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3. Trade

What we agreed at Gleneagles

The G8 will work to stimulate growth, improve the investment climate and make trade work for Africa.
The G8 will step up efforts to bring the Doha Development Agenda to a successful conclusion and ensure an outline agreement by the World Trade Organisation (WTO) Hong Kong Ministerial in December 2005 and a final agreement in 2006.
The G8 are committed to reduce trade distorting domestic subsidies and eliminate all forms of export subsidies by a credible end date. It is also committed to address products of interest to least developed countries in the negotiations, and to make sure least developed countries have the flexibility to decide their own economic strategies.

How is the UK doing?

We remain determined to work towards the creation of a freer and fairer global trading system. Following the suspension of negotiations in the DOHA round of world trade talks last July, the UK is delighted full negotiations have now resumed and will do all it can to achieve a conclusion to the negotiations at the earliest opportunity. We have also announced that our total support for aid for trade, including support for infrastructure - like roads, ports, power and telecommunications - is expected to increase by 50% by 2010/11. This would equate to $750m a year in 2010.

How the international community is doing

The Doha negotiations have resumed which is an important step considering the disappointing suspension in July 2006.

And several provisional, but important agreements have already been struck including:

An end to cotton export subsidies judged illegal by the World Trade Organisation (WTO)

An end to agricultural export subsidies by 2013

Duty and Quota Free Access for at least 97% of products from Least Developed Countries (the EU is on track to providing 100%).

However, we cannot be complacent. The Doha Round could enable growth and lift millions of people out of abject poverty – we must not delay. It is not in anyone’s interests for them to fail. For the talks to conclude successfully, all key World Trade Organisation (WTO) players will need to play their part and deliver:

Increased market access in agriculture, industrial goods and services; end export subsidies;

Substantially reduce all trade-distorting domestic support;

Provide effective special and differential treatment to enable developing countries to capture the gains from trade.

Developing countries must also have the flexibility to design, plan and sequence trade reforms in line with their country-owned development and poverty reduction strategies.

The G8 countries are on track to meet their pledge of $4billion spending on ‘aid for trade’ by 2010, including through the implementation, with other donors, of the Enhanced Integrated Framework (EIF). This international initiative aims to assist Least Developed Countries identify their supply side constraints and integrate trade into national development plans.

What should happen next?

flower exporter ghana The UK is urging all countries to conclude the Doha Round as soon as possible, with a strong pro-development final deal. A real opportunity exists during the next few months to conclude the negotiations. It is important now that the major WTO members, particularly the G4 Group (the EU, US, India and Brazil), show leadership and work constructively with Pascal Lamy, the Director General of the WTO, to take the negotiations forward. The UK Government will continue to work with the European Commission, other EU Member States and other WTO Members to ensure the negotiations are taken forward and concluded as soon as possible.

We are striving to increase trading opportunities and to reduce trade barriers. We are providing capacity building assistance to developing countries so they can participate more actively in trade negotiations. We are also pushing for simpler and more liberal rules of origin for exports from Least Developed Countries and sub-Saharan African countries, which will genuinely help developing countries integrate into the global economy.

Economic Partnership Agreements

We are working to ensure that the new Economic Partnership Agreements (EPAs) between the EU and African, Caribbean and Pacific (ACP) countries fully reflect development interests.

EPAs will ensure trading arrangements between these countries are compatible with WTO rules. EPAs will be regional trade agreements. Their objective is to provide development benefits to the ACP, by promoting regional integration and facilitating their integration into the global economy. The UK’s objective is to conclude EPAs which deliver real development benefits to ACP countries by the end of 2007, or as shortly after as possible. The UK wants EPAs agreements that consider the following points:

EU should offer duty and quota-free market access and simplify and liberalise rules of origin.
ACP must have maximum flexibility over their market opening. The EU should therefore offer all ACP regional groups long implementation periods.
There should be an effective safeguard mechanism for ACP countries to use if faced with a surge of subsidised EU imports.
EPAs should be accompanied by additional resources to enable the ACP countries to benefit from trade reforms and build their export competitiveness.
Investment, competition and government procurement should be removed from the negotiations, unless specifically requested by an ACP regional negotiating group.

Where it is making a difference

An ambitious, pro-development deal on Doha would deliver gains to the global economy approaching $200 billion by 2015, equivalent to 0.6% of global income.

The removal of all cotton subsidies and import tariffs could boost global economic welfare by $283 million per year – providing a huge benefit to sub-Saharan Africa of $147 million per year.

In Southern Sudan the UK has provided £10 million to rehabilitate road networks in order to encourage links between regions and neighbouring countries.

Last updated 24 April 2007