Australian Taxpayers Dig Deep for ‘Trade Liberalisation’ in LDC’s

Many Australian taxpayers – this one included – may be surprised to learn that we are collectively donating A$18 million for ‘trade facilitation to support the Least Developed Countries’ (LDC’s) in their endeavours to reduce or eliminate tariffs and ‘non-tariff barriers’ in order to benefit through global free trade.

You might have thought that our government would be loudly promoting this magnanimous gesture, but in fact we might not have found out about it if the World Intellectual Property Organisation (WIPO) had not issued a thank you note media release shortly before Christmas, announcing ‘an Australian donation of A$2 million for projects to help developing and least developing countries (LDC’s) build capacity in the field of intellectual property (IP) and ensure they were in a position to actively participate in the benefits of innovation and the knowledge economy.’

And we might not even have noticed the WIPO media release if it had not been kindly pointed out on the always-on-the-ball IPKat blog earlier this week.

The IPKat, and the WIPO release, both inform us that this is part of ‘a A$16 million contribution announced at the 8^th World Trade Organization Ministerial Conference’.

So, armed with this clue we went in search of further information about our significant financial contribution to global free trade and IP capacity-building…

EIGHTH WTO MINISTERIAL CONFERENCE

The Eighth Session of the Ministerial Conference of the World Trade Organisation (WTO) took place in Geneva on 15-17 December 2011.  Australia was represented by Trade Minister Dr Craig Emerson, who gave an address at the Plenary Session on 15 December.  A copy of the address is available from the WTO website, in MS Word format, but since it is only short it is also reproduced and the end of this article.

The Ministerial Conference is the topmost decision-making body of the WTO.  It consists of the relevant ministers (or equivalent representatives) of all WTO members, and usually meets every two years.  The Ministerial Conference can take decisions on all matters under any of the multilateral trade agreements.

AUSTRALIAN ADDRESS

Dr Emerson’s speech touched on a few specific points:

1. the ‘Doha Round’ of trade negotiations – the objective of which is to lower trade barriers around the world and which has been ongoing since 2001 – has essentially stalled;
2. failure of developed countries to reach agreement on various issues is harming developing countries and LDC’s;
3. however, there are aspects of the Doha negotiations on which broad agreement might be reached, and it might therefore be beneficial to break the round into its ‘component parts’, to enable progress to be made in some areas;
4. Australia is committed to ‘resisting protectionism’, and concerned that arguments about ‘policy space’ may be an excuse to increase tariffs and non-tariff barriers; and
5. Australia is committing A$18 million (which we now know is A$2 million to WIPO, and A$16 million elsewhere) ‘to support the Least Developed Countries on earth in this great endeavour’.

Incidentally, The term ‘policy space’ refers to the amount of ‘room’ available for individual countries to set their own domestic policies in view of the constraints placed upon them by international agreements to which they have committed.  Cries of ‘we need policy space’ are therefore generally raised by countries that do not wish to agree to tighter constraints on their ability to implement measures – such as tariffs or subsidies – for their own domestic benefit.

‘RESISTING PROTECTIONISM’

Dr Emerson’s somewhat cryptic words about ‘resisting protectionism’ (we presume that those at whom they are directed know who they are) and promising a ‘strong statement’ on the issue to follow the meeting, make a little more sense once you read the Pledge Against Protectionism, a joint ministerial statement endorsed by Australia, Brunei, Canada, Chile, Colombia, Costa Rica, European Union, Georgia, Hong Kong China, Israel, Japan, Korea, Liechtenstein, Mexico, New Zealand, Norway, Pakistan, Peru, Singapore, Switzerland, Separate Customs Territory of Taiwan Penghu Kinmen and Matsu, Thailand, and the United States.

Basically, the ‘pledge’ is a promise not to do things which, in these ‘times of global economic uncertainty’, a government might be tempted to do under pressure from domestic interests, such as raising tariffs or increasing subsidies.  At least until the next Ministerial Conference, anyway.

COMMENT

So, Australia is indeed donating A$18 million to the cause of helping LDC’s to reduce trade barriers and (presumably) move towards full implementation of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), with A$2 million of this being given to WIPO to administer.

The inner cynic of course retorts that paying those less fortunate than yourself is just one way to encourage them to do what you want.  The counter-argument, in support of free-trade, is that the arrangement is mutually beneficial, i.e. that Australia and the LDC’s will both be better off if more open markets result in greater economic activity in all countries.

We are not going to buy into the ‘free-trade’ or ‘globalisation’ debates.  For one thing, we are not qualified!  Our only comment is that we certainly hope the Australian Government knows what it is doing, and this investment in LCM’s pays off in the longer term.  Because A$18 million is a significant sum of money, especially when you consider that the current government committed an average of only A$56 million per year in 2009 to the first five years of its Commercialisation Australia grants program (see Australian Government Improves Access to Commercialisation Grants for the latest news on this program).

After all, what good will it do us to assist developing countries to join the global knowledge economy, if all we have to sell them once they get there is iron ore, coal, uranium and live sheep?

THE TRADE MINISTER’S WTO ADRESS IN FULL

Thank you Mr Chair. I want to say at the outset that I am not a diplomat and therefore I will speak very frankly. The Doha Round is blocked. It is at an impasse. Ten years of a business as usual approach has failed — has failed.

This is deeply disappointing for all of us but most particularly for the poorest countries on earth. This has been an abrogation of responsibility on the part of WTO Members to the poorest countries on earth.

We have, particularly in the northern hemisphere, very slow economic growth. We need a new sustainable source of stimulus to ensure there is a global economic recovery and the only sustainable source of stimulus is through trade liberalisation.

At the same time, while we are we are seeking to liberalise trade, we must resist protectionism in all its forms.

Mr Chair, there are many paths to the mountain top and Australia has been advocating a new pathway in recognition of the fact that the Round has stalled.

So, we strongly support the WTO General Council statement of 30 November, which has actually been agreed by all Members, and it has several essential features.

First, it embraces the notion of different approaches, of a new pathway.

Second, it provides a focus on components of the Doha Declaration where we can reach agreement on a provisional or definitive basis earlier than full conclusion of the single undertaking.

And third, it says we fully respect the development component of the Doha Round.

This argues for breaking the round into its component parts and it would allow the Least Developed Countries to benefit earlier instead of waiting for some grand bargain, magically, like a bolt from the blue, to strike us from the sky. This is not going to happen. It has eluded us for a decade.

So what are the sorts of priorities that we should consider?

Well, Least Developed Countries — it is obvious and Australia has committed to100 per cent Duty Free, Quota Free access for the Least Developed Countries of the world.

Trade facilitation will be of benefit to all countries of the world, but including the Least Developed and other Developing Countries of the world.

As Chair of the Cairns Group, of course, we would advocate agricultural trade liberalisation in all its forms.

Other items that can be considered for priority and early harvest are services, environmental goods and services, non tariff barriers, strengthening anti-dumping disciplines, fisheries subsidies and, we would argue, for Regional Trade Agreements to ensure that they are of high quality and contribute to the multilateral system.

We need a strong statement on resisting protectionism. We will be making a strong statement on resisting protectionism after this meeting.

We are very concerned about statements such as policy space if that means an excuse to increase tariffs and non tariff barriers.

We will commit AUD18 million to trade facilitation to support the Least Developed Countries on earth in this great endeavour.

We have a responsibility.

We should support the Director-General. We should support the Chairman.

We should support the system and get on with job of liberalising trade around the world for the benefit of everyone but, most particularly, for the poorest countries on earth.

Tags: Australia, Economics, Innovation policy, International treaties, Politics