WTO General Council Agrees Draft Ministerial Decision on Small Economies

Alicia Nicholls

On November 30th, the General Council of the World Trade Organisation (WTO) agreed on a draft ministerial decision on small economies which affirms WTO Members’ commitment to the work programme on small economies which was adopted in 2002.

The Draft Decision

Under the Draft Decision agreed to this week, WTO members meeting as the General Council have:

• Affirmed their commitment to the Work Programme on Small Economies
• Taken note of the work carried out since 2013, including on the challenges and opportunities faced by small economies in linking into global value chains in trade in goods and services
• Instructed the CTD to continue its work in Dedicated Session under the overall responsibility of the General Council.
• Instructed the Dedicated Session to consider in further detail the various submissions that have been received to date, examine any additional proposals that Members might wish to submit and, where possible, and within its mandate, make recommendations to the General Council on any of these proposals.
• Indicated that the General Council will direct relevant subsidiary bodies to frame responses to the trade-related issues identified by the CTD with a view to making recommendations for action.
• Instructed the WTO Secretariat to provide relevant information and factual analysis for discussion among Members in the CTD’s Dedicated Session
• Requested the WTO Secretariat to also conduct work on the challenges small economies experience in their efforts to reduce trade costs, particularly in the area of trade facilitation.
• Mandated the CTD in Dedicated Session to continue monitoring the progress of the small economy proposals in WTO bodies and in negotiating groups

The Draft Decision has been forwarded to the Ministerial Conference to be held in Nairobi, Kenya later this month for adoption by the WTO ministers.

Brief background on Small Economies 

The Small Vulnerable Economies (SVEs) do not form an official sub-category of WTO members but are one of the negotiating coalitions in the WTO which have been active in the negotiations on agriculture, NAMA and fisheries rules.

These small states, which  account for only a small fraction of world trade, pushed for WTO recognition of the unique  challenges they face in participating in world trade because of their small size, concentration of exports, distance from major markets, lack of economies of scale and limited trade capacity. They also expressed concern about what they saw was an erosion of their policy space.

The countries which have been spearheading the SVE initiative are small island states in the Caribbean and the Pacific and smaller Central and South America nations like Honduras, El Salvador and Paraguay.

The Doha Ministerial Declaration of November 20, 2001, which provided the negotiating mandate for the Doha Development Agenda negotiations, provided for a work programme “to examine issues relating to the trade of small economies”. Paragraph 35 of the Declaration states the objective of the work programme is to:

frame responses to the trade-related issues identified for the fuller integration of small, vulnerable economies into the multilateral trading system, and not to create a sub-category of WTO Members.

The Work Programme on small states is being done under the auspices of the General Council which instructed the Council on Trade and Development (CTD) in March  2002 to hold dedicated sessions  on the work programme and make periodic progress reports to the General Council, making the work programme on small states an agenda item of the General Council.

Under paragraph 41 of the Hong Kong Ministerial 2005 a two-pronged track was agreed where the CTD was instructed, under the General Council’s responsibility, to continue the work in the Dedicated Session and to monitor progress of the small economies’ proposals in the negotiating and other bodies. The aim of this was to be able to provide responses to the trade-related issues of small economies.

So far several Ministerial and General Council decisions have been taken and proposals by SVEs have been made in areas such as agriculture, industrial goods, service trade and trade facilitation. These decisions as well as proposals are routinely compiled by the WTO Secretariat to show what has been achieved under this agenda item so far. The text of the most recent WTO Secretariat compilation paper of October 16, 2015 may be found here.

Alicia Nicholls, B.Sc., M.Sc., LL.B. is a trade and development consultant with a keen interest in sustainable development, international law and trade. Please note that the views expressed in this article are solely hers. You can also read more of her commentaries and follow her on Twitter @LicyLaw.