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WTO grapples with defining poor countries in trade rules

Agence France-Presse - December 1, 2002
Jean-Louis de la Vaissiere

GENEVA, Dec 1 (AFP) - Two sets of negotiations at the World Trade Organisation (WTO) recently, dealing with sugar and medicines, have highlighted the difficulty of placing all developing countries in the same basket.

Developing countries represent some four-fifths of the trade body's membership, but their relative levels of poverty and their trade interests are often far apart.

The tiny Caribbean territory of St Kitts and Nevis is bundled in the group alongside China, the world's biggest potential market, while Mozambique is overshadowed by Brazil's power as an emerging market.

Some developing countries have accused rich states of trying to drive a wedge between them during negotiations about access to essential medicines or on preferential treatment for poor countries.

In private, rich countries hit back by accusing Asian tiger economies or emerging countries of wielding their status as developing nations to take advantage of trade concessions given to poor countries when it suits them.

"Some parts of southern Brazil are richer than regions of eastern Europe which are about to be welcomed into the European Union during its enlargement process," a diplomat said.

But one observer notes that the issue is still taboo in the WTO.

China is a competitive player in some high-technology markets, yet during accession negotiations before it joined the organisation last year it insisted on being recognised as a developing country to protect its 900 million farmers.

Industralised countries are often favouring a case-by-case approach when they negotiate special trade concessions or longer transitional periods, to the dismay of the more radical developing nations.

The European Union and Switzerland are carefully picking which developing countries should be allowed to import cheaper, generic medicines to tackle HIV/AIDS or other medical emergencies.

Basing themselves on World Bank data, they are trying to prevent developing countries with relatively high revenues from benefitting from the special conditions.

As a result, Hong Kong, Singapore and South Korea are being asked to waive their privileged status and to show solidarity with the poorest countries.

The EU often emphasises that emerging economies need to try harder than the Least Developed Countries (LDCs).

In negotiations on market access conditions for consumer and industrial goods, it has asked both industrialised countries and "if possible the most developed of developing countries" to drop customs barriers to goods from LDCs.

Developing countries have also been divided over the dispute over European Union subsidies to sugar exports, which pits Australia and Brazil against the EU.

Last week, the 78-nation African, Caribbean and Pacific (ACP) group aired its backing for the EU, because they fear the Brazilian challenge would damage their preferential treatment within the 15-nation European political and economic bloc.

Under the Cotonou agreements -- previously the Lome Convention -- ACP countries have economic ties with the EU which allow them to sell their raw sugar cane to the 15 EU members at the bloc's internal market prices.

EU companies then refine and export ACP sugar on world markets.

For ACP countries, which include some of the world's poorest states, the Brazilian-Australian move revives bad memories of the US challenge at the WTO which overturned the EU's preferential treatment for their banana exports last year.

Emerging economies, especially those in the Cairns group of agricultural exporting countries, have been trying to lever open all world markets for farm products.

The poorest countries fear that they will suffer on a level playing ground, and want to keep the protection that preferential trade agreements with major trading powers grant them, diplomats say.

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