TWN Info Service on WTO and Trade Issues (Dec09/10)
17 December 2009
Third World Network

WTO’s Seventh Ministerial Ends Early With Much Uncertainty Ahead
By Shefali Sharma, Third World Network

The World Trade Organization’s news release about the conclusion of the 7^th WTO ministerial describes Ministers as having shown “political energy” to conclude Doha.  Yet the atmosphere was far from energetic during the three day Conference as ministers shuttled from plenary sessions to side events and numerous trade officials stood waiting to take their turn to enter the Working Sessions (where only four officials per delegations were allowed).  The refrain echoed by many officials in the corridors and as phrased by one trade officials was: “There is nothing new to report here. “

Many also spoke about the numerous existing differences between members that will make it very hard to come to a deal by 2010.  According to one official, “Yes, ministers are talking about an early conclusion, but when we start getting down to the specifics, we all know that there is no way this can happen.”  In the end, the WTO decided to conclude early by eliminating the afternoon working session on Day 3 and moving forward the Closing Plenary. 

In the closing plenary, two out of the three decisions expected from the meeting were delivered.  The moratoriums on non-violations complaints in the TRIPS agreement and on e-commerce were extended; however, there was only a vague reference to the next ministerial meeting to be held “at the end of 2011.”  The consultations regarding the venue and other specifics were handed back for further consultations to the General Council.  There have been rumors that the next venue may be Doha—making it a ten year anniversary of the Doha Round if the talks are still on-going at that time. 

Early, but “Successful” Conclusion?

While formally, speeches of most delegations asked for a conclusion of the Round by 2010, deadlock remained on substantive issues across all three areas of negotiations—agriculture, non-agriculture market access (NAMA) and services .  The US was singled out by many delegations as the one intransigent party in arriving at a deal because they are seeking even more market access—particularly targeting the “advanced” developing countries like Brazil, China and India as well as South Africa and ASEAN countries.   And US Trade Representative Ron Kirk unambiguously stated so in both his bilaterals and in his plenary speech:  “We have made our specific interests well-known:  that meaningful market opening is required to complete the Round.  And we are looking for concrete signs from other Members that they are ready to join us in that commitment.” 

However, other developing countries also raised serious concerns regarding the existing Doha package before and during the meeting.  Trade Minister of South Africa, Dr. Rob Davies stated:

“Recent engagements have been dominated by unfair demands placed on major developing countries to enhance market access for the benefit of narrow commercial lobbies in parts of the developed world.   South Africa was not part of the agreements reached by some members in the July 2008 package….our view is that even these texts are imbalanced and reflect too much accommodation of the sensitivities of developed countries in agriculture while demanding too much from developing countries in terms of reducing their applied industrial tariffs and reducing necessary policy space for industrial development. “ 

The minister spoke about the historical injustices faced by South Africa and the specific problems it poses for the country and the Southern African Customs Union (SACU) to which it belongs.  “By implementing developed country commitments in the Uruguay Round, our tariffs were reduced by half that of comparator countries.”  Belonging to SACU, their commitments in Doha, however would then “also apply to three small and vulnerable economies, and a least developed country that would not otherwise have to take formula cuts.  Despite this hard won recognition, we still have to establish if our specific needs will be accommodated before we will be able to work on the basis of the December text.”  

He also emphasized that the “current recession is causing job losses in all countries all over the world…South Africa which already had a 23% unemployment rate before the recession has lost an additional ¾ of a million jobs since then, creating further strains on the stability of a highly unequal society and our nascent democracy.”    

“In recent weeks there has been much talk about resisting backsliding.  And we agree with that. But we need to be clear about what we mean by backsliding.  For us backsliding means retreating further from the developmental mandate that we all agreed to in Doha and further (emphasized in audio speech) imbalancing the proposed Doha outcome.   South Africa fully supports the position of the G20 and the Africa Group among others in calling for an early and successful conclusion to the Doha Round, with successful being understood in terms of its delivery of the Doha development mandate. Let me say though, that if we have to choose between the two, South Africa will opt for a successful development outcome, whenever (emphasized in audio speech) that may arise.” 

He supported the dialogue about the future reform of the WTO.  In particular he stressed on the consensus principle, inclusive and transparent decision-making and asked for greater clarity within the WTO about “what we understand by development and greater coherence between the WTO and other international institutions, charged with promoting development and decent work.  These reforms are essential to transform the WTO from an institution dominated by mercantilist discourse towards one which becomes, in reality, a public good.”

Ecuador’s Deputy Minister of Foreign Trade and Integration, Dr. Julio Oleas Montalvo said, “The current asymmetries in world trade, the financial crisis and the ravages caused by climate change have increased the vulnerability of the countries of the South and of their levels of poverty.  In order to confront these challenges, the WTO must define a new system of governance and must reform itself so as to exercise the leadership necessary to establish just and equitable trade rules that will reduce the widening gaps in welfare and technology that exist between the countries of the South and North.”

Since Ecuador has suffered major balance of payment problems during the economic crisis, he said, “It is also necessary to give priority in the WTO agenda to a new system of financial monitoring and regulation.  Without financial controls the vulnerability of the world economy will grow, many potential benefits of trade will disappear and asymmetries will increase.”  Ecuador, along with Argentina has tabled a paper that asks WTO members to address some of these concerns. 

Minister Mamadou Sanou from Burkina Faso on behalf of the Cotton four countries said with regards to Cotton, “The C4 is still awaiting written counterproposals from the United States and the European Union in response to the proposed modalities which are currently set out in the text of the Chair of the Negotiating Committee on Agriculture.” 

The least developed countries reiterated their positions to operationalize special treatment, adopt duty free quota  market access, services waiver and reach a deal on cotton.   

Indian Commerce Minister Anand Sharma said, “A major concern of developing countries is that the development objectives of the Round continue to be diluted or ignored.  Putting the development back firmly on the agenda would incentivize developing countries to bring more to the negotiations.  Major issues like duty free quota free, SSM, Cotton, preference Erosion, Fisheries subsidies, Mode-4 access in Services, the TRIPS-CBD relationship, need to be dealt with sympathetically as they have a major bearing on the development outcome of the Round.”

The G33, in their communiqué said, “We observe that the current economic and financial crisis has highlighted the issue of marginalization and eroded the legitimacy of globalization.  Therefore, in order to strengthen the global economy we need to adopt inclusive approaches to ensure sustainable global economic recovery, growth and development.” 

They stressed that the “present crisis has highlighted the vulnerability of [sic] agriculture system and the need to for safeguarding the livelihoods of the poor and vulnerable in agriculture around the world” and that “trade in agriculture has to be calibrated in view of pressure from highly distortive domestic supports and exports subsidies.”  They stressed that with regards to making a “simple, effective, non-burdensome SSM, “there is a lot of work that remains to be done, to improve the December 2008 Chair’s draft text.”

In a side event organized by the Consumer Association of Penang, South Center and the Third World Network during the ministerial, Indonesian Ambassador in Geneva, Mr. Erwidodo responded to questions from civil society organizations about the extent of acceptance amongst the G33 with regards to expansion in the blue box which would allow the US to provide trade distorting subsidies in the form of counter-cyclical payments and the further dilution of the G33 position in the December 2008 text.  He said the text is “not fully stabilized” yet.   Coordinator of the G33 and the trade Minister of Indonesia, Mrs Mari Pagestu reiterated that the SSM needed to be “simple, effective and operational.”

The Way Forward Unclear

The Chilean Finance Minister Andres Velasco, as Chair of the Ministerial, presented his concluding summary “in his own personal capacity” in the Closing Plenary.  He said that ministers reaffirmed the need, “for a stock-taking exercise to take place in the first quarter of next year. There was support for asking Senior Officials to continue to work to map the road towards that point. Gaps remain on substance and there was wide acknowledgment of the need for leadership and engagement on the remaining specific issues over the coming weeks. “ 

It is expected that this roadmap towards the first quarter of next year will be created starting December 7.  The stock-taking is likely to take place in March or April.  However, the US has openly opposed the idea of having more meetings to take stock until there is further movement on the modalities.

 One developing country senior official stated that the stock-taking could also possibly be a time for review of Doha and to take a step back to see if the objectives of the round are truly developmental.   The meeting finished with an air of uncertainty given the current stalemate and the plethora of concerns faced by Ministers at home--ranging from preference erosion, financial re-regulation—the need to protect farm-based livelihoods and economic sectors at home  in light and the shadow of the current global crises.  It remains to be seen whether members will use this “stock-taking” as an opportunity for a development review of the Round.