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WTO Agreements in Doha Could Help Fight Poverty and Promote Sustainable Development Efforts

15 November 2001—With the global economy mired in the doldrums, the decision by the 142 member countries of the World Trade Organization in Doha, Qatar to hold negotiations on removing trade barriers and promoting trade and investment in developing countries could provide a significant boost to efforts to fight poverty and protect the environment.

In addition to an agreement calling for negotiations on a range of key trade issues, the ministers attending the WTO talks joined in a declaration stating that governments had the right to deal with health problems despite any language to the contrary in the agreement on Trade-Related Aspects of Intellectual Property Rights, instruments governing the use of intellectual property. This agreement could pave the way for developing countries to obtain generic versions of patented drugs far more cheaply to combat diseases such as AIDS, tuberculosis and malaria.

United Nations Secretary-General Kofi Annan welcomed the agreement and said he hopes the new negotiations will lead to a true "development round" that removes trade barriers to developing country goods, opens market opportunities and helps developing countries build up the capacity to take advantage of those opportunities.

The WTO agreement spells out a programme of work through 2005, and significantly, calls for negotiations aimed at phasing out subsidies for agricultural products. Developing countries have maintained that high levels of subsidies for farmers in developed countries have effectively blocked their exports from competing in those markets. The World Bank estimates that at present, agricultural subsidies in developed countries amount to $1 billion a day, and elimination of those subsidies would benefit developing countries to the tune of $1.5 trillion a year.

Negotiations will also be held to improve the market access of non-agricultural products by reducing or eliminating tariffs. The ministers agreed that the new round of talks must result in developing countries receiving preferential treatment. In addition, countries will take up other issues, such as "anti-dumping" laws that developed countries have used to prop up their own industries.

World Bank President James Wolfensohn told the WTO that World Bank research suggests that the elimination of remaining barriers to trade in goods could reduce the number of poor in developing countries by 300 million in 2015.

According to some estimates, the new agreements could lead to the disappearance of as much as $700 billion in tariffs and trade-distorting subsidies, possibly generating $2.8 trillion in global economic activity by 2015.

Developing countries, however, entered the negotiations extremely wary of launching a new round of negotiations, contending that developed countries have not kept their side of the bargain under the previous rounds to open their markets to certain goods, such as textiles and apparel, from developing countries.

Indian Minister of Commerce and Industry, Murasoli Maran, said, "We cannot be held hostage to unreasonable demands that concessions be made for carrying forward what are already mandated negotiations. Nor can one accept the argument that there is mandate only for commencing certain negotiations and not for completing them."

Maran added that India was firmly opposed to any effort to link trade and labour or environmental standards. "We consider them as Trojan horses of protectionism."

But developing countries did win several important concessions. In addition to the drug patent issue, the European Union was granted permission to provide preferential tariff concessions to 77 developing countries in Africa, the Caribbean and the Pacific. Traditionally, the EU imported goods from these countries at preferential rates, but under WTO rules, the practice was ended, leading to sharp disputes. Countries in the Caribbean, for example, found themselves unable to compete in the banana market with the larger plantations found in Latin America, without such preferential treatment.

The WTO also expanded its membership at the Doha meeting, approving the applications of China and Chinese Taipei. There are 28 countries currently seeking admission to the WTO.

Calling the present downturn in the global economy "deeper, more widespread and more resilient than anticipated," United Nations Under-Secretary-General for Economic and Social Affairs, Nitin Desai, said the "clear and universal commitment to a new round of trade negotiations at Doha should immediately bolster confidence in international trade and in the international trading system."

The ministers agreed that they "strongly reaffirm" their commitment to the objective of sustainable development, and stated that they remained convinced that an open and non-discriminatory multilateral trading system, environmental protection, and the promotion of sustainable development can be mutually supportive. They also stressed that no country should be prevented from taking measures to protect the environment or to save lives, as long as they were not protectionist measures in disguise.

The ministers also urged greater cooperation between the WTO and international environment and development organizations in the process leading up to the World Summit on Sustainable Development that will take place in Johannesburg next September.

Alexander Erwin, South African Minister of Trade and Industry, told the WTO that while it was agreed that there was a link between trade, development and the environment, the linkages were complex and the issues went beyond the competence of the WTO. He said such issues were better left for the Johannesburg Summit.

"We will have an opportunity for locating this dialogue in the broader conceptual framework of 'sustainable development' at the World Summit on Sustainable Development that South Africa will host next year. For South Africa, the Summit should be an occasion for going beyond the review of the implementation of Agenda 21 to address issues of global inequality and high levels of poverty."

European Union Commissioner for Trade Pascal Lamy said Doha represented only the first stop of "a virtuous sequence that I have dubbed D-M-J." He said "First stop: Doha, for the Round. Next stop: Monterrey for improved development finance. Third stop: Johannesburg for sustainability. Particularly in the post-11 September environment, we need to use all the multilateral tools at our disposal if we are to make real progress toward sustainable development."

There was criticism of the new agreement. Friends of the Earth International called the new work programme of the WTO was "a disaster for sustainable development," even though governments agreed to advance discussions on trade and environment. Claiming that previous trade liberalization had led to considerable environmental degradation, they said the recent agreement was ambiguous, narrow and could pose a threat to environmental regulations.

Alexandra Wandel of FOEI said "Governments came here with a pro-liberalisation agenda that is no longer popular. They have failed again to achieve the joined up global thinking that the world so desperately needs. There must be a complete overhaul of the trading system to make it sustainable, fair and democratic."

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24 August 2006