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Draft declaration work to be moved forward, ignoring objections

by Chakravarthi Raghavan

Geneva, 3 October 2001 - The Chairman of the General Council, Mr. Stuart Harbinson, acknowledged Wednesday the gaps, in the draft ministerial declaration text presented by him, in several areas and the need to fill them up, but indicated his intention to move forward with new draft after consultations, and presenting his current one as a compromise that could not satisfy everyone.

Meanwhile, even the majors in private conversations and briefings, were acknowledging problems of security in relation to the meeting at Doha. However, it was not clear whether they are trying to use this to put off the meeting, while they would continue to apply pressures and split developing world, or real concerns because of problems (being discussed in the US media) of holding together a disparate coalition in the ‘war on terrorism’.

On Tuesday at the WTO, during the discussions in the afternoon and at night on the draft declaration, among those who spoke up, giving preliminary views and objections in a nuanced and yet clear way, against the structure and content of the draft, and the attempts to launch an open-ended round without saying so, were Malaysia, Pakistan, Zimbabwe for the African group, Tanzania for the least developed countries (rejecting almost every part of the new proposals, including industrial tariffs and Singapore and other issues), Indonesia, and India. And more countries took the floor Wednesday speaking in the same vein.

Many Cairns group members indicated they would make no judgement until the agriculture text was elaborated.

Among the major industrialized countries, Switzerland, Norway, east and central European Cepta and Baltic States, as well as the two major trading nations, the United States and the EU, pushed for an open-ended commitment to launch of a new round at Doha - but with US reservations and objections to any commitment to re-negotiation of rules and for the 5th ministerial to decide the issue, thus making clear it is not ready to negotiate any anti-dumping or subsidy rules.

The United States spoke of the downturn in the US economy (presumably as a result of the 11 September events and its effects on consumer and public confidence) which had so far functioned as an engine of growth for the world economy, and called for the launch of the trade negotiations to restore confidence and provide impulses for growth. The US called for development of the agriculture part of the draft, as this was the most important subject for developing countries. The US also wanted the Doha meeting to address and strengthen institutional arrangements for WTO governance and internal and external transparency. On the rules area, it noted the ‘broad interest’, but insisted that initiating negotiations was not the best way to deal with the problems, but instead countries should be invited to put forward proposals and these should be considered and if necessary acted upon at the 5th ministerial - thus ruling out both rules changes and interpretations under implementation, and the proposals for tackling subsidies and anti-dumping agreements.

The EC, which has been opposing any expansion of the agricultural mandate beyond the Art.20 of the Agreement on Agriculture called for ‘constructive engagement’ to develop a text, and insisted that there should be no attempt to look for a middle ground on the proposals, with alternatives on investment and competition.  The EC was also disappointed that the mandate for ‘transparency in government procurement’ to be negotiated did not provide for future market access, nor could it accept the idea that compliance with new rules and disciplines and clarification of existing provisions in terms of trade facilitation being left for future determination.

Some trade diplomats said that given that the chairman’s text seems to lean heavily in the direction of US and EC views, the criticisms from these two were basically to prevent any dilution, and that without a firm ‘no’, and only an ‘yes, but...’ viewpoint from the developing world, the existing text, which could be easily modified as the talks went along, would be sought to be pushed and forced down.

At the outset of the discussions on a draft declaration, Chairman Harbinson indicated that he would persevere to produce a ‘consensus draft’ by the end of October, and bring it before a formal General Council at the least by early November, for formal remittance of the draft to the Doha ministerial.

What the major developing countries and their trade ministers meeting in such conditions (including the US and UK navies and air, and military power in the Gulf, Arabian and Indian Oceans), when the US “war on terrorism” is sought to be used to launch new trade round, is not very clear - more so when the launch of a new round is being presented as part of the ‘war against terrorism’ and the Bush administration demanding that either governments were with it or against it.  Within the international system and organizations, contra voices (against a new round or questioning trade liberalization as the answer for the global recession) have been muted, with secretariats either acquiescing or remain silent, or spreading misinformation about the ‘purported’ actual positions of countries or based on long past diplomatic experience about how many countries would not stand up and hence it is better to compromise and get something. Civil society is also sought to be silenced through McCarthy tactics of associating them with ‘terrorists’.

At the end of the extended discussions in the informal meetings on the Harbinson-Moore draft on implementation, where not one of the 40-50 countries who spoke (individually or as groups) had expressed support and satisfaction (with perhaps only Morocco viewing the draft as a basis for further work), Harbinson had announced that the formal General Council Special Session to adopt his draft decision in Annex I, and recommend the drafts in Annex II to the 4th Ministerial, would now be postponed for further consultations towards a consensus.

Another point of flutter at the WTO and lobbies was the anger of the US and EC, both trying to launch new trade negotiations to further the interests of their corporations, by making this part of the agenda for the ‘Global war on terrorism’ and hoping as part of their domestic recovery programs to give some aid and trade benefits, on the margins for those whose support is found necessary for the ‘coalition’ against the Taliban in Afghanistan, and use it to push through a Doha meeting and a declaration to launch a new round, with an open-ended agenda.

In remarks and views on the declaration, made at the informal meeting, and made available later to the media, Kenya, Indonesia, Uganda, Zambia came out rejecting the new issues, while others supported study only.

Egypt complained that the level of ambition was “still high”, All proposals for negotiations (government procurement and trade facilitation) had been included irrespective of the level of support among the membership. Alternatives should have been proposed on issues where there were strong disagreements. Both the discussions in Geneva, and at Mexico city meeting, it was clear that there was no consensus to bring forward the new issues for negotiations. The present draft presented a broad, but imbalanced programme.

On the rosy preambular views about the world economy, trade and poverty, Egypt said that there was more than one relationship between economic growth and poverty reduction and there was no empirical evidence to support a positive relationship, and any case not in an equitable manner. The development dimension should be clearly brought in the work programme and its operations. Egypt also saw no reason to mention the ILO alone. One could as well refer to the WHO, WIPO and activities of others. Otherwise no non-WTO organization should be mentioned or their activities taken note of.

Egypt said it was not ready to negotiate on market access in non-agricultural products. On Singapore issues, Egypt wanted the current study programme to be listed and proposed as alternatives. And market access had to provided to developing countries in textiles. On the issue of relative reciprocity in tariff negotiations, Egypt underscored the provisions of Art. XXVIII bis, para 3, of GATT which underlined some special considerations relative to developing countries.

Earlier Indonesia, said that while it could go along with many elements in the draft, “as it stands now, there are certain parts... on which Indonesia has strong reservations.”

As for the new issues initiated in Singapore, Indonesia could not accept any language making references to negotiations on these issues, and hence could not accept paras 18, 20, 22 and 23 of the draft (covering investment, competition, government procurement and trade facilitation).

Even on investment and competition, where some alternative is formulated, Indonesia was not comfortable with existing draft, but was willing to agree to mandate for extension of work in the working groups, provided these would focus on addressing various concerns of members who had difficulties with the proposed agreements, including examination of the potential costs.

Earlier, Indonesia expressed deep concern that some “highly controversial and sensitive issues” had been included. It was not ready to accept para 5 of the text, since it gave greater discretion to take unilateral measures under the guise of regulating or introduction new regulations, for protection of environment, safety and health. On Labour, Indonesia would only accept a mere reaffirmation of the Singapore declaration.

For Indonesia, internal transparency and effective participation, especially in decision-making had the highest priority. And while it appreciated the need to improve public understanding of the WTO through ‘improved dialogue’, this could not mean direct public participation in WTO proceedings.

In agriculture, there was nothing substantive, and this was a crucial issue.

On the work programme, while recognising the importance of sustainable development, Indonesia had problems with the existing draft (para 27) on the work of the Committee on Trade and Environment, as also para 28 on technical barriers to trade.

For Indonesia, trade, debt and finance were important issues and a working group should be established to have a more focussed discussion. Indonesia had difficulty with the suggestion that the issue should be examined under the General Council auspices. As for technical cooperation and capacity building, the level of funding should be increased (without increasing budget contribution of developing countries).

As for the organization and management of the work programme, this would depend on the decisions to be taken at Doha including on proposals for future work. It would hence not be possible now to comment and prejudge the Doha outcome. All the paras 36-42, should be placed within square brackets, indicating there was no consensus.

Jamaica said that while the text was ‘short and clear’ and thus positive, in some areas “it was surprisingly comprehensive,and in other areas, such as organization and management of the work programme, it was quite detailed,” and this too was positive.

However, there were some important omissions. Agriculture was yet to be elaborated, and the precise shape of the implementation package would not be clear until at least Doha. Nor was the proposed approach after Doha clear. This made it difficult to assess the overall balance of the text, a problem compounded by absence of language on Special and Differential Treatment.

The preambular portions lacked balance about the development and role of the multilateral trading system over the past 50 years. While there had been growth “the asymmetries and imbalances could not be glossed over, and the preamble is guilty of doing just that.” This had led to an important lacuna in the text.

Meeting for the first time after the events after Seattle, particularly the current global economic environment and their acute implications, particularly for developing countries, the Declaration must make a strong and unequivocal commitment to pursue a development agenda at the WTO, both on substance and process. This was absent. The para five about environmental concerns was “too open-ended”. Jamaica also complained that the expanded work programme included a number of negotiations and without square brackets.

“Jamaica had not as yet agreed to negotiations on these issues” although it was looking at the draft to see how its interests might be met. The text went too far in negotiations on non-agricultural market access, holding out the possibility of tariff elimination and even the language about taking account of interests of developing countries was “instructive” in calling for ‘less than full reciprocity in reduction commitments’.

In a draft where agricultural commitments were yet to be elaborated, and there were ‘very modest’ proposals on rules, and in a situation where many developing countries, LDCs and small vulnerable economies, were seeking to cope with effects of previous WTO agreements and the Bretton Woods Liberalisation processes, there was a “high level of ambition” in market access for non-agricultural products. This was in contrast to the “modesty” of proposals in the implementation issues, in both the TBT and SPS measures.

There was thus a scenario of fragile domestic industries in developing countries facing a difficult fight for survival, especially if global economic environment worsens.

As for the paras (14-17) on TRIPS, a number of issues of interest to developing countries need to be added and the language (in para 16) for the TRIPS Council to give “due attention” was too weak.

On the new issues, the proposed alternatives (on investment and competition) for further focussed study was the more desirable basis for moving forward. As for trade facilitation, Jamaica had serious doubts about binding commitments as a realistic goal; the discussions so far to which Jamaica was a party did not suggest this would be a basis for consensus.

As for the DSU, a balanced package of amendments would require negotiations not to be confined to work done thus far. Jamaica also found the formulations on trade, debt and finance and technology to be “surprising”. While on first reading it seemed to be substantive, it was clear on a full reading that the General Council was merely being asked to make recommendations on institutional arrangements. And while in these areas only ‘progress reports’ are sought for the 5th Ministerial, Jamaica could not understand why there was not similar language under alternatives for investment and competition policy. Jamaica also reserved its position on paras 36-42 of the declaration, about organization and structures for the work programme, given the institutional structures already ushered in by the WTO.

Kenya supported the Africa group view that development and interests and needs of developing and least developed be placed at the heart of the WTO’s work. The Declaration must hence come up with a development agenda, in the interests and needs of developing and LDCs, and place it at the core of the WTO’s work.

On the other preambular parts, Kenya wanted a delinking of the accession and internal transparency issues and insisted that internal transparency in decision-making at the WTO, and how it would respond to the challenges from the MTS was of paramount importance.

The para nine of a work programme, envisaged a comprehensive agenda that was yet to be agreed. The text on implementation part of the declaration was incomplete without an operative para, and there should be expediting of the work on the sections on implementation, TRIPS and public health, S&D treatment and Agriculture.

As for market access on non-agriculture products, Kenya supported the LDC view for the establishment of a study process to examine effects of previous tariff reductions on economies and social development of developing countries, including impact on local firms and on employment, and government revenues, as also possible effects of future tariff reductions on individual countries. Such a study process should make clear that exemptions from further liberalisation commitments would be given to developing countries that have been or would be adversely affected.

In regard to TRIPS, Kenya shared the disappointment of developing countries on lack of substance or progress reflected in the formulation. While there was a public outcry worldwide about negative effects of TRIPS on prices of medicines and other essentials, about bio-piracy and patenting of life forms, about threats to food security and farmers’ livelihoods, these were not reflected in the text.

On the new issues or Singapore issues, the starting of negotiations was not appropriate. The issues were too complex and there were many diverging views.  Multilateral rules in these areas would lead to further obligations, limiting developing options and prospects. Kenya was hence not ready to agree to start negotiations.

There was now an emerging consensus on reorienting WTO work programme to place development at its core, and issues comprising the development agenda of developing countries and the LDCs need to be given positive consideration - including the new emphasis on access to technology, trade and finance, trade and debt as well as trade in primary commodities and integrating them into the WTO future work programme.

Kenya also complained that the way the organization of the work programme had been drafted, it implied that the future work of the WTO would be organized around the modalities of a New Round, including elements like ending negotiations by a certain date, forming a trade negotiations committee, the single undertaking, and possible additions of negotiating topics at the next Ministerial Conference. The experience of the comprehensive Uruguay Round showed that developing countries were disadvantaged by the negotiations being dealt with as a single undertaking. They were yet to recover from the negative effects of the previous Round, and the seemingly entrenched problems of implementation of what developing countries were unable to digest.

“Kenya is therefore not in a position to agree to the elements of another broad-based round. We do not want to run the high risk of being involved in another Round, with so many new issues which will generate more problems of implementation in future. This would make the WTO an anti-developmental organization, a risk that all of us must avoid.”

The next draft the Chair would propose should replace the section on organization with a simple text that the work envisaged in the work programme be conducted in the respective WTO bodies, under the supervision of the General Council, and that the General Council, would place the results before the next ministerial conference. – SUNS4981

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

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