Info Service on WTO and Trade Issues (Nov13/11)
26 November 2013
Third World Network
to Bali, ‘to buy a pig in a poke'?
Published in SUNS #7702 dated 22 November 2013
Geneva, 21 Nov (Chakravarthi Raghavan*) -- An ancient Indian saying
(perhaps by a disillusioned courtier) has this: ‘the words of a king,
are like words writ in water, disappearing in the next ripple of waves.'
As developing countries -- working against time and around the clock,
and involved in some confusing negotiations, on call for ‘green rooms'
(even without specifying agendas), and even more limited consultations
-- attempt to produce a "Bali package of deliverables",
they and their capitals should remind themselves of this saying, lest
they commit the same mistakes they did in the run-up to Marrakech
(November-December 1993, February-March 1994), and thereafter, and
some of the Ministerial Conferences since then.
At Marrakech, they need to remind themselves, in an effort to conclude
the Uruguay Round (UR), and convert a provisional GATT treaty (without
a legal institutional personality) into a definitive Treaty-based
Organisation (‘rules-based' as everyone claimed, singing from the
same music score at Marrakech and thereafter), they paid an advance
price in the form of agreeing to undertake new obligations (TRIMS,
TRIPS, several UR agreements, GATS) believing in some dubiously worded
commitments of advanced countries that they would implement over time
their commitments on agriculture reform and other trade agreements.
Even before Marrakech, in February-March 1994, during the legal scrutiny
stage of the UR agreements (most of them negotiated separately, using
variations of language on same issues, without knowing how they would
all be put together at the end into what became the WTO), they decided
not to reopen any text (in any agreement) to ensure consistency of
formulations across the agreements. This they did, lest they unravel
the whole package (a Canadian argument at that stage). They bought
into this argument of Canada that all these doubts could be left to
the dispute settlement process (involving adoption of rulings by negative
consensus) to resolve and reconcile the problems.
Though the WTO treaty makes clear that any issues of interpretation
is the sole prerogative of the Ministerial Conference (or the General
Council acting for the MC in between), the Dispute Settlement Understanding
(DSU) panels and Appellate Body (AB), have under the guise of ‘clarification'
of rights and obligations, misused the negative consensus process
to rewrite the rights and obligations by interpreting the treaty.
At Doha, meeting in the wake of 9/11, they agreed on a reform package,
including negotiations for rules to set right the inequities of the
system, and a range of negotiating issues to be negotiated and agreements
reached and implemented as a Single Undertaking.
In both instances, they bought a ‘pig in the poke', and they are now
on the cusp of repeating the same story for a third time.
The possibility of concluding the Doha Single Undertaking, with benefits
to themselves, was allowed to lapse, when then WTO D-G and Trade Negotiations
Committee (TNC) Chair, Mr. Pascal Lamy, in 2006, on the eve of US
Congressional mid-term elections (at a small informal meeting he convened
outside Geneva of a small key group of countries), suspended indefinitely
the Doha talks. He did so to save the US any embarrassment on Cotton
and other key agriculture issues at the November 2006 mid-term congressional
The power to suspend or adjourn the talks is vested with the General
Council (in between ministerial conferences), and not even with the
TNC, leave aside its chair. Nevertheless, Mr Lamy did so and announced
it to assembled newsmen there, and only after the WTO media office
was queried (by this writer) on what authority given to Lamy this
had been done, he called an informal TNC in Geneva, announced it there,
and had the TNC to endorse it.
Informal TNCs keep no records, and hence we don't know what view the
delegations there took. The GC, which keeps records, subsequently
merely took note (meaning it did not approve or disapprove!). So much
for the ‘rules-based' system and its rulelessness.
With the Republican Bush administration losing its majority in the
US House in November 2006, and soon thereafter its fast-track authority,
Lamy's "window of opportunity" for concluding the Doha negotiations
In all the subsequent efforts at the WTO, and deadlocks since then,
thanks mainly to the backtracking on agriculture commitments by the
US and EU, the Doha negotiations have been run to the ground, hopelessly
deadlocked, and needing a new look and new hand to its resuscitation
and successful conclusion as a Single Undertaking. (The US and EU
since then are trying to find a way of closing the DR, by blaming
the developing world, and forget their commitments at Marrakech 1994,
and Doha 2001, and move on to make further inroads into the national
space of developing countries.)
In all this time, the developing countries have allowed the US and
EU, with considerable help from the WTO leadership and secretariat,
to rewrite the narrative, to convert the Doha Round, its aims, objectives
and agenda, into one for the developing countries to open up their
markets to unreasonable neo-mercantilist demands of the US and EU
With a new Director-General from a developing country, Mr. Roberto
Azevedo from Brazil, and a Ministerial Conference in a key developing
country, Indonesia, which is due to hold Presidential and Parliamentary
elections early next year, and thus a stake in having a successful
Ministerial, developing countries face some dilemmas.
They have also allowed themselves, without public challenge, to be
victims of a new narration about the WTO, namely its inability to
function as a forum for multilateral trade negotiations (obligatory
in terms of accords already in its annexes, and enabling one on new
trade issues - vide Art III of WTO) to negotiate on multilateral issues
and reach agreement has reduced its credibility and that all this
is the fault of the majority of the developing countries, in particular
the major ones.
In this context, they are being asked to agree on a Bali deliverable:
-- a definitive agreement on Trade Facilitation (TF) with some commitments
and dispute settlement process to call them to account.
-- some dubious concessions for the developing countries in return:
a so-called 4-year peace clause (with no assurance of peace or continuance
of peace till a permanent solution is found) on public stockholding
for food security in developing countries; a ‘best possible endeavour'
effort to limit and phase-out agriculture subsidies (the language
used is worse than the ‘best endeavour' commitments of the Part IV
- development issues - of GATT 1947 that remain till this date as
paper promises; plus some efforts at an agreement on Tariff Rate Quota
issues in Agriculture (tabled much before by Azevedo as Brazil's WTO
envoy, as a deliverable for Bali), and some moves on LDC issues (with
many qualifications and ifs and buts).
The TF draft as has evolved so far (to be finalised over the next
24-48 hours) is so riddled with contradictory language for a definitive
agreement that it is now envisaged that Bali will take "a political
decision" on it, asking the General Council to clean up and complete
the process (the various provisions of the TF Agreement envisaged
really amount to amendments of GATT 1994, the WTO treaty itself, for
incorporating TF Agreement as a part of the annexed treaties, and
do all this without the amendment processes specified), and adopt
a protocol that countries would be asked (demanded may be a better
language) to accept, under pain of otherwise being drummed out of
Developing country members are being told that the US and EU have
lost confidence in the WTO system and its remit as a negotiating forum
(obligatory on all trade topics covered by WTO agreements, and enabling
one on other trade matters), and it is for them to act to win back
US and EU confidence. This is a narrative that also appears to have
been bought into by the WTO leadership or at least parts of it, and
among some elites in developing countries too.
Perhaps the US and EU should be asked to revisit the recent past,
and remind themselves of the similar stance of the leaders of the
then German Democratic Republic during the 1953 uprising (see https://en.
wikipedia. org/wiki/Uprising_of_1953_in_East_Germany) and the sarcastic
comments at that time (see https://en. wikipedia.
org/wiki/Bertolt_Brecht) by Bertolt Brecht, German poet, playwright,
theatre director, and Marxist, in one of the poems in the Elegies,
"Die Losung" (The Solution).
A Norwegian communication before the TF Negotiating Group sets out
its ideas and views on how various unfinished work in completing a
draft TF Agreement (and the amendments the TF Agreement wants to bring
about in GATT 1994 and the WTO's Agreements in Annex 1A can be achieved
without going through the amendment process). This, Norway suggests,
should be done through a protocol to be drawn up by the General Council,
which after Bali will clean up the TF Agreement, agreed as a ‘political
decision', and draw up a protocol. And like Ulbricht in the GDR, such
a protocol will ask WTO members to accept it (and win back confidence
of US and EU!) or enable them to act ala Brecht's suggestion to the
GDR leaders of his day (see citation above)!
And in its communication, Norway says it is based on the model of
the TRIPS amendment, to give effect to the Doha Public Health Declaration,
providing for an effective Final Date for TF Agreement to be accepted
and enter into force, and for ‘inviting' those Members not doing so
to withdraw from the WTO.
On the public health and TRIPS, a simple reference by Norway to the
WTO website would have shown that the WTO gave a waiver from TRIPS
obligations on this issue to Members, agreed on a TRIPS amendment
in 2003, with a target date set for acceptance and entry into force,
1 December 2007, and since then repeatedly extended the date, combining
it with a permanent waiver for Members until they are able to accept
it, and for entry into force when two-thirds of members have accepted
and deposited it etc etc. That amendment has as of now gained acceptance
of 48 of the WTO members, far below the two-thirds membership target.
In 1953, Ulbricht and the Soviets found, they had to erect a wall
to keep people in (rather than adopt Brecht's sarcastic suggestion
in the Elegies (for the GDR leaders to get new people that have confidence
of the leaders!).
If the US, EU and WTO move forward now on a course suggested by Norway,
they may find that rather than inviting Members not accepting a TF
Agreement to withdraw, they may have to erect a WTO wall to prevent
developing countries, unable to get equity and justice, to find a
way out, with their own alternatives to iniquitous and unjust rules
of the WTO.
The US and Europe may have horrendous military power, but otherwise
they are no longer in a power position in the world to dictate and
prevail, provided leaders of developing countries realise this. The
US and EU (despite their threats of bilaterals and plurilaterals)
need the WTO multilateral system as much as other members of the international
(* Chakravarthi Raghavan, Editor Emeritus of the SUNS, contributed