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By any other name, at any other place, a round will still be the same

by Chakravarthi Raghavan

Geneva, 15 Oct 2001 - The United States, the European Union and the WTO Director-General Mike Moore appear to be returning from a meeting at level of ministers of a key group of 21 countries at Singapore, relatively hopeful of being able to push their agendas for a new round with new issues - but with some EU-US differences still unresolved, but likely to be masked by clever drafting (as in Punta del Este) to be modified later.

This seems likely in the way re-visiting anti-dumping and subsidies accords could be masked as negotiations on WTO rules, or the environment talks - which the EC insists has to have high visibility for its own domestic constituencies, even if at the end everyone by consensus agrees no new rules are needed or the trade facilitation talks (which with government procurement are now presented without any alternatives in the Harbinson text).

The 21 countries who were present at Singapore, as the Singapore trade minister repeatedly said before the meeting, had been ‘hand-picked’ by the WTO - handpicked as in the bad old GATT ‘green room’ days with a view to isolate the opponents and try to make them change.

Those present at Singapore were: Ministers from Singapore, Australia, Canada, Colombia, the EC, Gabon, Hong Kong China, India, Indonesia, Jamaica, Japan, Korea, Mexico, Qatar, South Africa, Switzerland, Tanzania, a vice-minister from Brazil, and a trade diplomat from Egypt (who was allowed to be present at observe). Malaysia, invited from the region, and whose minister was in Singapore and spoke on the previous day, did not attend and the Minister, Mme Rafidah Aziz had publicly announced she saw no purpose. It is not very clear whether it meant a hardened stand as now on some issues, or something else at the end.

A full picture of what exactly happened or did not would become known in Geneva only over the next couple of days, when ambassadors and officials from the 21 countries who were at Singapore return and brief their own colleagues (and their regional groupings and friends), and reflect it at the General Council consultations.

Though it had been obvious to almost everyone from 12 September, and certainly from the time the US started bombing Afghanistan, that European and American governments would find ‘security’ problems in meeting in Doha, both USTR Zoellick and EC Commission Pascal Lamy had jumped on the ‘war on terrorism’ campaign, and tried to push a new trade round - ‘hitch-hiking’ as New York Times Columnist Paul Krugman called it, or ‘opportunistic’ as the Hindu’s Deputy Editor, Rammanohar Reddy described it in his opinion column.

With developing countries, particularly those from Asia and Africa (who as individuals on the street would not be mistaken by street protestors or any snipers as Americans or British, even when sensitive to security concerns of others), not feeling (or prepared to say in public) so insecure themselves to meet at Doha, the two majors and others were forced to bring this up themselves at Singapore over a dinner meeting with ministers, and suggesting a shift in venue, but meeting on same dates in November as originally set (the EC’s view).

According to reports received here, the Qatar minister promptly objected, and the Indian and Pakistan ministers formally saying they themselves would have no problems going to Doha.

In any event this is an issue that could only be decided at the General Council - and the WTO head and the General Council chair (Hong Kong China) would have to broach it, and try to cloak it around others as a consensus view.

Qatar is expected to come back to the WTO on Wednesday and give its response.

Singapore has offered to organise and host a ‘much scaled down’ version of a ministerial conference, though it is not very clear what this ‘much scaled down’ means - ensuring non-presence or very restricted presence of NGOs (as hoped by the WTO head a t Doha)? Or not having a 4-5 day meeting with all the paraphernalia? Or agreeing to everything in advance, and just gavelling a meeting to order, adopt the declaration and end it!

However, the stand that some other developing countries would take to a Singapore venue is clouded - more so when the Singapore small conclave last weekend could have left little doubt that the Singapore government and minister would use the chairmanship and clever ability to manouevre and manipulate, as in 1996, to reach pre-cooked decisions.

Politically, given the sensitivities among the neighbouring countries to the Afghanistan bombing now, and given Singapore’s own past identification with the US and Israel, it remains to be seen how the Arabs and Muslim countries would react at the WTO, if Qatar takes a difficult stance, and does not voluntarily come forward to give up its attempt to host the meeting - on which it has invested time and money to show it is different from the normal identification of Qatar with the neighbouring Gulf states. Other developing countries of Asia are sensitive to this and have assured Qatar that they would not oppose a meeting at Qatar.

With its per capita incomes only behind those of the US, Switzerland, Norway, Denmark and Japan, and in purchasing power parity PPP terms only behind the United States, Japan and Switzerland, Singapore hardly qualifies as a developing country. The trade and economic policies it advocates at the WTO are no different from those of the US or EU, and evident at the Singapore meeting too.

Even in an innocuous area, and for a country that has one of the cleanest records on corruption, Singapore as a transnational corporate centre, has strenuously opposed any mandate language (in the implementation decisions) that would force it to provide to an importing country, the export value of a good as declared to Singapore customs. The ‘compromise’, and that too in Annex 2 of the implementation decision is couched in best endeavour ‘should’ language.

Singapore is classed as a developing country under the self-elective basis, and the unwillingness of others to raise the issue. And so is Hong Kong China with its per capita of $23520 (world bank data) and PPP of $20,939 (US 30,600), though at the Singapore meeting itself Hong Kong China suddenly appears to have erupted out and vehemently asserted its status as a ‘developing country’ in response to the US view that it could not accept S&D treatment for all developing countries uncritically.

And the stands that Singapore, Hong Kong China and Korea take would be closely watched by the other countries in the WTO and at other fora.

The current situation is a highly volatile and explosive mix, and trade diplomats have been anxious to avoid tangling with it. Several of them in the past weeks, after 11 September, have been privately suggesting that if the EU and US ministers and officials and business feel they can’t risk going to Doha, a scaled down meeting should be held at Geneva, transact important business (like admitting China, and a few others) and schedule the next 5th Ministerial two years hence.

However, the issue has come into the open, and Singapore has publicly announced it is willing to host a scaled down meeting, it may become another hot potato for neighbours.

The General Council Chair, Mr. Stuart Harbinson of Hong Kong China, likely to put forward a new draft (after consultations) more or less on lines of ‘compromises’ floated by the majors and the WTO head at Singapore.

Though the media reports have given varying views about what happened or did not at Singapore, many of the stands expressed by ministers at Singapore on the subjects apparently discussed at the meeting - implementation, agriculture, environment, investment and competition - were not very different from those expressed by their trade negotiators here at Geneva, or earlier at Mexico.

Perhaps the nuances, judging from the media reports and press briefings to their national media of those at Singapore, lay in the EU floating openly at Singapore the idea of negotiations on investment and competition, with an opt-out for those not willing to join at the end or two tier system of obligations, theoretically ala the Services agreement. And the Americans, for their part, who have not been very enthusiastic about both the subjects, but were willing to go along at this stage to help the EC sell the agriculture agenda to its constituencies, let it be known that they don’t believe that an investment agreement can separate FDI from portfolio investment (as the EC has been talking).

Any expert with some knowledge of financial markets and derivatives know the Americans are right and the EC is merely fooling opponents.

The clear emerging picture is one of the US again persisting in the Punta del Este approach, of merely stating the subjects, allowing a two-year initial period when proposals would be made and subjects identified, and by a mid-term review process (of the 5th ministerial) modifying the agendas and mandates as it suited them - and always to the disadvantage of the developing world.

However in the current overall environment, with opponents in many countries not quite happy with their governments stands in closely identifying themselves with the US-EU positions on the ‘war on terrorism’, they could easily coalesce around an opposition to the new round or once launched make the entire process lack legitimacy.

At Singapore itself, when Tanzania on behalf of the least developed countries appears to have forcefully presented the LDC views against the four Singapore subjects and non-agricultural market access, and suggested that if there should be a round it should have a development agenda, the Singapore Minister tried to turn it around and suggested that the next meeting should launch a round, without so calling it given the negative views the word, and instead call it a ‘development compact’.

However, with none of the actual negotiating issues and agendas to be changed, India and some others warned against this - since none of the items discussed were ‘development issues’ and could actually work against development.

The compromises reportedly floated on agriculture (the Harbinson revised text has already been virtually cleared or accepted by the Cairns group and others here at Geneva, though each has expressed publicly reservations), on investment and competition - have all been tried out and the positions taken by the few who were at Singapore were not very different from that in Geneva.

Those invited to Singapore were hand-picked by Moore, in an effort to isolate the few opponents, and some Ministers who did not speak out there, clearly have left the room open for their diplomats in Geneva to take their positions, without the Singapore ministerial statements being thrown at them.

All in all it seems to be a confusing situation, though some who have been stoutly resisting like India might find it more easy to find some compromise language to be able to sell the outcome back home. But judged by the statements of the Minister at Singapore, and back in New Delhi, it would be difficult to conclude the exact position that would be taken at the Ministerial meeting.

The Indian government has to weigh the already tense situation it faces over its support to the US on the actions against the Taliban and the US-led ‘war on terrorism’ (India has, next to Indonesia, the second largest Muslim population in the world, higher than Pakistan’s), and the considerable opposition from civil society and domestic entrepreneurial sectors - though former trade officials, neo-liberal think-tanks and some sections of the media give a contrary view.

So is the actual situation on the ground, particularly in countries with some relative freedoms, for many other developing countries of Africa and Asia, and some of the Caribbean.

The situation of Latin American countries appear to be different - given the very difficult economic crisis they are already facing.

However the idea projected by the Singapore minister and the WTO that a new round will pull the world out of the current crisis is so far out of reality that it may create its own backlash.

According to an IPS report from Singapore, the Singaporean Trade and Industry Minister George Yeo, who chaired the two-day meeting, said in a press conference Sunday that calling a new round of global trade talks as ‘New Development Agenda’ was proposed by Tanzania and unanimously agreed to by the participants.

The recommendation will be relayed to the Doha meeting that is scheduled to take place on 9-13 November. But since the talks held here were informal and involved only some WTO member countries, nothing discussed here will be binding on the Doha conference.

The WTO has 145 member nations in all, and those represented at the meeting here made up less than 20% of the organisation’s total membership. Still, Yeo said, “We had a good meeting and the ministers were concerned of developing country issues ... there’s consensus feeling we should do more for them. It’s important rules and facilities are there to let them benefit.”

This was why, he said, they agreed to use the term ‘New Development Agenda’ instead of a ‘New Trade Round’. But he warned that if it were merely a change in the wrapping, it would end up being a joke. Said Yeo: “There has to be a change in substance.”

On Saturday, Singaporean Premier Goh Chock Tong had noted that the term ‘New Round’ has acquired a negative connotation. He then suggested that the trade ministers should consider a term like “compact” to describe agreements between developed and developing nations.

More than anything else, the meeting here seemed to be a show of optimism for world trade for many of the participants, most of whom said that it is essential to launch a new round of trade talks to get economies around the globe out of the doldrums.

“The economic situation worldwide gives peer pressure to move on with the talks,” said European Union Trade Commissioner Pascal Lamy. “We need a collective reaction.”

US Trade Representative Robert Zoellick also said that his country believes “ new trade talks will help us to come out of the global recession”. Host Singapore also happens to be one of the strongest voices for launching a new trade round.

Warned Goh in his speech Saturday: “A postponement of the (Doha) conference will show weakness and doubt on the benefits of globalization and free trade. A postponement of the conference will merely embolden the anti-globalists and protectionists.”

Many delegation heads here indicated the WTO is committed to pushing through with the Doha meeting, although a few did not discount the possibility that it could be moved to another location because of security concerns. Yeo even admitted that Singapore has been sounded out as a possible alternative venue.  “We have done some preliminary checks,” he said. “We could probably do something on a much scaled down basis.”

Meanwhile, Yeo reported that the trade ministers who met here had substantive discussions despite the informal nature of the talks.

The basis of the discussions here was the draft text prepared for the Doha meeting by WTO General Council chair Stuart Harbinson. Yeo said the ministers had comprehensive talks on five key issues in the Doha draft, and had agreed that agriculture should be the centerpiece of the new development agenda.

Yeo pointed out that farm subsidies given by developed countries were bigger than the combined GDPs of sub-Saharan African countries, and also these subsidies are depriving developing countries of exporting their farm produce to the developed countries.

The other key issues discussed here were the environmental aspects of trade, implementation issues and the two so-called “Singapore issues” - competition and environment.

Zoellick said that the US would like farm subsidies to be eliminated. But he added that WTO rules do allow farm subsidies as long as it is not trade distorting.

He said the US would be working with the European Union to address their concerns about environmental issues and agriculture trade.

Lamy, for his part, said that environmental issues are very important for the Europeans and they have been pushing this at the WTO from the beginning. “WTO has to be responsive to environmental concerns” he said, adding, “we have given an undertaking that we will not be pushing this towards some sort of trade protection”.

When questioned about any talks on the Trade-Related Aspects of Intellectual Property Rights (TRIPS), Yeo, Zoellick and Lamy all said the Singapore meeting has agreed not to question the intellectual property rights regime.

They said, however, that there was also an agreement to be flexible in the application of it to health issues, particularly when essential drugs are needed at an affordable price to address a public health emergency in developing countries.

Not all participants in the talks came away pleased. Indian Trade Minister Murasoli Maran, for instance, said that he was not fully satisfied with the outcome of the Singapore meeting.

‘Substantial improvements needs to be made to the draft text. Mere beautiful words will not suffice,” he said at a post-conference press briefing.

Maran also said that India has strong reservations on the ‘Singapore issues’.

He argued that if a new round of WTO trade talks are going to be on development, then questions of implementing earlier undertakings given by developed countries and eradicating poverty in developing countries must take top billing.

“If we want to call it a development agenda, then let’s take all development issues into consideration,” said Maran. “Investments and competition policy are not development issues.”

India in fact attended the meeting to express its opposition to starting a new round without first addressing the pressing needs of the developing countries.  But another strong WTO critic, Malaysia, pointedly snubbed the Singapore gathering.

Malaysian International Trade and Industry Minister Rafidah Aziz was even here Friday, but left the same day after delivering a lecture to the Singapore Chamber of Commerce.

But before leaving for Kuala Lumpur, she told the media here that the EU and Japan’s insistence on including “contentious issues” such as competition policy, investment rules, government procurement and environment, does not augur well for a “meeting of minds” in Doha.

“Times are so bad, industries are shaky,” said Aziz. “No one wants to talk about market opening at this time. People are more worried about extra protectionism.”  - SUNS4988

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

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