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THIRD WORLD ECONOMICS

Doha SU diminished, not dead, and retrievable

To some commentators, the 10th Ministerial Conference of the WTO in Nairobi had dealt a death blow to the Doha Round trade negotiations. But, contends Chakravarthi Raghavan, developing countries can still salvage the Round and its status as a “single undertaking”.

GENEVA: When the WTO’s 10th Ministerial Conference (MC10) ended in Nairobi on 19 December, WTO Director-General Roberto Azevedo and the Kenyan Cabinet Secretary for Foreign Affairs were beaming that they had pulled off a coup of sorts in a successful conference with a declaration and decisions (with the US and the EU acclaiming both of them).

The Financial Times carried a report by its World Trade Editor headlined “Trade talks lead to ‘death of Doha and birth of new WTO’”, while another piece had the title “The Doha round finally dies a merciful death”. And even some columnists in Indian media have dutifully taken this as gospel and echoed it (column by Vivek Dehejia in Mint, 21 December).

“The report of my death was an exaggeration,” Mark Twain famously said in a cable from Europe to the Associated Press (published in the New York Journal of 2 June 1897).

The FT, which once promoted the Doha Work Programme (as the WTO’s Doha Ministerial Conference of November 2001 characterized the programme of multilateral trade negotiations it launched, deciding it would be a “single undertaking”), has for some time now declared it to be dead and advocated its formal closure – since it no longer suited the US, the EU and US-British financial interests behind the FT (and more recently, Japan’s, after ownership of the newspaper passed from the Pearson publishing company to the Japanese Nikkei group).

Challenging the FT view in a letter to the paper published on 22 December, Timothy Wise of the Global Development and Environment Institute at Tufts University in the US has said: “In fact, Kenyan chair [of the Nairobi conference] Ms. Amina Mohamed, in her post-closure press conference, went out of her way to say quite the opposite. She was asked if this meant that the Doha round is over and new issues can be brought on to the agenda. She stated quite clearly that the language of the declaration specifically prioritized ‘outstanding Doha issues’ and that no new issues, such as investment and public procurement, could be taken up unless all WTO members agree. She presented that language as a firewall intended to keep new issues from supplanting the many outstanding Doha issues – domestic support, manufacturing and so on.”

The Indian Commerce Minister Nirmala Sitharaman, on her return from Nairobi, has sought to reassure her domestic constituencies, including the more nationalistic party faithful, via social media by posting therein the letter from the Indian Permanent Representative to the WTO Anjali Prasad to the Director-General on India’s disagreement with parts of the Nairobi Ministerial Declaration (NMD). Some of her own party supporters in Twitter comments appeared to question its utility and asked whether it was before or after the declaration had been declared adopted.

However, newspaper headlines and social media posts aside, former trade negotiators and long-time trade observers, in comments to this writer, suggest that when the trade delegations and ambassadors return to the WTO in Geneva and begin to consider the NMD with a view to reaching consensus, they can still retrieve ground.

Behind all the hype (of the US and the EU) and the doom and gloom elsewhere, a careful reading of paragraphs 30, 31 and 34 of the NMD (see below) as published on the WTO website seems to bear out these views.

The three paragraphs suggest that neither side has walked away from Nairobi with success, but that they have merely acknowledged the stalemate and reflected the reality of their deep divides; and both sides return to Geneva to continue their fight – whether on the single undertaking’s negotiating agenda of the Doha Work Programme (DWP) or the “new issues”. Nor can any conditional (non-MFN) plurilateral deals (as envisaged by the US and the EU) be incorporated into the WTO treaty framework, except when there is a consensus on it at a Ministerial Conference.

True, key developing countries, particularly the major ones of Asia and Africa, have returned from Nairobi empty-handed, insofar as their efforts at rectifying the inequities of the Marrakesh accords, in particular on agriculture, through decisions at Nairobi have not borne fruit.

While WTO Director-General Azevedo and, to some extent, Kenyan Foreign Affairs Cabinet Secretary and MC10 Chair Amina Mohamed have flaunted the various “decisions” out of Nairobi on the so-called “deliverables”, these are not enforceable at the WTO unless and until a protocol is adopted incorporating all the results into the WTO framework and accepted by all member states.

And Brazil, which joined hands with or was a silent supporter of the US and the EU in the final days of the Nairobi negotiations, against its own G-20 group, will soon realize the wisdom of Raul Prebisch. In 1963 and 1964, around the time of the first session of the UN Conference on Trade and Development (UNCTAD I), Prebisch repeatedly advised Brazil and other Latin American countries not to view themselves as stronger or superior compared to the African and Asian countries, saying that they needed the support of the Afro-Asian groups and not the other way round, since politically Africa and Asia collectively had more clout.

It was this wisdom of Prebisch that Brazil (under President Lula and Foreign Minister Celso Amorim) remembered and understood in 2003, on the eve of the WTO’s Cancun Ministerial Conference. At that time, the US and the EU had joined hands to ditch the entire WTO agriculture reform agenda (a treaty commitment), accommodate each other’s farm subsidy programmes and prevent future competition from developing countries’ agriculture sector. Lula, Amorim and Brazil’s then Ambassador to the WTO Luiz Felipe de Seixas Correa fell back on the Prebisch advice and approached China, India and South Africa to form the G-20 alliance with some other developing countries, which tabled alternative proposals.

Recognition of the need to maintain this alliance prevailed in Brasilia and Itamarty (the Brazilian foreign office) during the tenure of Amorim and his successor Antonio Patriota. However, on the eve of Nairobi, Brazil unilaterally abandoned the G-20 alliance to join the US and the EU, in trying to act against China and India. In time it will find this “a costly error.”

Upholding the single undertaking

Shorn of verbiage and self-praise of the WTO’s achievements in its 20 years of existence (virtually minuscule if not nil, vis-a-vis the developing nations and the billions of their poor and hungry), the core of the Nairobi Ministerial Declaration is in paragraphs 30, 31 and 34. And the three paragraphs merely reflect the existing deep divisions within the membership, including on the DWP and its single undertaking, where negotiations are at an impasse. There is no roadmap or agreed way forward out of Nairobi on the impasse.

The status of the DWP (the formal name of the agenda of the Doha Ministerial Declaration and the agenda of the multilateral trade negotiations launched in Doha, though since then it has acquired other names such as the Doha Development Agenda or the Doha Development Round) remains the same. However, its status as a single undertaking (legal concept) has been considerably diminished, though not altogether buried for good. There is still some scope to retrieve ground lost and uphold the single-undertaking character. The text in paragraph 31 of the NMD, notwithstanding the disagreement on that score in the text of paragraph 30, gives scope to breathe some life into the single undertaking.

Undoubtedly, there is a bit of a contradiction between paragraphs 30 and 31.

However, for the fight to uphold the single undertaking of the DWP, it is not material that paragraph 31 mentions “Doha issues” rather than “Doha Development Agenda” or “Doha Round issues”.

The real problem for developing countries is that they gave up the single most effective leverage they had in the negotiations by conceding, at the 2013 Bali Ministerial Conference, the Trade Facilitation Agreement (TFA) as a separate accord, and agreed at Geneva in 2014 to a protocol for its incorporation into the family of WTO agreements without resolving other issues of concern to them or tying it into the single undertaking.

If developing countries don’t band together now to enforce the single-undertaking nature of the mandate of the Doha Declaration, the developed countries will have managed to change the basic character of the multilateral trading system as it has been known since 1948 [when the General Agreement on Tariffs and Trade (GATT) 1947 came into being as a provisional agreement arising out of the Havana Charter].

It was rather strange and difficult to explain why, in the five-nation “green room” discussions at Nairobi on 18-19 December, India and China seemed unable to say “no” and to refuse to make any concessions to the US-EU, aided by Brazil, the Kenyan chair and the WTO Director-General. If China, India and South Africa at least now do not stand together and mobilize other developing countries, particularly in Asia and Africa, against the neo-mercantilist onslaughts of the US and the EU, they will have betrayed their people.

If the WTO and the multilateral trading system are allowed to take on the new “shape” that the US, the EU and their media shills are now pushing, the major players will only pick up issues of interest to them one by one from now onwards.

If and when that happens, the legitimacy of the WTO, which it sought to establish at its 2nd Ministerial Conference in Geneva in 1998 by claiming lineage from Havana, will also be at an end (“Birthday party that hosts didn’t plan”, in Chakravarthi Raghavan, 2014, The Third World in the Third Millennium CE, Vol. 2, pp. 183-187). And one more nail will have been hammered into the coffin of the postwar order, an order whose principal pillars in the UN Charter the US and the EU have been so busy dismantling (in their regime change interventions around the world).

A collapse of the multilateral trading system would hit the US and the EU too. For, in this 21st century, no trade and investment rights can be enforced anywhere through exercise of military power or gunboat diplomacy, unlike in the 18th and 19th centuries, but only through international accords – negotiated, concluded and implemented in good faith. At the WTO, this last has been lacking on the part of the US, the EU and the WTO secretariat acting to promote their interests rather than the interests of the membership as a whole.

Developing countries thus have to ensure that no consensus gets developed at the WTO on new issues – through taking up such issues for study or on the agenda of the WTO General Council, or through negotiations being allowed to begin at the WTO – until the successful conclusion of the DWP agenda. They also have to resist the temptation to get their issues addressed by paying a further price for them through new issues. Developing nations have since Marrakesh paid enough to the US, the EU and their coattail allies, whether in developed or developing nations.

They have to use their leverage in the various processes at the WTO in Geneva, including budget processes, to call the secretariat to order and ensure it does not continue with its partiality and advocacy role on behalf of the US.

As stated earlier, the only conclusion from paragraphs 30, 31 and 34 of the NMD is that the single undertaking is diminished, but not dead, though China, India and others have a strong fight on their hands in Geneva.

At Nairobi, Kenya’s Foreign Affairs Cabinet Secretary Mohamed hyped up the benefits of the TFA and more trade, and repeatedly appealed to all those nations which have not yet done so, to ratify the TFA protocol. However, Kenya’s leading newspaper, The Daily Nation, in an article on the Nairobi outcome, said the TFA “would allow Africa and other developing nations to access markets in Europe and the United States. On paper, this would be a boost to the developing world, but, in reality, it is not. Most exports from Africa are largely agricultural and raw. They hardly fetch good prices on the international market. At any rate, agricultural subsidies in the West mean products from Africa have little chance to compete in those markets. Not surprisingly, the West has resisted attempts to eliminate subsidies because they give their farmers a competitive advantage.”

As  noted  earlier, the  developing nations have given away the leverage they had on the TFA and, as China said before Nairobi at  Geneva, enabled the US and the EU “to pocket the TFA” and walk away. However, they can withhold depositing instruments of ratification/acceptance of the  TFA to prevent its coming into force until they secure their own demands and  include all the results (including the decisions on the Nairobi “deliverables”) into a single protocol incorporating the outcomes of the DWP, and ensure that the two protocols are accepted by a sufficient number of members to bring them both into force.

It is a difficult task, like trying to catch an elephant by its tail, but not impossible.

Operative paragraphs

The NMD stipulates in its operative paragraphs 30-34:

“30. We recognize that many Members reaffirm the Doha Development Agenda, and the Declarations and Decisions adopted at Doha and at the Ministerial Conferences held since then, and reaffirm their full commitment to conclude the DDA on that basis. Other Members do not reaffirm the Doha mandates, as they believe new approaches are necessary to achieve meaningful outcomes in multilateral negotiations. Members have different views on how to address the negotiations. We acknowledge the strong legal structure of this Organization.

“31. Nevertheless, there remains a strong commitment of all Members to advance negotiations on the remaining Doha issues. This includes advancing work in all three pillars of agriculture, namely domestic support, market access and export competition, as well as non-agriculture market access, services, development, TRIPS and rules. Work on all the Ministerial Decisions adopted in Part II of this Declaration will remain an important element of our future agenda.

“32. This work shall maintain development at its centre and we reaffirm that provisions for special and differential treatment shall remain integral. Members shall also continue to give priority to the concerns and interests of least developed countries. Many Members want to carry out the work on the basis of the Doha structure, while some want to explore new architectures.

“33. Mindful of this situation and given our common resolve to have this meeting in Nairobi, our first Ministerial Conference in Africa, play a pivotal role in efforts to preserve and further strengthen the negotiating function of the WTO, we therefore agree that officials should work to find ways to advance negotiations and request the Director-General to report regularly to the General Council on these efforts.

“34. While we concur that officials should prioritize work where results have not yet been achieved, some wish to identify and discuss other issues for negotiation; others do not. Any decision to launch negotiations multilaterally on such issues would need to be agreed by all Members.”

Paragraphs 30 and 31 are in effect contradictory. Paragraph 30 merely records the differences of positions and views on the Doha Development Agenda and its reaffirmation. Paragraph 31 notes that despite the differences, members are committed to “advance negotiations on the remaining Doha issues”.

As pointed out earlier, whether the remaining issues are referred to in terms of the Doha Work Programme, Doha Development Agenda, Doha Development Round or only as “Doha issues” remains irrelevant. The single undertaking can end only if and when the outcomes of all the negotiations and decisions since 2001 are incorporated into a protocol for ratification and acceptance by members and the protocol is accepted by all, before any of the decisions becomes enforceable under the WTO.

In sum, as a result of the Nairobi Ministerial Declaration, the multilateral trade negotiating agenda of the Doha Work Programme as a single undertaking remains somewhat diminished, but not dead. China, India, South Africa and other developing nations can still retrieve it and prevent any new issues from being brought onto the agenda for study or discussion, by withholding consensus in the General Council, and can block negotiations, which under paragraph 34 of the NMD need the agreement of all members. (SUNS8162)                            

Third World Economics, Issue No. 605, 16-30 November 2015, pp2-4, 14


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