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DOHA DEVELOPMENT AGENDA (DDA)

What is the DOHA DEVELOPMENT AGENDA?


The Doha Development Round or Doha Development Agenda (DDA) is the current trade-negotiation round of the World Trade Organization (WTO) which commenced in November 2001. Its objective is to lower trade barriers around the world, which will help facilitate the increase of global trade. As of 2008, talks have stalled over a divide on major issues, such as agriculture, industrial tariffs and non-tariff barriers, services, and trade remedies. The most significant differences are between developed nations led by the European Union (EU), the United States (USA), and Japan and the major developing countries led and represented mainly by Brazil, China, India, South Korea, and South Africa. There is also considerable contention against and between the EU and the USA over their maintenance of agricultural subsidiesseen to operate effectively as trade barriers. The Doha round was to be an ambitious effort to make globalization more inclusive and help the world's poor, particularly by slashing barriers and subsidies in farming. The Doha Round began with a ministerial-level meeting in Doha, Qatar in 2001. Subsequent ministerial meetings took place in Cancn, Mexico (2003), and Hong Kong (2005). Related negotiations took place in Geneva, Switzerland (2004, 2006, 2008); Paris, France (2005); and Potsdam, Germany (2007). The most recent round of negotiations, 2329 July 2008, broke down after failing to reach a compromise on agricultural import rules. After the breakdown, major negotiations were not expected to resume until 2009. Nevertheless, intense negotiations, mostly between the USA, China, and India, were held in the end of 2008 in order to agree on negotiation modalities. However, these negotiations did not result in any progress.

WHAT ARE ITS OBJECTIVES?


Making Globalisation Work for the Poor reducing trade barriers will be an important objective for negotiations and building developing countries negotiating capacity. The programme encompasses strengthened rules, and specific commitments on government support and protection for agriculture. The purpose is to correct and prevent restrictions and distortions in world agricultural markets Without prejudging the outcome, member governments commit themselves to comprehensive negotiations aimed at:
market access: substantial reductions in tariffs and restrictions exports subsidies: reductions of, with a view to phasing out, all forms of these domestic support: substantial reductions for supports that distort trade

Who are participants of the DDA?


144 countries which make up the WTO Included are the trade blocs of developing and industrialized nations: the G20. spearheaded by the G4 (the People's Republic of China, India, Brazil, and South Africa). The European Union The USA

While the General Agreement on Tariffs and Trade (GATT) rounds were successful in considerably reducing tariffs on non-sensitive manufactured goods, leaving the most difficult items to be tackled in the Doha Round. These items include agricultural export subsidies, domestic support for agriculture, agricultural tariff reductions, trade in services, anti-dumping duties, and the rules governing RTAs. Also, the non-uniformity of cuts in tariffs and non-tariff barriers to trade (NTBs) resulting from compromises in earlier rounds has been problematic because it can create its own distortions. Hence, the Doha Round has been particularly difficult.

PROBLEMS/ISSUES
AGRICULTURE Agriculture has become the most important and controversial issue. Agriculture is particularly important for developing countries, because around 75% of the population in developing countries live in rural areas, and the vast majority are dependent on agriculture for their livelihoods. In the decades-old debate over the global role of the World Trade Organization, agriculture is a constant point of reference -- particularly for those who question the organization's ability to make progress in leveling the playing field. Developing countries, many of them reliant on agriculture, have long wanted rich countries to stop subsidizing their farmers' production and lower tariffs. In exchange, wealthy countries are arguing against a proposal for a safety-net tariff mechanisms for developing countries; when prices fall or when imports rise too high, poor countries could charge substantially more at the ports to make sure local producers are protected. For more than three decades, during seven rounds of multilateral talks that finished with the Tokyo round in 1979, attempts to reach a deal on agricultural trade liberalization failed. In the ongoing Doha Development Agenda round of talks, agriculture has again taken center stage. Initiated in 2001, the negotiations had stalled by December 2008 as members became deadlocked, once again, over farming sector subsidies, tariffs, and other protections. WTO member countries have vowed to rev up talks in an effort to conclude the round in 2011, but so far this year there seems to have been little concrete progress. After 10 years of Doha negotiations, there is increasing concern that if the talks are not completed this year, then the round may be abandoned.

An agricultural subsidy is a governmental subsidy paid to farmers and agribusinesses to supplement their income, manage the supply of agricultural commodities, and influence the cost and supply of such commodities Although some critics and proponents of the World Trade Organization have noted that export subsidies, by driving down the price of commodities, can provide cheap food for consumers in developing countries, low prices are harmful to farmers not receiving the subsidy. Because it is usually wealthy countries that can afford domestic subsidies, critics argue that they promote poverty in developing countries by artificially driving down world crop prices. Agriculture is one of the few areas where developing countries have a comparative advantage, but low crop prices encourage developing countries to be dependent buyers of food from wealthy countries. So local farmers, instead of improving the agricultural and economic self-sufficiency of their home country, are instead forced out of the market and perhaps even off their land. This occurs as a result of a process known as "international dumping" in which subsidized farmers are able to "dump" low-cost agricultural goods on foreign markets at costs that un-subsidized farmers cannot compete with. Agricultural subsidies often are a common stumbling block in trade negotiations. In 2006, talks at the Doha round of WTO trade negotiations stalled because the US refused to cut subsidies to a level where other countries' nonsubsidized exports would have been competitive.

Antidumping
A product is considered to have been dumped if the export price is less than the price charged in the producing country for the same product. If a company exports a product at a price lower than the price it normally charges on its own home market, it is said to be dumping the product. Is this unfair competition? Opinions differ, but many governments take action against dumping in order to defend their domestic industries. The WTO agreement does not pass judgement. Its focus is on how governments can or cannot react to dumping it disciplines anti-dumping actions, and it is often called the Anti-Dumping Agreement. the WTO agreement allows governments to act against dumping where there is genuine (material) injury to the competing domestic industry. In order to do that the government has to be able to show that dumping is taking place, calculate the extent of dumping (how much lower the export price is compared to the exporters home market price), and show that the dumping is causing injury or threatening to do so. GATT allows countries to take action against dumping. The Anti-Dumping Agreement clarifies and expands Article 6, and the two operate together. They allow countries to act in a way that would normally break the GATT principles of binding a tariff and not discriminating between trading partners typically anti-dumping action means charging extra import duty on the particular product from the particular exporting country in order to bring its price closer to the normal value or to remove the injury to domestic industry in the importing country.

Subsidies
WTO disciplines the use of subsidies, and it regulates the actions countries can take to counter the effects of subsidies. It says a country can use the WTOs dispute settlement procedure to seek the withdrawal of the subsidy or the removal of its adverse effects. Or the country can launch its own investigation and ultimately charge extra duty (known as countervailing duty) on subsidized imports that are found to be hurting domestic producers. Prohibited subsidies: subsidies that require recipients to meet certain export targets, or to use domestic goods instead of imported goods. They are prohibited because they are specifically designed to distort international trade, and are therefore likely to hurt other countries trade. They can be challenged in the WTO dispute settlement procedure where they are handled under an accelerated timetable. If the dispute settlement procedure confirms that the subsidy is prohibited, it must be withdrawn immediately. Otherwise, the complaining country can take counter measures. If domestic producers are hurt by imports of subsidized products, countervailing duty can be imposed. Actionable subsidies: in this category the complaining country has to show that the subsidy has an adverse effect on its interests. Otherwise the subsidy is permitted. The agreement defines three types of damage they can cause. One countrys subsidies can hurt a domestic industry in an importing country. They can hurt rival exporters from another country when the two compete in third markets. And domestic subsidies in one country can hurt exporters trying to compete in the subsidizing countrys domestic market. If the Dispute Settlement Body rules that the subsidy does have an adverse effect, the subsidy must be withdrawn or its adverse effect must be removed. Again, if domestic producers are hurt by imports of subsidized products, countervailing duty can be imposed.

Safeguards

Safeguards: emergency protection from imports A WTO member may restrict imports of a product temporarily (take safeguard actions) if its domestic industry is injured or threatened with injury caused by a surge in imports. safeguard measures were always available under GATT (Article 19). However, they were infrequently used, some governments preferring to protect their domestic industries through grey area measures using bilateral negotiations outside GATT, they persuaded exporting countries to restrain exports voluntarily or to agree to other means of sharing markets The WTO agreement broke new ground. It prohibits grey-area measures, and it sets time limits (a sunset clause) on all safeguard actions. there is disagreement over the special safeguard mechanism used to protect domestic farmers in developing countries from agricultural import surges. WTO members have agreed that developing countries will have a special safeguard mechanism, and more or less agreed on how big the import increase would be to trigger a temporary tariff rise. The WTO members also agreed on how high the rise should be in general. The blockage is about the situation where the special safeguard mechanism raises tariffs above commitments countries made in their MFN bound rates. India has demanded that developing countries be allowed to apply high, temporary tariffs in excess of existing bound rates to stem imports above a threshold level that could harm local producers.

SPECIAL AND DIFFERENTIAL TREATMENT


S&D Special and Differential Treatment (SDT) consists of measures to compensate developing countries for the structural asymmetries existing between them and developed countries. These are expressed mainly in reduced access to technology and finance and deficiencies in human resources and infrastructure and result in the low systemic competitiveness of these countries. SDT compensates for such asymmetries so as to ensure more equitable participation in international trade. Several arguments have been advanced against SDT. First, it is argued that the heterogeneity of developing countries makes the concept meaningless in practical terms. Many developing countries have reached the stage of take-off while others have achieved a sufficiently high level of economic sophistication for the internal generation of investment and technological innovation necessary to achieve self-sustained growth. A second argument is that SDT is part of the baggage that was dismantled with the liberalization and globalisation processes. Thirdly, SDT is said to be an unnecessary crutch which protects inefficiency and hinders adjustment to the requirements of global competitiveness. A fourth argument is that SDT is tradedistorting and has encouraged the use of unsustainable subsidies. The heterogeneity argument is partly valid in the sense that there is a wide variety of developing countries and the category is barely functional from the trade negotiations perspective. Nevertheless, several countries, for example those of South East Asia, have reached the take-off stage under conditions different from those sanctioned by the WTO, by using policies of protection and strong state support for industry.