3. WTO technical cooperation - Previously published as “Trading into the Future”


^ 3. WTO technical cooperation
Technical cooperation is an area of WTO work that is devoted almost entirely to helping developing countries (and countries in transition from centrally-planned economies) operate successfully in the multilateral trading 3. WTO technical cooperation - Previously published as “Trading into the Future” system. The objective is to help build the necessary institutions and to train officials. The subjects covered deal both with trade policies and with effective negotiation.
^ Training, seminars and workshops 3. WTO technical cooperation - Previously published as “Trading into the Future”
The WTO holds regular training sessions on trade policy in Geneva. In addition, it organizes about 500 technical cooperation activities annually, including seminars and workshops in various countries and courses in Geneva.

Targeted are 3. WTO technical cooperation - Previously published as “Trading into the Future” developing countries and countries in transition from former socialist or communist systems, with a special emphasis on African countries. Seminars have also been organized in Asia, Latin America, the Caribbean, Middle East and Pacific 3. WTO technical cooperation - Previously published as “Trading into the Future”.

Funding for technical cooperation and training comes from three sources: the WTO’s regular budget, voluntary contributions from WTO members, and cost-sharing either by countries involved in an event 3. WTO technical cooperation - Previously published as “Trading into the Future” or by international organizations.

The present regular WTO budget for technical cooperation and training is 7 million Swiss francs.

Extra contributions by member countries go into trust funds administered by the WTO 3. WTO technical cooperation - Previously published as “Trading into the Future” Secretariat or the donor country. In 2004, contributions to trust funds totalled 24 million Swiss francs.

A WTO Reference Centre programme was initiated in 1997 with the objective of creating a network of computerized information centres in least 3. WTO technical cooperation - Previously published as “Trading into the Future”-developed and developing countries. The centres provide access to WTO information and documents through a print library, a CD-ROM collection and through the Internet to WTO websites and databases 3. WTO technical cooperation - Previously published as “Trading into the Future”. The centres are located mainly in trade ministries and in the headquarters of regional coordination organizations. There are currently 140 reference centres.
^ 4. Some issues raised

‘Peaks’ and ‘escalation’: what are they?

Tariff peaks: Most import 3. WTO technical cooperation - Previously published as “Trading into the Future” tariffs are now quite low, particularly in developed countries. But for a few products that governments consider to be sensitive — they want to protect their domestic producers — tariffs remain high. These 3. WTO technical cooperation - Previously published as “Trading into the Future” are “tariff peaks”. Some affect exports from developing countries.

^ Tariff escalation: If a country wants to protect its processing or manufacturing industry, it can set low tariffs on imported materials used 3. WTO technical cooperation - Previously published as “Trading into the Future” by the industry (cutting the industry’s costs) and set higher tariffs on finished products to protect the goods produced by the industry. This is “tariff escalation”. When importing countries escalate their tariffs in 3. WTO technical cooperation - Previously published as “Trading into the Future” this way, they make it more difficult for countries producing raw materials to process and manufacture value-added products for export. Tariff escalation exists in both developed and developing countries 3. WTO technical cooperation - Previously published as “Trading into the Future”. Slowly, it is being reduced.
The Uruguay Round (1986–94) saw a shift in North-South politics in the GATT-WTO system. Previously, developed and developing countries had tended to be in opposite groups, although 3. WTO technical cooperation - Previously published as “Trading into the Future” even then there were exceptions. In the run up to the Uruguay Round, the line between the two became less rigid, and during the round different alliances developed, depending on the issues. The 3. WTO technical cooperation - Previously published as “Trading into the Future” trend has continued since then.

In some issues, the divide still appears clear — in textiles and clothing, and some of the newer issues debated in the WTO, for example — and developing 3. WTO technical cooperation - Previously published as “Trading into the Future” countries have organized themselves into alliances such as the African Group and the Least-Developed Countries Group.

In many others, the developing countries do not share common interests and may find themselves 3. WTO technical cooperation - Previously published as “Trading into the Future” on opposite sides of a negotiation. A number of different coalitions among different groups of developing countries have emerged for this reason. The differences can be found in subjects of immense importance to 3. WTO technical cooperation - Previously published as “Trading into the Future” developing countries, such as agriculture.

This is a summary of some of the points discussed in the WTO.
^ Participation in the system: opportunities and concerns
The WTO agreements, which 3. WTO technical cooperation - Previously published as “Trading into the Future” were the outcome of the 1986–94 Uruguay Round of trade negotiations, provide numerous opportunities for developing countries to make gains. Further liberalization through the Doha Agenda negotiations aims to improve the opportunities.

Among the gains are 3. WTO technical cooperation - Previously published as “Trading into the Future” export opportunities. They include:

•  fundamental reforms in agricultural trade

•  phasing out quotas on developing countries’ exports of textiles and clothing

•  reductions in customs duties on industrial products

•  expanding the number of products 3. WTO technical cooperation - Previously published as “Trading into the Future” whose customs duty rates are “bound” under the WTO, making the rates difficult to raise

•  phasing out bilateral agreements to restrict traded quantities of certain goods — these “grey area” measures (the so-called voluntary export 3. WTO technical cooperation - Previously published as “Trading into the Future” restraints) are not really recognized under GATT-WTO.

In addition, liberalization under the WTO boosts global GDP and stimulates world demand for developing countries’ exports.

But a number of problems remain 3. WTO technical cooperation - Previously published as “Trading into the Future”. Developing countries have placed on the Doha Agenda a number of problems they face in implementing the present agreements.

And they complain that they still face exceptionally high tariffs on selected products 3. WTO technical cooperation - Previously published as “Trading into the Future” (“tariff peaks”) in important markets that continue to obstruct their important exports. Examples include tariff peaks on textiles, clothing, and fish and fish products. In the Uruguay Round, on average, industrial 3. WTO technical cooperation - Previously published as “Trading into the Future” countries мейд slightly smaller reductions in their tariffs on products which are mainly exported by developing countries (37%), than on imports from all countries (40%). At the same time, the potential for developing countries to trade with 3. WTO technical cooperation - Previously published as “Trading into the Future” each other is also hampered by the fact that the highest tariffs are sometimes in developing countries themselves. But the increased proportion of trade covered by “bindings” (committed ceilings that are 3. WTO technical cooperation - Previously published as “Trading into the Future” difficult to remove) has added security to developing country exports.

A related issue is “tariff escalation”, where an importing country protects its processing or manufacturing industry by setting lower duties on imports of 3. WTO technical cooperation - Previously published as “Trading into the Future” raw materials and components, and higher duties on finished products. The situation is improving. Tariff escalation remains after the Uruguay Round, but it is less severe, with a number 3. WTO technical cooperation - Previously published as “Trading into the Future” of developed countries eliminating escalation on selected products. Now, the Doha agenda includes special attention to be paid to tariff peaks and escalation so that they can be substantially reduced.
^ Erosion of preferences
An issue 3. WTO technical cooperation - Previously published as “Trading into the Future” that worries developing countries is the erosion of preferences — special tariff concessions granted by developed countries on imports from certain developing countries become less meaningful if the normal tariff rates are cut 3. WTO technical cooperation - Previously published as “Trading into the Future” because the difference between the normal and preferential rates is reduced.

Just how valuable these preferences are is a matter of debate. Unlike regular WTO tariff commitments, they are 3. WTO technical cooperation - Previously published as “Trading into the Future” not “bound” under WTO agreements and therefore they can be changed easily. They are often given unilaterally, at the initiative of the importing country. This makes trade under preferential rates less predictable than 3. WTO technical cooperation - Previously published as “Trading into the Future” under regular bound rates which cannot be increased easily. Ultimately countries stand to gain more from regular bound tariff rates.

But some countries and some companies have benefited from preferences. The gains vary 3. WTO technical cooperation - Previously published as “Trading into the Future” from product to product, and they also depend on whether producers can use the opportunity to adjust so that they remain competitive after the preferences have been withdrawn.
^ The ability to 3. WTO technical cooperation - Previously published as “Trading into the Future” adapt: the supply-side
Can developing countries benefit from the changes? Yes, but only if their economies are capable of responding. This depends on a combination of actions: from improving policy-making and 3. WTO technical cooperation - Previously published as “Trading into the Future” macroeconomic management, to boosting training and investment. The least-developed countries are worst placed to make the adjustments because of lack of human and physical capital, poorly developed infrastructures, institutions that don 3. WTO technical cooperation - Previously published as “Trading into the Future”’t function very well, and in some cases, political instability.

Chapter 7
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