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Improving market access for least-developed countries (LDCs) within
the Commonwealth
Mike Moore, Director-General, World Trade Organisation (WTO)
The world's poorest countries are not reaping
enough benefits from the world trading system. Partly, this is
because they often lack basic export infrastructure, such as good
ports and roads. That is why the WTO is working together with
the World Bank, the IMF, the ITC, UNCTAD and UNDP on an "Integrated
Framework" for trade-related technical assistance to the
least-developed countries (LDCs). But perhaps more importantly,
poor countries are often unable to export freely to richer countries.
This needs to change now. Without better access to richer-country
markets, the world's poorest have no hope of escaping poverty.
Of course, on its own, freer trade is not enough to lift people
out of poverty. They also need sound economic policies, debt relief,
and help to pay for better education and healthcare. But without
trade, and the faster growth it can bring, they will almost certainly
remain in poverty.
One of my priorities as director-general
of the World Trade Organisation (WTO) is to achieve duty-free
and quota-free market access for all exports from LDCs. Yet, contrary
to what some of our critics say, the WTO does not lay down the
law. It is up to member governments to decide to open their markets
to exports from the poorest countries. I urge them to do so. And
I also urge the Commonwealth to play its part by taking a stand
on this issue, which is consistent with its long-standing support
for trade liberalisation and extremely important to many of its
members.
Such a move would actually benefit consumers
in richer countries. And it need not harm their domestic industries.
Exports from LDCs account for a mere 0.5 per cent of world trade.
They pose no threat to companies in rich countries. Yet many rich
countries persist in offering LDCs free access in areas where
they have no comparative advantage and no prospect of acquiring
it, such as high-technology products and sophisticated industrial
consumer products, but not in areas where they are competitive,
such as textiles, footwear, agricultural products and tropical
products. LDCs need access to markets where they can compete,
not ones where they can't.
Richer countries need to eliminate their
tariff as well as their non-tariff barriers. In particular, they
need to tackle high peak tariffs and 'tariff escalation,' the
pernicious policy of taxing exports of processed goods more heavily
which is so damaging to LDCs' prospects for development. Non-tariff
barriers include quotas, the protectionist use of rules of origin
on products exported from LDCs; unnecessarily restrictive import
licensing and authorisation requirements; and unilateral standards
and regulations (in particular on health and phyto-sanitary issues)
that are more stringent than internationally agreed ones.
I have been consulting with WTO member governments
on measures to help LDCs since the WTO's General Council granted
me a mandate to do so on February 8th. I have been pressing rich
and developing countries alike to offer improved market access
to LDCs. Following my consultations, I was able to announce in
my report to the General Council on May 3rd that 13 WTO members
(12 countries plus the European Union) have taken, or signalled
that they intend to take, action to improve access for LDCs to
their markets.
The WTO Quad (the United States, European
Union, Japan and Canada) have proposed to implement tariff-free
and quota-free treatment for <I>essentially all<P>
products originating in LDCs. In granting such treatment, they
require that it be consistent with their domestic requirements
and with their existing international commitments to grant preferential
treatment to developing countries, such as the United States's
Generalised System of Preferences (GSP) and the European Union's
Lomé agreements. As well as the Quad, Chile, the Czech
Republic, Hungary, Iceland, Korea, Norway, New Zealand, Slovenia
and Switzerland have indicated that they will offer LDCs a better
market-access deal. Undeniably, this is progress. But it is too
slow, and not enough.
The Commonwealth ought to take the lead in
pushing for completely free access to rich country-markets for
all LDC exports. For one thing, the 15 Commonwealth countries
that are LDCs would benefit directly from an opening of rich-country
markets to LDC exports. More broadly, 46 of the 54 Commonwealth
countries are WTO members. So the Commonwealth has a huge stake
in preserving and strengthening the rules-based multilateral trading
system, which has done so much since 1948 to make the world a
richer place. Even the eight Commonwealth countries that are not
members of the WTO (the Bahamas, Kiribati, Nauru, Samoa, Seychelles,
Tonga, Tuvalu and Vanuatu) benefit from the prosperity that freer
trade brings the world.
The rich members of the Commonwealth have
a duty to help poorer members. Australia, Britain, Canada, New
Zealand account for about 11.5 per cent of world trade. Together,
they could make a difference. In particular, Canada and Britain
should use their influence within the Quad to the full. And fast-growing
developing Commonwealth countries, such as India, Pakistan, Singapore
and South Africa, which have already made some improved offers
to LDCs could also do more.
The Commonwealth as whole ought to come out
in favour of the objective of offering duty-free and quota-free
market access for all exports from LDCs. Such a common stance
would send a powerful message to the international community.
This would not be the first time that the Commonwealth had taken
a lead on trade issues. Remember that in the Fancourt Declaration
the Commonwealth stressed that the multilateral trading system
must take account of the interests of all of its members and not
just the most powerful. And it also said that the next round of
world-trade talks must have a development dimension and that "the
Commonwealth can contribute". Now is the time for the Commonwealth
to match its fine words with deeds.
The Commonwealth is a force for good in the
world. It has provided an intellectual basis for many of the policies
that we at the WTO are now following. Its technical assistance
here in Geneva is greatly valued. I hope it will join us now in
trying to do more to boost the prospects of the world's poorest
countries.
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