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TWN Info Service on WTO and Trade Issues (Oct07/18) 23 October 2007
In the wake of the contentious General Council meeting of 9 October, powerful developed countries are pointing fingers at certain developing countries either to find scapegoats to blame if the Round collapses or to use as a tactic for not making credible offers themselves. But officials of developing countries should worry about this only to a limited extent, because they also face increasingly knowledgeable and vocal constituencies at home, who are also ready to blame them if they sign on to a bad deal. There are two aspects to the blame game - the international and the national. The developing countries are accused of "lighting a fuse to blow up this round"by the US Trade Representative's office.. The US and EU seem to be orchestrating a media campaign aimed at placing the blame squarely at countries like India, Brazil, South Africa and Argentina for squashing the Round if they continue objecting to the skewed Stephenson paper. Below is an article published in the South North Development Monitor on 15 Oct 2007. It is reproduced here with the permission of the SUNS. Any reproduction or re-circulation requires permission of SUNS (sunstwn@bluewin.ch). With
best wishes
In the wake of the contentious General Council meeting of 9 October, powerful developed countries seem to be positioning themselves to point fingers at certain developing countries either to find scapegoats to blame if the Round collapses or to use as a tactic for not making credible offers themselves. But officials of developing countries should worry about this only to a limited extent, because they also face increasingly knowledgeable and vocal constituencies at home, who are also ready to blame them if they sign on to a bad deal. There are two aspects to the blame game - the international and the national. At the General Council, four groupings of developing countries presented a joint proposal on non-agricultural market access (NAMA) that in effect was very moderate. Its main message was that the developing countries should undertake lesser tariff-reduction obligations (in percentage cuts) than developed countries. Such
a principle is already in the Thus, the surprise is not that developing countries asked for what is obvious, but that they had to ask at all. And the reason for that is that the draft modalities paper of the NAMA Chair, Ambassador Don Stephenson of Canada, proposes coefficients that result in the opposite of the mandate - with developing countries affected by the formula having to undertake industrial tariff cuts more than double the rates of the US, EU and Japan (about 52-65 per cent versus 21-27 per cent). For expressing their continued dissatisfaction with (even anger at) with the Stephenson text and formally putting in their paper the principles and modalities they wish to see in the final NAMA outcome, the developing country groupings are now getting a tongue-lashing from the US and EU. The developing countries are accused of "signaling the end of the Round" and of "lighting a fuse to blow up this round", in the words of a spokesman for the US Trade Representative. The EU Trade Commissioner's spokesperson said "alternative papers are not needed and we await others to undertake the necessary negotiations." The US and EU seem to be orchestrating a media campaign aimed at placing the blame squarely at countries like India, Brazil, South Africa and Argentina for squashing the Round if they continue objecting to the skewed Stephenson paper. In
its editorial titled "Doha or Die", the Wall Street Journal
on 5 October ended with the paragraph: "The latest US concessions
mean that Brazil and India can no longer use farm subsidies as an excuse
for their own failure to move. If The US Trade Representative Susan Schwab herself started the blame game early when in the first half of September she accused countries of being "obstructionist" for not accepting both texts as the basis of negotiations and threatened that "it will be very clear who the spoilers are." She even specified four developing countries. If the US and EU have planned and built up the premises of their blame game, then the General Council statement of the developing countries would have triggered the next phase of their game. The
And in this plan, when the developing countries re-state their case on why they cannot accept the ranges in Stephenson's NAMA paper, the US joined by the EU are almost certain to call "Foul!" They will state that the developing countries must accept the NAMA text since they are willing to work within the agriculture text. And they will ignore, and try to hide from the public, that the agriculture text was built up through consultations that try to reflect various views (though it still contains gaps and flaws), while the NAMA text has ignored the positions of a wide range of developing countries, is biased towards the developed countries, and is not in line with the key mandated principle of less than full reciprocity. Yesterday,
The
Brazilian official added that the The developed countries often say that they have to satisfy their constituencies, such as Congress or manufacturers and farmers, and that accordingly the developing countries have to open up their markets or else there is no deal. However, the developing countries also have active constituencies to satisfy, and thus some of them face pressures from home. An
example of this is the pressure put by Cosatu (Congress of South African
Trade Unions) on the government of Cosatu is a partner of the ruling African National Congress, and is recognized as perhaps the most powerful of the African region's trade union movements. On
9 October, the same day that He started by criticizing the negotiations for putting implementation issues and special and differential treatment at the bottom of the agenda although they had started at the top when the Round was launched. "We
are absolutely convinced that a number of governments, particularly
from the European Union, together with the "Instead, a terrible trade-off is being offered to developing countries -- increased access to the markets of developed countries for agricultural products in return for significant market liberalisation, particularly in industrial products. "What
this means for a country like Vavi dismissed the developed countries' argument that developing countries should not be concerned about the tariff cuts as they will be allowed some flexibility, through excluding 5% of their tariff lines from tariff reduction or allowing 10% of tariff lines to take a smaller reduction than proposed by the formula. "The
reality is that these flexibilities will not sufficiently protect workers
and light industry in "To take a South African example, we will see a substantial decrease in 255 tariff lines affecting clothing. If we calculate how many of these we could protect through the provisions for exclusions, we find that they are already 4.63% of all tariff lines. "If you include the wider range of clothing, textiles footwear and leather, 15.3% of tariff lines are affected. This means that clothing, textiles, footwear and leather alone would not be protected by a 5% exclusion. There would be no space to even think of including automotive and components, plastics, furniture, downstream metals and a range of other labour intensive sectors. "Using
the formula to reduce our tariffs will also not allow Vavi said the developed countries' agricultural subsidies are very harmful to developing country producers, and can only be addressed multilaterally, through the Doha round, as no developed country will reduce subsidies in a bilateral agreement or unilaterally. However,
a very high price is being asked for reduction of subsidies that are
prohibited in the first place. The proposals for reductions in domestic
support will only reduce the maximum spending levels, but not the actual
spending. In other words, the In
Agriculture, the tariff reductions by the developed countries might
be much less in the end than proposals might assume because of the lenient
treatment of "sensitive products," so the gains for South
"The
Agriculture commitments by developed countries need to be compensated
for in other areas of negotiations as well, namely NAMA and Services,
where demands on developing countries including "The
demands in fact violate the "Not only are these modalities unfair and against the Doha mandate; they will also have a devastating effect on employment in South Africa and will seriously restrict South Africa's capacity and policy space to be able to industrialise and move up the value chain. "Moreover, developed countries have used the very trade tools that they now wish to restrict developing countries from using. "Coefficients
between 19 and 23 as included in the draft modalities, will bring the
average bound level in "Furthermore,
a study by the Carnegie Endowment on the Doha Round estimates that the
liberalisation of manufactured goods for unskilled labour will further
drive down wages of workers. It will lead to job losses in unskilled
jobs in manufacturing in countries such as " The
trade union leader also gave details of how "All
in all the balance is quite un-favourable for It
is evident from this speech that leaders of social movements in at least
some developing countries are following the If
It is not possible anymore for the developing countries' governments to negotiate a bad deal and "get away with it" because the level of knowledge and activism is much higher today than at the time of the Uruguay Round, when the developing countries indeed had the bad end of an unequal deal. Thus, in the blame game that is inevitably going to unfurl further in the WTO, the developing countries' diplomats and officials have to keep an eye not only on what the officials and media in the developed countries are saying, but even more so on the responses among their own people. For them, being accurately blamed at home would be worse than being blamed, unfairly, in the Western media.
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