World Trade Negotiations: Presentation.

I welcome Mr. Tony Joyce and Mr. Frank Doheny from the Department of Enterprise, Trade and Employment and thank them for coming before the committee and submitting a comprehensive and concise brief.

I am aware that other committees will also meet officials on similar matters during this week but members will appreciate that this committee has an overarching remit which mandates us to examine this important issue. They will be particularly interested in trade and development matters which will be on the table for discussion at the World Trade Organisation. I intend to conclude this discussion at 3 p.m., when we will continue with a presentation from Mr. Colin Roche of Trade Matters.

I invite Mr. Joyce to make a brief presentation, following which I will open the discussion to the floor.

Mr. Tony Joyce

I thank the Chairman. We have submitted a document to the committee outlining the background to the negotiations, the progress made to date and the current state of play. I wish to emphasise a few points. The negotiations were launched in 2001 and originally due to finish by January this year. Now the objective is to bring them to a conclusion towards the end of next year. The upcoming meeting in Hong Kong in December is regarded as an important stepping stone towards meeting the deadline of finishing the negotiations next year. The general view is that if the meeting is not successful in setting a framework for finishing the negotiations, there will be little realistic hope of continuing them. It is likely that in that circumstance the major participants would refocus their attention towards bilateral or regional trade agreements and away from the multilateral approach. In our view, that would not be a particularly welcome development because in such circumstances it is very likely that the development dimension of the negotiations would be lost and the interests of poorer countries not dealt with. We, therefore, see the Hong Kong meeting as being particularly important.

It is useful to point out that a wide range of issues are being negotiated in this round, not only the high-profile issue of trade in agricultural products but also trade in industrial products, services, overall trade facilitation and the entire range of multilateral trade rules, which are very important for the regulation of world trade. In addition, there is the important development dimension and the progress that must be made on the integration of developing countries into the trading system.

The Chairman is aware that for the European Union the negotiations fall to be dealt with under Article 133 in line with the common commercial policy of the European Union. The European Commission represents the Union in the negotiations and is required to keep member states fully informed of developments and negotiate in accordance with the mandate the member states deliver to it through the Council. The Irish input to the negotiations is made internally within the Union and feeds into the EU common approach. The Department of Enterprise, Trade and Employment co-ordinates the Irish input to discussions and co-ordinates with the other Departments involved, principally the Department of Agriculture and Food and the Department of Foreign Affairs. The Minister of State with responsibility for trade and commerce will lead a delegation in Hong Kong. The Minister for Agriculture and Food and the Minister of State with responsibility for overseas development will also attend.

In these negotiations in recent years we have consistently supported continued trade liberalisation and the development and strengthening of the multilateral system, especially a strong and effective World Trade Organisation. It is generally accepted that the system has made a significant contribution to our economic development and continues to do so. At the same time, in so far as agricultural trade liberalisation is concerned, we have sought to ensure this develops fully in line with the ongoing internal reform of the Common Agricultural Policy, CAP, and that the changes made in the mechanisms of the CAP are fully respected in the WTO.

The third element of our approach — by no means the least — is, as I said, to work towards a positive response to the concerns of developing countries and devise a package of measures specifically for them in the trade context. This overall Irish approach is fully catered for in the EU common approach and the line followed by the European Commission in the negotiations. A vast amount of detail is involved in the negotiations. As up to 150 member countries of the WTO are involved, a vast range of interests and concerns have to be addressed.

Overall, it is important to emphasise that we want to see a successful conclusion to the negotiations and that we see significant benefits to the economy in continued trade liberalisation. As we point out in the document, the prospects for success in Hong Kong are still very unclear. There has been a lot of activity in recent months in an attempt to narrow the differences across the various issues being negotiated. At this stage, we can say there has not been too much success in narrowing those differences, particularly in relation to the most contentious issue of agriculture. However, the discussions continue and efforts will continue, up to and including Hong Kong, to narrow the difference so that Hong Kong can achieve a framework which will allow the negotiations overall to be concluded successfully next year.

I thank Mr. Joyce. I take it he is looking for a balanced agreement and that he is in favour of a multilateral agreement.

Mr. Joyce

Yes. We are very clear that what we would see as a successful conclusion to the negotiations is a balanced result across all the issues being negotiated, including agriculture, non-agricultural products, services and, of course, the development dimension, which permeates all the issues under negotiation. In addition, we would like to see a package of measures agreed in order to address the other concerns of the developing countries.

I am very grateful senior people from the Department of Enterprise, Trade and Employment are here. The Chairman will excuse me for saying we have been down this road before in preparing for talks on trade. The success of multilateralism does not require a total surrender on fundamental issues. That is coming out of what I have heard as well. That is a fundamental principle. A set of regional or bilateral agreements is not the only alternative to the collapse of the Hong Kong process. I am interested in the direction the preparations are going. Given what happened at the opening process in Doha, how has the development requirement permeated the position of the Department of Enterprise, Trade and Employment or the Department of Agriculture and Food to the point where any of their previous presentations have changed?

I will not get bogged down in detail such as the fact that millions of pieces of frozen chicken from Germany are being sold to an African market where local people are prevented by WTO rules from becoming involved in chicken farming. That is detail, if you like. As we prepare for Hong Kong and this resumed process, I am interested in this phrase that it must become a development round. Are we talking about development being presented, as it so often is, as the fourth consideration? It usually opens as multilateralism being the only game in town. Multilateralism has been good for Ireland; I do not contest that. It is for another day as to what is meant by multilateralism, how far it is from the conditions of pure market performance and so on.

When one has looked at agriculture, the non-agricultural issues and at services, people add on the fact the needs of the developing countries must be borne in mind. To what extent are there significant changes to the big parameters which would justify its being called "a resumed set of negotiations with a development focus"?

My next question is, to some extent, related to that. If one looks at market access for non-agricultural issues and at services, is Mr. Joyce saying he believes the Irish approach is well represented within the overall EU approach? The requirement to remain within the overall EU approach is to be found in Article 133. I am sure Mr. Joyce is as amused as I am to find that in communication on my question on the ratification of the United Nations convention against corruption it was considered to be partially an Article 133 matter. It is amusing that corruption was a matter on which we were required to bury the national position in the European Union position. Moving on from what is an academic footnote, what has been the Irish contribution to the European Union position on matters such as education, water and energy in developing countries?

I am anxious to be educated on the process involved. If there is an atmosphere in the talks in the early stages, as I understand happens on many occasions, and one does not conclude until everything is agreed, do parallel discussions take place? During the negotiations on agriculture, do such discussions take place on exemptions and the timeframe for liberalisation of trade in both agricultural and non-agricultural products on the developing countries' side?

I am aware that Ireland's contribution to the capacity to negotiate is €1 million, which I fully support. However, I would support a larger contribution, an issue we dealt with at the last meeting.

I welcome Mr. Joyce and Mr. Doheny.

These are complex matters. As Deputy Higgins stated, our perspective is focused on development issues, from the point of view of Ireland's aid endeavour in developing countries. The sixth WTO ministerial round meeting in Hong Kong is important. It is not the end of the road but an important preparatory stage of the talks.

I would like to have a greater understanding of how coherently Ireland behaves in these negotiations. I am referring to our domestic trade interests as a member of the European Union and the wider issue of our development agenda and the significant amount of money we now contribute to Third World development. It totals more than €500 million this year and will increase to €1.5 billion per annum by 2012. In the context of expansion of the aid budget, it is important that there be coherence between our international trade policy negotiated by our Ministers and our development agenda negotiated by the Minister with responsibility for development at EU level and beyond.

Like Deputy Higgins, I would also like to understand how this round differs from previous rounds, given the context mentioned. How will we deal with substantial improvements in market access for developing countries? Ireland's stance as a non-aligned country and in donating aid that is completely untied means we have an obligation to be clear on our objectives in this round. Will the officials explain this dilemma and the possible conflicts for Ireland in the context of the negotiations? Will they also reassure the committee that the development agenda will not be lost or compromised by issues pushed forward by other EU countries which provide the context in which many of these issues are discussed?

The second point relates to the wider international agenda of the most recent G8 conference where the issue of fair trade was postponed. We had an agreement by the G8 that there would be substantial increases in aid and substantial concessions on debt cancellation and alleviation for the poorest countries. The trade issues, however, were left to the next meeting in Hong Kong. Given the momentum around the G8 summit, it is important that trade issues are not forgotten because they are an essential part of the mix in the development agenda. I would like to get a clearer understanding of just how forthright Ireland will be in these negotiations, with a bias towards the developing countries. The agenda is a serious one and preoccupies this committee in particular.

I also welcome the officials. At one stage, I thought I had a handle on what these negotiations were about, but the more they continue, the less I understand them. Listening to Commissioner Mandelson on BBC's "Newsnight" last night, one would wonder if there is a uniform EU position on anything. I know the EU Services Directive is parked, but it must impact in some way on the EU's position on a whole range of issues within the talks and also, if we are serious, the Lisbon Agenda. While that directive must have an impact on the EU position, I do not know whether there is any uniformity about the directive itself — in whatever form it will re-emerge — or about the Lisbon Agenda.

Turning to point 7.6 in the briefing note, I am completely at a loss to know where we are. The briefing note states:

Progress on opening markets and reducing support in agriculture will over time bring substantial benefits to developing countries, including least-developed countries or LDCs. Such liberalisation would, however, benefit the larger and more advanced developing countries' economies more than the poorer ones who, in the short to medium term, could well be net losers. The principle that LDCs should have access to the benefits of liberalisation without suffering its negative effects should be established by the ministerial meeting.

Members of the committee have the remainder of the briefing note. I find it difficult to square that circle and I would like some enlightenment.

Before Mr. Joyce replies, I wish to raise a couple of points. Regarding the US and the Cairns Group, how does Mr. Joyce see the prospects of them meeting their obligations, particularly on agriculture?

Our movement via the EU is conditional on movement by others. For instance, we have built up an agriculture base to save our small farmers, although many have gone to the wall anyway. Nevertheless, they will have to face further changes under the CAP. They are adjusting to those at the moment and as far as the EU is concerned that seems to be a sine qua non. They insist that the efforts being made by EU countries under the CAP must be recognised and complied with, especially as the decoupling movement has just begun. It represents a big change in our circumstances.

As other members have said, we strongly support the developing regions in every possible way. More than anything, they need access to markets. We must at the same time look to our position globally and ensure we continue to increase our opportunities because that has been part of our recent development and reduced dependence on Britain. In the 1960s approximately 70% of our exports went to Britain. That figure is down to approximately 18% now, which shows how the country has progressed. There are many lessons in what we have done which developing countries might take on board, if given the opportunity.

The submission is comprehensive and helpful. We need some time to read and get to the bottom of it. We want a balanced outcome that others will genuinely reciprocate. Too often we find trickery in the activities in this area and afterwards we discover that what people said was not sincere. As a country that is so interested in helping development, we must be careful not to be greatly disadvantaged by general developments, hence our desire to see a balanced programme.

In the past couple of weeks the American Administration has tried to broker an all-American agreement, even sideliningMercosur. This has been scuppered temporarily. The Chairman spoke about the Cairns group. If regional agreements such as that are brokered in advance of a key point in these talks, is there any basis for optimism about its successful outcome?

Mr. Joyce

Before the ministerial meeting in Cancún, two years ago, I presented at a committee — I am not sure whether it was this or another one — where one member said he found our document "impenetrable". I am glad we have managed to improve our drafting since then.

Some of the ideas might be impenetrable but the document is excellent.

Mr. Joyce

It is important to remind the committee of the process. We feed into the EU position, and all our action is internal to the European Union. Domestically, we co-ordinate our approach between the Departments involved. For example, Development Co-operation Ireland has a particularly strong input to the discussions in Brussels regarding development.

The development dimension of these negotiations has two aspects. It is not separate from the rest of the negotiations and it must be borne in mind in all the issues under consideration, particularly in respect of how the agriculture question is addressed. The developing countries seem to have a growing concern with the effect the liberalisation proposals tabled in Geneva would have on the domestic agriculture of several developing countries. For example, the United States, in the latest flurry of activity, made some very dramatic proposals for reductions in the sort of support that should be available to agriculture and for certain changes in support in various countries around the world. A number of developing countries reacted by saying that such proposals would devastate agriculture in particular product areas in how they were developing their trade.

Proposals of that kind must be viewed in the context of these overall negotiations to see their development impact and dimension. Getting back to the process I mentioned earlier, we must look carefully at the proposals coming forward from the European Commission in terms of how they would impact on the development aims we see as central to the negotiations. At the same time there is a separate area under negotiation involving specific development angles to be pursued in the trade context. These would be of particular help to developing countries, for example, in special and differential treatment in the way in which the WTO rules are applied to developing countries by means of some of the agreements which we hope we will reach in this round, in the way in which they will have to be applied by developing countries in lesser reductions in support, lesser reductions in tariffs and longer time periods in implementing particular agreements. The two aspects taken together would be the strong influence on the attitude we adopt and the proposals we make in the context of EU discussions on these matters. The question of coherence is always in our minds in terms of co-ordinating our response to the proposals on the table.

I do not think there is any particular dilemma in the different aspects of these negotiations. What is important, and difficult, is to make sure that the effect of particular proposals on different countries and on the way in which different countries are developing is borne in mind.

Getting back to the agriculture negotiations, in recent weeks the focus has been on the difficulties the European Union has in granting increased market access to the more advanced developing countries, the South American countries such as Brazil and Argentina, countries of that kind and at that stage of development, and which have a great beneficial background in terms of their agricultural production. We in Europe are probably the most open market accepting agricultural exports from the developing world. The way we tailor our market access proposals or concessions in order to facilitate the sort of development we want to see taking place raises a question of differentiation between developing countries, always a difficult issue.

An important aspect of these negotiations is the worry among developing countries about the erosion of their trade preferences. The European Union has quite a large number of trade agreements with different parts of the world, including developing countries, and it is important in the context of these overall negotiations to be sure that the outcome is not negative for particular sectors of the world economy, for particular developing countries.

Regarding the G8 meeting, my recollection was that the G8 leaders decided that the trade issue should be left to the WTO to decide. As the Deputy noted, the leaders of the G8 decided trade issues should be left to the WTO.

On the ways in which the European Union takes into account its other policy objectives, the developments taking place within the Union in terms of the Lisbon Agenda and the services directive are matters that the Commission is required to build into the proposals it tables. Co-ordination is also needed among member states to respond correctly to the proposals made by the Commission. The European Parliament is about to vote on the first proposals tabled for the services directive but the general view is that the Commissioner with responsibility for the Internal Market and services, Mr. McCreevy, will bring forward a revised proposal towards the end of the year. Negotiations will, therefore, recommence on the basis of a new proposal. However, in terms of its impact on the negotiations within the WTO, the underlying objective of the services directive is to create a genuine internal market in services within the European Union. This would easily fit into the liberalisation of trade in services and the opening of markets being sought by the European Union within the WTO.

I ask Mr. Doheny to respond to the remarks made on market access for non-agricultural products.

Mr. Frank Doheny

Deputy Higgins raised a question on market access in non-agricultural areas and mentioned services, in particular. When conducting negotiations, the European Union adopts the request offers approach, that is, the Union requests market opening of others and responds to similar requests with offers. In the context of such offers, the European Union has not sought market openings from developing countries in what may be identified as public service sector areas. The requests that have issued from the Union to developed and developing countries are in areas other than education, health and social services.

The GATT architecture is built on a bottom-up approach which allows developing countries to chose the sectors in which they wish to commit. In that sense, it is not the intention of EU member states, including Ireland, to compromise the pursuit of valid public policy objectives by developing countries such as those within the areas of universal provision, health and education. We do not seek that they give commitments and enter into obligations in respect ofthe opening of these public service areas toprivatisation.

In many ways, we are coming to the core of the matter. I welcome Mr. Doheny's statement that Ireland has not presented views to the European Union on public services. The background to my question is provided by the OECD documents which assert that education will be the next big issue in Africa and suggest people in Europe are slow to see opportunities for private education on the African continent. More than one OECD paper has been written on the issue. There are studies of the other areas mentioned such as water and energy.

I am happy with the suggestion that nothing will interfere with the concept of universal provision. However, as I understand it, with regard to an area such as financial services, we have reached something quite delicate, namely, that the IMF and WTO rules are not necessarily consistent with what Mr. Doheny has just said. They may require, for example, the privatisation of a state-funded banking system which, in turn, is used to finance the provision of seeds, materials and tools, etc., as happened in Zambia. I would welcome adoption of the position mentioned, if it spread to parallel organisations, but I do not see much evidence of this.

The language used in this discourse sometimes creates problems for me. The word "reciprocity", for example, can be translated in many ways. It can most easily be translated as the ability of the strong to abuse the weak, or it could be put the other way to mean a relationship within equals. However, it is clearly not a relationship between equals in this instance, in particular with regard to internationally traded services. I have heard this afternoon that nothing will stop a developing country opting for universal provision in education, water, energy, housing, etc., but I have not heard it mentioned in connection with anything else.

What I have heard from others describing the approach to the talks in Hong Kong is that true trade liberalisation with regard to agriculture relates to access, including financial services. I note in footnote 5 of the submission we received that the services mentioned are construction-related engineering services. In the Transparency International report we considered a few weeks ago such services topped the list of corrupt international activities, followed by distribution and financial services. Telecommunication services, professional and other business services were also included in the list.

The reason I ask the question is the difficulty I see with regard to a country coming out of a development phase. I have a real difficulty in seeing the negotiations as taking place between developed and developing countries because there are many differences between countries in the developing county category. I am particularly interested in countries that need protection at an historic moment of economic development to protect the right to develop education, energy, financial provision, commercial banking and other services in their own way. I am interested in the degree to which these countries are protected. This is not just a matter of them having time, but having a sufficient period to reach a point where one could say reciprocity was a meaningful concept.

I agree the language of the discourse can be very dense, but I know the two officials have tried to make it as understandable as possible for us. Even though we are not dunces, we are still struggling with some of the concepts used. I recall Peter Sutherland remarking about the GATT negotiations that if one was not confused, one was not listening. I feel a bit like that today.

The great promises offered by the previous G8 discussions, arising from the Make Poverty History campaign, concerned aid and development, debt relief and trade. I do not get an understanding from this briefing that this round, heralded as the trade part, will deliver significant or dynamic change for developing countries. Will the next round fail to live up to the promise made by the G8 leaders that trade aspects would be dealt with as a key issue? That is my concern. I did not see anything in the document on the implications for the next round of discussions of the growth of China and India during the past few years. In global economic terms, what are the implications of the rise of China and India for the European Union in this round?

Mr. Joyce

I will take the last point first. It is extremely difficult to cover the wide range of issues involved. I have attempted to communicate the message that despite the flurry of activity during the past few weeks, the negotiations have not made good progress. One aspect that frustrates participants in Geneva, particularly from developing countries, is that a focus has not been placed on the development dimension. It has been set aside. We consistently refer to this.

Are we being duped?

Mr. Joyce

I am trying to respond to Deputy O'Donnell's question on whether the G8 leaders' promise on the trade element of the development objective would be met. During the past few months the development aspect has been set aside and the negotiations have focused almost entirely on agriculture market access. This was due to the fact that the major developing countries, particularly in South America, focused on achieving greater access to the European market. I attempted to mention this at an earlier stage but I have not get across the message that the negotiations have not been going well, particularly those regarding the development dimension, which to a certain extent has been set aside because the focus has been placed on other elements.

The Chairman referred to the CAIRNS group. Agricultural exporting countries have a similar objective regarding market access and the United States is quite happy to go along with it and focus entirely on attempts to open the European market to agricultural exports. I have tried to refer to the various agreements and preferences the European Union has with a wide range of developing countries. The conflict between the interests of the major developing countries and major agricultural exporting developing countries and those of the least developed countries and countries at a lower stage of development is difficult to handle. The question of differentiation arises and creates conflict among developing countries when one tries to differentiate between them in negotiations.

The Chairman mentioned the fact that the European Union's offers on agriculture were conditional on others taking on the same obligations that the European Union had considered. This is exactly the way in which the Commission has put forward its agriculture offer, on the understanding that other major countries will take on the same obligations to reduce supports, increase market access and join the European Union in eliminating export subsidies.

Mr. Joyce has stated that, unfortunately, the negotiations have not gone well in the context of our wishes for trade and development as promised at the G8 summit and the Irish Government's policy. I hope it is also European Union policy. Mr. Joyce has also stated development issues have been set aside in the negotiations. Is there a political direction behind this? Are the negotiations being handled at the level of officials or is there political engagement? It seems an aberration that this is happening since there is the political will in these negotiations to act and secure an outcome favourable to the developing world.

It is a form of politics, effectively.

Mr. Joyce

No. It is definitely not the case that the action is taking place at official level. In the past few weeks it has been taking place primarily and almost solely at ministerial level. The development dimension is not being given the attention it deserves and should receive. It is frustrating for developing countries that this is happening, which is due to the fact that the major participants are interested in achieving certain things. The major participants on the South American side are looking for access to the European Union agricultural market, with the European Union preparing offers in response.

The negotiations among 140 countries are extremely difficulty to manage, as the Deputy can appreciate. In the context of the WTO, smaller groups tend to meet to try to develop particular approaches to particular problems, come to agreement on how matters should develop and then roll that agreement out to other member countries of the organisation. The European Union, the United States and the CAIRNS group of agricultural exporting countries play the major role in the negotiations. That is why the focus is on particular elements. For example, in Cancún some years ago the developing nations, as a bloc, played a major influential role in getting their issues to the top of the agenda. This resulted in a failure to reach agreement in Cancún, but it was a novel element in trade negations to see groups of developing countries playing a very influential role. At the moment this is not happening. However, that is not to say that, as we move towards the Hong Kong meeting, the developing countries might not play a more influential role, allowing development issues and the development dimension of other issues to come to the fore.

Mr. Joyce seems to suggest it is likely progress can be made in Hong Kong. That meeting should not be regarded as an end point but a major step to move further in coming months.

Mr. Joyce

The meeting in Hong Kong was never supposed to represent the end point of the negotiations. Most of the major participants want to set a framework which would allow the negotiations to come to some conclusion, perhaps in mid-2006. One of the major elements to be taken into account is that the US Administration will lose its trade promotion authority in 2007, which will make it extremely difficult for the United States to engage in any trade negations at a multilateral level once that deadline is reached. The trade promotion authority gives the Administration in the United States the ability to present Congress with a negotiated trade agreement which it must either accept or reject. It cannot change elements of the agreement. If the US Administration does not have that ability, it makes it much more difficult for it to negotiate.

On behalf of the joint committee, I thank Mr. Joyce and Mr. Doheny for coming and being so clear in their explanations of a very complex situation. It must be an honours A, if not an honours A-plus, subject when compared with the position of two years ago. We wish the departmental officials continuing success in the negotiations.

I welcome Mr. Colin Roche of Oxfam, Ms Maeve Taylor of Banúlacht and Mr. Conall Ó Caoimh of Comhlámh, who represent Trade Matters, a coalition of development NGOs and trade unions. I thank Mr. Roche for the material he has submitted.

Mr. Colin Roche

I thank the committee for inviting us. This is an important time, with the Hong Kong ministerial meeting taking place in a number of weeks and given next week's General Affairs Council, at which trade Ministers from across Europe will discuss progress, or the lack of it, in meeting the Doha development agenda.

We will split our presentation. Ms Taylor will begin, I will continue, Mr. Ó Caoimh will finish and we will then answer questions.

Ms Maeve Taylor

I thank the committee for the opportunity to address it. As members may know, Trade Matters is a coalition of development non-governmental organisations and trade unions which campaigns collectively for fundamental changes to world trade rules so that trade will work for everyone. Members of Trade Matters are ActionAID Ireland, Banúlacht, Christian Aid, Comhlámh, Fair Trademark Ireland, the Congress Solidarity committee, Oxfam Ireland and Trócaire. Our aim is to address some of the issues pertaining to the Doha development agenda. There will necessarily be some overlap between issues raised earlier and our own but it is heartening for us to find the committee so focused on the development agenda.

As organisations working on issues such as justice, human rights and sustainable development, we believe trade has a vital role to play in development and the eradication of poverty in developing countries of the south. We also have concerns at ways multilateral trade liberalisation and the current process of trade liberalisation, with its unfair and biased rules, undermines and frustrates the capacity of developing countries to determine their trade, economic and development policies at their own pace. I will give a brief overview of some of the main points in the Doha development agenda and Mr. Roche will focus on agricultural and non-agricultural market access. Mr. Ó Caoimh will focus on the issue of services.

When the WTO launched the current round of trade negotiations at Doha in 2001, Ministers named it a development round with the stated aim of addressing the concerns of poorer countries. The Doha development agenda makes some impressive statements about the commitment of the World Trade Organisation to sustainable development. Paragraph 2 of the declaration states:

International trade can play a major role in the promotion of economic development and the alleviation of poverty.

We recognize the need for all our peoples to benefit from the increased opportunities and welfare gains that the multilateral trading system generates. The majority of WTO members are developing countries. We seek to place their needs and interests at the heart of the Work Programme adopted in thisDeclaration.

As a non-governmental organisations working in the area of development, we wish to address what it would mean to place the interests and concerns of developing countries at the heart of the WTO.

According to paragraph 3 of the Doha development declaration, the WTO recognises "the particular vulnerability of the least-developed countries and the special structural difficulties they face in the global economy". In the development agenda, the WTO states that it is "committed to addressing the marginalization of the least-developed countries in international trade and to improving their effective participation in the multilateral trading system". The development agenda also strongly re-affirms the commitment of the WTO to sustainable development.

Many of these concerns are reiterated in Ireland's national trade policy statement. According to the statement, the successful conclusion of the Doha development agenda is a key element of Ireland and the EU's trade policies, the successful conclusion of the Doha development agenda remains a key goal and Ireland will continue to make a positive and constructive contribution to its achievements. Challenge nine in the national trade policy statement is identified as "driving the development agenda". It strongly re-affirms the use of Ireland's influence in the WTO and states that Ireland should use its influence through the EU to ensure that the WTO is fully consistent with its development programme. The national trade policy statement refers to the dual goals of broadening Irish trade and promoting development.

In his address to this committee last week, the Minister of State at the Department of Foreign Affairs, Deputy Conor Lenihan, referred to the Doha development agenda and his commitment to ensuring its aims are met. However, his comments related very much to agriculture and there was no reference to access to non-agricultural markets or services — issues at the heart of the developing countries' concerns in the Hong Kong ministerial meeting.

Trade Matters and other non-governmental organisations in developing countries believe that far from achieving the aims of the Doha development agenda, negotiations since 2001 suggest that the outcomes of the current round may further tilt the balance against the poor. There has been a roll-back on the development round since 2001. Instead of the introduction of new approaches and a proactive attempt by the WTO to think about what a development round would mean and the necessary policies for a genuine development round, there has been a renaming of rapid liberalisation approaches as development tools.

There has been renaming and rebranding but not necessarily restating and rethinking of new approaches that would put development at the heart of the WTO. No country, including Ireland, has developed its own economy through unbridled liberalisation. We raised this issue previously with this committee and it has been part of our briefing paper. The pace of liberalisation is crucial to the capacity of developing countries. It is a matter of letting these countries have their own policy space and the flexibility to develop their own economic and development policies. If the world's leaders are serious about development, they cannot allow trade negotiations at the WTO to ignore human rights issues and the framework of international human rights agreements, the millennium development goals andthe international framework of agreements ongender equality.

Trade Matters argues that trade policy must be consistent with human rights law and sustainable development. The WTO must become more transparent and accountable. The Minister of State's speech in this committee last week contained no mention of coherence.

To ensure the outcomes of the current round enable the poorest countries to gain from the world trading regime, governments must ensure trade policies do not exacerbate existing inequalities, impede the achievement of the millennium development goals or the implementation of international agreements on human rights, gender equality and labour standards. We would like the representatives of the Irish Government in the talks in Hong Kong to uphold the strongly stated commitment in the national trade policy statement and at this meeting, to put forward the Doha development agenda in a way that is coherent with and informed by the cross-cutting issues of Ireland's development policy and to make concerted efforts to use their influence at the World Trade Organisation to push for a coherent development-centred trade policy.

Mr. Roche

I would like to address a few key sectors in the negotiations. It was interesting to hear the officials from the Department of Enterprise, Trade and Employment speak about the failure thus far to take into account the development agenda. We agree with that. To answer the question directly, there has been a failure to take into account that agenda. It is difficult to see how a development round that will result in proactive gains for developing countries will be achieved from this set of negotiations.

Focusing on the specifics, it was strange to hear the officials say the issue of agriculture was holding up the show in terms of a development agenda when agriculture has been singled out by developing countries as the key area where they would like to see progress. That cuts across issues such as market access, export competition, export subsidies, domestic subsidies and special and differential treatment. Developing countries have stated strongly that agriculture is key in development. The majority of people who live in developing countries are involved in agriculture. Some 80% plus of the population in many of the countries in which Ireland supports programmes, such as Ethiopia and Tanzania, are involved in agriculture. Hundreds of millions of people who live on less than $1 a day depend on agriculture in the developing world. It is only natural, therefore, that they would focus on agriculture as a sector in which they can see gains. It is also natural to focus on agriculture in seeking gains in the negotiations. The Doha development agenda specified that market access should arise out of the Doha development negotiations. It is not unnatural that the question of opening markets and access to the markets of rich countries should arise out of the development negotiations.

We outlined our suggestions in the recommendations in the paper before members. We are focusing on the tariff discussions. At the negotiations some of the members of the WTO seek aggressive market access to developing countries and do not properly respect the issue of special and differential treatment. The United States, for example, has vague but what appear to be serious proposals on access to the markets of developing countries. Mr. Joyce from the Department of Enterprise, Trade and Employment highlighted that point. We will seek a progressive, proportionate and flexible tariff reduction formula which respects the special, differential and less than full reciprocity principles of the WTO.

We also seek two particular elements, which we believe the Government and the European Union should support to allow developing countries the flexibility to protect their agricultural sectors. In particular, we seek food and livelihood security to ensure the agricultural sectors in developing countries can be developed, thereby not leaving them dependent on the vagaries of international commodity markets. These proposals include one on special products, namely, not to seek reductions in tariffs on these self-identified products, and the other proposal is to put in place a special safeguard mechanism to ensure developing countries can block import surges which undermine livelihoods and food security in their countries.

On the issue of agricultural market access, the Government should support greater market access in agriculture for developing countries, which we consider reasonable. It should also take into account the issue of preference erosion which Mr. Joyce mentioned. It should examine deepening our preferences and making sure they are positively operational. Many developing countries do not get the gains from the preferences they have because of various bureaucratic measures in place.

We agree with the Government that in parallel with reform of export subsidies in agriculture, the United States, for example, should reform its export credit system, among other measures. Nevertheless, there is a commitment to ending export subsidies and we should not delay on that. It should happen by 2010. However, we should not wait until 2010 to phase out export subsidies, as they are currently a problem.

We also need to look at the domestic support system. Mr. Joyce referred to market access but developing countries have also made very strong proposals in regard to disciplining domestic support here in Europe and in the United States. In the United States, for example, we can see how its system of domestic support leads to the export of cotton, which undermines the livelihoods of millions of people, especially in west Africa. This is a major issue at the World Trade Organisation but it is something on which we need to see movement if we are to have a development agenda. These demands have been on the table for several years. Poor west African countries have been looking for progress on this and have not seen very much. That is another area.

The Chairman referred to decoupling. We have moved from a system of direct support for commodities to a system of decoupled payments. Nevertheless, that still allows for subsidised exports from Europe or the United States. We need to find a way in which that is disciplined so that we can see the environmental and rural development benefits that are intended and that it is not simply acting as a subsidy for exports to allow the European Union and the United States to compete against producers in the developing world.

It is curious that development on non-agriculture market access has been held up because of the negotiations on agriculture. Whereas the United States and the European Union have been very aggressive in promoting their interests in other areas, in the area of non-agriculture market access the United States and Europe have been seeking serious tariff reductions from developing countries. Mr. Ó Caoimh will speak about services. The technicalities of reductions are about formulas and suchlike. To cut what could be a long story short, the formulas being proposed by the United States and Europe will end up with developing countries reducing their tariffs more than developed countries and, therefore, not respecting the principles of less than full reciprocity and special and differential treatment. Our concerns with that are not just the level of tariff reduction but also the manner in which tariffs are bound and reduced at the same time. There is a double ask for many developing countries in that having to bind and reduce is more than was asked of developed countries in the previous GATT agreement.

There are also implications for the long-term ability of developing countries to support industrialisation if the policy instruments they have are frozen in place. It will be very difficult for developing countries to move forward and to change the way in which the tariffs work in order to support emerging industries. They are the key concerns we have. We have set out the recommendations in respect of those two areas, agriculture and non-agriculture market access.

I am sure members will have questions. I hand over to Mr. Ó Caoimh.

Mr. Conall Ó Caoimh

I thank the Chairman and committee members. It is good to remember where these talks came from. In Seattle, members will remember the ruckus out on the street but inside at the world trade talks, developing countries said "No" to a millennium round. The European Union and other industrialised countries had proposed a set of negotiations to be called the millennium round but developing countries said "No, thanks". Pascal Lamy spent the following two years doing a marketing exercise and changed it by calling the process a development round. In the aftermath of the events of 11 September 2001 the developing countries accepted this development round. It was supposedly to address the disadvantage of developing countries in the multilateral trading system. However, the mandate that the European Union had given its Commissioner had not changed. The millennium round mandate continues to be the one the Commissioner has in this development round. When we consider the negotiations and what is happening in them, how would we recognise the development round? It is a round and there will be a trade-off. Broadly, the trade-off will be what our countries are looking for, or for access to the services and manufacturing markets of developing countries, particularly the middle-income ones. If they are to open up their services sectors and have them disadvantaged by the presence of our services and manufactured products, they want agriculture in exchange.

Irish farmers need not be under any pressure from the World Trade talks — except that Europe sought the negotiations. The developing countries did not look for them. The pressure is not coming from the little bit of political pressure we are able to muster. It is coming from those keeping well out of the way of the cameras or the services industries who are very effectively lobbying on Kildare Street and in Brussels to push for these talks to give them access. The Government is largely saying there are jobs in it. That is from where the pressure is coming in regard to agriculture and jobs in the agricultural sector. It is not coming from our weak little bit of pressure.

When one considers the services area of a development aspect, a development aspect in a development round would not just involve longer timeframes; commitments would be linked to how they are developing. People will be familiar with the access to medicines question. The poorer countries were given a longer period to be bound by the commitments entered into in the Uruguay Round. However, we know nothing has happened in the intervening decade which would put them in a place to be better able to afford the medicines. They have had to go back and get an extension. If we are calling this a development round and when we give special treatment to developing countries, it must be not only an additional 12 years to implement the same commitment but a different set of commitments.

It is a pity the committee did not meet both groups together so that members could see us interchange on these issues. Mr. Doheny said the services commitments were deliberately structured in a way that countries could go at their own pace, that there would be a bottom-up approach and that they could name those sectors they want to liberalise. What Mr. Doheny omitted to tell the committee was that Europe has tabled a proposal that there would be a general framework of minimum commitments in the services area. In a well-choreographed sequence, Japan followed by specifying the percentage. Switzerland came up with a measure for quantifying current levels and Korea followed with another technical step. In a well-choreographed approach, Europe has sought to change the agreed current mechanism Mr. Doheny proposed in what is still called the "development round".

We spoke to the committee on an earlier occasion about the type of policy space countries need to retain in the area of services and how Europe is seeking that they give up more of those policy areas. I will not repeat those areas, although members may recall one of them referred to the ability to purchase land for the provision of services.

Will the committee communicate to the Minister, Deputy Martin, whether by resolution or letter, the need for Europe to keep this development aspect which it initiated? When Mr. Joyce said there is no focus at present for the development side, he omitted to say the European Union is not giving it that space. The European Union has the freedom within the negotiations to keep the issue of development at the top of the agenda, as was done when it was selling this round.

I propose that we return to this topic and seek to reconcile the presentations we have heard. On the last point, I want to make some observations because it is important. This entire matter and some of its fundamental aspects are not as complex as they might appear at times. One point on the economic programme is perfectly clear. If one asks what characterises most of the European countries participating in the WTO talks it is that between the 1940s and the 1980s they had a Keynesian moment. Those 40 years can be referred to as a period during which the countries concerned had discretion in crucial areas of fundamental economic policies such as employment and money supply. If we are to break into clear air, we must understand this. Those 40 years following the Second World War crucially affected the positioning of countries in the international trading environment. What is at stake is that the extreme liberalisation process seeks to impose an advanced form of that model on countries which are not being allowed the same space in fundamental aspects such as education, housing, universal provision of services through education, the right to start a domestic industry and agricultural production. Before we progress much further I want to see a proper model of trade flows such as the flow of European agricultural products. The committee is missing this. I mentioned one example of a country in Africa. People would be shocked to discover the amount of frozen food such as chicken exported from Europe to a particular country, while at the same time there are restrictions on that country entering the chicken-farming industry.

I am not confused on the first presentation on the millennium development goals. Goal No. 8 deals with trade. Before people get carried away, the eight goals are not rights-based. There is not a necessary point of correspondence between the achievement of the first six, the poverty reduction goals, and goal No. 8, the trade goal. Goal No. 8 has been discussed least and was tagged on to keep certain countries quiet. It is not necessarily consistent with the other seven.

A model of population pressures is also required to resolve the points of conflict mentioned. Countries in the lower part of the undeveloped country category are perceived to be labour markets, while middle-income developing countries are perceived to be potential consumers.

All the confusion on this is clarified if one listens to some of the British politicians speaking about access to the Chinese or Indian markets. It is not a matter of having an unresolvable argument about ourselves, but the degree of change between the opening and current positions. In responding to the public debate around the G8 summit on aid, debt and trade, what changes can we perceive now in the negotiating positions?

Mr. Keynes said that a longer timeframe is not enough and I agree. I cannot offer a Keynesian possibility to any country now because of single paradigmatic economics. For almost 20 years I was an academic teaching in the area of social sciences. There was no time when there was less tolerance of what one called multi-paradigmatic teaching, where one taught paradigms. When I was teaching, one was not required to be a simple, liberal economist. One was allowed to read Keynes and in a few places in the Irish academic system one was also allowed to read Marx. If one went abroad to England, one was allowed to read the work of neo-Marxists.

Today, however, there is a kind of illiteracy concerning the discussion of economics. For example, we are not able to speak about the differences between developing countries at various stages. Such countries themselves have differed over time. In the 1970s, the confrontation point was most interesting; some developing countries argued strongly against meeting either food security or basic needs. We had that debate at the end of the 1970s. The attitude of the countries that were seduced by the neo-liberal model at that time was, "None of that will be good enough for us." No one wanted to hear the basic needs argument or the human rights underpinning it. The idea was that we would go helter-skelter towards the single model. Those are the conditions that preceded all these trade talks.

When one starts showing television images of children dying and one produces projections for infant mortality and women who die in childbirth, people throw up their hands and affect great concern that such things are happening. The reality, however, is that nothing has changed in the economic model as we approach the new talks. The Chairman is as familiar as I am, if not more so, with a time when people discussed the rights of states to achieve basic needs, including food security. Also discussed at that time were the rights of states to prime their new industrialisation efforts, training, the establishment of national education and health systems, urbanisation and migration from villages to towns and cities. One would not be living in the real world if one did not imagine that every one of those capacities is affected by what is being sought at the WTO talks with regard to services.

It is not just a matter of degree, however, and I do not want to be entirely negative by suggesting that there is no way out. The way out is to seek a general exception in the talks to any of the categories I have mentioned. In that case, we would be getting somewhere, but I do not see much evidence of that happening. Rather, I see a situation developing whereby in order to have access to the bigger picture and be allowed into the big game, one will have to sign up to the WTO agreement. I find it very depressing and I do not have much faith in what will emerge from our discussions here.

I am one of the longest-serving members of this committee and I recall that one of the most intolerant positions we ever had was when we were unable to discuss NEPAD. I asked the representative of the South African Government of the day what the assumptions were, and how we could possibly get the basic requirement for local investment in regard to the South African economy and the South Africa-Nigeria deal. This was regarded as old-fashioned thinking.

I am somewhat depressed at the point we have reached. We should have both people back together. How would those before us now identify a true development negotiating position, and what would they ask this committee to do?

I welcome the NGOs. To judge by their excellent presentation and the candid presentation from the Department of Enterprise, Trade and Employment, the prognosis is not good on the development side of the next round of negotiations. Many of the questions articulated imply a consensus among the officials from the Department, the NGOs and committee members that the prospect for a positive outcome for developing countries is poor. The strong message to come from the committee today is that all is not well for development and the great promise held out in the past through articulation of Irish foreign policy in this area, and by the G8 for trade, will not be fulfilled.

I agree with Deputy Michael D. Higgins that a strong message must go to our Minister and the team attending, in preparation for the talks, to the effect that Ireland, from its traditional independent stance, should say the rights of the least-developed countries, central to our aid programme, must be considered. Ireland should express their interests strongly. The presentation today reveals a disappointing prospect for developing countries, particularly Africa, in the next round.

How confident are the visitors that the LDCs will not be prevented from properly developing public service provision? What measures would they recommend in that regard?

The presentation was very interesting. It mentioned phytosanitary control, which made me think immediately of the avian flu because we are in danger if we lose sight of the necessity for that control. The NGOs say that sanitary and phytosanitary measures must not be used for protection purposes because that would encourage people to protect themselves. Nevertheless, we would have suffered had we not acted quickly to deal with the outbreak of foot-and-mouth disease. Our citizens will want us to control such things as the avian flu, and being an island we have a great opportunity to do so.

We want to see a genuine round of development. That has been expressed several times this afternoon. The NGOs said that the pace of liberalisation is important. That involves studying the development of industry and agriculture in these countries, which is a separate issue. How does one prevent or avoid the abuse of the situation whereby large operators move into a country to avail of the particular tariff positions or whatever, and the small businesses are left with no outlet?

In the past we had the time to build up the small operators and extend the farms from the bottom up. At the same time we developed all the other industrial activities and services and so on. That controlled the flight from the land. There was virtually no control until we joined the European Union, when we got some sort of base from which we could work, and support for that base. The European Union helped us to develop the base, to develop producer groups and co-operatives and to help ensure we had development research and education. All these had to go hand in hand. We do not want to see a situation where people can be abused in small-farm situations. Mr. Roche spoke of 80% of the population in some countries being involved in agriculture — the actual figure is 85%, and one can be pretty well assured that in most of the economies in sub-Saharan Africa, some 80% to 85% of the people are effectively involved in peasant farming. How does one get from there to the other situations without leaving many of those people outside, with nothing to do? There are big challenges there.

I have seen large-scale agricultural operators already moving into places like Zambia. They are enclosing their areas and turning out huge volumes. While a few people get employment in such ventures, there are so many seeking employment that such activity will exclude many people very quickly.

The witnesses also emphasised that the developing countries still need special preferences in areas if they are to survive the situation. We can agree to communicate to the Minister for Enterprise, Trade and Employment, Deputy Martin, the importance of keeping the development round at the top of the list and also bring forward the point Deputy Michael D. Higgins made about the rights of the least-developed countries. We can do so after this meeting. The Deputy also wanted to see a true model of the trade floor. I do not envy anyone who tries to put that together because that will be a real challenge as to what happens, how it happens, how fast it happens and what the implementation timespan is. The latter is important for the developing countries. It must relate to their needs rather than merely to those of the major operators who want to move in certain directions in a hurry.

As for what changes we can perceive the developing countries making at different stages, this brings us back to a similar position. We have the traditional, transitional and development side, and then the highly developed side. In all of that we should not forget how Ireland developed. We began with very large numbers in what amounted to peasant agriculture. There was a very high labour content, with a great many small farmers and very little return. We worked our way up from that. We were maintained by Britain as a cheap food area, which anyone over 40 remembers fairly well. That was our problem. We could go nowhere with farming, and to a large extent people were emigrating. Once we got some sort of base under us we were able to develop agriculture and develop other things at the same time. The world markets then provided great opportunities for us generally and we are now highly involved in those markets. That is why the officials from the Department of Enterprise, Trade and Employment must keep an eye on this area because this is where our policy has brought us, into very open competitive markets around the world. Many people are very envious of us in that regard.

Mr. Ó Caoimh

Regarding trade flows, I will provide the committee with a very good document. The 2004 Least Developed Countries Report of the United Nations Conference on Trade and Development contains some startling information. It reveals that the proportion of trade for sub-Saharan Africa, including Nigeria's oil exports, fell from 3% to 2%. Such circumstances give rise to the need for a development round. The report examined the distribution of income within the 51 least-developed countries and found that, despite an overall increase in exports, only 21 of the countries had experienced increases in the levels of family income. The information on 12 countries was ambiguous and decreases in family income were experienced in 18. These countries were all following the model they were given, yet only some experienced increases. The model is, then, quite ambiguous in terms of family incomes. The same report demonstrated that the average commodity prices of exports from least-developed countries had fallen to 63% in the preceding five years. I have given a summary of the trade flows but the report can provide more detail.

With regard to the content of a development round, negotiations will be involved which will require trade-offs. However, the European Union, while staying within the neoclassical model, is playing hardball on agriculture, services and NAMA, despite its promise that this would be a development round. The EU should make concessions to poorer countries rather than employ such a tactic.

This weekend, Comhlámh hosted a Ghanaian visitor from the Third World Network, Mr. Yao Graham, who discussed the chicken case. He noted that the Ghanaian parliament agreed a 20% tax increase on frozen chicken imports to protect the country from the German chicken wings flying its way. However, because of Ghana's indebtedness and need for loans, it was pressured by the IMF to repeal the law. Such an issue reveals the interrelationship between trade and debt and shows that the IMF as well as the WTO is determining trade policy.

The European Union is also negotiating economic partnership agreements with these countries, a process which may be regarded as "WTO plus". They are using these agreements to seek concessions that were not received through the WTO, supposedly in the name of aid and trade relationships with the poorest set of countries.

A development round should involve not only longer timeframes but must also be related to economic and development indicators. In addition, the hardball currently being played should be discontinued.

Mr. Roche

Two elements are obviously involved in a development round. The first concerns improvements in the income derived from international trade for developing countries. In that sense, market access proposals are important in improving the opportunities for developing countries to benefit from international trade.

The second element involves ensuring we do not go backwards by eroding the policy space that allows developing countries to choose the policies they consider most suitable for development. They have responsibilities to manage their respective economies as they see fit but that is often being undermined by the IMF and the World Bank. Progress is needed rather than an erosion of the abilities of developing countries to decide appropriate development policies.

We would like to see an expansion of the policy space which, as Mr. Ó Caoimh noted, is being threatened by changes to the timeframe within which least-developed countries must implement the TRIPS agreement. The Deputy asked what should be allowed for the provision of public services in the developing world. A key point we did not get to earlier is that it is good that public services are not being requested by the EU and that should be acknowledged. However, there is a lack of clarity in respect of the services agreement. It is difficult for us to know what the commitments will mean down the line in, for example, cleaning services in hospitals or in the area of health insurance — I will pose the question and members of the joint committee can answer it themselves. We said we were looking for liberalisation in financial services, one of which could be insurance and another health insurance. What will these mean for the provision of basic services and crucial public services in the future?

On the issue of what we can do to prevent those big players coming in, are we seeking land liberalisation in services to allow others come in and buy land? We were seeking greater access in terms of investment where development countries have rejected an investment agreement. There are local policies, for example, land policies, which development countries can have for themselves. We would like to see developing countries having that policy space to choose whether to allow investors in from abroad to develop their agri-business industries and to balance the interests of small farmers against those of larger businesses as we do here, but whether we take the right decisions is another question. We have made those choices during the past 18 years and we would like to see developing countries being able to make similar choices.

Ms Taylor

I wish to make a couple of final points on one of the issues raised by Deputy Higgins in terms of the ideological framework in which these negotiations are taking place and the lack of coherence. In talking about the World Trade Organisation and the development round we are not challenging the ideological framework of an uncontested assumption that trade liberalisation is a path to economic growth, that economic growth is necessarily welfare-producing, and even the uncontested assumption of Ireland's economic growth is a good example. We still have wide inequalities in Ireland and we have not eradicated poverty here. Something needs to be looked at more closely when we speak of Ireland's development as an example for countries of the south, particularly when Ireland's development was not achieved solely by unbridled liberalisation — there were many other factors. Those issues have to be reflected on as part of these discussions.

I do not want to give the impression that the millennium development goals reflect the height of anybody's ambition in development but, at least as a set of targets and frameworks that was established five years after the World Trade Organisation was established, the WTO if it is claiming a development round, ought to be able to show that its policies are not undermining the policy space of a developing country to achieve those goals. Yet the kind of approaches being pushed by the EU and others in the World Trade Organisation are running counter to the ability of countries in the south to achieve the millennium development goals. We should not see it as the ambition of our development policy simply to provide aid to ameliorate the worst effected trade liberalisation but there should be a coherence with the aims of international human rights developed more broadly, as is expressed by Ireland's development policy.

On behalf of the committee I thank the delegation for coming before us today. We can maintain contact with the delegation. We will communicate with the Minister for Enterprise, Trade and Employment, Deputy Martin, and also with the Minister for Foreign Affairs, Deputy Dermot Ahern, on the importance of highlighting development in the round. We wish all concerned at least some measure of success in Hong Kong and progression to a more successful 2006.

The joint committee went into private session at 16.05 and adjourned at 16.10 p.m. until 2 p.m. on Tuesday, 22 November 2005.