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LDCs Reject New Round for Doha

by Yash Tandon

Zanzibar, 24 July 2001 - In a remarkable show of unity, the Least Developed Countries (LDCs) declared in a decisive manner that they were not ready to get into a new round of trade negotiations at the 4th Ministerial Conference of the WTO at Doha. The LDC declaration came at a Ministerial meeting here of the Least Developed Countries (22-24 July 2001), convened and hosted by the Government of Tanzania (the country that is currently the LDC coordinator at the WTO).

Ever since the collapse of the Seattle meeting of the WTO, the developed countries, especially the European Union, have been trying to persuade the LDCs that their interests were best served by agreeing to a new round.

At Zanzibar, the LDCs were unanimous in declaring “... the scope of future multilateral trade negotiations will have to take into account the inability of LDCs to participate effectively in negotiations on a broad agenda and implement new obligations due to the well-known limited capacity of the LDCs.” (LDCs’ Development Agenda at the Fourth WTO Ministerial Conference, Negotiating Objectives and Proposals - LDC/MM/ZNZ/3, 24 July 2001).

Explaining this further in his closing address, the Minister for Industry and Trade of Tanzania, Mr. Iddi Simba, in his capacity as Chairman of the meeting, said: “From the perspective of the Developed Countries, as we have understood them, the professed goal is to launch a new round of multilateral trade negotiations in Doha. From the perspective of the developing countries, there are many who would prefer to ensure the enhanced implementation of the Uruguay Round Agreements and the advancement of negotiations focussing on the review issues and the in-built agenda, through the mechanism of the WTO structures.  Most of us are not ready for a New Round. There are strong reasons for our apprehension about a New Round as we understand it.”

Among these reasons, Minister Simba explained, was the fear that once they get into binding commitments, the LDCs might find themselves at the sanctions end of the process.

“The WTO is a trade negotiating body which, in the end, creates binding obligations and a mechanism for sanctions in case of violations. We obviously need to be very careful about getting into new obligations; and certainly, we must not succumb to the pressure for rushing into a new round which most of us cannot even define. The magnitude of responsibilities emanating from the Multilateral Trading System (MTS) is immense.”

In the final text containing “Negotiating Objectives and Proposals,” the LDC delegates focussed their agenda primarily on three issues: market access, implementation, and the “built-in agenda”.

The one issue on market access that engaged the delegates was the issue of Rules of Origin. Bangladesh, supported by Nepal and Bhutan, argued that these should be “liberalized” so as to ensure a full and effective utilization of preferences. Stringent regulations on Rules of Origin, they argued, made it impossible for LDCs to take advantage of the preferences.

Many delegates, however, were opposed to the use of the word “liberalized”.  After lengthy discussion, it was agreed to substitute the word “realistic and flexible” for the word “liberalize”, thus ensuring consensus on the one issue that looked like breaking the unity of the LDC group.

It was also agreed that wherever the word “liberalized” occurred in the text, it should be substituted by a more appropriate terminology.

The chairman explained that liberalization, in the case of many LDCs, has led to deindustrialisation and increasing poverty and unemployment.

Liberalisation, it appears, has become another dirty word in the vocabulary of the LDCs, and the developing countries generally. On implementation, the delegates identified a number of issues where they hoped “significant movement” would be made “before, during and after the Doha Conference”.

These issues included outstanding commitments made by the developed countries in relation to Agriculture, Services, subsidies, SPS and TBT, Textiles, TRIMS, TRIPS, Customs Valuation, Anti-dumping and countervailing actions, and Safeguards.

On the last issue, the delegates proposed: “LDCs should be exempted from all safeguard actions. LDCs that are implementing safeguard actions should be exempted from undertaking compensatory measures.”

On the Built-in Agenda, which is part of the mandated agenda for Doha, the LDCs defined their negotiating positions in respect of Agriculture, Trade in Services and TRIPS. Some of the provisions of the Agreement on TRIPS (Trade-Related Aspects of Intellectual Property Rights), are coming for review at Doha.

The LDCs took the position that in relation to Article 27.3 (b) of TRIPS, the review process should clarify that patents must not be granted on plants, animals and parts of plants and animals, including gene sequences and biological processes for the production of plants, animals and their parts. This is a clear and decisive demand for the unpatentability of living organisms. The delegates also declared: “Essential drugs included in the WHO list should be excluded from patentability.”

The assembled delegates in Zanzibar included many LDC countries that are not yet members of the WTO. Many are at various stages of application or negotiations for accession, but ever since 1997, few LDCs have secured membership on account of cumbersome, onerous and stringent rules of entry.

At Zanzibar, the LDCs proposed, inter alia: “In view of LDCs’ special economic situation and their development, financial and trade needs, WTO members should exercise restraint in seeking concessions in the bilateral accession negotiations on market access for goods and services in keeping with the letter and spirit of the provisions of the Ministerial Decision on Measures in Favour of the Least Developed Countries.” In all these proposals coming up for negotiations in Doha, the LDCs insisted on two cross-cutting issues. One is in respect of “Special and differential treatment”. This, the delegates insisted, needs to be part and parcel of the negotiations on matters of concern to the LDCs. And the second relates to the provision of technical assistance to enable the LDCs to obtain the necessary capacity both to negotiate in the process in a meaningful manner, and to benefit from their integration into the multilateral trade regime.

Ironically, the one set of issues on which the LDC countries meeting in Zanzibar spent least time on was the set that falls under the category called “New Issues.”

This is ironical because it is this set of issues on which the developed countries have spent the most time and energy in trying to get them on board at Doha. These include the Singapore issues (Trade and Investment, Competition Policy, Transparency in Government Procurement, and Trade Facilitation), the Geneva issue (e-commerce), and other issues such as labour standards, environment and industrial tariffs.

The LDCs noted that they were not demanders on these issues. And, furthermore, they argued that they were in no position, “materially, technically or psychologically” (as the Chairman put it) to negotiate on these issues.

In relation to Investment, Competition Policy and Transparency in Government Procurement, the LDCs took the position that all these issues were under study by the WTO in the various working groups, and that these studies have not been completed, and therefore there was no substantive basis for entering into negotiations on these issues.

On Trade and Environment, the LDCs took the position that they attached importance to the “on-going negotiations in the Committee on Trade and Environment”, and that these negotiations must continue, but emphasized that “under no circumstances should environmental considerations be used for protectionist purposes against LDCs’ products.”

It is an oft-proclaimed and declared objective of trade that it is not an end in itself but a means to the upliftment of the poor and the marginalised sections of the global community out of their poverty and marginalization. This is what the developed countries also say.

The only country on the African continent described (some say, falsely) as a “developed” country is South Africa. On the eve of the Zanzibar meeting, South Africa called members of the Southern African Development Community (SADC) to a meeting in Johannesburg to persuade them to agree to a New Round at Doha, which South Africa, like all developed countries, argues would be of benefit to the developing countries. In Zanzibar, however, at least the LDC members of the SADC region (that includes, among others, Tanzania, Uganda, Zambia and Lesotho) took the unanimous view that a New Round would not be welcome at Doha.

The richer members of the international community have often expressed their commitment to improve the lives and living conditions of the poorest of the global community. Zanzibar was the voice of the latter. The assembled delegates hailed the Zanzibar meeting of the LDCs as a major landmark in demonstrating the unity of the poorest 49 members of the international community on what they expected out of Doha. The question is whether at Doha the rich members will have

the ears to hear the voices of the poor. [*Mr. Yash Tandon, the Director, Southern and Eastern African Trade Information and Negotiations Initiative (Seatini), and who was at Zanzibar for the LDCs meeting, sent this contribution to the SUNS] – SUNS4944

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