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Deal could cut US, EU ''domestic supports'' by as much as 70%

WASHINGTON, DC - 11/27/09 - Countries can contribute to a more robust recovery from the global recession by rapidly concluding the Doha Development Round (DDR), which could bring up to $160 billion in gains, according to a recently published World Bank research paper.

Released just days before the World Trade Organization (WTO)'s ministerial meeting in Geneva on Nov. 30, the paper - Conclude Doha: It Matters! - notes that “now more than ever the completion of the Doha deal is a must, as it would create new market access, lock in existing market access openness, and boost real income for the world.”

According to the paper, "There is a significant deal on the table that will help the global economy get out of the recession," said Bernard Hoekman, World Bank Director for Trade. "A conclusion of the Doha Round will reduce the probability of protectionism, help reduce fiscal pressures by imposing limits on subsidies, and improve prospects for trade policy cooperation in other critical areas such as climate change."

Despite outstanding disagreements on agricultural safeguards, the extent of liberalization commitments for merchandise trade, and the coverage of additional services commitments, “the benefits of what is now on the table are larger than what many skeptics think,” it said.

Even by taking into account likely product exceptions and sensitivities, the modalities under consideration will generate increased trade that in turn could produce an additional $160 billion in real income for the world, the paper said.

Average farm tariffs exporters, it said, face would fall to 12%, down from 14.5%, while the tariffs on exports of manufactured products could decline to less than 2.5%, down from about 3%.

“Just as important, there are substantial opportunities for the DDR to deliver enhanced security of market access for services activities, which account for 60%-75% of total employment and production in many countries,” said the paper. 

The WTO has said that global trade volumes are expected to decline by some 10% in 2009 – an unavoidable consequence of the collapse in demand, trade will be critical for the recovery, especially for the many developing countries with small domestic markets that rely heavily on external markets as a source of employment and foreign exchange.

Apart from constraining the scope for tariff protection in all goods, the DDR would ban agricultural export subsidies in the industrial countries and sharply reduce the scope for distorting domestic support by 70% in the European Union and 60% in the US. 

The Doha Development Round was launched eight years ago with the aim to help countries prosper through trade.

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EU Slams Intel with Record Fine

SANTA CLARA – 05/20/09 – Giant microchip maker Intel has been slapped with a record $1.45 billion fine following an eight-year investigation by the European Commission, which found that the California-based firm ''violated EU competition rules by exploiting its dominant position with a deliberate strategy to shut out'' its rivals for European business, particularly Advanced Micro Devices; Intel ''takes strong exception'' to the ruling and says it will appeal to the EC courts in Luxembourg.