sebs assignment

8/8/2019 SEBS Assignment

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SECTORAL EXPORTS AND BUSINESS STRATEGY

ASSIGNMENT 1

IMPLICATIONS OF DOHA ROUND

ON THE

BUSINESS SERVICES SECTOR


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Introduction:

The Doha Development Round or Doha Development Agenda (DDA) is the current

trade-negotiation round of the World Trade Organization (WTO) which commenced in

November 2001. Its objective is to lower trade barriers around the world, which allows countries

to increase trade globally. As of 2008, talks have stalled over a divide on major issues, such

as agriculture, industrial tariffs and non-tariff barriers, services, and trade remedies. The most

significant differences are between developed nations led by the European Union (EU), the

United States (USA), and Japan and the major developing countries led and represented mainly

by China, Brazil, India, and South Africa. There is also considerable contention against and

between the EU and the USA over their maintenance of agricultural subsidiesseen to operate

effectively as trade barriers.

Doha Development Agenda: Negotiations, implementation and development

The November 2001 declaration of the Fourth Ministerial Conference in Doha, Qatar,

provides the mandate for negotiations on a range of subjects and other work. The negotiations

include those on agriculture and services, which began in early 2000.

In Doha, Ministers also approved a linked decision on implementation problems

developing countries face in implementing the current WTO agreements.

Ministerial discussions have taken place in Cancun in 2003, Geneva in 2004, Hong

Kong in 2005 and Geneva in 2006 and 2008.

Collapse of negotiations

The negotiations collapsed on 29 July over issues of agricultural trade between the

United States, India, and China. In particular, there was insoluble disagreement between India

and the United States over the special safeguard mechanism (SSM), a measure designed to

protect poor farmers by allowing countries to impose a special tariff on certain agricultural goods

in the event of an import surgeor price fall.
http://www.wto.org/english/thewto_e/minist_e/min03_e/min03_e.htmhttp://www.wto.org/english/tratop_e/dda_e/dda_package_july04_e.htmhttp://www.wto.org/english/thewto_e/minist_e/min05_e/min05_e.htmhttp://www.wto.org/english/thewto_e/minist_e/min05_e/min05_e.htmhttp://www.wto.org/english/tratop_e/dda_e/modalities06_e.htmhttp://www.wto.org/english/tratop_e/dda_e/meet08_e.htmhttp://en.wikipedia.org/w/index.php?title=Import_surge&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Import_surge&action=edit&redlink=1http://www.wto.org/english/thewto_e/minist_e/min03_e/min03_e.htmhttp://www.wto.org/english/tratop_e/dda_e/dda_package_july04_e.htmhttp://www.wto.org/english/thewto_e/minist_e/min05_e/min05_e.htmhttp://www.wto.org/english/thewto_e/minist_e/min05_e/min05_e.htmhttp://www.wto.org/english/tratop_e/dda_e/modalities06_e.htmhttp://www.wto.org/english/tratop_e/dda_e/meet08_e.htmhttp://en.wikipedia.org/w/index.php?title=Import_surge&action=edit&redlink=1


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Current Progress:

Several countries have called for negotiations to start again. Brazil and Pascal Lamy have

led this process. Luiz Incio Lula da Silva, president of Brazil, called several countries leaders to

urge them to renew negotiation. Lamy visited India to discuss possible solutions to theimpasse. A mini-ministerial meeting held in India on September 3 and 4 pledged to complete the

round by the end of 2010. The declaration at the end of the G20 summit of world leaders in

London in 2009 included a pledge to complete the Doha round. Although a WTO ministerial

conference scheduled in November 2009 would not be a negotiating session, there would be

several opportunities over the year 2009 to discuss the progress. The WTO is involved in

several events every year that provide opportunities to discuss and advance, at a conceptual level,

trade negotiations.

In early 2010, Brazil and Lamy have focused on the role of the United States in

overcoming the deadlock. Lula has urged Barack Obama to end the trade dispute between Brazil

and the US over cotton subsidies following his increase in tariffs on over 100 US goods. Lamy

has highlighted the difficulty of obtaining agreement from the US without the Presidential fast

track authority and biennial elections.One of the consequences of the economic crisis of 2008 -

2009 is the desire of political leaders to shelter their constituents from the increasingly

competitive market experienced during market contractions. Lamy hopes that the drop in trade of

12% in 2009, quoted as the largest annual drop since the Second World War, could be countered

by successful conclusion of the Doha round.

Implementation issues

Developing countries claim that they have had problems with the implementation of the

agreements reached in the earlierUruguay Round because of limited capacity or lack of technical

assistance. They also claim that they have not realized certain benefits that they expected from

the Round, such as increased access for their textiles and apparel in developed-country markets.

They seek a clarification of language relating to their interests in existing agreements.
http://en.wikipedia.org/wiki/Uruguay_Roundhttp://en.wikipedia.org/wiki/Uruguay_Round


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Before the Doha ministerial, WTO Members resolved a small number of these

implementation issues. At the Doha meeting, the Ministerial Declaration directed a two-path

approach for the large number of remaining issues: (a) where a specific negotiating mandate is

provided, the relevant implementation issues will be addressed under that mandate; and (b) the

other outstanding implementation issues will be addressed as a matter of priority by the relevant

WTO bodies. Outstanding implementation issues are found in the area of market access,

investment measures, safeguards, rules of origin, and subsidies and countervailing measures,

among others.

Services

The negotiations on trade in services shall be conducted with a view to promoting the

economic growth of all trading partners and the development of developing and least-developed

countries. We recognize the work already undertaken in the negotiations, initiated in

January 2000 under Article XIX of the General Agreement on Trade in Services, and the large

number of proposals submitted by members on a wide range of sectors and several horizontal

issues, as well as on movement of natural persons. We reaffirm the Guidelines and Procedures

for the Negotiations adopted by the Council for Trade in Services on 28 March 2001 as the basis

for continuing the negotiations, with a view to achieving the objectives of the General

Agreement on Trade in Services, as stipulated in the Preamble, Article IV and Article XIX of

that Agreement. Participants shall submit initial requests for specific commitments by

30 June 2002 and initial offers by 31 March 2003.

Business services:

Business services are essential to all modern economies. They have accounted for a

significant portion of cross border trade in services for some time. For example, the United

States exported $71 billion worth of business services, or about 20% of total US services exports,in 2005. But the importance of business services in global trade has increased dramatically, as

new providers, enabled by advanced technology and highly skilled people, have become major

suppliers of business services to a globalized market. So for the first time, a growing number of

developing countries are engaging, or readying them to engage, in world trade in these services.


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Business services include a broad array of activities such as computer services, research

and development services, marketing and advertising, management consulting (including

consulting services incidental to agriculture, manufacturing, mining, and energy), employment

and personnel services, and others.

The Indian Experience

India's experience with BPO demonstrates the benefits of liberalization in this fast growing

sector. Foreign investment in Indian BPO helped establish a dynamic new industry by providing

capital, credibility and the advanced technology and practices necessary to develop this sector.

The growth and synergies created by Indias successful software, IT, and BPO companies are

having a powerful ripple effect throughout the Indian economy.

Because business services jobs - particularly in the IT area are relatively well paid, this

industry has a multiplier effect on employment. For every IT job an estimated three other

new jobs are created in India.

The Indian business services industry has been primarily export- oriented, but it also

serves local businesses. This is leading to greater efficiency in a large number of

businesses like retailing. The result is that business process outsourcing is expected to

grow 30% a year in India.

Two-fifths of the Fortune 500 companies outsource software requirements to India.

While the sector has grown rapidly, BPO services have grown even faster. Nor will

Indias comparative advantage be limited to back office services; already, Indias cross-

border services exports are evolving from lower-end, disentangled BPO services to more

integrated, web-based and enabled services.

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