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EU Calls for Duty-Free Access to Poorest Countries

Dec. 12 (Bloomberg) -- The U.S. should follow Japan and the European Union in giving quota- and tariff-free access to the world's poorest countries, European Trade Commissioner Peter Mandelson said.
Japan on Dec. 9 pledged $10 billion over three years to promote trade with developing nations as a commitment to economic development before World Trade Organization talks that begin tomorrow in Hong Kong. Japan, the world's second-largest economy, agreed to buy more goods from poor countries and relax import duties as part of an aid package that may include low- interest loans, grants and technical assistance.
Wealthy economies such as the U.S. should follow suit, Mandelson said. ``We need this as a down-payment for developing countries here in Hong Kong,'' he told a news conference today. ``We need to give a signal, right from the beginning.''
The WTO's 149 members are trying to cobble together a trade agreement that would pump billions of dollars into the world's economy and lift as many as 300 million people from poverty. The Hong Kong talks are part of a round of negotiations initiated in Doha, Qatar, in 2001, aimed at helping poor countries by cutting agricultural subsidies and tariffs in the U.S., Japan and Europe.

Flexibility
While the U.S. has ``an interest in improving market access for the least-developed nations,'' any deal on duty-free, quota- free access must come ``within the context of our existing programs and allow us some flexibility,'' U.S. Trade Representative Rob Portman told a Hong Kong press conference. Further announcements are planned on a development package, Portman said, though he declined to provide details.
More than half of all exports from the 50 least-developed countries such as Bhutan, Mauritania and Djibouti end up in the EU. The 25-nation bloc buys almost 70 percent of agricultural exports from those countries -- more than the U.S., Japan, Canada, Australia and New Zealand combined.
The EU in 2001 adopted the so-called Everything but Arms regulation that granted duty-free access to imports of all products from the poorest nations with no quantitative restrictions except to arms and munitions.
Imports of bananas, rice and sugar still aren't liberalized, though duties on these products will be gradually scaled back until duty-free access is granted for bananas in January, for sugar in July 2009 and for rice in September 2009.

Trade Aid
The amount of trade-related technical assistance and ``capacity building'' to help poor nations participate more efficiently in global commerce has surged by 50 percent since the Doha trade round began, according to a report by the WTO and Organization for Economic Cooperation and Development.
Assistance to help countries reform their trade policies and prepare for closer integration in the international trading system rose to $850 million in 2003-2004 from $650 million in 2001-2002. Trade development aid climbed to $2.1 billion from $1.3 billion while payments to help countries build an infrastructure to produce, transport and export goods grew to $9.3 million in 2003, according to the joint report.
Still, ``least-developed countries represented 16 percent of total commitments for support to trade policy and regulations and 20 percent for support to trade development, less than their 25 percent share, in 2003, in both categories,'' the two organizations said in today's report.

To contact the reporter on this story:
Jennifer M. Freedman in Hong Kong jfreedman@bloomberg.net

Source: Bloomberg