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Harbinson, Moore drafts widen gaps at WTO

by Chakravarthi Raghavan

Geneva, 3 October 2001 - Trade representatives of a range of countries, small and medium, big traders and small or not very significant traders, and the least developed as well as the marginalised economies, all have spoken clearly critical of a proposed draft declaration for Doha, which, without saying so, is seeking to launch a new round, with a comprehensive and open agenda.

The discussions on the draft, at an informal General Council meeting, began Tuesday, and is due to continue Wednesday. While not many, if at all, from the developing world spoke out in favour of support of the draft - merely praising the Chairman’s effort - the US, EC, and several other industrialized countries sought to support the declaration draft, with some complaining that it has not gone far enough.

Malaysia’s Ambassador Supperamaniam, viewed the draft as one ‘drawn up in good faith’, and in ‘skilfully crafted’ language to give the semblance of a clean and concise draft, but unable to avoid the impression of its being “imbalanced”. In a clever and subtle way, the draft had incorporated elements for negotiations to proceed on a broad range of issues, even though there was no explicit reference to a “comprehensive and broad-based round, which is an anathema to many delegations.”

In willing to use the draft as a working document, Malaysia, however, entered several objections and caveats, that need to be taken into account:

·        There had been and continues to be a basic disagreement between those wanting a comprehensive round on the one hand and those on the other who can accept a more manageable set of further negotiations. However, it had to be recognised that there are members who have difficulties even with the launch of a new round.

The impression given in the text is that it is going for a comprehensive agenda that is to culminate in the launch of such a round.

The General Council was entering a phase where crucial decisions had to be made:

(a)  whether a new round of multilateral trade negotiations need to be launched;

(b)  the agenda that will provide the basis for the round and negotiations; ( c) the timing of the launch - a Doha deadline is now being mooted; and (d) the negotiating principles and formats which can result in a successful conclusion of the new round.

·        Malaysia believes that the way to get around the problem was to look at the work programme that all members could live with, that in essence will underpin, what the WTO means to all Members. The draft contained elements of a possible future programme and it was up to the members to decide what was needed to be done with each and every element.

The WTO and the General Council must be aware of the fundamental issues of the day:

·        first, the fact that developing countries want to benefit from the system in order to overcome their prevailing development related concerns. This is achievable by ensuring market access for their goods and services as well as having rules that assist and not impinge on their development prospects;

·        second, it is evidently clear that many developing countries had not been convinced towards starting negotiations on new issues. To insist they had to begin, at all cost, “does provide the impression that opinions are being brushed aside, and this is not a healthy phenomenon”;

·        third, there has to be resistance towards making WTO irrelevant that could very well turn out to be the case with calls for inclusion of non-trade issues like environment and labour.

Keeping these in view, it was Malaysia’s judgement that the draft “needs to address an inherent imbalance, generally and specifically.” The text tended to focus on the new and untried, but set aside “the more current and all important matters that the WTO needs to really address.”

Uppermost in this regard was the treatment, or rather the lack of it, of the agriculture negotiations, and the text on implementation issues. And measured against the elements relating to the new issues, “it is difficult to be convinced that the concerns of developing countries are being taken care of.”

Again, as in the recent past preparatory process meetings , “we are presented with the impression that the new issues somehow have attracted the limelight, without which, a package is not possible. This does not augur confidence.”

The chair in the draft has forwarded two options on investment and competition.  However, the fact remains that the options are in direct opposition to each other.

Supperamaniam said: “Malaysia cannot support the start of negotiations on these issues. ... there were also fundamental difficulties expressed by delegations, including my own, as to the necessity of starting negotiations on transparency in government procurement and trade facilitation. These have not been reflected in the draft. We would have preferred alternative texts that would give a fair reflection of where the positions differ.”

Malaysia could not also comprehend the need to refer to issues that only evoked controversy, such as the need to refer to labour. At the Singapore ministerial conference, Malaysia agreed on how the issue should be handled and it abided by that decision. Why should the WTO take note of what was to happen in a working party in the ILO, which was to meet only next month?

“My government will not take note of an event that has not yet taken place and when it does, may also be prejudicial to Malaysia’s position.”

On environment, Malaysia said that skilful drafting in the preamble of the text could have the unintended consequences - of the right of members to take measures under multilateral rules implies that the WTO gives recognition to actions under other multilateral rules, though they may conflict with WTO agreements. And identifying certain issues for priority discussion in the CTE (Committee on Trade and Environment) upsets the mandate of the CTE. And the CTE could become a forum to identify and debate developmental and environmental aspects of the negotiations.

A major preoccupation of Malaysia is the need to inject a purposeful and concrete action plan on development dimension of the WTO rules - something absent from the text and without which the imbalance would not be redressed.

Malaysia asked the membership to empathise with the difficulties faced by many members, including Malaysia, vis-a-vis a comprehensive round. The time had come to strengthen resolve and focus on collective efforts to finalise a realistic and manageable agenda that took into account the differences in levels of development and which would directly determine the capacity of members to open up markets and make and implement commitments.

Pragmatism, the Malaysian envoy said, should drive the WTO decision-making process. Major trading nations should display political will and courage to scale down ambitious targets and goals so that there could be real moves forward to start negotiating issues that every country in the WTO could accept and subscribe to.

“It need not be a case of all or nothing. Any effort to insist [on] the inclusion of new issues to be part and parcel of the agenda of the New Round will only prolong the stalemate and will not allow for the consensus in Doha to launch of a New Round.”

Pakistan’s Amb. Munir Akram, in remarks addressing both the implementation issues and the other parts of the draft declaration, said his country had problems with language on paras where labour, regional trade agreements and environment had been referred to in the preamble. And there was insufficient attention to the development dimension. Pakistan could not accept decisions on implementation issues being pushed beyond Doha. And the decisions on implementation on textiles and clothing (now in annex II, for growth-on-growth) should be brought into annex I (for decision now) as a measure of goodwill.

Akram then went on to comment, mostly negatively, on the various paragraphs of the draft declaration on the assessments (about the benefits of the WTO agreements).

The agreements reflected wide ranging imbalances and deficiencies to the disadvantage of trade and development interest of developing countries, resulting in unequal benefits and further marginalisation of developing economies.

The Regional Trade Agreements undermined the primacy of the multilateral trading system and there was a systemic concern about their proliferation. Any language tending to legitimise RTAs was not acceptable. The paragraph 5 of the draft seemed to give indefinite leeway to national governments to regulate and introduce new regulations. Such blunt language could be abused and used for protectionist purposes, and the entire reference should be omitted.

The labour standards issue had been buried once and for all at Singapore, and Pakistan could not agree to any linkage being created between the WTO and the ILO. As for the plans to improve dialogue with the public, this must be qualified in terms of holding seminars and symposia only and provide “an opening for happenings such as submission of amicus curae briefs etc.”

There were still wide gaps in positions of members on issues to be discussed in the General Council including on implementation and as such, Pakistan “cannot agree to the language of para 9 of the draft which talks of an expanded negotiating agenda.”

Pakistan also had difficulties about several paras of the implementation package and the manner in which these were being dealt with and reflected in the draft decisions.

The draft text on Agriculture only provided a structure but no clear language, and unless the ministers provided a clear language, for an Art 20 plus mandate and reflection of Pakistan’s concerns for a Development Box, there would be problems.

As for Market access on non-agriculture products, the current language was not acceptable, since there was no reference to the special problems of developing countries. The results of such negotiations should reflect the needs of developing countries, with special mention of the need to eliminate tariff peaks and escalation that discriminate against developing countries. There must also be specific reference to S&D treatment for developing countries, including other preferential and non-reciprocal measures. Tariff peaks and escalations must be eliminated, and not merely reduced.

On the Singapore issues, a large number of developing countries have asked for continuation of the study programme in working groups. The text did not reflect this factual situation.

There was also no reference to the TRIMS review, and there should be one and for agreement of ministers that during the review, Members should agree not to have recourse to dispute settlement against developing countries.

Pakistan could not also agree to the text on WTO rules about seeking clarification and improving disciplines and procedures on RTAs.

There should be specific reference to need for a Framework Agreement on operationalising S&D .

On other issues, the Ministers must agree to set up working groups on Trade and Debt, Trade and finance, and Transfer of Technology and prepare for and make recommendations on the relationship between Trade and Finance, Trade and Debt and Trade and Transfer of Technology.

The concept of a single undertaking proposed was not clear, and indications that negotiations on DSU would not be part of a Single Undertaking. A two-tier system like this would only undermine the integral nature of the multilateral trading system.

Pakistan insisted that the overall conduct of the negotiations should be in the General Council and there was no need for a Trade Negotiations Committee. And the only mandate for the 5th Ministerial Conference should be to adopt decisions on priority issues identified in the Declaration, especially those of interest to the developing countries including remaining implementation issues, S&D provisions, work relating to Trade and Debt, Trade and Finance and transfer of technology.

India’s ambassador Narayanan complained that though the term ‘round’ had not been used, the implication of the draft was to launch an “open ended new round of negotiations with all the traditional elements of a round seen during the Uruguay Round, built into it.” This was not acceptable. India had made known its position on the implementation issues at the separate informal discussions, and the progress on these issues achieved so far did not warrant the para in the draft declaration about the Ministers being determined “to resolve” the implementation issues. And the work programme on these proposed appeared to be a separate second track.

On Agriculture, where no text had been formulated, India would reserve its position. India had no serious problems with the para on services, but would make some drafting suggestions later.

India had however problems with the draft text, beginning with para 13 (relating to non-agricultural market access). While initially opposed, India had been willing to consider some negotiations, but had set out its clear objectives: clear indication in the mandate that tariff peaks, tariff escalations and specific and mixed duties would be addressed as a matter of priority. Also, there should be a satisfactory outcome on the implementation front and there must be negotiations for extension of the protection of geographical indications to products other than wine and spirits. India also had difficulty with the use of the term “less than full reciprocity”.

India fully sympathised and supported the view of some delegations (Africa Group and the LDCs) for a study process to determine effects of tariff reductions (WTO or World Bank/IMF programs) on the domestic industries of developing countries.  This was also a message that came out prominently in the WTO sponsored seminar on industrial tariffs.

As for TRIPS, India wanted a separate meaningful declaration on relationship between TRIPS and public health, for negotiations for extension of Geographical Indications (GI) to products other than wines and spirit. It was not enough for the TRIPS Council to be asked to pay ‘due attention’.

On the Singapore issues, India had been clearly indicating it was not in a position to agree to commence negotiations on any of the four. These had to be dealt with in the framework of the Singapore Ministerial decision. At Singapore, a “solemn commitment” was given to the Indian Minister by India’s major trading partners that “there will be no pressure on us to negotiate in these areas.” As a compromise, India had then agreed to a non-prejudicial study process, with a clear stipulation that negotiations will commence only when there was “explicit consensus.” So far there had been no consensus to change from the study to negotiating mode.

India was surprised that in government procurement and trade facilitation, the text now suggested without any option, negotiations. This was not acceptable.  Also the draft kept open the possibility of invoking the DSU in these two areas, though even many delegations willing to negotiate in these areas had said they could not accept invoking DSU.

There was no provision in the draft even for continuing the study process on the basis of a Singapore mandate. And India repudiated the Swiss suggestion that at Seattle there was any agreement “on any type of ‘bridging proposals’ on investment.”

[On the night of 2-3 December 1999, trade ministers of South Africa, Egypt and one or two others had attempted a bridging language, but this was rejected unequivocally. Both South Africa, and Egypt to some extent, have been trying to revive that idea, but it was rejected again at the recent Abuja meeting of African Trade Ministers.]

As for the proposals to negotiate rules on subsidies and anti-dumping, India would reserve its position until its proposals on these under implementation were dealt with and decided.

As for the DSU, India could not understand the proposals that the negotiations should be based on work done thus far.

As for the environment issue, and the CTE, India was concerned that the jurisprudence in this area in the WTO was evolving in a direction of trying to justify easily measures claimed to have been taken by members on environment groups by applying the “evolutionary theory of implementation.”

[The Appellate Body in an illegal usurpation of jurisdiction for ‘interpreting’ agreements has evolved this theory to support US and EC actions. This has provoked a rising movement against the DSU process itself in many developing countries, through it is yet to be fully reflected at the WTO by their official positions.]

On the paras 36-42 of the draft, Narayanan complained that “all the ideas, concepts and trappings that go to make a ‘round’ had been included, and the paras closely mirrored the Punta Declaration.

Since 1995, the WTO is a permanent negotiating forum and the fact that there was no longer any GATT “seems to have been overlooked.” There was no need for a Trade Negotiation Committee. The General Council, mandated as the supreme organ of the WTO, next only to the Ministerial Conference, and fully entitled to act on behalf of the Conference when it was not in session. Also, there was no need for a Special Ministerial Conference to decide on the implementation of agreements. As for the single undertaking concept, it was not necessary if only the negotiations are under existing agreements and it was be impracticable in such a case to implement new obligations only in respect of some members and leave aside others. This reference to single undertaking was being brought in towards inclusion of new subjects. The paragraph was worded in an open-ended and ambiguous way, and the memories of developing countries about the Uruguay Round “are still fresh and feel threatened by the paragraph.”

Zimbabwe, for the African Group, in some preliminary comments on the draft Declaration, insisted, in relation to the preambular paragraphs, on the need to delink the issue of internal transparency from the question of expansion of membership. It should address the question of transparent and inclusive decision-making process.

Our focus should be on internal transparency and Ministers should take a formal decision on this matter, Zimbabwe said.

There can be no premature qualifications before we have agreed on the elements of the Work Programme, Zimbabwe added.

As for the structure of the draft Ministerial Declaration, Zimbabwe, on behalf of the Africa Group, said that meaningful progress on this document can only be achieved when the gaps in sections dealing with Implementation, Agriculture, TRIPS, and Special and Differential Treatment are filled in.

Zimbabwe said that there should be a balanced treatment of all the Singapore and other new issues and reiterated the position of the African trade ministers at Abuja, where in effect, they insisted on continuing the study process and against any negotiations.

As for the Organisation and Management of the Work Programme, consideration of this should be deferred until such time as we have agreed on the elements of the Work Programme, Zimbabwe stressed. – SUNS4980

The above article first appeared in the South-North Development Monitor (SUNS) of which Chakravarthi Raghavan is the Chief Editor.

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