RP to benefit from Doha Round – Lamy

The proposed reduction of trade barriers in the Doha Round development negotiations will bring more market opportunities to the Philippines, visiting World Trade Organization (WTO) Director General Pascal Lamy said.

In his speech before local businessmen yesterday, Lamy said the Doha industrial tariff negotiation is looking at a sizeable reduction of high tariffs, tariff peaks and escalation which would result in the lowering of tariff barriers local exporters face.

The three issues on the forefront of the Doha round are: agricultural subsidies, agricultural tariffs and industrial tariff.

"Doha could bring more market access, a fairer playing field, new disciplines and better enforcement of existing rules," Lamy explained.

At the same time, he warned that failure of Doha round would lead to "consequences beyond pure economic consideration."

Lamy said he expects a breakthrough by June and estimates final conclusion eight months after a breakthrough is achieved.

"Success is now a question of months away and not quarters or semesters, especially given the upcoming expiry of the US Trade Promotion Authority on 1 July. We now have in our hands the possibility to strengthen the multilateral trading system and make it fairer for developing countries," Lamy noted.

This time, Lamy said the "Development Round" will address the unfair rules in the trading system particularly the developed countries’ trade distorting subsidies in agriculture. In fact, the actors involved in this round is different from previous rounds as more developing countries have taken active roles.

"After a period of suspension, the negotiating engines are buzzing again. Members are now working at three different levels," Lamy said.

According to him, a breakthrough would have been achieved if countries would reach a basic agreement on agriculture tariff reduction. He said the WTO already knows what it needs but the precise number of trade subsidy reduction is missing.

Lamy said developed countries must be ready to contribute more than the smaller and weaker nations. For example, the United States has to accept cuts in its subsidies beyond its current offer while the European Union and developed Asian countries like Japan and Korea have to agree to greater cuts in agriculture tariff.

When asked what will happen if there is no breakthrough, Lamy said the situation will be the same as last year when the Doha talks collapsed. "This is bad news to the economy. What is on the table is impressive in terms of trade flow."

The Doha round is advocating reduction of high tariff barriers local exporters of manufactured goods are experiencing. Manufactured exports make up over 70 percent of the country’s exports in 2005.

In addition to this, because the Philippines is classified as developing, the country is entitled to special and differential treatment for developing countries.

However, Lamy cleared that this does not mean that the country will be exempt from concessions. Instead, the government will be allowed to cover the most sensitive sector. "The government can choose where to protect."

On the other hand, the country being a net importer of food has an interest to make sure that trade distorting export subsidies are reduced.

Lamy said the Doha Round can address this concern. The subsidies being enjoyed by developed countries like the US have made their products more competitive thereby harming the interest of poor farmers in developing countries such as the Philippines.