EU bids to win support for WTO agenda

Date: 30/09/1999

By Simon Taylor

EU GOVERNMENTS are planning to offer key concessions to developing countries in a bid to win their support for a wide-ranging agenda at the next round of global trade talks.

The latest draft of the Union's proposed list of sectors to be tackled in the new round calls for "further enhancement of the development role of the World Trade Organisation." In the draft, which is due to be discussed by EU trade ministers at an informal meeting in Florence tomorrow (1 October), officials have sought to boost the incentives for the world's poorest countries in each of the areas which the Union wants to see discussed during the round.

The EU has already offered the world's least developed nations the chance to export their products to the Union duty-free, but it is now proposing extra concessions in the fields of agriculture, services, investment rules, competition, trade facilitation and labour rights.

The Union is aware that developing countries are reluctant to discuss further liberalisation or new common rules for world trade because they feel rich industrialised states gained more from the last round than the world's poorer nations. It is this reluctance which the concessions outlined in the report seek to overcome.

On labour rights, which poorer countries view as an attempt at find a new excuse to exclude their products from key markets, the Union tries to reassure them that "the comparative advantage of countries from lower wage costs should not be put into question." It also emphasises that the EU favours an incentive-based strategy for promoting labour standards and is opposed to a "sanctions based or unilateral approach."

On agriculture, which is the main source of friction between developing countries and the Union because of the latter's heavy subsidies, the EU promises to "promote actively special and differential treatment for developing countries." On multi-lateral investment rules - a key area for the Union - officials stress the need to favour foreign direct investment instead of short-term capital flows, which were widely blamed in poorer countries for the Asian crisis.

Union governments have also tried to boost the incentives for developing nations to discuss common competition rules in the WTO, stating: "The development dimension should be at the centre of considerations by combining possible transitional periods with technical assistance and flexibility for developing countries."

EU governments are planning to offer key concessions to developing countries in a bid to win their support for a wide-ranging agenda at the next round of global trade talks.