Supachai stress on time limit for zero tariff

New Delhi, Jan 26 | Updated: Jan 27 2005, 07:08am hrs
Developed members of the World Trade Organisation (WTO) should commit on establishing a date by which all their tariffs will move to zero, the consultative board of eminent persons set up by WTO director-general Supachai Panitchpakdi has suggested.

The eight-member board, headed by former WTO director-general Peter Sutherland, was set up in June 2003 to give suggestions on improving the functioning of the WTO while safeguarding the strengths of the institution. Professor Jagdish Bhagwati of Columbia University is one of the members of the board.

Stating that the long-term remedy to the spaghetti bowl of discriminatory preferences is through the effective reduction of MFN (most favoured nation) tariffs and non-tariff measures in multilateral trade negotiations, the boards report submitted recently pointed out that the need for success in the Doha round is manifest from this perspective. Developed countries should seriously consider bringing their tariffs down to zero, it said.

The board expressed its concern over the spread of preferential trade agreements (PTAs) and said that preferential treatment was becoming merely a reward for governments pursuing non-trade related objectives.

Non-discriminatory most-favoured nation treatment, which is a fundamental principle of the WTO, is close to becoming exceptional treatment, it said.

It warned that governments needed to show restraint or risk more damage to the multilateral trading system. The first test of any new initiative should be that it clearly improves trading and development prospects of beneficiaries and does not harm the interests of those outside, the report said.

PTAs need to be subject to meaningful review and effective disciplines in World Trade Organisation, it added.

To expedite consensus building in negotiations, the board urged that a declaration should be adopted that a member should be allowed to block a measure which otherwise has very broad consensus only if it declares in writing, with reasons included, that the matter is one of vital national interest to it.

For helping poor countries in implementing WTO agreements, the board suggested that wherever possible new agreements should contain provisions for a contractual right, including necessary funding arrangements for LDCs to receive appropriate and adequate technical assistance and capacity building aid as they implement new obligations.

The consultative board also came up with a number of suggestions for changing the organisational structure of the WTO and securing political reinforcement and efficient process.

It advised that ministerial conferences of the WTO should take place on an annual basis. The director-general should be required to report on trade policy developments to ministers, in writing, on a six-monthly basis. In addition, a WTO summit of world leaders should be held every five years.

As required by the Marrakesh agreement, the powers and duties of the director-general should be spelled out clearly by the General Council, the board said.