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Will Doha preparations repeat pre-Punta del Este?

by Chakravarthi Raghavan

Geneva, 8 Mar 2001 -- The General Council of the World Trade Organization, which is chaired by Mr. Stuart Harbinson of Hong Kong China, was due to start Thursday, at an informal session, discussions on a Preparatory Process for the 4th Ministerial meeting at Doha.

With WTO Director-General Mike Moore having already started some kind of a consultative process with groups of countries and delegations on various issues and items sought to be put on the agenda of a new round, the process now being sought to be taken in hand by Harbinson has some very tricky issues to face.

Immediately after the World Economic Forum meetings in Davos in January, and after the meetings there of trade ministers of some leading countries (the US was absent, as were trade ministers of some key countries like India and Malaysia), Moore had reportedly told a group of WTO-friendly journalists that he had now received a mandate to move ahead, and he hoped to get a draft declaration for Doha ready by July.

There is of course an inbuilt tension in the trade organization - between the leadership of the legislative organ; in this case, it is the Chairman of the General Council (which has the responsibility of settling the agenda and making preparations) and the Director-General.

It is likely to be more so with Harbinson as General Council chair.

Moore who has been travelling North and South, East and West, to promote a new round and launch it at Doha, has held several consultations, including one before he left for Washington to canvass the US.

The US and the George W. Bush administration are trying to forge ahead with the Free Trade Area for the Americas (FTAA) initiative (launched by Bush Sr), and on which a meeting of heads of the Americas is scheduled for April.

Though public statements by the USTR Zoellick suggest that he wants the US to take on the leadership role for the WTO (snatching it from the EC), US position and priorities as between the FTAA and the WTO are not clear. If the past be a guide to the future (and in the trade front, there is every reason for negotiators to look at the past), the US may try to do both, playing one against the other, to get maximum for itself.

While it has been keeping its proposals for the FTAA a very closely guarded secret, sharing it only with major corporate interests (and astonishingly, the other trading partners on whom the US demands are being made for the FTAA are keeping quiet about it), it is known, for example, that the US wants to use the FTAA to tighten up the IPR regime—doing away with compulsory licensing or forcing compensation as if it is a case of nationalization, preventing parallel imports (the WTO TRIPS has no provisions on it, leaving it to countries to decide their policies), and tightening other provisions of TRIPS, including on Art. 27.3

The Bush administration is aware that it cannot hope to move ahead on the FTAA without getting fast-track negotiating authority from Congress, and that this is going to be tricky.

It has therefore been putting pressure on Moore not to rock the boat with his speeches and newspaper interviews. In fact, it is known among WTO trade diplomats that several other delegations too have cautioned Moore, arguing that he was only helping to mobilise opposition in their countries.

Moore has also been holding informal consultations with some smaller and variegated groups of  delegations, and has been explaining to others that he has been trying to ascertain the views of the ‘demandeurs’ on various issues, though in each he has been pushing the idea of a new round and the need for it.

Apart from Moore’s consultations in the WTO, the EU, Japan and a few others - promoting investment, competition, government procurement, trade facilitation and other new issues - have also been having meetings outside the WTO. While participants are mostly or overwhelmingly those who the EU and Japan feel will support them on the drive for a new round with new issues, a few of the key players who are opposed and might even block some of the new issues, are being sought to be ‘pulled in’ by asking them to be ‘observers’ without any commitments.

The EU initiative is in a sense similar to what the US and then GATT director-general did in 1985 and early 1986, in setting up a process outside, splitting the developing countries (starting with ASEAN), and which ended up, on the eve of the Punta del Este meeting, with the Colombian-Swiss paper, known among trade diplomats then as the 'cafe au lait' (Colombian black coffee and Swiss milk) paper.

At that time, the EU played a different role, formed a front of sorts with India and Brazil, leading to a compromise at Punta del Este (which was however eroded by those who forged it forgetting subsequently the actual deal) and allowing the extension of the ‘single undertaking’ for goods negotiations, to make goods, services and TRIPS into a single undertaking at the conclusion.

The EU has been promoting the idea of negotiations on investment, with the possibility of a plurilateral accord at the end—and suggesting to countries that they could object, if at all, only at the end, when the issue of incorporation of a plurilateral agreement into the WTO comes up in terms of Art. X:9.

However, it is also clear that ‘investment’, and negotiating ‘investment rules’ as such, is an issue going beyond  the rules for trade relations among members.

As such, in terms of Art.III of the Marrakesh Agreement for the WTO (which defines the functions of the WTO), the WTO is mandated as the forum for negotiations among members on multilateral trade relations dealt with under the agreements annexed to it.

That Article also enables the WTO to provide a forum (“may provide a forum...”) for further negotiations among members concerning their multilateral trade relations.

It is thus clear that from a strictly legal view - and the WTO is an international treaty, and not a provisional arrangement as the old GATT was - before investment negotiations can be taken up at the WTO, Article III would need to be changed.

It was possible to argue under the old GATT, as the EC’s top negotiator for TRIPS told a news conference during the Uruguay Round, that “anything is possible among consenting adults at the GATT”.

But the WTO is a different animal, an international treaty, and it would not be too difficult to take the issue (even before its launch) to courts in countries with a Rule of Law to restrain the government from agreeing to such ‘free-wheeling’ ways.

It is against this background that the Doha preparatory processes are getting under way.

Qatar, as the host, has an interest in making it a success, and there have been feelers from it to some of the Arab and Islamic countries (though one of the avowed reasons for Qatar’s offering to host is to break out of that mould in the region).

But for the Qatar meeting to be a success, and to avoid a repetition of Seattle, those planning it need to avoid taking up contentious issues and trying to force it through.

Contrary to popular mythology, spread by the WTO officials themselves after Seattle, that meeting collapsed not because of street demonstrations or NGO protests (which could be difficult at Doha), but because of serious differences among the majors, and the majors and some key countries, on the new issues, and differences over the process and the feeling of exclusion from decision-making from a large number of developing countries.

The Moore process so far, and the outside processes orchestrated by Japan and the EC, are leading to the same non-transparency and attempt at steam-rollering that backfired at Seattle.

For the Thursday meeting, Chairman Harbinson has posed six questions and has sought the views of delegations. The questions posed by him are :

·        What is the most effective way to organize the preparatory work for the Doha meeting and how the General Council is to exercise its oversight of the process, and when the process should start?

·        How should the work through the General Council Special Sessions on Implementation, and the work of Special Sessions of the WTO bodies on mandated negotiations relate to the preparatory process?

·        Should the discussions on some other possible elements of the WTO’s future work programme, currently being carried out through the informal gatherings organised by some delegations, be brought under the preparatory process, and if so when?

·        Do we agree that the ‘output’ of the Doha Ministerial be in the form of a Ministerial Declaration(s)/Decisions?

·        If so, when should the General Council start discussions on the Declaration(s) and when and how should the actual drafting process begin?

·        Are there any thoughts on what should be the initial outline of the Declaration(s)? Could an outline precede the drafting process?

Each of these questions in bullets are quite tricky, in an organization and culture full of quicksand.

But the third bullet is perhaps the most tricky.

It is tricky for those wanting to get the issues in by a repetition of the 'cafe au lait' process before Punta del Este. For, it could end up by making Doha a repetition of Seattle, and unleashing vast domestic lobbies against the new issues, and enabling them to join forces with those opposing the extensions of the scope of GATS and of TRIPS, but rather seeking a ‘shrinking’ of the WTO remit on this.

It is even more tricky for those who are opposed to the issues like investment. If they do not allow these discussions or the subjects figuring in the preparatory process, it would still be carried on outside, and they could be faced with a situation of a proposal from a large number of delegations, but in whose shaping they have had no hand. But if they agree to the discussions of these items in the preparatory process, would they not have already yielded ground?

If there was a sizeable group opposed, they could stand their ground. But they should not be ‘adventurist’ in making loud statements now, and then retreating or reaching private deals as at earlier meetings - in Singapore or Geneva.

But would there be such a group? There is no need for an overwhelming number, in fact, no more than six or seven active participants in the WTO are enough.

Or would others opposed - adopt the trade organization’s culture and wait for their own battles to be fought by others; and acquiesce for small side benefits, in the hope that countries opposed will stand up and they will benefit?

As in the area of security, in the area of trade too, in an organization functioning and furthering neo-mercantilism under the guise of ‘free trade’, there is no alternative for countries to stand up, alone if need be, for their interests.

In international negotiations, as UNCTAD Secretary-General Rubens Ricupero has often been saying, one has to be aware of the power relations. The market power is insidious; it can more easily mobilise  elites of the opposing country to function as a fifth column - expounding ‘free trade’.

But history, remote and recent, shows that exercise of power has its own limitations; what seems achievable by threat of use of power, fails when exercised and meets with resistance.-SUNS4851

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

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