Quad backs Union move to scrap duties for poorest nations

Date: 27/04/2000

By Simon Taylor

THE EU and three of the world's richest nations are set to scrap duties and quotas on virtually all imports from 48 of the globe's poorest countries.

The move, which will be announced at a meeting of the World Trade Organisation's ruling body next Wednesday (3 May), is designed to restore confidence in the organisation and build support for a new round of global trade liberalisation talks. The idea was first proposed by the Union last year, but the other 'Quad' countries - the US, Japan and Canada - have only recently joined the initiative.

European Commission President Romano Prodi argues that the offer is essential to demonstrate the benefits of more open trade to the world's poorest countries. 'To make globalisation and trade work for the world's poor, I want the developed world - and in particular Europe and the US - to open our borders unilaterally to the poorest countries,' he said recently.

Under the terms of the package, the Quad countries, which account for the majority of world trade, will scrap restrictions on 99% of imports from the world's least-developed countries (LDCs).

But the four will retain tariffs and quotas on sensitive products accounting for 1% of total trade with the LDCs. These range from agricultural products such as sugar and bananas for the EU, textiles for the US and Canada, and fisheries products for Japan.

Initial reactions to the offer from the LDCs, which currently only have a 0.5% share of global trade, were critical, with the Bangladeshi delegation calling on the world's richest nations to go further. But Commission officials claimed this week that the LDCs had warmed to the proposal after some of the Quad countries improved their offers. WTO sources say the US made a more generous proposal on textiles after an appeal from the organisation's director-general Mike Moore to politicians in Washington.

The duty-free package is one of a range of measures due to be announced at next week's meeting which are designed to convince developing countries of the benefits of WTO membership and to win their support for a new round of trade talks. Complaints from the LDCs that rich countries dictated the WTO's agenda was one of the reasons cited for the failure of last December's ministerial conference in Seattle which attempted to get agreement on a new round.

Next week's meeting will also address developing countries' problems with implementing existing trade liberalisation agreements. Seven Latin American countries and Pakistan have, for example, failed to abolish restrictions on international investment linked to the car industry.

Other nations want talks on anti-dumping and anti-subsidy agreements. But the Quad countries are not expected to grant blanket extensions to states which have not fully met their existing commitments, arguing instead that such problems should be assessed on a case-by-case basis.

WTO delegates will also discuss ways of addressing the concerns voiced by LDCs about the organisation's internal administration and proposed measures to ensure full participation by all the WTO's 135 members in its decision-making process.

The EU and three of the world's richest nations are set to scrap duties and quotas on virtually all imports from 48 of the globe's poorest countries.