The new round has little to do with development. We look at the agenda and what is on offer is not acceptable for the South

"The developed countries have been saying it would be a development Round. But when you see what they are putting in, it has little to do with development. Rather, it is trying to limit the space of our development. So we look at the agenda, and so far, what is on offer is not acceptable to many of us."

Nathan Irumba, Uganda's Ambassador to the WTO, Geneva, 5 July 2001

Developing countries are loath to launch any form of a trade negotiating round at the WTO Ministerial in Doha. However, they are under intense pressure that will only increase in the weeks leading up to the November meeting.

The developed countries - particularly the EU and to a lesser extent the US - are whipping everyone into line before Doha, desperate to prevent a repeat of Seattle. Yet, for developing countries the promises of Seattle have not materialised. Implementation issues have been discussed - endlessly - but the US and the EU have given nothing away and have shown no willingness to rectify the situation.

While the majority of developing countries are refusing to back down, their positions could easily collapse without massive civil society backing.

It is the responsibility of civil society groups in the South and the North to take up the call for "No New Round." They should instead support the demand that the Doha Ministerial

· limits itself to delivering on implementation issues
· addresses key institutional questions within the organization - including the non-democratic decision-making processes, the lack of internal transparency and the marginalisation of most developing countries in Green Room-style consultations
· launches the mandated assessments in agriculture and services before these negotiations continue further.

The stand-off between developed and developing countries reflects the fact that the non-democratic structure of the WTO - the fundamental cause of the developing country revolt in Seattle - has not been addressed and that the rich and powerful countries continue to operate non-transparently in their attempts to intimidate, divide and rule the majority.

The EU and WTO secretariat: carpetbaggers for a new round

The EU Trade Commissioner, Pascal Lamy, and the WTO Director General, Mike Moore, have been working overtime in the past months, garnering support amongst WTO members to get a new round off the ground in Doha.

Despite the vehement protests by developing country governments against a comprehensive round, both Lamy and Moore claim to know what is in the best interest of the South. Pascal Lamy told a recent NGO symposium that, while the EU and the US could get along without a round, "I am less sure about developing countries, particularly the poorest. My fear is that without a round, the world trade system will leave them further behind."

In the past year, the EU has tried to "soften" (but not change) their position, arguing that a comprehensive round -- which includes industrial tariffs, investment, trade facilitation, competition policy, environment and government procurement -- is beneficial for developing countries. As part of the public relations drive, at the Least Developed Countries conference in May the EU committed to giving LDCs unrestricted market access (notwithstanding some significant restrictions) in the Everything But Arms initiative. Late last year they also suggested including investment and competition as 'plurilateral' agreements in the WTO (that is, to be signed only by those interested). Most recently, the EU tried to appear sympathetic to developing countries concerns on TRIPs (the intellectual property agreement in the WTO). But they have yet to offer anything more tangible than sympathy.

Mike Moore, too, has been heavily criticised by governments and NGOs for crisscrossing the globe promoting a new round when this is not the position taken by all WTO members. Moore claims that "a round would help the poor and weak countries more than anyone else. The big guys can fend for themselves. But without multilateral rules, the poor are subject to the law of the jungle."

The US: ambitious but ambiguous

The US, in the past weeks has made great efforts to appear to take a similar position as the EU. In the senior officials meeting on 25 June in Geneva, the US and the EU gave a joint press conference calling on the WTO to launch "an ambitious round of trade negotiations at Doha." The reality, though, is that their positions remain far apart. The US is unlikely to halt the launch of a new round, but they are certainly not demanding one. Bush seems far from likely to get the trade promotion authority ("fast track") he would need to realistically negotiate a broad round. The most recent exposition of their position (25 June) has shown carefully and cautiously crafted language aimed to give the appearance of support to the EU, but also with large doses of ambiguity. Washington's interests include:

· ambitious negotiating mandates for the built-in-agenda items of agriculture and services
· further development of the dispute settlement understanding with particular attention to transparency in proceedings
· market access in non-agricultural products (usually known as industrial tariffs)
· "appropriate means" to address trade facilitation, transparency in government procurement, investment and competition policy. "We are open to exploring how best to treat these topics in the context of launching the Round."
· intersection of trade and environment issues
· "immediate and continuing efforts on implementation issues…"
· "internal transparency in the operations of the WTO and external transparency to enhance the credibility of the WTO in the eyes of public opinion."

Also significant is the reference to the Punta del Este negotiating mandate. The US has pointed out that the declaration that launched the Uruguay Round was a fairly "simple" mandate, which enabled negotiations to begin, suggesting that this could be useful again at Doha. That is, that the negotiating mandate, as in the Uruguay Round, could be changed along the way.

The US also underlined that "the WTO can't afford to fail a second time," and that Washington is "cautiously optimistic that we will succeed in launching a Round at Doha."

Developing countries; implementation is the unifying issue

While there are certainly shades and differences between developing countries' positions, one clear fact is that they are not demanding a new round. The developing countries which have come out openly in support of a comprehensive round are South Africa, Costa Rica and Chile and, less vocally, Colombia and Singapore.

THE CAIRNS GROUP: The Cairns Group of (agricultural exporting) developing countries are cautiously agreeing to a round, but are taking the offensive in challenging those calling for a new round to make concessions that are sufficiently significant. Their main interest is in agricultural markets, particularly in the EU where they want market access plus a firm commitment to significant cuts in their huge domestic and export subsidies.

The like-minded group(LMG)

The LMG is an informal coalition of like-minded countries at the WTO. This group includes India, Pakistan, Egypt, Dominican Republic, Uganda, Malaysia, Indonesia and Cuba, amongst others. The group has been in existence for some years and has been coordinating positions, sometime meeting daily when negotiations are intense.

"We're not ready for it (a new round). We'll lose more than we'll gain. " Srinivasan Narayanan, India's Ambassador to the WTO, Geneva, 26 June 2001. This group can be credited with the fact that that all developing countries have rallied around the common demand for implementation issues (redressing imbalances from the Uruguay Round) to be addressed. This has been top of their agenda long before Seattle. It is also members of the LMG, such as India and Pakistan, who have repeatedly emphasised that implementation issues must not be put in the basket of a round or developing countries would have to give more concessions in order to attain the benefits that had already been promised by the developed countries, but which never materialised.

There are of course some differences between the positions of these countries, with India and Pakistan taking strong positions against a round. Malaysia says that it is not against a round, but that the agenda for a round must be agreed by all and that the negotiating mandate must be made clear. That is, new issues must not be added on in the course of the round.

African Group:

Many in the African Group do not want any round of any sort to be launched, however limited or manageable. Many African countries are still struggling to implement the Uruguay Round commitments, and find it incomprehensible that they would commit themselves to further, knowing that this would only bring them to dispute settlement. Indeed, despite intense pressures that have been building up, the African countries have refused to agree to the launching of a new round. This was evident at Libreville a year ago, but also during the UN LDC conferences in Brussels in May.

India:Leading the resistence?

On 14 June, India's Minister of Commerce and Industry, Murasoli Maran, sent round a seven-page communiqu? to his counterparts of the G77 highlighting India's opposition to a new round. It included the following points:

· The EU "has been relentless in its efforts to launch a comprehensive New Round" on the basis that the Round would promise "welfare gains to all." Maran categorically states that "There is a widely shared view that Uruguay Round of Negotiations resulted in serious imbalance and asymmetry to the detriment of developing countries."
· "Despite the May 2000 decision of the General Council that 'implementation issues' should be resolved before the 4th Ministerial Conference, many developed countries are now openly stating that these implementation issues can be resolved only as part of a new round of negotiations. Most of the developing countries including India have been taking a stand that 'implementation related concerns' are a legacy of the Uruguay Round of negotiations and the developing countries have already paid for them by way of taking onerous obligations though not to their liking, under TRIPS, TRIMS etc and that these concerns should be resolved up-front without linking it to any new round of negotiations. We would like to stress that the resolution of the implementation related concerns requires political will and good-faith efforts on the part of the developed countries."
· "We remain unconvinced that issues such as investment, competition, labour and environment under WTO will facilitate any additional market access or open up newer development opportunities for the developing countries."
· "We are of the view that the WTO work should concentrate on the full implementation of the Uruguay Round results and the 'built-in-agenda' (agriculture and services). Other matters of priority are a) implementation of special and differential treatment as envisaged in various WTO agreements, and b) correction of imbalances in several WTO agreements including subsidies and countervailing measures, anti-dumping, TRIPS and TRIMS which have major implications for development policies and interests of developing countries…Unless the present inequalities are removed, we do not believe in the success of any Round of Negotiations'.

Trust in WTO at a low ebb

The day before the WTO NGO Symposium in early July, the LMG convened press conference to publicise their position. This was clearly a sign that they did not trust that the WTO Secretariat, who was organising the Symposium, would correctly represent the variety of positions in the organisation.

At this event, Malaysia's Ambassador Supperamaniam said that there was now no consensus at the WTO on the launching of a round. On implementation issues, Egypt's Ambassador Aboulnaga said that the developing countries had already paid a price twice on their issues - once during the Tokyo Round, and the second time in the Uruguay Round and that they still had not gained or benefited. They were now being asked to pay the price a third time by going into another round, with new issues and more unkept promises. This was not acceptable.

Uguanda's Ambassador Irumba even said "there is a systemic issue here… The whole notion of Rounds was before the WTO was created as an organisation. Our understanding was that when it was created, it was supposed to be a continuous negotiating forum." On the Singapore issues (investment, competition etc) that some countries are pushing, Irumba commented that 'the developed countries have been saying it would be a development Round. But when you see what they are putting in, it has little to do with development. Rather, it is trying to limit the space of our development. So we look at the agenda, and so far, what is on offer is not acceptable to many of us'.

"This time round, we in the LMG (Like Minded Group) think we should proceed on the basis of a realistic assessment. If by the end of July, there is no movement on issues of importance to developing countries, but convergence on other issues, the level of ambition for Doha will have to be lowered. In that event, Doha could result in some simple declaration for a work programme or other options. " Munir Akram, Pakistan's Ambassador to the WTO, Geneva, 5 July 2001.

Indeed, at this press conference, the like-minded group ambassadors present complained of the "spin" that had been put on the issue of a round gaining consensus as a result of the position Mike Moore is taking in his personal capacity. This, they said, was not an accurate reflection of the reality.

Myths, threats and accusations abound

Northern countries, particularly the EU, and the WTO Secretariat, are spreading threats and accusations in their attempt to corner the South into accepting a round. These include:

· The WTO will collapse if a round is not launched
· This could mean going back to the "law of the jungle"
· If the multilateral system does not move in the interest of the North, the North will slowly opt out and carry out their business in another forum - regionally or bilaterally.
- Countries who close themselves up could end up like North Korea.
- "Trade is good for the poor." If you oppose the WTO, you are opposing lifting the poor out of poverty. This particular charge is usually directed at NGOs by Northern governments (especially Pascal Lamy and the UK's Clare Short) but also by the WTO Secretariat.

As recently as 6 July, Pascal Lamy gloomily predicted that "The WTO may go into hibernation if we do not launch the Round in Doha. It may be worse than that: sometimes hedgehogs do not survive a long cold winter." But developing countries at the WTO are not buying into these arguments. India's Minister of Commerce and Industry Mr Maran, in the communiqu? sent to the G77, stated that he is "painfully aware of the veiled threat given by some of the developed country friends that if the developing countries do not agree to the launch of a new round of negotiations, then WTO would lose its relevance and regionalism would get an upper hand." In response to such an argument, he says that these regional trading arrangements have been entered into by various countries based on "perception of their self-interests and may have nothing to do with the launch or otherwise of a new round."

Geneva-based representatives of developing countries have repeatedly argued that the system is already overloaded. To put more onto the WTO, and without sorting out the problems in the current system, would be detrimental to achieving development objectives in the South.

Why a limited round would be a disaster for the south

A round of any nature, no matter how 'limited' or 'manageable' would not benefit developing countries for two reasons:

First, it would mean that implementation issues would not be addressed as stand-alone issues but would be traded-off with other new liberalisation commitments. This would obviously not redress the imbalances, but in fact exacerbate the imbalances for the South. Southern governments have repeatedly called for implementation issues to be dealt with first, and separately, from any other negotiations for precisely this reason.

Second, the US and the EU have already asked for flexibility in the negotiating mandate at Doha. The US recently called for a "mandate in general terms, like at Punta del Este" and the EU stressed that they wanted a "permissive and sufficiently open-ended and not restrictive mandate." That is, even if the most limited of rounds is launched, these countries will certainly continue to put pressure on developing countries to include new issues along the way.

Implementation: the heart of the matter

Developed countries claim that implementation issues can only be adequately dealt with in the context of a new round. The US' position, articulated by former US trade representative Charlene Barshefsky before Seattle, is well-known: a deal is a deal. The EU also says that while there are a few issues that can be dealt with without changing the texts, implementation issues that are of greater significance, or require changes to the language of current agreements, can only be dealt with in a round.

In fact, the General Council in the WTO does have the power to make changes to texts of current agreements. That this has not happened -- despite implementation being high on the post-Seattle agenda -- does not reflect any strictly legal procedural impediments but reflects the playing out of the power imbalances within the WTO which leave the South unable to make changes in areas which would impinge on the commercial interests of the major players.

"A comprehensive Round would lead to a 'comprehensive disaster." Indian, Pakistan & Malaysian representatives to WTO, Geneva, 25 June 2001. Indeed, there are gapping inequities in the current Uruguay Round package. Developing country governments have identified problems in almost all agreements, from agriculture, to textiles, services, TRIMS, TRIPS, subsidies agreement, anti-dumping, technical barriers to trade, sanitary and phytosanitary agreement. Below are only highlights of some implementation problems. In particular, agriculture and textiles have been key areas which developing countries had hoped that they would gain from in the Uruguay Round package.

Agreement on agriculture:

Six years into the WTO, despite the Agreement on Agriculture, the overall subsidization of agricultural producers in the OECD countries is much higher today than in 1995. OECD estimates that overall support levels have increased from US$247 billion in the base 1986-88 period to US$274 billion in 1998, to US$326 billion by 1999. This is taking place even as developing countries are reducing their tariff levels, and therefore making themselves much more vulnerable to this unfair competition. Furthermore, the rich countries have refused to implement their promises they made to soften the impact of liberalization. The Ministerial Decision approved at Marrakech in 1994 to take measures to counteract the negative effects of trade liberalization on net food importing countries has never been implemented. Not surprisingly, the impact of this Agreement has been destructive for many developing countries, whose imports have suddenly surged, while their exports have not significantly increased, leading to a host of problems, including food insecurity, and increasingly rural unemployment and poverty. According to the FAO, growth in agriculture exports in the period 1990-97 was 3.05% per annum for developed countries and only 0.63% per annum for developing countries. On the other hand, annual growth in agriculture imports was 1.85% for developed countries and 3.87% for developing countries during this same period.

Agreement on textiles and clothing:

Similarly, in textiles, developed countries have failed to implement the agreement according to the spirit of the agreement. This area is of significant export interest to developing countries, but has also represented a key area whereby the rules offer the rich countries special treatment. Even though these countries have been expected to remove their quota restrictions over the 10 year transition period from 1995-2005, at present, (six years on) only a fraction of these restrictions have been removed. According to the International Textiles and Clothing Bureau in June 2000, the status quo on the removal of quota restrictions are 13 out of 750 by the US; 14 out of 219 by the EU; and 29 out of 295 by Canada.

General agreement on tade in services (GATS):

In the area of services, developed countries have refused to abide by the originally set deadline to establish rules on emergency safeguards before market access negotiations in the many services sectors take place. They have also circumvented any serious discussion on the extent of subsidies they provide to their services corporations, even as they are pushing relentlessly for more access to developing countries' services markets. At the same time, developed countries are refusing to open up their own markets in the area of most interest to developing countries - service provision via the "movement of natural persons." The imbalances of the GATS are evident in the following statistics: In 1997, services trade conducted via commercial presence amounted to US$820 billion, while it was a mere US$30 billion via the "movement of natural persons."

Dangling carrots and breaking promises

Despite developing countries' efforts to stand their ground and insist on addressing implementation issues first, their capacity to resist pressures is fragile.

The process since Seattle of long negotiations on implementation but never delivering on promises, has been described by a key developing country delegate in Geneva as one of "dangling carrots before us." Just at the moment when Southern negotiators think that they are finally going to get some results, no matter how paltry, the carrot of moved, ever so slightly, out of reach again. This is how, despite implementation being the key area of work by the General Council in 2000, the year ended with the sum total of zero results. The US and the EU simply would not give. To date, there are still developing country governments, such as the LMG, which are standing up for their rights and pushing the line that what is rightfully owed to them should be duly delivered.

The current standoff between the Quad countries (EU, US, Japan, Canada) and the majority of developing countries was crystallized by a mainstream WTO press reporter who asked NGOs at the launch of the campaign to oppose a new round "How do you expect implementation issues to be addressed when you do not want your governments to engage in further negotiations?"

Top issues for developing countries

Decision-making processes of the WTO:

A key reason why developing countries are in a weak position is because the decision-making structure, based on consensus and the Green Room, remains unreformed. This allows the North to play a non-transparent game whose results are then passed off as consensus.

Indeed, the Green Room-Consensus system remains the key decision-making mechanism of the organization. This is despite the fact that right after Seattle, two key officials, then USTR Barshefsky and UK Secretary of State for Trade and Industry, Stephen Byers, admitted that it was undemocratic.

At the last Seattle press conference, Barshefsky said, "The process was a rather exclusionary one… The WTO has outgrown the processes appropriate to an earlier time. An increasing and necessary view, generally shared among the members, was that we needed a process which had a degree of internal transparency and inclusion to accommodate a larger and more diverse membership." (Press briefing, Seattle, 2 December 1999).

The UK's Trade and Industry Minister, Stephen Byers, also said that the "WTO will not be able to continue in its present form. There has to be fundamental and radical change in order for it to meet the needs and aspirations of all 134 of its members." (Byers, Guardian New Services, 'Deadline Set for WTO Reforms', 10 January 2000)

But in the past one and a half years WTO officials have been busy defending these non-transparent structures, rather than working to change them. Indeed, Philippe Legrain, Special Adviser to Mike Moore, defended this system in a recent article "One of the myths about Seattle is that there were no Africans and hardly any developing countries in the Green Room. In fact, there were six Africans and a majority from developing countries. Moreover, any deal reached in the Green Room must still be approved by all WTO members." ('Should the WTO be Abolished', Ecologist, Dec 2000-Jan 2001 Vol. 30, No.9, p. 23).
Mike Moore himself, in his speech at UNCTAD X, reiterated "The consensus system is 'non-negotiable." (February 15, 2000, Bangkok).

The current system also means that there is no system of checks and balances for equity within the institution. If there is no consensus on an issue that may be of critical importance to three-quarters of the membership, but not for the others, nothing moves. This is the case even if the issue could be one of life and death for people in Member countries (for example AIDS, drug pricing and TRIPS). It is therefore almost impossible to make changes to existing agreements given that there will always be those whose commercial interests are represented who will block consensus.

Negotiations based on reciprocity:

Negotiations are traditionally based on reciprocity and not on any principle of equity. This again gels with the strictly commercial logic of the WTO: "Until I get some benefits from you, I will give nothing away." The powerful members never voluntarily relinquish benefits out of sympathy for the difficulties others may be facing without extracting a price.

Institutionalizing the law of the jungle:

To portray the WTO as being above the law of the jungle -- characterised by Mike Moore as something like "the WTO or barbarism" -- is plainly wrong. In fact, apart from the dispute settlement system (which is also highly problematic for the South), negotiations at the WTO institutionalize the law of the jungle. Arm-twisting is commonplace and weak countries are constantly threatened that their food aid would be cut off, or their loan suspended, if they do not tow-the-line.

Mobilise to stop a round!

The odds are stacked high against developing countries. While Southern governments can try their best, their continued resistance and fight for their rights in this highly unbalanced power-based system demands strong backing from mass civil society mobilisation in the South and the North. Some NGOs in the North are already weakening, perhaps because of pressures from their governments or because of the allure of pragmatism. There are groups which have bought the rhetoric of their governments: that no new round would bring the WTO to its knees and that the WTO is the only thing that stands between order and the jungle, that the South has to make some concessions if it wants to move forward on implementation, and, most insidiously, that trade is "good for the poor."

The power imbalances in the WTO are so entrenched that we must challenge the fundamental institutional problems that lie at the heart of the current stalemate. Timidly chipping away at small reforms does little more than legitimise the "rules" with which the powerful and rich countries accelerate and institutionalize their exploitation of the weak in the world trading system.

Aileen Kwa, Focus on the Global South
Aileen Kwa is a research associate with Focus on the Global South. She is based in Geneva and has been following the WTO negotiations since 1996