose out as local content clause not legally binding (The East African)
Kenya Railways Corporation — the project’s implementing agency — confirmed that the 40% local content condition was merely an informal agreement between the government and the contractor, implying that the latter is not legally bound to dish out jobs to Kenyans and to procure construction materials and equipment from local manufacturers.
Kenyan president says 60% of China-financed signature railroad complete (M&G Africa)
China's rocky Silk Road (East Asia Forum)
In some ways the initiative seems the ultimate expression of China’s ambitions to remake the world around it. If built, the initiative could change the strategic and economic character of Eurasia and the Indian Ocean region. China would no longer be dependent upon its connections with East Asia and the Pacific; it would sit astride two oceans and potentially be able to dominate the entire Eurasian continent. But there is reason to be sceptical about how much of China’s plans will actually come to fruition. Elements of the OBOR — particularly in the Indian Ocean region — are increasingly seen as more of an expression of China’s long-term aspirations than reality. [The author: David Brewster]
Benchmarking to boost Africa’s science and technology education standards (World Bank)
The WSIS+10 High-Level Meeting starts today (UN)
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Africa free-trade bloc implementation date may be too optimistic
A 2017 implementation date set for creating a free-trade zone in Africa, a region with a combined economy worth more than $2 trillion, may be too optimistic, according to trade experts.
Talks to establish a working free-trade zone will go beyond 2017, Trudi Hartzenberg, director of the Stellenbosch-based Tralac Trade Law Centre, said in an interview in the Kenyan capital, Nairobi on Tuesday.
“The indicative date is really a political decision, but realistically the negotiations will take much longer,” said Hartzenberg, who is in Nairobi for the World Trade Organization’s 10th ministerial conference. “What may be possible is some kind of framework agreement by 2017, and then the more detailed provisions on specific substantive issues will take much longer.”
Three regional groups on the continent – the Common Market for East and Southern Africa, the East African Community and the Southern African Development Community – signed an agreement in June in Egypt to create a trade bloc covering 26 countries with a combined economy of about $1 trillion as a precursor to the continental grouping. A week later, members of the African Union launched the negotiations for the establishment of the continent-wide free trade area in Johannesburg.
Some of the issues that could potentially slow down the continent-wide negotiations, which are expected to start in April, are the lack of impetus to liberalize import tariffs, slow regulatory reforms and harmonization and countries reluctant to enter into investment protection agreements, Hartzenberg said.
“I think that it’s somewhat optimistic,” Joanmariae Fubbs, chairwoman of the South African parliament’s portfolio committee on trade and industry, said in Nairobi on Tuesday. “I do think we ought to make a start and perhaps that date will provide the driver to the timeline, to pressurize it.”
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Ministerial Declaration: LDC Trade Ministers’ Meeting, December 2015
LDC Trade Ministers’ Meeting: Nairobi, Kenya, 14 December 2015 – Ministerial Declaration
We, the Ministers of the Least Developed Countries,
Meeting in Nairobi on December 14, 2015 on the eve of the Tenth session of the WTO Ministerial Conference (MC10, December 15-18, 2015);
Underlining the importance of the multilateral trading system embodied in the WTO and the need for meaningful and effective integration of Least Developed Countries (LDCs) in the multilateral trading system;
Reiterating the need for the WTO to remain the premier negotiating forum to improve multilateral trade rules and respond to the dire need for this institution to deliver on substantive market access for trade and competitiveness of LDCs for their meaningful and effective integration;
Recognizing that a logical conclusion of the DDA with economically meaningful and balanced outcomes will provide impetus to global trade liberalization and facilitation, correct the development deficit in the rules resulting from the previous rounds of multilateral trade negotiations and improve the trading prospects of LDCs, and enhance the primary role of the WTO in global trade governance;
Expressing concern that the continuous lack of progress on most of the issues of the Doha Development Agenda undermines the aspiration of LDCs to gain the development benefits of fair and equitable trading system;
Determined to complete the DDA as has been reaffirmed by our Leaders in Sustainable Development Goal 17.10;
Emphasizing that development is central to the success of MC10, and crucial for the credibility and efficiency of the multilateral trading system;
Recalling the commitments made by Ministers at all of the previous sessions of the WTO Ministerial Conference and the July Framework, as well as by the international community at the Fourth UN Conference on Least-Developed Countries in Istanbul, to assist Least-Developed Countries secure beneficial and meaningful integration into the multilateral trading system and the global economy;
Noting LDCs’ share in world merchandise trade at 1.24% with a deficit of US$60.6 billion (2013), share in global exports (excluding fuels) at 0.72% (2013), participation in world services exports at 0.68% (2013) and share of manufacturing value added actually declining from 2% in 1992 to 1% in 2012;
Expressing grave concern at the delay in the implementation of LDC-specific Declarations and Decisions so far as a result of which LDCs remain vulnerable and continue to face structural difficulties in the global economy
Urging Members to consider all possible means to help LDCs improve their participation in world trade including concrete and binding trade rules in favour of LDCs;
Recalling WTO Work Programme for LDCs adopted by the Sub-Committee on LDCs in June 2013;
Further recalling the Declaration adopted by LDC Trade Ministers at Bali during the Ninth WTO Ministerial Conference in 2013;
Strongly emphasising the need for agreement on LDC proposals for decision at the Tenth Ministerial Conference;
Hereby we highlight the importance of the following position in the context of the forthcoming Tenth WTO Ministerial Conference and of implementation of the specific areas mentioned below:
1. We call upon the Members to fully and faithfully implement all the LDC-specific provisions contained in the existing WTO Agreements, Ministerial Decisions and Declarations.
2. We call upon the Members to reaffirm the Declarations and Decisions we adopted at Doha and at the Ministerial Conferences we have held since then and give effect to them.
3. We further call upon the Members to strongly commit to addressing the marginalization of LDCs in international trade and to improve their effective participation in the multilateral system. Towards this end, Members are urged to ensure that all issues of specific interest to Least Developed Countries are pursued on a priority basis with a view to achieving commercially meaningful and legally binding outcomes.
Decisions in Favor of LDCs
Duty-free-quote-free (DFQF) market access
4. We urge Members to fully and faithfully implement the Decision on Measures in Favour of Least-Developed Countries contained in Decision 36 of Annex F of the Hong Kong Ministerial Declaration as well as the Bali Ministerial Decision on Duty-Free and Quota-Free Market Access for LDCs.
Cotton
5. We reaffirm the importance of cotton in the economies of many LDCs, and note with grave concern the lack of progress in implementing the results of the WTO Ministerial Conference held in Hong Kong in December 2005, with regard to cotton, with a view to eliminating all trade distorting policies affecting the sector. Therefore, we strongly urge Members to fast track the resolution of the cotton issue in Nairobi by adopting a decision on the basis of the submission contained in TN/AG/GEN/38; TN/AG/SCC/GEN/14.
Preferential Rules of Origin
6. We call upon Members to adopt the proposed decision on rules of origin for LDCs contained in WT/L/917/Add.1 which aims to operationalise the guidelines enumerated in the “Ministerial Conference Decision on Preferential Rules of Origin for LDCs” adopted at the Bali Ministerial Conference. We further call upon the preference-granting members to faithfully implement the decision by improving their rules of origin applicable to imports from LDCs by making them simple, transparent and development-friendly so that they do not act as barriers to LDC exports, but rather enable them to fully utilise the market access opportunities provided to them to fulfil the commitment made at the Hong Kong Ministerial Conference.
Services Waiver
7. Having undertaken important work to identify sectors and modes of supply of particular export interest to us in developing the LDC Collective Request (S/C/W/356, Corr. 1 and Corr.2), we welcome the efforts made by those Members having notified preferences for LDC services and service suppliers pursuant to the LDC Services Waiver decision. We especially welcome the approval by the Council for Trade in Services of those notifications that included preferential treatment beyond GATS Article XVI in accordance with paragraph 2 of the Waiver. Building upon these results and to provide more effective operationalization of the LDC Services Wavier, we call on Members to adopt a decision in Nairobi based on the LDC proposal found in TN/C/W/72.
Special and Differential Treatment
8. We require that Members affirm that special and differential treatment for Least-Developed Countries, shall be an integral part of all WTO agreements and future outcomes and shall be embodied as appropriate in schedules of concessions and commitments and in the rules and disciplines, so as to be operationally effective and to enable developing countries, in particular LDCs, to effectively address their development needs, as set out in paragraph 13 and 16 of the Doha Ministerial Declaration.
9. In furtherance of these objectives, we call upon WTO Members to adopt the decision contained in JOB/DEV/29/Rev.1 as a stepping stone towards fulfilling the mandate of paragraph 44 of the Doha Declaration.
Flexibility in Undertaking Commitments by LDCs
10. We further request the affirmation in Nairobi that the flexibilities that have already been identified and stabilized in the process of the negotiations in favour of LDCs should be maintained, and that enhanced flexibilities should be provided for LDCs in view of their special needs and circumstances as part of any future outcome. In particular, we call for a reaffirmation that LDCs shall be exempt from taking on new commitments in agriculture and industrial goods and services, including in domestic regulations negotiations.
11. We demand that any transparency rules set forth across the rules negotiation pillars of antidumping, countervailing duties, regional trade agreements and fisheries subsidies, and transparency in domestic regulation in the services sector for consideration by Members, shall include special provisions for LDCs, in particular that LDCs are not required to undertake new commitments.
Agriculture
12. We call for substantial reduction of all forms of market distorting domestic support, towards their eventual elimination, and consideration of innovative and practical approaches to avoid box-shifting practices that impact trade distorting domestic support reduction commitments.
13. We urge Members to agree to the elimination of all forms of export subsidies and disciplines on all export measures with equivalent effect, in accordance with the Hong Ministerial Declaration, reaffirmed by the Bali Ministerial Declaration on Export Competition, while maintaining the flexibilities for LDCs contained in WTO document TN/AG/W/4/Rev.4 as well as in the Decision in Favour of NFIDCs and LDCs.
14. We further urge developed country Members, and developing countries in a position to do so, to provide duty-free quota free market access on a lasting basis, for all agricultural products originating from all LDCs, in a manner that ensures stability, security and predictability.
15. We further call upon Members that maintain Tariff-Rate Quotas (TRQs) for agricultural products to accord LDC Members priority in filling under-utilised quotas, when implementing the Bali decision on TRQ administration (WT/L/914).
Fisheries
16. We recognize the importance of fisheries as a source of employment, livelihood, poverty reduction and food security of LDCs. Therefore, we call for disciplines on subsidies that contribute to IUU fishing and over-fished stock. We further reaffirm that any disciplines in fisheries subsidies shall not prevent LDCs from maintaining subsidies that do not contribute to over-fishing or the depletion of fish stock.
Trade-Related Intellectual Property Rights (TRIPS) Agreement
17. We applaud the adoption of the Decision of the Trade-Related Intellectual Property Rights (TRIPS) Council extending the transition period under Article 66.1 for LDC Members for certain obligations with respect to pharmaceutical products (IP/C/73), as well as the related waiver adopted by the General Council concerning LDC Members’ obligations under Article 70.8 and Article 70.9 of the TRIPS Agreement with respect to pharmaceutical products (document WT/L/971).
Standing Agenda Item Decisions for the Tenth Ministerial Conference
18. We welcome the decision to extend the moratorium on the application of GATT 1994, Article XXIII subparagraphs 1(b) and 1(c) on non-violation and situation complaints to the TRIPS Agreement. However, we expect that by the Eleventh Ministerial Conference, Members will agree to a permanent moratorium in this regard. We also welcome the decision to extend the moratorium on electronic transmissions and the electronic commerce work programme.
Accessions
19. We acknowledge the recent accessions of three LDCs since the Bali Ministerial Conference. In this regard, we welcome the membership of the Republic of Yemen as well as the completion of the accession package of the Republic of Liberia and the Islamic Republic of Afghanistan and look forward to their formal adoption in Nairobi.
20. We note the contribution of accessions to the strengthening of the multilateral trading system and therefore call upon the WTO Membership to fully operationalize the 2002 and Addendum 1 of 2012 General Council Decisions on the LDC Accession Guidelines, with a view to facilitate and accelerate remaining LDC accessions.
21. In furtherance of this objective, we request convening of a special dialogue between acceding LDCs and WTO Members, under the guidance of the Sub-Committee on LDCs, during 2016, in order to discuss ways and means to effectively move LDCs accessions to their respective conclusion.
22. Taking into account the extensive market access and rules commitments made by recently acceded Least Developed Members during their respective accessions, we urge the global application of all relevant LDC waivers and Special and Differential Treatment to all recently acceded and acceding LDCs
23. We also commend the entry of the Republic of Seychelles and the Republic of Kazakhstan as Members of the WTO this year.
Enhanced Integrated Framework
24. We recognize the contribution of the Enhanced Integrated Framework (EIF) in mainstreaming trade in development policies of LDCs and building their trade capacity. This significant role in helping LDCs achieve their development objectives is duly recognized by the 2030 Agenda for Sustainable Development Goals.
25. We emphasise the need for financial contributions to the programme aimed to facilitate predictable trade related support to LDCs, based on the programme needs as set out in the EIF Phase Two Programme Framework.
26. While welcoming the extension of EIF into Phase Two, we urge donors – existing as well as potential – to contribute at the Pledging Conference to be held in Nairobi on 14 December 2015. We urge members to further intensify their efforts to secure necessary level of contributions for the timely replenishment for effective implementation without any disruption of EIF between 2016 and 2023.
Aid for Trade
27. We underline the importance of Aid for Trade initiatives in trade-related capacity building; overcoming supply-side constraints; infrastructure development; and facilitating integration of LDC economies in regional and global trade. Towards this end, we call upon members to accord priority to the LDC projects and ensure that Aid for Trade will be available for projects identified by the recipient governments, particularly in the areas of trade development, trade-related infrastructure, building productive capacity and trade-related adjustment, and lowering trade costs.
Way Forward
28. We urge all WTO members to redouble their efforts towards the full, successful and multilateral conclusion of the negotiations pursuant to paragraphs 45, 47 and 48 of the Doha Ministerial Declaration in fulfilment of the commitments undertaken at Doha. In those areas where a high level of convergence on texts has been reached, we urge Members to commit to maintain this convergence as the basis for further negotiations towards the conclusion of the DDA.
29. We also urge Ministers to instruct their officials to continue working towards the expeditious conclusion of the DDA with a renewed sense of urgency under the auspices of the Trade Negotiations Committee to advance its development objectives for the least developed country Members. We call for the convening of a special meeting of the General Council no later than 31st March 2016 and every three months thereafter to review the progress of work done towards this successful conclusion in a time-bound manner.
30. We emphasise that without successful conclusion of the DDA any new issue must not be introduced.
31. We emphasise the need to ensure that Regional Trade Agreements (RTAs) remain complementary to, not a substitute for, the multilateral trading system. Any RTA should not undermine preferences currently being enjoyed by LDCs. We call upon developed and developing country members negotiating regional agreements that do not include any LDCs to provide special provisions in favour of LDCs in order to accommodate their interest.
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Divides run deep as Ministers arrive at Nairobi WTO meet
Trade ministers are arriving in Nairobi, Kenya to begin their latest biennial conference, set to be held from 15-18 December. Whether the WTO meet will indeed be able to yield substantive outcomes is, at this stage, anybody’s guess, given the deep divides that remained across the membership at the end of preparations in Geneva.
Members have spent the past several months negotiating the terms of a possible package of deliverables to present at the meeting, which marks the WTO’s Tenth Ministerial Conference, as well as language that will set the direction of the organisation’s future work.
However, talks in Geneva ultimately left much to be decided by ministers on all fronts once the conference officially gets underway on Tuesday afternoon, with WTO Director-General Roberto Azevêdo reporting to members on 7 December that at this stage, they “have no deliverables for Nairobi – either on the potential outcomes that we identified, or on the Ministerial Declaration.”
At the time, he urged members to use the remaining time in Geneva to advance their work as much as possible before Nairobi.
“We should aim to present ministers with documents for a yes/no decision – or if necessary with only a couple of outstanding issues to resolve,” Azevêdo urged. The days that followed, however, did not yield such a result, with members forwarding bracketed documents in some areas, while remaining divided in others on whether to continue pursuing negotiations at all.
More negotiating paralysis?
The ministerial – referred to in trade circles as MC10 – has been heralded by some trade watchers as a potential landmark event, marking both the first such conference to be held in sub-Saharan Africa, as well as the 20th anniversary of the WTO.
The gathering comes shortly after other major international events such as the UN climate talks in Paris and the Sustainable Development Summit in New York, where trade has been slated as a potential means for advancing sustainability goals.
However, the repeated setbacks in the Doha Round trade negotiations have loomed over this year’s ministerial preparations, as they have over many other meets before it. This time, however, the stakes have changed, particularly given the various evolutions in the global trade landscape, including among others the proliferation of regional and “mega-regional” trade deals – many of which are now addressing areas that do not feature in WTO negotiations.
How to ensure that the WTO remains relevant as a negotiating forum has therefore been a key focus for members, with some such as China, India, and the African Group, among others, advocating for language reaffirming the Doha Round and subsequent ministerial declarations and decisions. Others, such as the US, EU, and Japan have opposed such language and are pushing for discussing the same issues outside that context, alongside “new” ones.
Calling upon members to demonstrate flexibility and political will to resolve their disagreements, Amina Mohamed, Kenya’s Cabinet Secretary for Foreign Affairs and International Trade and the chair of the ministerial, noted in a piece for the Huffington Post that “the Tenth Ministerial in Nairobi is the last chance for some time to come for the WTO to dig itself out of its negotiating stasis.”
The updated draft of the ministerial declaration – dated 9 December and released by Bloomberg BNA – shows various bracketed areas that will need to be tackled by ministers over the coming days. Brackets are included in the preamble and all three parts of the ministerial declaration – which address the achievements and challenges over the WTO’s 20-year history, any decisions from the ministerial, and the future work of the organisation, respectively. The area with the most brackets, however, is the third and final part.
Various alternative paragraphs are put forward in that section, ranging from reaffirmations of the Doha Development Agenda and subsequent ministerial declarations and decisions; a recognition of different perspectives without any final agreement; or instead providing instructions to WTO members that they “continue deliberations” on how to address their disagreements with a view to agreeing a way forward by the end of next year.
Among these brackets is a paragraph on undertaking, “at least on an exploratory basis,” trade-related issues that would require discussion for the WTO to keep pace with the changing global trading system.
Agriculture
Over the past week, Azevêdo reportedly held Green Room meetings with ambassadors of key trading countries on the three areas that have lately commanded the attention of farm trade negotiators – specifically, agricultural export competition, the special safeguard mechanism (SSM), and public food stockholding – to see whether some of the existing gaps could be resolved.
However, farm talks chair Vangelis Vitalis of New Zealand reported at an informal meeting on Friday, 11 December that “this group did not succeed in bridging the significant gaps that still separate members,” noting that his 7 December report on the state-of-play in the agriculture negotiations “remains eerily and depressingly valid.”
Vitalis reportedly noted, however, that of the areas on the table, things were looking slightly more positive on export competition, expressing hope that ministers could provide useful guidance.
At the same meeting, members discussed a revised proposal from the G-33 coalition of developing countries regarding a special agricultural safeguard. The proposal co-exists with the earlier SSM proposal.
Currently, the special agricultural safeguard in the Agreement on Agriculture is only available to countries that converted non-tariff border measures into tariffs during the Uruguay Round of trade talks, and as a result is not available to most developing countries. The G-33 proposal would expand this to allow all developing countries access to this safeguard in the case of an import surge for products that have an SSM symbol in their schedules, among other provisions.
Sources say that the proposal has been welcomed cautiously in some quarters, such as the EU and Norway, as having more promise, while noting there was no time to discuss it ahead of Nairobi. Others, such as Brazil and Argentina, continue to question the viability of achieving a safeguard-related outcome without a result on market access.
LDC package, rules
Another lingering question is whether the event will be able to deliver substantive outcomes for the WTO’s poorest members, those classified as least developed countries (LDCs). In that context, four main areas have been discussed as items for a possible LDC “package” – duty-free, quota-free market access (DFQF), cotton, the LDC services waiver, and preferential rules of origin – with varying success.
Regarding the LDC package, while advances have been very limited in areas such as DFQF, some progress has been seen in rules of origin. Ambassador Steffen Smidt of Denmark – the talks’ chair – reportedly circulated a revised chairman’s text late last week which, he said, could serve as a potential opportunity for reaching consensus. MC10 negotiations will be based off of the bracketed draft text.
Another area where WTO members have been considering possible deliverables for Nairobi is under the “rules” negotiations, which address anti-dumping, subsidies and countervailing duties, fisheries subsidies, and provisions on regional trade agreements (RTAs).
Members have been debating possible transparency-related outcomes in these areas, as well as prohibitions on fisheries subsidies. Whether to take on more rules-related negotiations in Nairobi has nevertheless proven divisive, sources say, with no convergence on any proposals to date and no clear path forward for MC10.
While some members suggest that a lower-ambition outcome on rules may still be possible for Nairobi, others are less certain that a deal is still feasible and whether that would be the best use of ministers’ time, while still a third group opposes a rules outcome at the ministerial and is instead pushing for talks later on.
EIF pledging conference, LDC accessions
Some notable events related to LDCs are on the docket for Nairobi. For example, Monday 14 December, the day prior to the launch of the ministerial, will see the hosting of the pledging conference for the Enhanced Integrated Framework (EIF), a multi-donor Aid for Trade programme designed exclusively for least developed countries. The pledging conference marks the launch of the second phase of the EIF, which will run from 2016 to 2022.
Later in the week, two least developed countries – Liberia and Afghanistan – are set to be invited into the organisation, with the accession ceremonies scheduled for Wednesday and Thursday, respectively. The two countries would, once they ratify their accession terms, become the WTO’s 163rd and 164th members.
Possible ITA-II deal?
Another open question going into the ministerial would be whether a group of countries negotiating to expand the product coverage of the WTO’s Information Technology Agreement (ITA) – a tariff-cutting plurilateral pact for information and communication technology (ICT) products – will be able to wrap up a final deal.
A final product list was announced by the ITA-II expansion members – who are a subset of the original ITA’s membership – in July. In the months since, negotiators have been working to agree the “staging periods” for phasing out tariffs on those 201 products, with these product additions meant to reflect some of the new commercial realities of technology trade. Tariffs would be removed either upon the ITA-II’s entry into force, or within three, five, or seven years.
While advances have been reported in the latest talks, with some key participants reducing the number of goods they aim to put in the longer phase-out periods, the final hold-up is said to be the continued need for a revised national tariff schedule from China as well as for Beijing’s lifting of reservations on some members’ schedules.
“If things drag deeper into the week, this precious initiative risks being thrown into the less-than-savoury stew of the Doha Development Round discussions or misused as a negotiating chip against unrelated issues,” said John Neuffer, President and CEO of the Semiconductor Industry Association and a long-time watcher of the talks.
At the time of this writing, a press conference on the ITA, hosted by Japan, was scheduled for Wednesday 16 December, trade sources confirm. Whether an outcome will be ready by then remains uncertain at this stage.
E-commerce, TRIPS non-violation, TFA
Despite the uncertainty, there are some draft decisions already prepared for ministers to approve in Nairobi. These involve renewing the WTO’s long-standing e-commerce work programme and moratorium on e-commerce duties, as well as renewing a moratorium on non-violation and situation complaints under the Trade-Related Aspects of Intellectual Property Agreement (TRIPS), both regular items on ministerial conference agendas.
A draft decision on the WTO’s work programme on small economies has also been forwarded to ministers for approval. Separately, while WTO members are still far short of the number of ratifications needed to bring the Trade Facilitation Agreement (TFA) inked two years ago in Bali into force – with ratifications now numbering at 57 with Kenya’s submission – various events relating to the multilateral pact are scheduled to be held in Nairobi on the conference sidelines.
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WTO Ministerial: A time for reflection in Nairobi on the future of global trade
This week, trade ministers will gather together in the Kenyan capital city of Nairobi for the WTO’s Tenth Ministerial Conference, marking the first time that the global trade body’s highest-level meeting will be held in sub-Saharan Africa.
The occasion will also allow for a celebration of the WTO’s 20th anniversary, as well as giving ministers a chance to agree on a possible set of deliverables from the areas of agriculture, development and least developed country issues, and “rules,” as well as chart the course of the international organisation’s future work – particularly regarding the Doha Round and so-called new issues.
Beyond the fanfare, however, is the worry that months of preparations and negotiations may all be for naught. Headed into this year’s ministerial, disagreements among WTO members both over the content of various specific deliverables – as well as how to address the organisation’s future negotiating work – remained unresolved, leaving ministers with some very difficult decisions to make in the days ahead, as well as in the months and years to come.
Meanwhile, the structure of trade governance is changing rapidly, leaving questions over how – and if – the global trade club will be able to respond and appropriately adapt.
As the world turns, what role for WTO?
The Doha Round negotiations just hit the 14-year mark last month, having been launched in the Qatari capital in November 2001. At that stage, WTO members were aiming to wrap up this new round of negotiations – designed to have development at its core – by January 2005.
The years since, however, have taught WTO members a strikingly different lesson with multiple high-profile failures and stalls in the negotiations. The adjectives and metaphors used to describe the Doha talks in recent years have now become familiar in their negativity: the Round is struggling, stalled, moribund, a zombie, or just plain dead. The inability to update global trade rules has, in turn, fuelled fears that the challenges of the Doha Round would eventually drive the organisation into irrelevance, unable to adapt to changing realities.
Whether the original Doha mandate fully addresses the needs of the world of today – versus that of 2001 – is another question being raised in some trade circles. Abandoning it, however, has been referred to as untenable by others.
Global trade realities have indeed altered significantly in the WTO’s 20 year history. The WTO has gone from the 128 signatories of the General Agreement onTariffs and Trade (GATT) in 1994 to 162 members, with Kazakhstan the latest to enter the organisation on 30 November of this year.
China, which joined the WTO in 2001, has now become the world’s largest exporter. Developing countries, particularly emerging economies such as Brazil, Russia, India, China, and South Africa, are playing an ever-greater role in world merchandise trade, according to this year’s edition of the WTO’s International Trade Statistics.
Regional and bilateral trade deals are also on the rise, with 619 being notified to the international organisation as of this month, with over 400 of these in force. “Mega-regional” pacts, such as the recently-concluded Trans-Pacific Partnership (TPP) negotiations, have drawn particular notice for their potential commercial impacts and their forays into areas not traditionally dealt with in trade deals.
Average applied tariffs, meanwhile, have dropped in half – from 15 percent in 1995 to less than eight percent today. Trade volumes have doubled, though recent years have shown worrying signs of slowing trade growth in the wake of the global financial crisis. Meanwhile, the digital economy has taken off, with electronic commerce being credited for slashing trade costs and boosting cross-border trade, thanks to the advent of new technologies and the internet.
As the global economy continues to evolve, the Doha Round, otherwise known as the Doha Development Agenda or DDA, has meanwhile showed comparatively little progress, with some critics calling it a drag on the organisation’s work, reputation, and potential while criticising the scope of its mandate as either too broad to yield an outcome or too narrow to address the rapidly-changing trade scene.
As a result, the global trade body as a whole has repeatedly been said to be arriving at a crossroads, despite the fact that the organisation’s other key pillars – trade monitoring and the work of the WTO’s regular bodies, as well as the dispute settlement system – have been widely applauded for their success.
Trade monitoring, for example, played a significant role during and after the 2008 financial crisis in boosting transparency on the trade policy measures being taken by WTO members, while in the area of dispute settlement the global trade body hit a notable milestone in November with its 500th dispute.
However, questions on how to build upon and improve the work of these other pillars, have been raised. The pace of notifications by members across various areas has proven slower than what was originally envisioned. The dispute settlement system, for its part, has essentially been a victim of its own success, now facing a caseload that in both number and complexity calls for more resources than what are currently available, leading to significant delays. This is now the subject of discussions between the membership and WTO officials on how to address such challenges.
Even so, the pace of the Doha Round negotiations still seem to capture the bulk of the headlines when it comes to the WTO – as well as the harshest scrutiny.
From post-Bali to post-Nairobi
After a series of high-profile collapses and setbacks, the 2013 ministerial conference in Bali, Indonesia, provided a brief reprieve from these criticisms: ministers were able to announce that they had successfully negotiated the first global trade agreement since the WTO opened its doors in 1995.
This new deal, known as the Trade Facilitation Agreement (TFA), would ease customs procedures in order to speed up trade flows, while providing developing countries with technical assistance and capacity-building in order to implement these commitments. It also achieved a notable first for WTO agreements, in that the commitments adopted by members would be linked to their capacity to implement them.
Estimates on the economic impact of the agreement have widely varied, with this year’s World Trade Report placing the annual increase in merchandise exports at US$1 trillion once in force. When that entry into force occurs, however, is yet unclear, with only 56 WTO members having ratified the agreement at press time – just under half of the number required.
A handful of other deliverables relating to agriculture and development were also announced in Bali, although these were mainly non-binding. Perhaps most notable of all, however, was a commitment by ministers to reinvigorate the Doha Round trade talks, specifically by developing a “clearly defined” post-Bali “work programme.” Ministers agreed to prioritise areas that did not yield binding outcomes at the time and directed members to resume exploring options within WTO committees and negotiating groups for those issues not addressed at the conference.
The results from Bali were widely heralded as a shot in the arm for the organisation. Now, two years later, the momentum from the 2013 ministerial has been replaced by frustration in many quarters, as trade negotiators have struggled to overcome their differences, both old and new.
Earlier this year, members had attempted to return to the toughest issues of the Doha Round – agriculture, non-agricultural market access (NAMA), services, and rules – as they worked to craft the work programme mandated in Bali. These efforts, however, were unsuccessful, after members were unable to resolve disagreement over issues such as whether to use the 2008 draft texts in agriculture and NAMA – and if so, to what extent – as well as what ambition to aim toward in time for a 31 July 2015 work programme deadline.
With such a troubled history and low expectations, what are the actual stakes for the upcoming Nairobi meeting? Will ministers be able to reach an outcome that can draw back the interest of those stakeholders who have largely written off the WTO’s negotiating function, or will the global trade body’s 162 members instead be entering uncharted waters, without a clear course to follow or significant deliverables to applaud?
Key in answering these questions, at least partially, is how members address in their planned “ministerial declaration” the Doha Round, the future work of the organisation, and so-called new issues that do not currently fall within the scope of the negotiations’ mandate.
Some major traders, such as the US, EU, and Japan, have been opposing specific language referring to the reaffirmation of the Doha ministerial declaration and subsequent ministerial outcome documents, as well as language regarding the continuation of the Doha Round, expressing an interest instead in discussing those same topics outside of that framework, together with exploring newer issues.
Meanwhile, various emerging economies and some developing countries, such as China, India, South Africa, Ecuador, Venezuela, and Indonesia, have publicly proposed language in the declaration that would include a reaffirmation of the Doha Round and the ministerial declarations and decisions taken since. Similar language has also been backed by the African Group.
New members, possible plurilateral outcomes
While most eyes will be on the multilateral discussions in Nairobi, some interesting signals could come from the “plurilateral” front. For one, a group of WTO members that has been working to expand the product coverage of the Information Technology Agreement (ITA) – a tariff-eliminating deal on various information and communication technology (ICT) goods – in order to bring it up to date with the times and commercial realities could be formally completed in Nairobi.
That group of members had already announced in July that they had reached agreement on a “product list” of over 200 goods to add to the ITA’s coverage. Since then, they have been negotiating to finalise the scheduling of the tariff phase-outs for these products, with a view to having an outcome ready to forward to ministers from that group in Nairobi.
Another tariff-cutting initiative, focusing specifically on environmental goods trade, has also been working toward reaching a finalised product list in the near-term, though sources indicate that this will not be ready in time for Nairobi and may instead be delivered at some stage in the coming year. This proposed pact, known as the Environmental Goods Agreement, was launched in the Swiss ski resort town of Davos in January 2014, with negotiations kicking off later that same year.
Two countries are also expected to be invited into the WTO during the Nairobi meeting, with both being least developed countries (LDCs). These are Afghanistan and Liberia, whose accession packages were approved ad referendum earlier this autumn.
The following set of briefings are designed to provide an overview of the negotiations that have taken place in Geneva, Switzerland, throughout 2015 in preparation for the Nairobi ministerial conference. These notes provide a brief recap of the relevant history of these negotiating areas, their respective mandates, and the state of play shortly prior to the ministerial.
This article is published under Bridges, Volume 19 - Number 42, by the ICTSD.