WORLD TRADE
ORGANIZATIONG/MA/W/44
29 October 2002
(02-5957)
Committee on Market Access Original:  English
IMPLEMENTATION ISSUES:  MEASURES DESIGNED TO SECURE A
REDISTRIBUTION OF NEGOTIATING RIGHTS IN FAVOUR
OF SMALL AND MEDIUM-SIZED EXPORTING
MEMBERS IN TRADE NEGOTIATIONS
Communication from Saint Lucia
The following communication, dated 29 October 2002, has been received from the Permanent
Representation of Saint-Lucia.
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1. Tiret 99 of Job (01)/152/Rev.1 reflects the following implementation concern raised by the
delegation of St Lucia:
2. The General Council shall adopt measures designed to secure a redistribution of negotiating
rights in favour of small and medium-sized exporting Members in trade negotiations
(Job(01)/152/Rev.1).
3. The Chairman of the Council for trade in Goods (minutes of meetings of 22 and
27 March 2002) proposed that this tiret fell within the area of competence of the Market Access
Committee which was directed to take up the issue and report to the Trade Negotiations Committeeby the end of 2002.  Pursuant to this direction and at the request of the delegation of St Lucia the
Secretariat prepared a background information note JOB(02)93 on ‘Negotiating Rights under
Article XXVIII of GATT 1994’.  St Lucia expresses its gratitude to the Secretariat for this very useful
paper clarifying certain aspects of the Committee’s deliberations on INRs in light of the discussion on
redistributing negotiating rights in the Uruguay Round.
The scope of the underlying concern identified in Tiret 99
4. The methodologies and modalities of trade negotiations have failed to produce a balanced
result which takes into account the interests of all Members, particularly small developing countryexporting Members.  The various negotiating techniques utilized over the history of GATT/WTO
negotiations include offer and request, formula  - tariff independent and tariff dependent /
harmonization (linear and non-linear) - and ‘cocktail’ approaches.  Our concern is that none of the
approaches employed to date have secured outcomes which address the particular circumstances of
certain small exporting Members.  In this regard, we note the deep concern  expressed by Ministers at
the Second WTO Ministerial Conference about the growing marginalization of least-developed
countries and certain small economies . (Geneva Ministerial Declaration, paragraph 6)
5. The offer and request approach dominated tariff negotiations in the five rounds which
preceded the Kennedy Round.  It was also used in the Uruguay Round subject to overall target
average rate reductions.  The offer and request approach is the main method of negotiation in the
ongoing services negotiations.  Significantly, commentary on offer and request negotiations withG/MA/W/44
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MFN application observes: “ The request and offer approach has the disadvantage for small countries
in that they are rarely principal suppliers to foreign markets, nor are their markets of great interest to
other countries .” (Sam Laird, “Multilateral Approaches to Market Access Negotiations”, Staff
Working Paper, WTO TPRD-98-02, May, 1998, paragraph 45)
6. The ‘ability to pay’ has always been a consideration in trade negotiations.  The tendency has
been to expect “to win a dollar of concession for each dollar of concession granted.”  It is generally
conceded that a Member’s ‘negotiating capital’ is largely assessed in terms of it’s existing or potential
share of world trade.  In request and offer negotiations, Laird notes, the computation of equivalence in
offers is usually done in terms of the percentage increase in trade to be expected from implementation.
(ibid., paragraph 44)  Members with inherently small markets, such as St Lucia’s with in-built
diseconomies of scale, have limited leverage in trade negotiations and therefore limited ability tosecure an outcome which adequately addresses their concerns - a circumstance which is particularly
unacceptable in the post-Uruguay Round era.
7. Alternative formula and combination/mixed approaches have also failed to address the
particular circumstances of many vulnerable WTO Members.  Across-the-board and alternative tariffcutting formulae – subject to exceptions (carve–outs), zero for zero and ‘cocktail’ approaches have, in
general, not provided an enabling environment which empowers smaller WTO Members.
Recognition of an imbalance in the negotiatin g process in the UR Understanding on the
Interpretation of Article XXVIII of GATT 1994
8. The mandate for a “ redistribution of negotiating rights”  in favour of a subset of the
Membership, i.e. small and medium-sized exporting Members, in the limited circumstance of the
renegotiation of tariff bindings derives from the Uruguay Round Understanding on the Interpretation
of Article XXVIII of GATT 1994 (paragraph1).  The Understanding reflects the recognition of allMembers of a basic reality that the evolution of the multilateral trading system has built in a disparity
within the Membership which effectively precludes the existence of a level playing field in the
negotiating process.  The Secretariat’s paper provides useful insights into the negotiating history of
the Uruguay Round Understanding.
9. The Secretariat note (JOB(02)93) highlights two kinds of ‘rights’ which generally accrue in
the context of negotiations – a ‘right to consultations’ and a ‘right to negotiate and seekcompensation’ (see paragraphs 1.15 & 1.21).  The paper highlights several proposals which were
advanced in the Uruguay Round Negotiating Group on GATT Articles elaborating relevant criteria for
determining the extent of a Member’s interest in trade in the affected product.  Under Article XXVIII
of the GATT 1994 Members are accorded rights based on their classification as a principal or
substantial supplier.  The limitations of the initial discussion are recognized in proposing a broadreview of concepts raised as applied to trade negotiations in general:
10. “The criteria proposed included: (i) the GNP of the exporting country; (ii) the total exports of
the exporting country; (iii)  the population of the exporting country; (iv) the exports of the affected
product by the exporting country to all destinations; (v) the total exports of the exporting country inthe trade sector in question; this criterion was to be used only in the case of a developing country.”
(paragraph 1.24)
11. Other criteria included:
“its potential trade in the product affected, based on such considerations as its production and
export capacity and level of international competitiveness. …  A formula which would take
account of two factors: (1) the affected exports in relation to total exports, and (2) the
importance of exports for the domestic economy.” (paragraph 1.26)G/MA/W/44
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Recognition of Size and Vulnerability
12. The relevance of market size in the negotiating process is recognized, for example, in the
‘Guidelines and Procedures for the Negotiations on Trade in Services’, adopted by the Special Session
of the Council for Trade in Services on 28 March 2001 (S/L/93).  Paragraph 3 thereof, provides:
13. “The process of liberalization shall take place with due respect for national policy objectives,
the level of development and the size of economies of individual Members, both overall and in
individual sectors.  Due consideration should be given to the needs of  small and medium-sized
service suppliers, particularly those of developing countries.”
14. It is worth noting that the request and offer process has begun without the effective
participation of many vulnerable developing countries which are not in a position to secure negotiated
specific commitments in implementation of Article IV of the GATS1.
15. The Negotiating Group on Market Access is deliberating on the modalities for the market
access negotiations on non-agricultural products.  Many interesting proposals have been advanced andthe particular circumstances of developing countries with a weak and vulnerable industrial base have
been eloquently articulated by, inter alia , the African Group.  It has been clearly stated that “The
modalities could not be in the nature of a one-size-fits-all approach or formula”  (e.g. TN/MA/M/2,
Minutes of the Meeting held on 2 August 2002, paragraphs 116-117 – Representative of Kenya).
Similar concerns have been raised in the negotiations on agriculture where the special circumstancesof various groups of Members, including small island developing states such as St Lucia, have been
articulated.
16. An assessment of the deliberations in each negotiating group highlights the shortcomings of
the offer and request approach and rejection of a one -size–fits-all approach or formula by a significant
number of vulnerable developing countries.
17. St. Lucia was the initial proponent of Tiret 99 and we have consistently underscored the
breath of our fundamental concern: the problems posed by bilateral negotiations (offer/request) under
a multilateral framework and of formula approaches which fail to take into account the particular
circumstances of small and vulnerable Members.  This has served to create a ‘negotiated’ inequity in
the rules-based system which must be addressed in order to forestall a repetition of the mistakes of theUruguay Round.  This was the underlying rationale for raising the issue of a redistribution of
‘negotiating rights’ – the right to consultations , negotiations and compensation – prior to the Doha
Ministerial Conference.
The Way Forward
18. The St Lucian delegation supports the continuation of the ongoing discussion in the Market
Access Committee on INRs, particularly from the perspective of transparency as raised by
Switzerland.  Internal transparency in the negotiating process is an important feature which merits
further focussed discussion and a specific recommendation thereon by the Committee by the endof 2002.
                                                     
1 Note that paragraph 17 of the Guidelines and Pr ocedures for the Negotiations on Trade in Services
further details, “in implementing Article IV consideration shall also be given to the needs of small service
suppliers of developing countries.”G/MA/W/44
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19. As to the broader and more fundamental concerns raised, further debate in the Committee on
the concept of according ‘negotiating rights’ – i.e. a legal right to consult and/or negotiate – in the
context of undertaking commitments and/or modifying existing undertakings could facilitate refining
the scope of the recommendation to be made as regards matters beyond the competence of the Market
Access Committee.  It is suggested that these be re ferred back to the General Council or, possibly, the
TNC for further consideration.
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