TWN Info Service on WTO and Trade Issues (Dec09/02)
15 December 2009
Third World Network

Seventh WTO Ministerial Conference gets underway
Published in SUNS #6825 dated 1 December 2009

Geneva, 30 Nov (Kanaga Raja) -- The seventh Ministerial Conference of the World Trade Organization (WTO) got underway Monday afternoon, with the Director-General Pascal Lamy stating that the single largest adjustment that WTO Members need to make is to conclude the Doha Round successfully and soon.

In his statement opening the three-day Conference, being attended by some 2,700 delegates, over 400 civil society groups and nearly 350 journalists from around the world, the WTO chief said that this is not just about its economic benefits, "it is also about our collective ability and determination to preserve and strengthen the global public good, which is the multilateral trading system."

He urged WTO Members to follow the Chinese proverb "unity is strength", and expressed hope that "we come out of the next few days stronger, more united and with a clear determination to conclude the Round in 2010."

Some trade observers are of the view that nothing substantial is expected to emerge from the Conference in relation to the Doha Round of trade negotiations, and that the three-day event is likely to be nothing more than a talk-shop.

In the run-up to the meeting, several trade diplomats have been saying that the US and the Obama administration are not ready to engage in trade negotiations or in the Doha Round at this point, when it is facing external problems (such as Iraq, Afghanistan, the Af-Pak strategy of fighting Al-Qaeda and the Taliban, Iran, and Middle East peace) and major domestic preoccupations on financial regulatory issues (the financial meltdown, and the growing backlash over Wall Street vs Main Street) and health care.

The US does not even have an ambassador here - the Obama nominees for ambassador and agriculture negotiator are awaiting Senate confirmation.

With the US having made clear to the WTO head that they do not want to be engaged in trade talks, Lamy is hence ensuring that no negotiations (formal or informal) that would put the administration on the spot takes place.

On top of this, the EU trade commissioner Lady Ashton is due to leave office on Tuesday, to take over her new responsibilities as the EU's High Representative on External Relations. The new EU trade commissioner (from Belgium) has been named, but won't be in office, until the EU Parliament votes to endorse the new Commission.

As a result, the Ministerial meeting is likely to be no more than a meeting for speeches, and informal contacts and meetings of Ministers, without any negotiating agenda.

According to Chakravarthi Raghavan, Editor-Emeritus of SUNS, this last though was what Arthur Dunkel, the GATT Director-General who as TNC chair was running the Uruguay Round from 1986 to 1993, had in mind when he proposed at the Montreal Ministerial meeting of 1988, the idea of trade ministers meeting regularly at least once in two years.

At that time, he explained to the SUNS, that Foreign Ministers met annually at the UN General Assembly, without having to negotiate anything. Finance Ministers similarly met at the annual Fund-Bank meetings. But trade ministers never had an opportunity like that excepting in the context of tension-ridden negotiations. A normal meeting once in two years, without a negotiating agenda, he thought would be useful for the trading system.

However, it was the EU (Sir Leon Brittan at Marrakesh and Singapore, and Pascal Lamy at Seattle and Doha) that insisted that trade ministers can't meet excepting for concluding deals - thus, putting the WTO on this track to nowhere.

An article in the Indian newspaper the Business Standard dated 30 November cited a senior trade official from a developed country saying "When you run out of anything important, then you would start talking about institutional-building activities."

The same article quoted the Chair of the WTO General Council Ambassador Mario Matus of Chile as saying: "We are going to focus on the institutional-building activities during the three-day meeting, particularly the current global economic climate and how to strengthen the WTO."

Over the weekend, both the G20 and G33 grouping of developing countries held a meeting of their Ministers.

The G20 and the G33 insisted on and stressed the centrality of development outcomes for successful conclusion of the Doha Round, and in the case of the G33, that this development outcome involves Special Products and the Special Safeguard Mechanism. (See separate articles.)

Meanwhile, at an ITUC event held in the ILO over the weekend, South Africa voiced strong views on the issue of non-agricultural market access (NAMA) and its impact on employment.

According to civil society participants at that meeting, Brazil was diplomatic and Europe was basically reiterating the global Europe strategy. A German trade unionist asked about taking financial services out of the WTO, to which Director-General Lamy replied that financial services is "just liberalization not de-regulation", which Brazilian Foreign Minister Celso Amorim said was not the reality.

According to the civil society participants, South African Minister Rob Davies said that South Africa has an offer on Financial Services, which is basically to rescind their commitment!

The seventh Ministerial Conference was also somewhat marred by events preceding it over the weekend, when peaceful demonstrations by some 3,000 activists in Geneva on Saturday were hijacked by a small group of demonstrators who proceeded to smash shop windows and torch a few cars, according to media reports.

According to some of the civil society groups who organised the demonstration, but did not want to be named, the local Swiss civil society organization had in fact got a commitment from the anarchist groups that they would not engage in violence, and these groups kept their word. However, said the NGOs, it would appear that some others had got into the demonstration, and even though it was obvious that they were trouble-makers, the police did not interfere and kept quiet, until mayhem broke out. The civil society organizations are said to be further investigating.

The WTO chief subsequently issued a statement on the same day expressing regret over the confrontation that resulted in destruction of property and several arrests. "It is unfortunate that a peaceful expression of discontent from those who have honest differences with the WTO should have been disrupted by violent acts of a few who want neither dialogue nor constructive interaction. The WTO has been and continues to be open to debate with civil society," Lamy said in his statement.

In his opening statement at the Ministerial Conference on Monday afternoon, Lamy said that there is more than eight years' work on the negotiating table. This is already a major storehouse of assets.

"It contains trade-offs that you have all fought hard for, compromises you have crafted, interests you have protected. Of course, the final balance needs to be found, and there is still hard negotiating ahead. Time is running out, and it is not credible at this stage to see issues in isolation from the work and the achievements of the past eight years," he said.

"The moment of truth is fast approaching when you will have to decide whether the 2010 target can be met," he told the assembled delegates, adding that political leaders are practically unanimous that they want to meet it, but reaffirmation is not enough.

"Now we need action, concrete and practical action, to close the remaining gaps." he stressed.

The Director-General noted that the year 2009 will go down in history as a moment of great global insecurity. Millions of citizens lost their jobs. Many more lost their savings. Many of the development gains of the last decades vanished.

"But at the same time, we saw nations coming together as never before," he said. The world united to find a response to the global economic crisis.

The multilateral trading system has also been tested as never before. It has stood firm and showed its value.

Though trade has contracted, the WTO's rules and commitments have ensured that there was no general rush to protectionist measures, said Lamy. As long as Members continue to follow responsible policies at home, the WTO system should continue to provide a global insurance policy against protectionism.

The WTO system can also be an important plank in the platform for recovery. "Getting trade moving again and keeping trading opportunities open is vital to the progress of all our Members, especially the poorest. This is why we have worked hard with other stakeholders on trade finance to counter shortfalls in liquidity which imperil the trade of developing countries."

The value of the WTO dispute settlement system has also been highlighted by the crisis, said Lamy. "The ability to resolve trade disputes peacefully, without resorting to uncontrolled retaliation, is a huge asset that our forbears lacked in previous economic crises."

"The WTO is you, the 153 Members. You have subscribed to the principles of advancing and defending open trade within a non-discriminatory and transparent framework. At Doha, you also agreed to put development at the heart of the multilateral trading system," he continued.

Trade can be a powerful tool for developing countries to fight poverty, but trade in itself is not a magic potion. For trade to work, it has to be rooted in a bedrock of domestic policies that enable its potential gains to be realised.

"The commitments we negotiate here need to complement and support these domestic policies. Now, more than ever, it is time to reinforce the message that open trade is not a zero-sum game."

And the WTO is more than a forum for agreeing on market opening and rules, he said, adding that it is also about ensuring that existing rules and agreements work properly. It is about settling disputes peacefully. It is about furthering coherence with other policy priorities, starting with climate change. It is about making the case for a more open trade. It is about capacity building.

"These are all part of the insurance policy to which you have collectively subscribed in the WTO," he said. And while the crisis has proved the value of this policy, it has also shown that it needs to be adjusted to changing risks.

Lamy also pointed to the need to improve the ways in which Members maintain their existing agreements, as well as the need to do more to help improve the trade capacity of developing and least-developed countries.

Meanwhile, in a statement issued on the eve of the Ministerial Conference, Oxfam International expressed concern over the continued lack of progress in the Doha Round.

"The very fact that the Doha Round is not even on the agenda of this week's Ministerial shows that the Round is moribund. Yet, a strong and fair multilateral trading system is more needed than ever at a time when poor countries are being triply punished by the food, climate and economic crises," said Celine Charveriat from Oxfam International.

"While a Doha deal wouldn't be the panacea for today's development challenges, it could at least put an end to the most trade distorting policies, help developing countries to protect employment and food security and provide duty-free market access for Least Developed Countries' products," she added.

"Rich countries, especially the United States, need to come back to the negotiating table with new concrete proposals that put an end to export dumping as well as with more realistic market access demands. What is currently on the table will simply not deliver for development."

Reform of the WTO is urgently needed if it is to remain relevant today, said ActionAid in a separate statement.

"Trade liberalization has been the major cause of the food crisis in developing countries," said Aftab Alam of ActionAid. "Yet, the WTO is still pushing the same unjust trade policies and as a result, over one billion people - a sixth of humanity - don't have enough to eat."

(Meanwhile, on 29 November, Australia hosted a dinner with eight other countries attending including Japan, the US, the EU, Colombia, Chile, New Zealand, Switzerland and Singapore. According to trade diplomats, in their discussions, they stressed that market access is not just confined to agriculture but should also be in the area of services. They called for greater market access in services. They also discussed ways to move forward on this issue, said trade diplomats.) +