137th Session of the Trade Committee - Summary

The OECD Trade Committee provides senior trade policy officials of OECD Member countries and several observer countries the opportunity for a wide-ranging exchange on key trade policy issues and developments. It held its 137th Session on 21-22 October 2003 in Paris (agenda of the 137th Session of the Trade Committee). The meeting was preceded by a one-day informal consultation between the Trade Committee and civil society organisations.

A significant portion of the Trade Committee meeting was devoted to an assessment of the 5th WTO Ministerial Meeting in Cancun and a discussion on the way forward for the DDA. All participants agreed that what happened in Cancun was a collective failure, and that all WTO members needed to take responsibility for the outcome of the meeting. Most participants agreed that all WTO members need to engage productively and make contributions in order to get the negotiations back on track. All participants reiterated their commitment to the multilateral trading system, although several of them did not exclude the possibility of plurilateral agreements within the WTO to address certain issues. Most participants therefore felt that Cancun was a temporary setback of the DDA, albeit a serious one, and considered that putting negotiations back on track was a priority. However, they understood that it was likely that a period of reflection would take place before the resumption of negotiations.

While participants agreed that the Doha Declaration was still the basis for negotiations, and that by no means should the ambitions of the Declaration be diminished, there was some debate about how practically to get the negotiations started again. In this regard, most participants agreed that the Derbez text of 13 September could be used as a basis for discussion, even if many participants saw problems with parts of the text. Participants called for a spirit of compromise, and recalled the importance of the single undertaking and the need for all Members to reap gains.

In Cancun, groups of developing countries, e.g. the G22 and the G90, were active, with participants noting their differing interests, ambitions, and degree of commitment to the negotiations and the multilateral trading system more broadly. Many participants noted the need to distinguish between developing countries at different stages of development, both for determining special and differential treatment and for evaluating the need for adjustment measures and capacity building; it was understood that this was a very complex issue. It was suggested that more market-oriented incentives were needed for developing countries to “graduate themselves” to developed country status on a voluntary basis, since currently developing countries were reluctant to give up the advantages received due to special treatment

On ways to move forward on the Singapore issues, several options were noted. One was to move forward with negotiations on trade facilitation and transparency in government procurement as suggested in the Derbez text, while working to further clarify investment and competition for negotiation at a later stage. Several participants reiterated the importance they attached to all four issues. Several participants mentioned the possibility of a plurilateral agreement within the WTO as a way forward on investment and competition.

Concerning systemic issues of process and procedure within the WTO, while most participants agreed that reform was needed, they all stressed that this should not be a distraction for the current negotiations under the DDA.

On the role of the OECD in helping to get the negotiations back on track, participants expressed the view that the current OECD programme of work was already addressing many key issues for the negotiations through its high-quality analytical work. Suggestions were made for work to be started or intensified in a number of areas: costs of adjustment to trade liberalisation; erosion of preferences; South-South trade; the Singapore issues; special and differential treatment, including the calibration of countries on the basis of objective criteria; country- or region-specific studies; and sectoral studies. It was also suggested that outreach and dialogue with non-members be further enhanced and targeted to specific countries and/or regions.

On the subject of “Policy Coherence for Development”, which can be defined as the systematic promotion of mutually reinforcing policy actions across government agencies in support of development goals, participants were informed of the latest actions in this horizontal initiative within the OECD. The OECD initiative aims to raise awareness of this issue, and encourage OECD Committees to mainstream development issues into their work programme. In the OECD, the initiative is focused on seven areas: agriculture, trade, investment, technology and knowledge transfer, migration, fisheries and donor policies. The Committee and its Working Party will continue to take account of the need for coherence between development and trade policies and will return to this theme in the spring.

The Trade Committee also examined two proposals for work made at the 2003 Ministerial Council Meeting: a proposal by Japan on “Enhancing Performance of the Service Economy” and a proposal by Sweden on “Trade and Structural Adjustment”. Both proposals received support, and the Trade Committee expressed its willingness to contribute to both studies.

In response to the invitation made to Delegates to share information and discuss recent developments in policies that may significantly affect trade relations or the function of the multilateral trading system, Australia informed Delegates of the free trade agreement recently concluded with Thailand and which will enter into force on 1 January 2005.

The Trade Committee will hold its next meeting on 17-19 February 2004.