What is the Doha Development Agenda (DDA)?
Trade ministers of member countries of the World Trade Organisation (WTO) meet once in two years. In 2001, the meeting was held in Doha, Qatar. This was different from the other ministerial meetings as it took up the ambitious agenda of trade liberalisation. The agenda, which came to be called the Doha Development Agenda (DDA), also dealt with other areas and issues that had a development focus. These are:

• Public health
• Debt and finance
• Technical assistance and capacity-building, and technology transfer

The agenda committed to special attention for Least Developed Countries (LDCs), to ensure duty-free, quota-free market access for products originating from LDCs.

It also committed to support diversification of LDCs’ production and export base, and trade-related technical assistance and capacity-building.

How did the DDA come about?
After the WTO came into being in 1995, there was some apprehension that the WTO framework was not development-friendly. The WTO-based TRIPS (Trade Related Aspects of Intellectual Property Rights) agreement that was threatening public health, especially the treatment of HIV/AIDS in many developing countries, reinforced such sentiments. Hence, there was a call for WTO members to launch a development round.

Except the issue of modifying/clarifying TRIPS to protect public health, most of the issues included in the Doha Agenda were already indicated in the first ministerial conference in Singapore. Still, it was named the Doha Development Agenda.

What are the main issues covered by the DDA?
The Doha Ministerial Declaration offered a clear negotiating mandate for seven main areas under the Doha Work Programme:

• Agriculture
• Market access for non-agricultural products (popularly known as Non-Agricultural Market Access or NAMA)
• Services
• Trade and environment
• WTO rules
• TRIPS
• Implementation issues and dispute settlement

The declaration also agreed to proceed on the so-called Singapore issues, namely:

• Trade and investment
• Trade and competition policy
• Trade facilitation
• Transparency in government procurement

However, after the failed ministerial meeting in Cancun in 2003, WTO members agreed on a revised agenda called the July Package in which three of the Singapore issues were dropped from the agenda. Now, only trade facilitation is included in the DDA.

There are three other areas that were included in the Doha Ministerial Declaration:

• Trade, debt and finance
• Technical assistance and capacity-building
• Trade and technology transfer

What are the specific requirements in the agenda?
As a result of the Uruguay Round, agriculture was brought under WTO disciplines. Countries had to eliminate import measures or convert them into tariffs (“tariffied”), which were then subjected to progressive reduction commitments. Rice and some other staple foods were subject to minimum access commitments -- that is, Tariff Rate Quotas (TRQs).

There was also agreement on a reduction in the level of domestic support, except for exempted Green Box (see glossary) policies and de minimus amounts (amounts below a certain level).

However, the share of developing country exports in global agricultural trade has increased only marginally. This has been attributed to support to agriculture that is still sizeable and growing in developed countries. Under the DDA, substantial cuts in subsidies as well as reduction in tariffs were envisaged.

In NAMA, tariffs on industrial goods were to be reduced or eliminated. Tariff peaks, high tariffs, and tariff escalation were to be reduced or eliminated. The same applied to non-tariff barriers, particularly in products of export interest to developing countries. Product coverage was to be comprehensive.

Similarly, in services, further liberalisation was envisaged on a wide range of sectors and on the movement of natural persons, though the specific details were not worked out.

WTO rules covered contingency protection, standards and issues such as anti-dumping, subsidies and countervailing measures and safeguard measures. They are permitted by WTO rules to check alleged unfair trade practices by foreign competitors. However, the experience with these rules shows that there has been increasingly arbitrary use of the measures by developed countries. Hence, the objective of this component of the DDA is “improving and clarifying” WTO provisions governing anti-dumping, subsidies and countervailing measures. It is also intended to clarify and improve rules on regional trade agreements.

In the area of TRIPS, the most important issue is how to enable countries without pharmaceutical manufacturing capacity to take advantage of the compulsory licensing provision in the case of a public emergency, as a compulsory licence is issued only to domestic companies.

Other items on the agenda are:

• Extension in coverage of geographical indications for goods other than wines and spirits.
• Clarification of the relationship between TRIPS and the Convention on Biological Diversity.
• Appropriate mechanisms for the protection of traditional knowledge and folklore.

During implementation of the Uruguay Round Agreement, it was realised that though there were several S&DT (Special and Differential Treatment) provisions to protect and promote developing countries’ interests, they were not being implemented. They were, by and large, best-endeavour clauses and there were no concrete mechanisms to implement them.

Developing countries had complained about a number of items under the various WTO agreements, which eventually came to be referred to as “implementation issues”. At the Seattle Ministerial, developing countries pushed unsuccessfully for an agreement on these issues. The matter was raised once again in Doha and culminated in the signing of a separate text – the ‘Declaration on Implementation-related Issues and Concerns’.

Recognising that the Dispute Settlement Understanding (DSU) has a lot of room for improvement, the Doha work programme in this area was to clarify and improve the DSU.

The work programme on trade facilitation is meant to expedite the movement, release and clearance of goods, including goods in transit. This will be ensured by simplification and harmonisation of customs and related rules and procedures, and enhanced technical assistance and capacity-building in this area.

The main items in the area of trade and environment were:

• Examining the relationship between existing WTO rules and specific trade obligations set out in the existing Multilateral Environmental Agreements (MEAs).
• Examining the issue of granting observer status to multilateral environment bodies.
• Reduction or elimination of tariff and non-tariff barriers to environmental goods and services.

The work programme on trade, debt and finance was intended to examine the relationship between these three areas. It was to recommend steps to be taken within the WTO mandate to enhance the capacity of the multilateral trading system to solve the problem of external indebtedness of developing and least developed countries.

The work programme on trade and technology transfer was to work out steps to increase flows of technology to developing countries.

What was the progress, or lack of progress, made on realising the DDA till the Hong Kong Ministerial?
Members had hoped to come up with a “first approximation” of agriculture modalities by the end of July 2005. The actual modalities -- percentages of tariff and subsidy cuts, reduction formulae, criteria for domestic support, deadlines, or transition periods -- were to be completed at the Hong Kong Ministerial.

However, negotiations were severely delayed during the first five months of 2005. On October 10, 2005, at a meeting between ministers from the Five Interested Parties (FIPs: Australia, Brazil, the European Union, India and the US), the US tabled new proposals both on domestic support and market access. For the first time it showed a willingness to cut its own trade-distorting subsidies. However, the European Union was reluctant to cut its subsidies to the level demanded by developing countries.

When intense ministerial-level negotiations held in the second week of November 2005 failed to bridge differences, members acknowledged that the full modalities would not be reached in Hong Kong in December 2005. WTO members stressed that they remained committed to an ambitious Doha Round outcome, but that more time was needed for convergence to emerge on agricultural market access, industrial tariff reductions and services.

In NAMA, the basis for negotiations is Annex B of the 2004 July Package. The annex is much less specific than the agriculture text, simply placing an additional paragraph outlining developing country concerns in front of the Cancun NAMA text. The new paragraph stipulates that “additional negotiations were required to reach agreement on the specifics of some (initial) elements”. These initial elements refer to:

• Tariff reduction formula
• Flexibilities for developing countries
• Treatment of unbound tariff lines
• Participation in sectoral initiatives
• Preferences

By late October 2005, members were unable to agree on any of these elements.

In the area of services, the most significant and controversial recent development has been the strong push by certain WTO members, especially Australia, the US and the EU, to establish mandatory minimum market access commitments (benchmarks). In fact, the EU has linked its agricultural tariff reduction offer to mandatory market opening commitments in services. In contrast, the overwhelming majority of developing countries remained fiercely opposed to any kind of benchmarks.

The proposed solution to compulsory licensing and lack of pharmaceutical manufacturing capacity in TRIPS was partly implemented on August 30, 2003. The deadline for the development of a permanent amendment to TRIPS was extended to March 31, 2005, but this date was missed. Discussions at the last scheduled TRIPS Council, in October 2005, failed to reach agreement. The TRIPS Council did take a decision on an amendment to TRIPS on the issue of compulsory licensing just before the Hong Kong Ministerial. No progress was made on other issues concerning TRIPS.

In 2005, the Negotiating Group on WTO Rules met mainly in informal sessions of a highly technical nature and entered into preliminary discussions on possible textual amendments to certain parts of the anti-dumping and subsidies agreements. Members’ interests and positions remained highly divergent over a wide range of complex issues. The talks on rules are expected to be wrapped up only after outcomes in other areas of the Doha Round negotiations become clearer.

Though it picked up some momentum in 2005, the review of the WTO’s Dispute Settlement Understanding (DSU) didn’t get very far. This was largely due to members’ unwillingness to move forward in the absence of concrete advances in their key areas of interest in the Doha Round, notwithstanding the formal de-linking of the issue from other issues in the DDA. In addition, while recognising that the DSU has room for improvement, most members considered it operated well enough for the moment.

Negotiations on the relationship between WTO rules and Multilateral Environmental Agreements (MEAs) were largely bogged down by procedural issues. Discussions on environmental measures and market access, eco-labelling and paragraph 51 (integrating sustainable development into the Round as a whole) also virtually came to a standstill. Only the negotiations on environmental goods saw some movement.

The issue of trade, debt and finance has not been a high priority for most members. There have been disagreements in the working group over the future direction of work, and no recommendations have been agreed on. 

In 2005, members continued discussions on measures to promote transfer of technology, in the working group on the relationship between trade and transfer of technology. Although no consensus was reached on recommendations that could be put forward at the Hong Kong Ministerial in December 2005, three developing country proposals provided some potential for advancing discussions towards practical outcomes.

What progress was made on the DDA in Hong Kong?
In Hong Kong, in the area of agriculture, members agreed to ensure the parallel elimination of all forms of export subsidies by the end of 2013. This will be achieved in a progressive and parallel manner, to be specified in the modalities. The modalities must ensure that a substantial part is realised by the end of the first half of the implementation period.

With respect to negotiations on market access for non-agricultural products, WTO members agreed to adopt the so-called Swiss Formula that, for a given set of parameters, cuts higher tariff rates proportionally more than lower tariff rates. No agreement was reached on the specific parameters to be adopted by WTO members, or by groups of WTO members.

On services, WTO members agreed to adopt an annex to the Doha Ministerial Declaration that describes certain aspects of the objectives, content, form and timetable for these negotiations.

The decision to amend TRIPS has been adopted. However, no progress has been made in other areas like geographical indications or the issue of the relationship between TRIPS and the Convention on Biological Diversity. It has been decided to continue with the consultation process and not start any negotiations.

Other areas included in the DDA did not receive adequate attention in Hong Kong; ministers simply extended the mandate of the respective working groups.

What are the unresolved issues and major stumbling blocks?
Increasingly, there is the feeling among many that the concession offered by developed countries on export subsidies in agriculture is too small to have any impact on developing countries. On the other hand, market access commitments being sought from developing countries on NAMA and services are fairly substantial.

Details on what or how numerical targets or indicators would be used in the negotiations on services are not specified, nor is there any clarity on how guidance will be provided by the sectoral and modal objectives contained in the annex. However, though the benchmark approach has been abandoned, there may be an attempt to achieve the same objective through sectoral and modal objectives. This would set most developing countries at loggerheads with developed countries.  

On NAMA, developing countries, except Brazil and India, agreed to accept the Swiss Formula somewhat reluctantly. Agreement on coefficients for the Swiss Formula would thus be quite difficult. The baseline for adopting tariff cuts will be the applied tariff with some markup. The degree of markup will be another area of contention. Moreover, though the original work programme on NAMA envisaged finding solutions to increasing non-tariff barriers that developing countries face in developed markets, the Hong Kong Ministerial simply ignored the issue. It was addressed in other areas that, unfortunately, did not see any progress.

During the entire period between Doha and Hong Kong, only three “core areas”, namely agriculture, NAMA and services, received attention. Other areas were virtually ignored. Ironically, it is in the non-core areas that developing countries have a substantial stake. These are the areas whose inclusion justifies the word “development” in the Doha Development Agenda. Most developing countries, thus, could feel let down. The timeframe envisaged for further negotiations also appears to be too short.

What happens next?
WTO members committed themselves to establishing modalities on agriculture negotiations by April 30, 2006. Draft schedules that are to be based on those modalities are to be submitted by July 31, 2006. NAMA will also follow a similar schedule.

With respect to services, the negotiations are supposed to culminate in the submission of final draft schedules on October 31, 2006.

In areas where no clear mandate was given for actual negotiations, the dateline of July 31, 2006, has been set for the WTO General Council to review progress on the subject.

February 2006