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TWN Info Service on WTO Issues (Aug04/3)

11 August 2004

Third World Network

 

SUNS Report:  From euphoria to “ownership” and advocacy?

Below please find a report by Chakravarthi Raghavan, Chief Editor of the South-North Development Monitor (SUNS), on the recently concluded WTO Geneva negotiations on the “July package”.

The report warns about the seeming “euphoria” among some developing country delegations about the conclusion of the Geneva talks, spilling over into a sense of ownership and advocacy.

This report was published in the SUNS of 5 August and is reproduced here with permission.   Any application for further reproduction should be sent to Raghavan at sunstwn@bluewin.ch

With best wishes

Martin Khor

TWN

 

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From euphoria over Doha talks, to ‘ownership’ and advocacy?

Published in the SUNS, number 5630, 5 August 2004

Geneva, 4 Aug (Chakravarthi Raghavan) - If developing country ministers, senior officials and ambassadors seemed somewhat euphoric when (capping a week of day and night negotiations - in and outside the WTO premises, in green rooms, ‘blue’ rooms and dark rooms) the WTO General Council agreed after midnight of 31 July-1August on a decision of hortatory exhortations and a package of frameworks for hard negotiations, it was an understandable reaction.

For, agreements in Geneva, in today’s world of internet and weblogs and instant reactions, not only from transnational media (purveyed by courtesy of the WTO in its daily clippings journal) but also other stake-holders and activists, have to be ‘sold’ by governments in countries, and by others to their constituents, to explain or defend the outcome.

However, there is a danger, when some key negotiators of the developing world, begin to feel a sense of ownership and move to advocacy. The outcome could be adventurist (in the true Marxian dialectical meaning of that abused term) and may prove no different than the old IMF/World Bank Structural Adjustment Programs and conditionality loans to the early and later versions of the Poverty Reduction Strategy Papers (PRSPs) that countries supposedly evolve themselves to get funds from the IMF and the World Bank, and then implement and take ownership and blame at home.

The most successful of the outcome in Geneva, according to public pronouncements of Third World protagonists, has been the Annex A (the framework for agriculture) which at best contains a series of objectives and principles that have to be further negotiated in great detail.

Nevertheless, negotiators from the developing world, including the leadership of the G20, would find themselves in the weeks ahead, facing some well-informed critiques by activists who have been looking at and drawing their data from US government websites which (even under the George W Bush administration) contains a lot of data and statements of intentions.

The EC is more opaque, even to its own citizens and even governments and parliaments.

These studies by today’s civil society groups in the South or the North are in fact better than many official studies by sometimes second or third rate economists. Civil society now is better equipped in knowledge of political economy, econometrics and analysis of data, and look for empirical evidence of assertions and are confident enough to announce, if no evidence is found, that the emperor has no clothes. They are also willing to pose publicly clear policy questions and demand answers, and they carry weight in their own constituencies.

Two such studies, one from India and another from European activists, and whose initial outlines and data we have seen, show that the ‘ambiguities’ in Annex A are such that the US and EC could easily manipulate their WTO notified data, to arrive at a “Final Bound Total Aggregate Measure of Support’ that could be higher than the bound total AMS at end 2003, the end of the current implementation period under the Agreement on Agriculture (AoA) under the Marrakesh Treaty, and start their new cuts (including the initial down payments) over the new implementation period, from a much higher level.

True, the key negotiators from the South - Brazil and India in the talks on behalf of the G20 with the United States and the EC, and later at the WTO green rooms - have put in words and phrases that they could use to set other criteria than the US and EC envisage for increased ceilings. But this is not certain at all - given the turnover in delegations, as well as in the capitals.

But when a sense of ‘ownership’ takes over and key Third World capitals begin to advocate what they have agreed to reluctantly, and forget about their own starting points from which compromises have been clinched, when the majors have no such hesitancy - there are dangers ahead not only for their own leaderships, but also for the WTO and its claims to be a multilateral system that delivers.

An example of majors bringing up old demands is the Trade Facilitation question - where some of their demands during the Tokyo Round on customs valuations that the TNCs data about imports of subsidiary from parents should be accepted (but turned down in the customs code agreement), and again brought up but rejected during the Uruguay Round talks for the Agreement on Implementation of Art. VII of GATT (on customs valuation) has now been been resurrected for Trade Facilitation, with more demands for infrastructure facilities by governments to facilitate TNCs.

A series of future articles in the SUNS would address the agriculture issue in depth.

However, some ongoing studies by civil society activists, based on published and available data of the US and EC (but not necessarily notified to the WTO) suggest that the ceiling from which the US cuts could begin when a new agreement is reached could be as high as 18-20 billion dollars or even more annually (compared to actual authorization for about $16 billion as counter-cyclical payments).

For the European Community, the ambiguity in wording means that the EC ceiling (taking account of its blue box and the single farm payments etc) from which cuts would begin could be as high as 25-26 billion euros.

And at the end of the new implementation period (say of 6 years, as in the AoA for the first one, from the time the new agreement is made effective), the ‘Final Bound Total AMS’ could be the current bound total AMS - ‘keep running to stay in the same place’.

Agriculture negotiators - of Brazil, India and other G20 and G33 and other developing country coalitions - perhaps are fully aware and would try to plug the loopholes in agreeing on the details. But very hard negotiations are ahead, where there will be strains among groups and within groups.

But developing country public can’t take this for given and the subject left merely to the tactical skills of their negotiators. Too much would be at stake for their farmers and development.

And, there is a need to remind oneself at every stage, that all this fight has merely been to set right a totally erroneous interpretation and decision of the GATT panels, and the GATT Contracting Parties of the 1950s, when the intended meaning of ‘primary’ products in Article XVI.3 of the GATT 1948 (an exception to the general rule of Art. XVI.1 against subsidies in exports), was perversely interpreted by panels and accepted, first in the wheat flour dispute (between US and EC) and then the Italian pasta case - so that such processed products could be treated as primary products subject to no disciplines.

Those two decisions in time has brought the world agriculture trade, to the point where as now all kinds of domestic support and border protections can be provided by the rich to their agriculture sector, while the rich nations breaking down market barriers abroad for corporate, dumped agriculture exports.

The Doha negotiations on Agriculture, and any new agreement and rules for ‘reform’ won’t even take the trading system to the position intended by those who put together and agreed to bring into force the GATT 1948, as a provisional arrangement, until the Havana Charter and the International Trade Organization (including its special provisions on commodity trade) could enter into force.

Constructive ambiguity was useful to reach agreements which governments bona fide agree to put into practice, but cannot be so in the face of the determination of the rich and powerful to maintain their domination of the WTO, to massive subsidies in agriculture to advance the interests of their corporations while claiming to act for their farmers, and break open Third World markets for such dumped corporate exports.

But when that ‘constructive ambiguity’ is subject to the WTO Star Chamber processes, the WTO may end up in the same way as its equivalent in English Constitutional history and law making. - SUNS5630

[c] 2004, SUNS - All rights reserved. May not be reproduced, reprinted or posted to any system or service without specific permission from SUNS. This limitation includes incorporation into a database, distribution via Usenet News, bulletin board systems, mailing lists, print media or broadcast. For information about reproduction or multi-user subscriptions please contact: sunstwn@bluewin.ch

 


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