WTO MC 11—from Bangladesh perspective

The Ministerial Conference, the highest-level decision-making forum of the World Trade Organisation (WTO), which is the single multilateral rule-based trading system in the world, will take place on December 10-13 this year in Buenos Aires, Argentina. A high-level delegation from Bangladesh, led by the Commerce Minister and represented by relevant government officials and business leaders, are attending the conference. This year, decisions are expected in the areas of Least Developed Countries (LDC) issues, e-commerce, public stockholding of food, fisheries subsidies, etc.

The WTO is the forum for setting multilateral trading rules, a platform for trade negotiations and the apex body for settling trade disputes. One hundred and sixty-four countries are the members of this organisation, which facilitates more than 98 per cent of the world's total trade. The WTO through its various agreements like General Agreement on Tariffs and Trade (GATT), General Agreement on Trade in Services (GATS), Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), and Trade Facilitation Agreement (TFA), creates an enabling environment in the area of international trade. The forum with mandates of openness, transparency and inclusiveness, works for meaningfully integrating the LDCs (among the 47 LDCs, 36 are WTO members) to the multilateral trading system. Several arrangements within the WTO like Special and Differential Treatments (S&DT) and flexibilities in all the agreements, Aid for Trade and the Enhanced Integrated Framework (EIF) are designed to accommodate interests of the LDCs and to improve their share in global trade which, at present, is only around 1.0 per cent. The ministerial conferences are generally held in every two years as the platform for having negotiations and taking decisions on these issues and, therefore, have immense importance.

The issues that might be discussed at this year's conference can be divided into three categories, namely LDC or development issues, issues already on the table and new issues. LDC issues include the Duty-Free, Quota Free (DFQF) market access, LDC Services Waiver, Preferential Rules of Origin, etc. These are the areas where Bangladesh should put forward strong arguments in order to get meaningful benefits. Bangladesh has been active in the negotiation of the DFQF market access for the LDCs since the Singapore Ministerial in 1996, where it raised the issue as the LDC co-ordinator. As a result of those negotiations, the first concrete decision on DFQF came from the Hong Kong Ministerial, held in 2005. As stated in the Hong Kong Declaration, developed countries and developing countries in a position to do so, should provide DFQF market access to all products originating from the LDCs and countries facing difficulties to provide DFQF to all products shall provide the benefit to at least 97 per cent of the products. The Bali Ministerial (2013) had a decision which urged the countries, which are yet to implement the decision, to improve their DFQF market access before the subsequent ministerial. Due to divergent views of members on scope and coverage, the issue was not raised at the subsequent Nairobi Ministerial, held in 2015. Most of the developed and many developing countries have provided DFQF market access to the LDCs for 97 per cent or more products of the tariff line. However, there are still countries which have not yet implemented the decision, like the USA and Russia. Now Bangladesh should carefully decide whether to take this issue up in the multilateral forum or to negotiate bilaterally. 

Another issue where Bangladesh and other LDCs should put forward their arguments is the LDC Services waiver. Till date, despite the waiver decision taken at the Ministerial in 2011 and the decision on operationalisation of waiver taken at the Bali Ministerial in 2013, only 24 countries have submitted their preferential schedule of commitments for allowing easy access to services and service providers from LDCs. The preferential commitments, however, impose stringent conditions to services and service providers. The countries have shown reservations in opening up Mode 4, which is movement of natural persons for the LDC service providers.  It should be mentioned here that the LDCs had significant interests in Mode 4 waivers.  Stringent Mode 4 conditions include nationality requirement, residence permit, authorisation from relevant ministries, registration with local institutes, etc., which hinder the LDCs from utilising the waiver. It is also observed that most of the countries have not gone much beyond their DDA (Doha Development Agenda) commitments in trade in services. Bangladesh and other LDCs should urge the countries, which have not yet provided their commitments, to do so before the next ministerial. In addition, a demand can also be placed for a re-visit or revision of the preferential notification so that the LDCs can reap benefit from the service waiver.

On the issue of Rules of Origin where the Nairobi Ministerial clearly states that developed countries should provide preferential Rules of Origin criteria to the LDCs, which is allowing the use of non-originating materials up to 75 per cent of the final value of the product, or an equivalent threshold, the actual implementation seems far behind. With Bangladesh actively pursuing the matter, thhis ministerial should take a stance on operationalising the decision.

Another widely discussed issue is extending the continuation-period of   preferential treatment to the LDCs after their graduation. As per existing rules, LDC countries may continue to get the preferential benefit for three years after graduation. A longer period of continued preferences is necessary for the LDCs to make their transition smooth. LDCs were trying to include the issue in the Ministerial Agenda but failed due to strong reservation of some developed countries. This issue is critically important for Bangladesh, as it is expecting to be graduated from the LDC status soon. Bangladesh can take a stand in further pursuing the matter at the negotiation forum.

Bangladesh should be careful in the negotiations on the continuing issues like fisheries subsidies and new issues like Agreement on e-commerce. Bangladesh should also actively participate and negotiate in keeping a strong S&DT (Directorate General of Supplies and Disposals ) provision for the LDCs if a WTO binding rule on fisheries subsidies are taken. Bangladesh not only should support the prohibition of Illegal, unreported and unregulated fishing practices, but also ensure that LDCs get some preferential treatment in order to develop their fisheries sector. The issue of e-commerce is a cross-cutting issue and Bangladesh is yet to have a developed and well-regulated e-commerce sector. Having WTO binding commitment in this area at this moment, might be risky for Bangladesh and may have negative impact for the domestic players. Similarly, on other continuing issues like public stockholding of food, cotton, agriculture, Bangladesh should put forward its offensive or defensive interest, whatever is applicable, depending on the arguments on the table.

This year the WTO is considering appointing five facilitators in the areas of agriculture, development, rules, e-commerce and service who will facilitate the open negotiations to be held and will work with the chair. Since there will be no closed-door meeting, as mentioned by the Director General of the WTO, there is space for LDCs to negotiate and establish their interests and bring positive results. The Commerce Minister, who led the LDC group of the WTO several times and played a significant role in negotiating the issues of LDCs' interest, has an opportunity to play an important role in bringing a meaningful outcome not only for Bangladesh, but also for the all the LDC member-countries.

Amitava Chakraborty is Director, Bangladesh Foreign Trade Institute. [email protected]