138th 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 138^th Session on 17-18 February 2004 in Paris.

The first part of the meeting was devoted to an informal consultation between the Trade Committee and the Trade Union Advisory Committee (TUAC) of the OECD. This consultation provided the opportunity for an informed and mutually beneficial exchange of views on a variety of trade-related topics, with a focus on the ongoing OECD horizontal project on Trade and Structural Adjustment, which is based on a proposal by the Swedish government. In TUAC’s introductory comments, representatives reiterated that they consider trade as a means to the important goal of sustainable development, and not as an end in itself. They pointed to the need for improved coherence between international organisations dealing with economic and social issues, adding that the social dimension of trade should be given more attention in the international debate.

TUAC expressed its appreciation and support for the OECD initiative to undertake a horizontal project on Trade and Structural Adjustment. They underlined the importance of structural adjustment as a tool for development, in particular through employment creation and poverty reduction. They advocated a whole-of-government approach to structural adjustment to ensure coherence and balanced outcomes. They pointed to the need to examine in particular the role of export processing zones, including their impacts on the labour market, along with the textiles sector and the impact of trade-related structural change on the informal economy. TUAC also agreed to provide case studies of experiences in trade-related structural adjustment. They stressed the need to engage the ILO on this project. They encouraged the OECD to consider transforming the project into an ongoing one, since the issue of trade and structural adjustment will continue to be an important one, and one in which the OECD could make a valuable contribution.

Trade Committee Delegates expressed agreement with many of TUAC’s views. They reacted positively to a call for a whole-of-government approach to trade and structural adjustment, but indicated that this is a complex concept which is not easy to put into practice. They also agreed it would be useful to consider extending the project. In regard to the need for cooperation between international institutions, Delegates agreed that this was essential, but also pointed to the need to respect the expertise of each institution. As one of the outcomes of the project, Delegates called for a message which would be differentiated in terms of what trade and structural adjustment mean for developed and developing countries, and in terms of the challenges presented by adjustment to both imports and exports.

Another part of the meeting was devoted to discussing the state of play in the Doha Development Agenda (DDA) and the way forward, including a preliminary discussion of the message that the Chair of the Trade Committee will send to the OECD Ministerial Council Meeting in May 2004. Delegates welcomed the fact that the environment for negotiations had improved following a period of slowed activity after Cancún. They affirmed that 2004 should not be a lost year for the DDA, but rather a benchmark year for making progress. They expressed appreciation for recent initiatives by the United States and the European Union to restart dialogue, and noted that the G20 was also showing signs of increased engagement. They saw the recent election of new chairs for the negotiations as an encouraging sign and an important prerequisite for advancing the negotiating process. Delegates felt that increased engagement from capitals would be an important part of this process. With the infrastructure now in place, Delegates felt that the focus should be on the negotiations themselves. A number of Delegates expressed the hope that a framework could be put in place by mid-year, with full modalities agreed by the end of the year.

The Trade Committee also had a discussion on the strategic orientations for its Programme of Work and Budget for 2005-2006. A preliminary document outlining possible areas of focus was presented by the Secretariat for comments and with a view to obtaining guidance for preparing the proposals for the Programme of Work, which will be prioritised by the Committee in the coming weeks. Delegates agreed that the proposed orientations were on track and provided appropriate continuity with the current Programme of Work. They underlined that the Programme of Work needed to strike a balance between having sufficient focus and maintaining the flexibility needed to respond to new developments. They agreed that the priority would continue to be the support of the WTO negotiations through objective and high-quality analysis. There was agreement on a number of areas that should receive particular focus, including the costs and benefits of trade liberalisation in goods and services and structural adjustment, including the development dimension of these issues and particularly the South-South dimension; special and differential treatment; and outreach to non-members, among others.

Delegates had the opportunity to discuss preparations for UNCTAD XI, which will take place in Brazil on 13-18 June 2004, and its implications for the OECD. The Brazilian Delegate informed the Committee on the state of preparations for the meeting. Delegates welcomed the holding of this meeting as an important forum for constructive discussions between developed and developing countries on a number of trade issues. They reiterated that UNCTAD has a valuable role to play in trade-related capacity building and technical assistance, which complements the WTO’s role as the forum for trade negotiations.

Delegates also discussed the programme for outreach to non-members for 2004. In presenting the programme, the Secretariat highlighted the need for balance in three areas: geographic balance, balance between topics addressed, and balance between global, regional and national events. Accordingly, events are planned to be held on a variety of topics in South America, Asia and Africa.  Delegates reaffirmed the importance they attach to outreach to non-members, and the continued need for clear objectives and assessment of each event, in order to make the best use of scarce resources available in this area.

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 functioning of the multilateral trading system, Korea informed Delegates of the ratification by the Korean assembly of its free trade agreement with Chile. Australia informed Delegates that agreement had been reached on a text for the free trade agreement with the United States.

The Trade Committee will hold its next meeting on 13 April 2004.