Technical Note for PSA 5

URN No: 02/1613/A5

PSA Target 5. Secure agreement by 2005 to a significant reduction in trade barriers leading to improved trading opportunities for the UK and developing countries. Joint target with DfID and FCO.

The decision on whether the target has been met will be based on a comparison of full implementation of the Uruguay Round Agreement and the commitments agreed at the Doha trade round. The analysis will concentrate on those areas that are most measurable, as some subjects for negotiation in the Doha Development Round not contained in the Uruguay Round such as World Trade Organisation (WTO) proposals on “new issues” (such as investment and competition) do not lend themselves to precise measurement. Nevertheless the UK position is that a broad agenda which includes such proposals, will contribute to the objective of reduced trade barriers and improved opportunities for all. 

This target will be judged to have been met if there is agreement at the ‘Development Round’ of WTO negotiations (launched in Doha in November of 2001 and due to be completed by January 2005) by WTO members taken as a whole to (a) an average reduction of at least 20% in bound tariffs on industrial goods and (b) a substantial reduction in support for agriculture.

“Developing countries” are those listed as Low- or Medium-Income in the World Bank’s Global Economic Prospects.

a) an average reduction of at least 20% in bound tariffs on industrial goods.

Data
The ultimate source of data on industrial tariffs is expected to be the WTO Integrated Database or the WTO Consolidated Tariff Schedules database, though estimates of tariff averages are likely to be calculated and published by both academic sources and international institutions, including the WTO itself. These databases are compiled by the WTO Secretariat using notifications from WTO members. They cover the majority of WTO members accounting for the vast majority of world trade, though reporting for some of the smaller members is patchy.
The databases are thought to be reliable and are updated annually, though it may take longer to incorporate fully data on new tariff offers made as part of a Round. Care must be taken to ensure that the calculation method used to determine if the target has been met, is the same, ie bound tariffs are compared with bound tariffs, only industrial products are used, and the selection of countries formulating the average is the same. The data and methods will come from WTO.

Consistency of definitions of bound tariffs and method of assessing progress will be assured with WTO.

Timings
Formal measurement will be at the conclusion of the Doha Round.
Databases are updated annually though it may take longer to incorporate fully data on new tariff offers made as part of a Round.

Territorial scope
WTO members.

b) a substantial reduction in support for agriculture. 

Data
Assessment of whether the target has been met will be based on a comparison of full implementation of the Uruguay Round Agreement (the baseline) and the commitments agreed at the Doha trade Round.

It will consider commitments to reduce production-linked support, supplemented by commitments to reduce agricultural tariffs and support for agricultural exports. 

The OECD and WTO will be encouraged to evaluate and estimate the impact of agricultural commitments on producers and consumers in both developed and developing countries arising from the Doha round. Other international institutions and academics may also produce estimates.

For baseline data the WTO annually publishes data for production-linked support, using data supplied by its members. 

Quality control will be through WTO and OECD procedures. Care must be taken to ensure that the estimates of the impact of commitments agreed at the Doha round are made on the same basis as the baseline figures. 

Production-linked support will be defined as the sum of ‘amber’ and ‘blue’ box support as set out in the Uruguay Round Agreement on Agriculture. (See http://www.wto.org/english/tratop_e/agric_e/agboxes_e.htm.) This will include all support except that which will have no, or at most minimal, trade-distorting effects or effects on production.

Timing
Measurement will be at the end of the round and will involve matching new round commitments against the full implementation of the Uruguay commitments (the baseline).