DRAFT DOHA DECLARATION SEEKS TO LAUNCH BIG NEW ROUND, IGNORES CIVIL SOCIETY DEMANDS
COMMENT ON THE WTO DRAFT MINISTERIAL DECLARATION
By Martin Khor
Third World Network
Geneva 28 September 2001
A. OVERVIEW AND SUMMARY
1. On 27 September, the WTO released the Draft Ministerial Declaration. This is the draft of the Ministerial Declaration that the Ministers are to adopt in Doha in November. The Declaration is the most important document of Doha as it will set the work and mandate of the WTO. The draft is the first attempt by the chairman of the WTO General Council, aided by the WTO director-general, to get WTO members to discuss a text that can be adopted. The draft is important as it sets the tone and framework of the next weeks' discussion.
2. The draft Declaration is extremely disappointing. It does not meet the demands of global civil society, which has been asking for the correction of all the imbalances and problems generated by the present WTO system and rules, and which has been against the plans by the big powers to launch a New Round that would inject yet more issues into the mandate of the WTO. According to the overwhelming views of civil society, as elaborated in joint statements such as "No New Round, Turnaround", "WTO: Shrink or Sink", and "Our World Is Not For Sale", there should be a fundamental rethink of the rules and operations of the WTO which have caused such damaging problems as high prices for medicines, biopiracy, and threats to the livelihoods of small farmers and small firms. NGOs have also campaigned widely against a New Round with new issues such as investment, competition, government procurement, etc.
3. However the draft Declaration fails to meet these requests. It has refused to recognise that the WTO is imbalanced and needs reform. It has also in a big way proposed the launching of a New Round with many new issues.
4. In pareticular the draft is very imbalanced against the interests of developing countries. It gives the appearance of a ‘clean text’ with only a few points of contention (mainly investment and competition). In reality this ‘clean text’ is only trying to hide or paper over the disagreements among WTO members. It does this in a way that is imbalanced against the views and interests of developing countries.
5. Like thousands of NGOs, most developing countries have been expressing the urgent need to correct present imbalances, and to resolve problems of implementation; they have expressed inability to accept negotiations on new issues, and their refusal to launch a New Round.
6. However the text does not reflect these views of developing counties. On the contrary the draft is against developing countries as it:
a) does not recognize at all the existence of imbalances in the agreements;
b) fails to provide commitments by industrial countries for increasing access for products of export interest to developing countries (in particular, the agriculture issue is left empty);
c) does not offer serious commitments to resolve implementation problems such as TRIPS, TRIMS, agriculture, etc.
d) promotes many new issues (investment, competition, transparency in government procurement, trade facilitation, non-agriculture tariffs, trade and environment, electronic commerce) in a manner that indicates negotiations will be involved immediately or in a few years. The new issues are thus being promoted in a dangerous way as it is very biased towards accepting negotiations in these areas despite the opposition of many developing countries.
e) contains all the elements of launching a New Round, although without saying so explicitly.
7. As it is the draft cannot be accepted as acceptance will be detrimental to development interests. Therefore, the following needs to be done. NGOs need to make their views known to their respective governments, and to the WTO as a whole to make the following changes to the text:
(a) Insist that the next draft recognizes the imbalances and problems arising from the present rules and system and the need to rectify these through a Development Agenda whose elements can be spelt out. This should be reflected in new language to be put forward for the first section of the text.
(b) Insist that there can be no launching of negotiations in new issues, including investment, competition, transparency in government procurement and trade facilitation. The text has to change to reflect this.
(c) The draft’s unconditional promotion of negotiations on industrial tariffs should be countered. Many NGOs and also many developing countries' delegations are uneasy about negotiating this issue and their concerns about deindustrialisation should be addressed.
(c) Redraft the section on TRIPS to reflect civil society concerns as well as the views of many developing countries.
(d) Insist on more serious commitments on implementation issues before Doha.
(e) Redraft the section on organization of work programme (paras 36-42) to remove elements that involve a new Round.
B. PREAMBLE DOES NOT REFLECT REALITY OF DEVELOPING COUNTRIES: NEEDS TO CHANGE TO REFLECT DEVELOPMENT AGENDA
The preamble (para 1-8) contains a lot of rhetoric, making exaggerated and often inaccurate claims about the wonders of the trade system, eg how the trade system "embodied in the WTO" has promoted growth, development and employment the past fifty years, and how "trade plays a key role in alleviation of poverty." There is no mention of the downside of the operations of trade, such as the massive losses to poor countries and poor people from the continuous decline in commodity prices and terms of trade, or the threats to livelihood and jobs when small firms and small farmers are unable to cope with the flood of cheap imports.
There is no mention of the concerns raised many times by developing countries about the imbalances and deficiencies in the present system and rules. There is no mention of the need for a Development Agenda. Although the WTO secretariat and industrial countries have put forward a lot of statements and rhetoric about development concerns in the WTO, there is no such reflection in the preamble or elsewhere in the document. The need to mainstream development concerns in WTO, and to make development take center stage in WTO (together with concrete points) should be placed in the preamble. But this is altogether missing.
C. IMPLEMENTATION PROBLEMS
Implementation problems facing developing countries from the many existing agreements (such as TRIPS, TRIMS, agriculture) get little attention in the draft declaration. It is dealt with in another document. But there are very few areas of progress in the implementation paper. Therefore developing countries are not provided with any redress on implementation, despite many years of discussions. The concerns of civil society about the impacts on consumers (and their access to food and medicines) and on the poor (whose jobs and livelihoods are affected) have not been addressed.
This section (para 11) only lists down issues, stating the text is to be elaborated later. Agriculture is the critical issue on which many other issues depend. Developing countries expect the ending or severe curbing of subsidies in industrial countries as these subsidies enable cheap food products from the rich countries to flood into the poorer countries. Many developing countries also strongly requested greater flexibility in implementing their own obligations to avoid a situation where their small farmers become unviable as a result of import liberalization. The right of the small and poor farmers to be protected from cheap imports overrunning their livelihoods should now be recognised. But the section is at present empty. It is thus very difficult or impossible to consider all the other issues as they have to be considered in relation to what is being presented in agriculture.
The section on TRIPS (para 14-17) is extremely disappointing and indeed disastrous. TRIPS is one of the agreements causing the most public outcry. On 17 September, hundreds of NGOs released a statement calling for the fundamental revision of TRIPS as it promotes monopolies by big companies, blocks the access of the public to affordable medicines and other products, and helps to facilitate biopiracy. But the draft declaration does not give any indication that it has heard the public outcry, nor the developing countries' demands.
On art 27.3b (biodiversity), it merely instructs the TRIPS Council to give ‘due attention’ to the TRIPS-CBD relation and traditional knowledge. This ignores the many carefully articulated demands of the Africa Group and other countries to clarify that all living organisms and living processes cannot be patented; and that sui generis national plant-varieties policies that protect rights of local communities to their traditional practice of saving and exchanging seeds are recognized. These are in the pre-Seattle Ministerial text but absent here.
Many other proposals made by developing countries in the pre-Seattle text and at the TRIPS Council and implementation process following Seattle are also absent. There is no mention of the technology transfer objectives or obligations. There is also no mention of the mandated overall review of TRIPS under article 71.1, as if the drafters of this document do not want the WTO Members to be reminded of this pending review.
The issus of TRIPS and medicines is also absent from this text as there will be a separate document on this issue. But even on this most obvious of issues where change is required, the situation is not optimistic as a group of developed countries (led by the US) is opposing the statement on this issue put forward by a large number of developing countries.
This whole section has to be redrafted to reflect the NGOs' and the developing countries’ concerns.
F. NEW ISSUES
The most dangerous parts of the draft relate to the Singapore and other new issues.
The draft declaration gives no option but to launch negotiations on transparecy in government procurement, trade facilitation and another round of industrial tariff cuts. It gives an option in the issues of investment and competition of either launching negotiations at Doha, or continuing the "study process" in the working groups for another two years before reporting to the 5th Ministerial conference. Overall, the draft is attempting to inject many new and inappropriate issues into the WTO, thus expanding its mandate and powers manifold.
(a) Trade and Investment
An option is given between a lengthy para 18 (agreeing to negotiations with some terms of reference and feeble attempts to allay developing countries’ concerns through technical assistance); and a short para 19 (that the working group will do further work, with a report to be presented at 5th Ministerial). Pressure can be expected to be applied to developing countries to accept para 18, or at least to agree that the working group will continue for only two years and then negotiations will automatically be launched by the 5th Ministerial. Developing countries that have stated they are not prepared to negotiate, or are opposed to investment rules being in WTO, have to stand firm against para 18 and instead strengthen the language of para 19 and ensure that there is no commitment whatsoever to transform the study process into negotiations at the 5th Ministerial. NGOs that have taken a stand against the establishment of a multilateral investment agreemen may advocate dropping para 18 and insist that this issue should be dropped altogether from the WTO agenda.
(b) Trade and Competition
Again, an option is given between para 20 (agreeing to negotiations, with terms of reference, and feeble attempts to assure developing countries) and a short para 21 (that the working group should continue with a report to be presented at 5th Ministerial). As in investment, there will be intense pressure to accept para 20, or to modify para 21 so that after two years there will be negotiations to be launched at the 5th Ministerial. Developing countries who are against competition rules in the WTO should be prepared to stand firm against para 20 and strengthen para 21, also ensuring that there is no commitment to transform the study process into negotiations at the 5th Ministerial. NGOs that have taken a stand against the WTO having a competition agreement under its wings may advocate dropping para 20, and insist that this issue should be dropped altogether from the WTO agenda.
(c) Transparency in government procurement
This section (in para 22) is extremely bad for NGOs and the many developing countries that do not want negotiations for an agreement. Unlike investment and competition, there is only one option given, to agree to negotiations on an agreement. This is extremely unfair, as many developing countries have made it clear they are not prepared to begin negotiations (eg the LDC Ministers in Zanzibar) or that they want the study process to continue (eg the Africa Ministers in Abuja). Moreover there is no consensus yet in the working group and there is contention on many issues (including scope, level of government and type of procurement, definition of transparency, linkage to DSU). Most developing countries also want a guarantee that the issues are confined to transparency and will not extend to market access. The Singapore mandate is for the working group to only develop elements for a possible transparency agreement.
At the least this para 22 should be placed in brackets, and another option to the effect that the working group should continue its work should be included. The inclusion of such an option was present in the pre-Seattle text which is now removed in the current draft, and this omission is unfair and imbalanced. Developing countries that are not ready or willing to start negotiations should ask for an appropriately worded option to be included and to stand firm on this option.
(d) Trade facilitation
As in the case of transparency in government procurement, there is only one option given (in para 23) to begin negotiations on this issue. Again, this is unfair and imbalanced as many countries have stated their opposition to starting negotiations on this issue (eg LDCs Zanzibar Declaration).
Para 23 should be placed in brackets, and another option to the effect that the working group should continue its work should be included. The inclusion of such an option was present in the pre-Seattle text which is now removed in the current draft, and this omission is unfair. Developing countries that are not ready or willing to start negotiations should ask for an appropriately worded option to be included and to stand firm on this option.
(e) Non Agricultural Products (Industrial Tariffs)
This key issue is dealt with in para 13, which agrees to negotiations to reduce or eliminate tariffs and non-tariff barriers in industrial products, with product coverage to be comprehensive and without a priori exclusions. This is a ‘new issue’ in that the Uruguay Round outcome did not mandate negotiations for another round of industrial tariff liberalization. Recently many developing countries have voiced grave concerns at how tariff cuts have already led to deindustrialisation, or the closure of their domestic industrial firms. To agree to negotiate another round of industrial tariff reductions without first studying the effects of past and future tariff reductions on their industries, and without clear guarantees that they do not have to liberalise further beyond what the local industries can bear, could lead to further deindustrialisation (and without the certainty that there will on the other hand be realizable export benefits due to supply constraints).
Therefore para 13 will have to be amended, for example, with a proposal (formulated by many African countries during the Abuja OAU Ministerial conference) that any engagement on industrial tariffs would be conditional on the completion of a study process to analyse the effects of previous and future tariff reductions on local industries and national economies of developing countries.
(f) Trade and environment
Para 27 on this issue instructs the committee on trade and environment (CTE) to work particularly on two areas, ie how eliminating trade barriers would benefit trade and the MEAs-WTO relation. There is also mention of eco-labelling. This leaves out several other issues in the CTE which are of interest to developing countries, including the relation between TRIPS and the environment; and exports of domestically prohibited goods.
G. ORGANISATION OF WORK PROGRAMME (AND THE NEW ROUND).
The final section on organization of work programme (para 36-42) does not mention a New Round but it contains several elements that make it clear that a New Round is being proposed to be launched. There is thus an attempt to launch a New Round by stealth, ie without calling it a Round because of the unpopularity of a Round.
The elements of a New Round in this section are:
(a) The negotiations shall be concluded not later than …. (para 36). This gives a time limit to all negotiations.
(b) The negotiations shall be supervised by a Trade Negotiations Committee (para 37). This institutional arrangement is the same practice as the Uruguay Round and previous Rounds.
(c) The outcome of negotiations shall (except the DSU issue) be treated as parts of a single undertaking. (para 38).
(d) Elements which do not involve negotiations are also accorded a high priority, and the progress shall be reported to the 5th Ministerial (para 42). This opens the road for new issues that are not immediately subjected to negotiations (but are subjects for a working group) to be upgraded to negotiations for new agreements at the 5th Ministerial. For example, if the investment and competition issues are not subjected to negotiations immediately after Doha, they could be brought into a Round at the 5th Ministerial. There could thus be additions to the agenda of the Round beyond what is initially agreed to in Doha.
Thousands of NGOs and many developing countries have expressed they are opposed to a comprehensive New Round or that they are not prepared to join in the launch of a comprehensive New Round.
However paras 36-38 commit Members to a broad-based new Round, with a single undertaking, with negotiations on new issues immediately after Doha, and the possibility of additions of more new issues at the 5th Ministerial.
There should therefore be amendments made to this section to reflect the views of these developing countries.
1. The draft cannot be accepted as a balanced or objective basis on which to base the Doha outcome. The views of NGOs and civil society worldwide have not been taken into account. Also, developing countries’ interests are not reflected. Moreover it may be a clean text in that there are very few options or square brackets, but it is not an honest text as it does not fairly reflect the diverse views of Members.
2. In particular, the imbalance is reflected in: (a) non recognition of the present imbalances in the WTO; (b) non recognistion of the need to put development in the center of the WTO’s work programme and to have a Development Agenda; (c) instead there is lack of benefits to developing countries in terms of export opportunities, and in the weak progress on implementation issues; (d) the new issues are very unfairly treated as the text is promoting all the new issues, whereas many developing countries and most African countries do not want issues like investment, competition, transparency in government procurement, trade facilitation and industrial tariffs on the negotiating agenda of Doha; (e) the elements of a New Round are all present, although the draft does not mention it.
3. There has to be very substantial and substantive redrafting. Those points and words that developing countries cannot agree to should be put within brackets. New text will also have to be proposed to reflect the views of civil society and also the views and interests of developing countries.
4. This exercise of reviewing and reworking the text is extremely important as the future of the multilateral trading system and the future of the local communities and the people worldwide, especially the poor, will depend on it. Therefore this cannot be taken lightly. Everyone who is interested in the future of the trading system, and the welfare of the people everywhere, should pay full attention and exert their efforts to change this present draft declaration.