Newsflash: Draft Decision for SVEs adopted

A draft decision regarding Small and Vulnerable Economies (SVEs) has been adopted by the WTO for its 10th Ministerial Conference (MC) in Nairobi. As of now it is a mere skeletal structure, primarily highlighting the problems that these countries face in international trade and encouraging further effort towards solving such issues. SVEs are disadvantaged owing to their small size and the vast distance that separates them from major trading partners. So the major problem that they face is transportation costs. [See here for the up-to-date version of the progress so far in this respect.] It will be interesting to see how the debate regarding SVE assistance actually unfolds at Nairobi this month keeping in mind the recent adoption of the Trade Facilitation Agreement. [I previously talked about it here] You may remember it as the agreement that brought massive criticism towards India during and after the last MC. India had decided to oppose its adoption until a positive solution was found with respect to the usage of agricultural subsidies (and other domestic support). Though it is the only significant “achievement” (so to speak) of the WTO negotiations in its 20 years of existence, the TFA had raised several questions about the ability of developing and least developed economies with regard to actual implementation. The rules are seen by some (including Professor A.K. Kaul) to be too strict and many developing countries (Including India presumably) fear that not being able to abide by these rules may lead to unwanted WTO litigation. The fate of even smaller SVEs obviously hangs in the balance. It will take adept and constructive negotiating on part of the delegates at this months MC to maintain the delicate balance between desired growth, implementation reality and increased “liberalization costs”.

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