Month: January 2016

Concluded WTO historic Nairobi Package

On 19 December was concluded the Tenth WTO Ministerial Conference in Nairobi. The Nairobi Package includes six Ministerial Decisions on agriculture, cotton and least-developed countries (LDCs) related issues. The most important decision (the Ministerial Decision on Export Competition (WT/MIN(15)/W/47)) hails from the fact of abolishing export subsidies for farm. Roberto Azevêdo, the general director of the organization, commented by saying that it is “the most significant outcome on agriculture” secured in the 20-year WTO history. The other decisions include safeguard mechanism for developing countries, public stockholding for food security matters, as well as preferential treatment for LDCs concerning services and criteria for determining whether exports from such countries might benefit from trade preferences.

Furthermore, WTO members concluded a landmark IT trade deal thanks to which tariffs on information technology products, valued at over $1.3 trillion per year, will be eliminated. Accordingly, all WTO members will benefit from the agreement by enjoying a duty-free market access to the markets of the members that eliminated tariffs on such products.

 

The Ministerial Decision on Export Competition

The Ministerial Decision on Export Competition is very significant as export subsidies have distorting effects not only on domestic product but also on trade overall. Such subsidies impose high costs on taxpayers of the subsidizing countries and they also reduce the price of competing products on the international market to the detriment of producers in developing and LDCs. However, on the other hand, they do benefit consumers in food-importing countries, several of which are developing countries.
By this decision, developed countries have agreed to remove export subsidies immediately; developing counties will do so by 2018, whereas the poorest and food-importing countries will enjoy additional time.

 

Decisions that benefit LDC

The first decision concerns the preferential rules of origin for LDCs (in particular, key beneficiaries will be sub-Saharan African countries). This will facilitate opportunities for LDCs’ exports of goods to both developed and developing countries. Such decision give detailed guidelines on specific issues, such as methods of determining when a product can qualify as “made in a LDC”.

The second decision concerns LDCs trade in services, the Ministerial Decision on Implementation of Preferential Treatment in Favour of Services and Service Suppliers of Least Developed Countries and Increasing LDC Participation in Services Trade (WT/MIN(15)/W/39). Such decision extends the current period, by 15 years (that is until 31 December 2030) under which non-LDCs WTO members might grant preferential treatment to LDCs services and service suppliers. Accordingly, WTO members are allowed to deviate from the MFN obligation under the GATS.