|
Monday, October 8, 2001
The draft texts for both Implementation Issues and
the Ministerial Texts of the World Trade Organisation (WTO) were
discussed last week in Geneva. On Monday, October 1, many countries
made statements about their dissatisfaction with the implementation
text and on October 2, they made general statements about their
reaction to the proposed draft ministerial declaration. Most developing
countries were so dissatisfied with the implementation text that
they postponed the Special Session on implementation scheduled
for October 3 in anticipation of a better draft pending further
consultations. Many countries have also made very strong statements
of disapproval of the Draft Ministerial Text. The Chair of the
General Council has been advised to provide a revised draft. This
draft can be expected later this week or at least before the Singapore
meeting scheduled for October 12-13.
The Singapore meeting is a follow-up to the Mexico
meeting where only 19 of the 142 membership of the WTO were invited.
The Singapore meeting is also "invitation only" as told
to other Geneva delegations who wish to attend. It promises to
be a green room away from Geneva where discussions on the Ministerial
including points of conflict and consensus on the draft text will
be held. Though the WTO secretariat is not organizing it, it will
be represented. These two key meetings where WTO decisions are
discussed in the absence of 87% of its members leaves the organization
and its most powerful members open to all the criticisms of an
undemocratic and nontransparent process that have been associated
with the WTO since Seattle.
Shared below are perspectives about the ministerial
text based on some conversations with delegations from Africa,
Latin America and Asia. These perspectives include actual statements
from the block of Least Developing Countries (LDCs), the Africa
Group and India. They also include statements made by the Indian
and Pakistani Ambassadors at a meeting organized by the Modern
Asia Research Centre on October 4.
The LDCs represent thirty of the most poor and marginalised member
countries of the WTO. There are 48 LDCs in the world as recognised
by the UN system. They differ in needs and capacity from some
of their stronger developing country allies such as India and
Pakistan. India and Pakistan are two of the strongest of the Like
Minded Group of developing countries at the WTO. The African Group
represents 41 countries and includes strong economies such as
Egypt and South Africa and the perspectives of developing sub-Saharan
nations.
In particular, the statements by the LDCs, the African
Group and other key developing countries demonstrate two years
since Seattle that the process and principles of "internal
transparency and inclusive decision-making" still do not
reflect the work of the World Trade Organisation. While there
have been more "open-ended meetings" and updates of
green room meetings at the General Council, these two drafts,
which ought to represent the essence of WTO work, have been much
further off the mark than the majority of the WTO members expected.
Surprising also is the lack of coverage by trade and development
press of some of the strongest critiques made to date by a large
block of countries like the LDCs. If the WTO is truly concerned
about the health of the multilateral trading system it embodies,
then it must take these criticisms seriously, if not from an engaged
civil society outside its doors, then at least from the majority
of its own members.
The Preamble
The first two paragraphs of the preamble of the
draft ministerial text received widespread criticism from many
developing countries. The text applauds the multilateral trading
system (MTS) for promoting "economic growth, development
and employment for the past fifty years." It continues, "We
are determined, particularly in the light of the global economic
slowdown, to maintain the process of reform and liberalization
of trade policies, thus ensuring that the system plays its full
part in promoting recovery and growth."
The LDC statement in response to the preamble text:
"It is undeniable that the trading system has several positive
aspects. However the preamble is imbalanced in not recognising
the points made by LDCs and other developing countries on the
downside in the operations and implementation of the system, such
as the imbalances in the rules, the inequitable distribution of
benefits and losses, the lack of tangible benefits to poorer countries,
the massive losses to poor countries and poor people from the
continuous decline in commodity prices and terms of trade, or
the threats to livelihood and jobs when small firms and small
farmers are unable to cope with the flood of cheap imports. In
short, the marginalisation of LDCs and some other developing countries
should be mentioned so that there is recognition of these problems
by Ministers with the view to resolving them."
India stated, "Incidentally, I would also like
to mention that paragraphs 1 and 2 appear to paint a very rosy
picture of the multilateral trading system. While we all appreciate
the need for a rule based multilateral system, it may not be very
desirable to ignore the reality that the fruits of the system
are not available to all countries in an equitable manner. All
of us are aware that there is no credible assessment, as of today,
of the benefit derived by developing countries from the Uruguay
Round Agreements. In the light of these considerations, some adjustment
to the language in paragraphs 1 and 2 will be appropriate in order
to make it more balanced.
"We disagree with the suggestion in paragraph
9 of the preamble that the Ministers agree to undertake the broad
Work Programme. As you will see Mr. Chairman, it is precisely
this broadness of the work programme that causes us maximum difficulty
in your draft."
The Pakistani Ambassador, Munir Akram, commented
on the October 4 gathering that the "economic slowdown"
referred to in the preamble is "extraneous to the negotiations
of the WTO," and though there may be psychological impacts
of new negotiations, the idea that the problem of the economic
slowdown may in part be resolved by new negotiations, "remains
questionable."
Finally, the Africa group requested "that the
preamble should reflect the experiences and aspirations of all
members in the multilateral trading system. There is also a fine
distinction between what the multilateral trading system, could,
should be and is achieving." The group stood by its September
23rd Declaration of African Trade Ministers in Abuja, which stated
that "there is a an urgent need for development issues to
be put on center-stage at the WTO…the objective should be
the achievement of global growth and development for all members,
while decisively addressing the present inequities in the MTS."
Ministerial Text
The African Group: "It is our view in the Africa
Group that meaningful progress on this document can only be achieved
when we have filled in the gaps in sections dealing with Implementation,
Agriculture, TRIPS, and Special and Differential Treatment. These
are critical areas for developing countries in general and the
Africa Group in particular. Indeed they are critical for all members
particularly in view of the linkages between all the sections
of the Draft Declaration."
Non-Agricultural or Industrial Tariffs
The multilateral trading system is currently under
scrutiny and being judged as to its fairness and decision making
process for all of its members. LDCs oppose the inclusion of any
new issues including non-agricultural tariffs citing the de-industrialisation
that has resulted in their countries through autonomous liberalisation,
while other developing countries are now softening to the inclusion
of industrial tariffs.
Tanzania, as LDC coordinator: "We would like
to remind Members that during the stocktaking meeting in June
2001, the Co-ordinator of the LDCs in the WTO, in his statement,
had highlighted the problem of de-industrialisation faced by many
LDCs as a result of removal or reduction of tariffs in the industrial
sector. In many LDCs, there has been the closure of many local
firms in many sectors, and the loss of manufacturing jobs. Keeping
this major problem in mind, we view with concern and we are unable
to accept para 13 on negotiations on non-agricultural products.
LDCs require more time before agreeing to fresh negotiations in
this area."
While India has acknowledged the problems of de-industrialisation
and is cautioning against an agreement that will disenfranchise
LDCs, it is willing to negotiate on non-agriculture tariffs if
1) tariffs on value-added products of developing countries are
made top priority 2) if implementation issues are resolved and
3) if concessions are made on the extension of Geographical Indications
under the TRIPs agreement:
"Our suggestion is to make the reduction or
elimination of tariff peaks, tariff escalations and the application
of specific and mixed and compound duties on products of export
interest to developing countries, the specific objective of the
proposed negotiations. We are proceeding on the basis that your
draft does not imply that the developing countries including least
developed countries will not have the freedom not to bind their
tariffs in respect of certain sensitive items…There should
be a clear commitment that the reduction for elimination of tariff
peaks, tariff escalation and specific and mixed and compound duties
in the developed countries will not be conditional on concessions
from the developing countries. Furthermore, it should be clearly
stipulated that developing countries shall not be required to
offer reciprocal concessions."
Singapore Issues:
Most countries have unequivocally spoken against
the "clean text" presentation of government procurement
and trade facilitation and maintain that there is no consensus
on including Investment and Competition for negotiations.
India: "While I respect and understand the
wishes of some of my colleagues for launching of negotiations
in these four areas, I am sure they will acknowledge that even
in the meetings convened by the proponents themselves, it became
absolutely clear that there was no consensus in favour of changing
the study mode into negotiation mode in respect of any one of
these subjects. Therefore, I am a bit surprised that in respect
of Government procurement and trade facilitation, your draft provides
commencement of negotiations as the only option in these two areas."
LDCs: "At Zanzibar, LDC Ministers indicated
that they are not willing to accept the four "Singapore issues"
(investment, competition, transparency in government procurement
and trade facilitation) as subjects for negotiations for new rules…
The LDC Ministers indicated that the four "Singapore issues"
were not yet ripe for negotiations as the issues were complex
and the LDCs were not able to fully understand the implications
for them.
"On investment, the LDC Ministers said the
implications for development of a multilateral investment agreement
of whatever type have not been fully discussed nor understood.
On competition, they said that most LDCs do not have competition
laws in place, lack capacity to enforce them, find the relation
between competition and development to be complex and have difficulty
for introducing anti-competitive policies in their dualistic economies.
LDCs had also not yet comprehended the implications of framework
on transparency in government procurement in the WTO, how it would
affect development, and the issues are complex with divergent
views existing. On trade facilitation, the Ministers said this
area does not require new rule making."
New Round
LDCs: "Paragraphs 36-42 clearly indicate the
launching of a new Round, i.e. the conclusion of negotiations
by a dateline, the formation of a Trade Negotiations Committee,
a single undertaking. LDC Ministers have already stated that LDCs
are unable to undertake a broad agenda due to lack of capacity
and inability to absorb more commitments. Thus this section of
the draft has to be amended to reflect that LDCs would not want
a new Round nor elements of such a Round."
African Group: "Our view is that we defer consideration
of this section (paras 36-42) until such time as we have agreed
on the elements of the Work Programme. However, we strongly believe
that it is important to develop language on paragraph 40 that
formalizes a Ministerial decision on transparent and inclusive
decision-making in the WTO."
India: "Mr. Chairman, you will not be surprised
if I say that I have serious concerns with many elements as well
as the structure of the Draft. The fundamental concern for my
delegation is that the fact that though the draft does not use
the word "round" anywhere, the implication of the draft
declaration appears to launch an open-ended new round of negotiations
with all the traditional elements of a round as seen during the
Uruguay Round, built into it...
"When I first glanced through your draft, I
got the impression that there was no "round" in it,
in as much as I saw only the first two-thirds of the draft. But
subsequently, when I looked at paragraphs 36 to 39 and 42, all
ideas, concepts and trappings which go to make a "round"
have been included in these paragraphs. We feel that these paragraphs
closely mirror the Punta Declaration. Somehow the fact that since
(January 1, 1995), we have a permanent negotiating forum and that
we are no longer in the GATT era seems to have been overlooked.
We do not see as to why there should be a trade negotiation committee.
We have the General Council in the WTO as provided for under Article
IV.2 of the WTO Agreement. This is the supreme organ of the WTO
next only to Ministerial Conference. Moreover, in the intervals
between the meeting of the Ministerial Conference, its functions
shall be conducted by the General Council. Therefore, it is beyond
my comprehension as to why there is need to introduce a new structure
"trade negotiation committee" and then go on to say
rather defensively that the new structure will be under the authority
of the General Council."
Single Undertaking
Along with objections to a new round, many countries
also objected to the use of the word "single undertaking"
in the draft ministerial text. Historically, "single undertaking"
was coined in the beginning of the Uruguay Round as a way to convey
that all negotiations would begin and end at the same time. No
one agreement could be completed in its negotiation before all
of the agreements had been negotiated. There was a vague understanding
that all members did not have to negotiate on all of the agreements.
However, by the end of the Uruguay Round, this concept of harmonizing
the conclusion of all negotiations had been changed to: all members
have to accept all agreements under the Uruguay Round or not be
part of the WTO. TRIPS and TRIMS, to the dismay of most developing
countries, were included as part of this "Single Undertaking."
The following quote by the Indian Ambassador refers to this historic
process and suggests that the concept of single undertaking need
not apply if members decide to continue negotiating on existing
issues. Furthermore, he stresses that any open-ended sentences
on the future work programme must be clarified in advance rather
than future surprises due to "open" language.
India: "In para 38, there is a reference to
the idea of single undertaking. First, I am not very sure whether
there is clarity about this concept. I remember, Mr. Chairman,
one of your illustrious predecessors mentioned in a meeting in
this very same hall that the concept of single undertaking had
a particular connotation at the time of Punta Declaration and
that the concept acquired a different connotation towards the
end of Uruguay Round negotiations. To the best of my knowledge,
if the negotiations are limited to existing areas, the concept
of single undertaking may not have much relevance, as it will
be quite impractical to implement the new obligations in these
areas only with respect to some Members and leave it out in respect
of others. We have an uncomfortable feeling that reference to
single undertaking in the Draft might be a pointer towards inclusion
of new subjects, a prospect which we do not look forward to. Moreover,
your paragraph 42 is so ambiguous and open ended that many developing
countries whose memories about Uruguay Round are still fresh genuinely
feel threatened by this paragraph."
Environment
Developing Countries are concerned about the EU's
stance on environment. The EU has said that the wording on the
environment is too weak and that it must include language on precautionary
principle and labeling. Norway expressed dissatisfaction with
weak language on environment. Meanwhile, developing countries
continue to maintain that the environment cannot be used as a
protectionist measure. As part of the CTE, however, developing
countries are suggesting that Southern environmental concerns
such as the relationship between the TRIPS agreement and the Convention
on Biological Diversity should be included in this paragraph.
Labor could be a deal breaker
EU has also pushed for stronger wording on labor.
However, developing countries have indicated that the current
language on labor is the maximum they will allow. Labor could
be the strongest deal breaker of a round if it were to be included
or pushed by developed countries.
Other Issues
US has maintained its stance that anti-dumping does
not need to be revisited, that it is still an agreement that many
countries do not have enough experience with and needs more time.
The US could also be using this stance as a potential trade off
for receiving further market access in Agriculture. Discussion
has begun on drafting language for Agriculture, one of the most
contentious and important areas for developing countries. There
seem to be ongoing conflicts between developed and developing
countries--a particularly controversial issue is the use of export
credits as a way of subsidizing US Agriculture exports, while
France does not want to concede any export subsidies as part of
the EC negotiating platform.
The Chair has also been charged to draft a text
on a Ministerial Health Declaration. Developing Countries are
still pushing for clarity that nothing in the TRIPS agreement
will prevent Members from taking measures to protect public health.
Finally, developing countries have proposed a separate
binding framework agreement on Special and Differential Treatment.
Consultations are continuing on this issue.
Conclusion
Currently, none of the paragraphs of the Ministerial
Text are being debated on a "negotiation" basis. Countries
are waiting for more results from consultations. Will there be
a new consensus after the Singapore meeting at the end of this
week? And whose voices will count? In the next 5 weeks before
Doha, the 142 members must come to terms with a just plan of action
on implementation issues. Developing countries have stressed that
the implementation text prior to Seattle which highlighted approximately
97 issues is the best text upon which to base discussions. In
the two years since Seattle, this text has been watered down to
smaller and smaller "tirets" of implementation issues.
The proposed draft implementation text deals with about 47 (to
be addressed prior to or at Doha). The other remaining 50 or so
tirets are not even mentioned. Ambassador Akram from Pakistan
commented, "the May 3rd 2000 decision on implementation mandated
that all important issues were to be addressed and decided upon
by Doha." Developing Countries expect all of the 97 or so
tirets to be tackled as a valid part of the agenda of the Ministerial
Conference.
Final Notes: Rethinking Unconditional Liberalisation
The Indian Ambassador said on October 4 that there
are three basic problems with the multilateral trading system.
1) There are signed agreements that were supposed
to give benefits to developing countries and did not deliver.
2) There are in-built obvious imbalances and inequities within
the system such as the TRIPS agreement, the Anti-dumping agreement
(where the US has repeatedly invoked its clauses to protect its
markets), and the Subsidies agreement where almost all developing
country subsidies are looked at less favorably while developed
countries have been able to continue their subsidies.
3) Special and Differential Treatment Provisions have never been
operationalised.
The Indian Ambassador's message has been that if governments want
to strengthen the multilateral system, it is not through adding
new issues, but rather through rebalancing the institution and
putting development at its center. He commented on the idea of
liberalisation by saying that developing countries have to pay
too high a price now if they want to have the flexibility to reverse
some of their liberalisation policies. He gave the example of
India having reduced its tariffs on rice to zero percent in 1948
through the GATT. Since then, India has paid the price of bringing
its rice tariffs up to a level where it could protect its rice
farmers by reducing tariffs in many other vital sectors of its
economy. He said that developed countries keep using the words,
"development round." But for that to happen, the "existing
development deficit has to be dealt with," and that "developing
countries cannot be forced to run faster than they are able to
run." He even went as far as to say that tariff liberalisation
policies under structural adjustment have lead to deindustrialisation
in many parts of the world and that a " one size fits all"
solution can no longer be applied.
Shefali Sharma
Institute for Agriculture and Trade Policy--Geneva
|
