TWN Info Service on WTO and Trade Issues (May08/09)
13 May 2008
Third World Network

UNCTAD XII: NGOs against a WTO Ministerial in May
Published in SUNS #6464 dated 28 April 2008 

By Martin Khor, Accra, 25 April 2008

About forty civil society organizations attending the UNCTAD XII have issued a joint statement calling on the WTO members not to proceed with a mini-Ministerial meeting in May but instead to put the Doha negotiations "on the back burner" until a new US Administration and Congress are established.

The NGOs, which include the Africa Trade Network, Oxfam International, Public Services International, Action Aid International, Third World Network and the World Council of Churches, as well as many national organizations from Africa and Asia, as well as Europe and the USA.

The NGOs said that the development content of the Doha Round is more important than deadlines. They presented several reasons why a May Ministerial would be inappropriate.

The WTO's Doha negotiations is a major topic that has been discussed in several NGO workshops during UNCTAD XII. The NGOs also held dialogue sessions with Director General Pascal Lamy, Canadian Ambassador Don Stephenson (chair of the NAMA talks) and Mr. Pillai, Commerce Secretary of India.

Below is the statement on the WTO by the CSOs at UNCTAD XII:

The WTO's Doha Round negotiations are at a crucial stage. At this time, we need to re-affirm the centrality of development concerns and the interests of developing countries in any outcome of the Round. It should be remembered and reaffirmed that the objective of this Round is not market access per se, and especially not market access for developed countries, but the reorientation of the multilateral trading system so that it will contribute to the development of developing countries.

As the Development Declaration of the ACP Group, African Group, LDC Group, Bolivia and Venezuela stressed in their document (WT/L/687 dated 12 July 2007): "For the developing countries, what matters in this Round is the content of the agreements, which must translate into positive outcomes for our trade and trade balance, improvement in production and supply capacity, and increased employment and incomes of our people. These are among the development yardsticks by which proposals, negotiations, modalities and texts have to be assessed.

We are concerned about moves by some quarters, including the Director General of WTO and the European Trade Commissioner, to rush to conclude the Doha Round as soon as possible. We are especially concerned about plans to hold a Mini Ministerial meeting in May or June, and a super Green Room meeting of senior officials before that. The promise made by developed countries at Doha in 2001 has been betrayed in the current trade offs. What is now on the table is not a development package.

These are our concerns:

-- The time is not right to hold a "horizontal process" or Ministerial. There are too many areas on contention in agriculture, NAMA, services, etc.

-- The main proposals on the table lack development content. Instead, developing countries will be on the losing end in agriculture and industrial products, as well as services, based on these proposals. Developed countries would have to make small commitments, they would also not make much in terms of development obligations, but developing countries would have to cut their tariffs very steeply in NAMA (60-70% in many cases) and also very significantly in agriculture (36% on average compared to 24% in the Uruguay Round).

-- The process of starting a "horizontal process" and a super Green Room of a few senior officials and later a few Ministers is top-down, exclusive, lacks transparency and is fraught with the possibilities of pressures and manipulations. The legitimacy of whatever is the outcome will be questioned.

The US domestic situation means there is no confidence that any commitments it makes can be honoured. Trade authority lies with Congress, and there is now no fast track authority for the President. Especially in light of the current confrontation between President Bush and Congress over US trade policy, as evidenced by the debate on the US-Colombia FTA, it is clear that Congress will not grant new fast track authority to the current Administration. Thus whatever deal is concluded would have to be passed on to the next President and Congress. No one knows what may happen if a Doha agreement is initialed by the current US President and passed on to the next President. Only a new US Administration and Congress would be able to agree to a final deal and ensure follow through for its passage. Thus the current rush for an agreement is illogical.

Governments have to ensure the content of the proposals and draft texts conforms to the development interests of developing countries. Content cannot be sacrificed for timelines. It is more important to get the agreements right than to meet deadlines. Therefore the WTO members should not be rushed into agreements on modalities. We maintain our stand that "no deal is better than a bad deal."

We are concerned about the process of calling a "Ministerial." Unlike a full Ministerial, this "Ministerial" is expected to be attended by only 20-30 Ministers. (1) How are decisions taken on the scope, nature and participation of the horizontal process? (2) Which countries are invited to the meetings? On what basis are they selected? (3) If a country is not selected, can it request to participate in the process? If yes, what is the procedure? If not, why not? (4) Will the proceedings of the horizontal process and its Green Room meetings be made known to the whole membership and to the public? By what method, and at what time? (5) How will the public and all WTO members be ensured that they can know the options and outcomes and can participate in the decisions?

The conclusion of a Doha Round on present terms will also worsen the present food crisis and financial crisis, and not help solve these problems, as claimed by some quarters.

The food crisis is in large part a result of supply not meeting demand due to a drastic reduction in food production in many countries. Other factors are sharp price increases due to speculation on the world's food market, the expansion of bio-fuels, climate change affecting weather patterns, and rising oil prices that push up the cost of fertilizer and fuel. In particular, many developing countries have been pressured to reduce their applied tariffs on food products and to dismantle government support (such as subsidy of inputs, infrastructure and marketing assistance) due to World Bank and IMF policies. This allowed the massive inflow of food products including those that are heavily subsidized by rich countries and thus artificially cheapened.

The Doha Round will worsen this situation by reducing developing countries' tariffs further by an average 36%. Developed countries meanwhile will be able to retain their high domestic subsidies by "shifting boxes", as many of the supposedly non-distorting Green Box subsidies have been found to be in reality distorting, and there is no plan to limit or eliminate these subsidies. Many of the LDCs or small economies that do not have to reduce tariffs or by as much as other developing countries meanwhile face higher tariff cuts through the EPAs, which in turn will render their agricultural sector less competitive in a more permanent manner than structural adjustment programmes did.

To resolve the food crisis, developing countries need to produce more food. They can do so through having higher tariffs to enable local farmers to compete with imports, especially when high subsidies in imports continue. This includes explicit protection of domestic policy space for developing countries to strengthen the livelihoods of small producers. There must be a review of the Doha proposals in light of this paramount priority to ensure developing countries can produce their own food, and not just rely on imports. There must also be a change in the policies of the international financial institutions and a re-negotiation or cancellation of the EPAs, to enable the use of policy tools (including tariffs and government support to farmers) for food production in developing countries.

The Doha Round would also worsen the financial crisis through the pressures put on developing countries to open their financial services to foreign financial institutions. The practices and financial instruments of these institutions are now recognized as causing the financial crisis. Through the GATS negotiations, developing countries are pressurized to commit to liberalise. This liberalisation of finance can lead to the further spread of harmful financial practices and instruments to developing countries, and thus magnify the world financial instability and crisis. FTAs (incuding EPAs) will worsen this problem through the services and the investment chapters, that enable unregulated inflows and outflows of funds.

We therefore request the following to the governments:

1. There should be no rush to convene a Mini-Ministerial at the WTO. After the new Chairs' papers on agriculture and NAMA are produced, the Doha negotiations can be put on the back burner, with all the proposals including those by members (especially developing countries) to be placed on the same status, when talks actively resume after the new US administration and Congress are established.

2. The development content of the proposals on the table must be carefully assessed, and this development content of the Round must be expanded until it reaches an adequate level.

3. The food crisis highlights the need for developing countries to expand food production and increase self-sufficiency to a high degree. Especially due to the food crisis, developing countries should have sufficient leeway to not reduce their tariffs on food products so that they can locally produce food. An effective agricultural special safeguard mechanism should be established for developing countries, as soon as possible, without waiting for the conclusion of the Doha Round.

4. Given the link between financial deregulation and liberalization and the global financial crisis, the WTO should suspend negotiations on liberalizing financial services in the GATS. Any other GATS negotiations including on domestic regulation should not affect governments' policy space to regulate financial services.

5. Reforms are urgently needed to the policies of international financial institutions, to stop their policy advice and conditionalities that pressure developing countries to lower their agricultural tariffs and to abandon or reduce government support to farmers.

6. Existing FTAs (including EPAs) that pressure developing countries to lower their agricultural tariffs and to liberalise their financial sector and other services should be reviewed, renegotiated or stopped. FTAs and EPAs that are being negotiated should not pressure developing countries to cut their agricultural tariffs or to commit to liberalise their financial markets. WTO rules should be reviewed to enable developing countries to have sufficient flexibility, special and differential treatment and non-reciprocal treatment in regional agreements so that they do not face additional pressure towards excessive liberalization. +