A group of 22 developing countries began signing this week in Geneva an agreement to cut tariffs with the purpose of boosting South-South trade, effective in spite of the World Trade Organization negotiations.
The Sao Paulo round of talks has been going on since 2004 even as the WTO own broader and longer-running Doha round, now encompassing 153 economies remains stalled.
Although South-South commerce accounts for a relatively small share of global trade flows, it is growing, particularly as emerging economies increase in importance. This agreement is expected to increase South-South trade by 8 billion US dollars.
“It’s a most important step for South-South cooperation”, said Argentine Foreign Affairs minister and president of the group Jorge Taiana, on announcing the agreement.
The deal under the General System of Trade Preferences (GSTP) will see participating members, who include trade heavyweights like Brazil, India and South Korea, but not China or South Africa, cut tariffs by at least 20% on 70% of their goods.
Taiana said the full scale of trade opening under the deal would become apparent when signatories exchanges lists of the goods on which tariffs will be cut, by the end of May 2010. That will be followed by bilateral negotiations for four months in which the countries may decide to cut tariffs by even more.
Although WTO members are supposed to offer each other the same trading conditions without discriminating in favour of particular groups, the rules allow members to give developing countries preferential treatment, known as preferences.
“The South-South trade is a good response although not the only one to overcome the crisis”, said Brazil’s Foreign Affairs minister Celso Amorim.
Supachai Panitchpakdi, United Nations Conference on Trade and Development Director General said the new agreement should help boost trade among the signatory countries to the tune of 8 billion USD annually.
The 22 GSTP participants are WTO members Argentina, Brazil, Chile, Cuba, Egypt, India, Indonesia, Malaysia, Mexico, Morocco, Nigeria, Pakistan, Paraguay, South Korea, Sri Lanka, Thailand, Uruguay, Vietnam and Zimbabwe, and non-members Algeria, North Korea and Iran.
Top CommentsDisclaimer & comment rules
Commenting for this story is now closed.
If you have a Facebook account, become a fan and comment on our Facebook Page!