The Doha debacle

The Doha Declaration is a clear gain for the developed capitalist world. It has catered to the needs of global capital in crisis.

THE self-appointed drum-beaters and trumpeters of the New Round were right: they knew better than even the leader of the Indian delegation what would be the denouement of the week-long negotiations at the Ministerial Meeting of the World Trade Organisation (WTO) in Doha, Qatar. They had tendered unambiguous advice to the government of India to join the bandwagon of the United States and the European Union well in time and welcome the launch of the New Round. Notwithstanding their expertise, their advice was based not so much on the rigorous examination of the issues involved as on the unflinching faith in the TINA (there is no alternative) doctrine. The wise Ministers accept such expert advice with alacrity. Alas, Murasoli Maran, the Union Commerce Minister, was too professional in his analysis of the issues confronting him and a bit too honest in his remarks. He could have learnt a thing or two about the virtues of expediency at the feet of our TINA brand experts. But that was not to be. And in the end, he had to swallow more than a mouthful of pride and a whole lot of strong statements he had made opposing negotiations on new issues.

The question, however, is not how sincerely and doggedly Murasoli Maran fought before he finally caved in. It is even less about his personal embarrassment at the volte-face he had to do. To begin with, it is necessary to expose and lay threadbare the pitiable attempts to rationalise the failure at Doha and invent microscopic "gains". More important is the task of setting out the far-reaching implications of the Doha Ministerial Declaration. It is equally important to reflect on why it happened the way it happened.

First, the argument that the Indian delegation "succeeded" in postponing the launch of the New Round, or at the minimum, the negotiations on new issues, by two years. It is only a "Work Programme" that the Declaration speaks of, not the "New Round", it is argued. The argument is as naive as it is false.

The change of nomenclature does not alter the pith and substance of the process. The past "rounds" have followed a pattern: the Ministerial Declaration lays down a broad negotiating mandate for every subject on the agenda, a time-frame is indicated, a Trade Negotiations Committee is set up to supervise and direct the negotiations. The concept of treating the negotiations as a "single undertaking" was invented in the Uruguay Round. All these elements are unmistakably present in the Doha Ministerial Declaration.

NO negotiations of the type envisaged have ever been completed at one go in one ministerial meeting; nor even in two years. The Tokyo Round, which had some rule-making agenda, modest though in comparison with the agenda of new issues adopted in Doha, lasted six years. The Uruguay Round, which had a comparable agenda, lasted eight years. It has always been the practice that the broad negotiating mandate in the ministerial declaration would be followed by a process of elaboration of the mandate into specific elements of the multilateral discipline. The process took anywhere between three to five years. It is this process that has been launched in Doha and the talk of "postponement" of the negotiations on the new issues to the next ministerial meeting is stupid. One has only to look at the language and content of the so-called work programme under specific subjects, to see through this argument. For example, on all the three important new issues, namely, investment, competition policy and government procurement, the mandate starts with the acknowledgment: "Recognising the case for a multilateral framework." This amounts to a clear decision in favour of elaboration of a multilateral discipline.

Right up to the last hour of the ministerial meeting, the Indian delegation, among others, had questioned the very need for a multilateral discipline on these subjects. If postponement of negotiations had to have any meaning under the circumstances, the very question whether there should be a multilateral discipline should have been kept open until a later date. This matter, however, has been effectively and finally closed in favour of initiating substantive negotiations on the multilateral agreements. While the formal decision on modalities of negotiations, that is, on exchange of concessions under the agreement, has been left to the next ministerial meeting, no doubt whatsoever has been left in the text elaborating "further work" under the work programme that substantive negotiations on the content of the new disciplines would begin forthwith. Thus, the working group on investment will focus on "scope and definition; transparency; non-discrimination, modalities of pre-establishment commitments; development provisions, exceptions and balance of payments safeguards; consultation and settlement of disputes between members." The working group on competition policy will focus on "core principles including transparency; non-discrimination and procedural fairness; provisions for hardcore cartels; ... progressive reinforcement of competitive institutions in developing countries." One look at the lists of issues to be focussed on shows that they are but a contents page listing chapter headings of the text of a new multilateral agreement. Once these elements are elaborated in the next two years, as the Work Programme lays down, all that will be left for the next ministerial meeting would be to adopt formally the texts of the new multilateral agreements containing the elements elaborated earlier.

It has been argued that vehement opposition by the Indian delegation secured a last-minute "out" in that the Declaration was adopted on the basis of "an understanding" from the Conference Chair in regard to negotiations on new issues. The "understanding" says that "a reference to the explicit consensus being needed for the decision to be taken" at the next ministerial conference "would give each member the right to take a position on modalities that would prevent negotiations from proceeding after the fifth (that is, the next) session of the ministerial conference until that member is prepared to join in an explicit consensus." (The clarification within the brackets added.) As noted earlier, the decision on negotiations on modalities has been slated for the next ministerial meeting. Let us leave aside, for a while, the semantic and substantive confusion caused by the inclusion of some important modalities of negotiations in the Work Programme itself, which has to start forthwith. Let us also ignore, for a moment, the basic point that negotiations on modalities of exchange of concessions cannot be divorced from the substantive negotiations on the content of the disciplines. Let us also not question, for the sake of argument, the legal value of the Conference Chair's understanding. Even so, it is difficult to visualise what has been "gained" through such an " understanding". If members opposing the inclusion of new issues failed miserably in preventing the launch of the substantive negotiations on those issues at Doha in the first instance, on what basis can one hope that they would succeed in doing so two years later, when the substantive negotiations would have gained momentum and each member would be busy protecting its own specific interests in the light of the various elements of the discipline that would have been elaborated by then? If one were bent on blocking the consensus and forcing a vote, it could have been done at the Doha conference itself. Such a move would have sent shock waves around the developed world and energised the Third World countries, restoring one's credibility. Such a step can be taken at a later stage also, when a formal decision comes up for adoption. The Conference Chair's "understanding" is not needed to buttress the legal right inherent in the decision-making procedure. In sum, the "out" that has been obtained has little practical or legal significance. The fig-leaf does not cover the reality that India succumbed to the combined pressure of the U.S and the E.U.

LET us now turn to the second issue: the implications of the Doha Declaration. The implications are far-reaching with regard not only to the new issues but also to the old, continuing issues.

The investment issue has been on the agenda in the form of studying the implications since the Singapore Ministerial Meeting in 1997. That study exercise is by no means over. Nor are a large number of developing countries convinced about the need for a multilateral discipline on this subject. Their main argument is that it is not a trade issue and is best left for national governments to handle according to their own perspectives and objectives and requirements. The industrialised countries and their multinationals in financial and other sectors had tried hard to get the issue included under the services negotiations in the Uruguay Round. There was a specific proposal on the table then that the capital's "right to establish" should be recognised, meaning thereby that the investor should have the freedom to move across national borders without let or hindrance caused by nation-states. The move was countered by tabling the labour's "right to reside", meaning thereby that labour should have the right to migrate and reside wherever it may decide to improve its prospect. Hastily, the proposal for "right to establish" was withdrawn. Also, the services negotiations resulted in an agreement, which left a good deal of discretion in the hands of the member-countries. In the opinion of many analysts of the developed capitalist world, GATS (General Agreement on Trade in Services) remained a "weak" agreement. This perceived weakness is being sought to be removed by means of a comprehensive multilateral discipline on investment. What has happened in Doha is the beginning of the final assault of global capital on the economic sovereignty of the nation-states, particularly of the Third World. That would also ultimately spell the end of auto-centric development for the developing countries. The insistence on the inclusion of this item on the agenda has to be understood in this perspective and context and not in the limited context of the bald chapter headings that have been incorporated in the Work Programme.

THE move for a global discipline for competition policy has also been opposed by many developing countries. For one thing, their national policies and structures to implement such policies are not yet in place in many countries. The need, if any, is for a global discipline on regulating and eliminating the restrictive business practices of multinationals. But all initiatives in that regard have been squarely thwarted and effectively neutralised by developed countries in forums such as the United Nations Conference on Trade and Development (UNCTAD) and the United Nations Economic and Social Council (ESOSOC). Under a multilateral discipline on competition policy, the powers of nation-states in the Third World would get circumscribed in the name of principles and rules of non-discrimination, procedural fairness and transparency.

Government procurement was always outside the purview of any multilateral discipline. Under the General Agreement on Tariffs and Trade (GATT), a code on government procurement was established but it remained a plurilateral arrangement, that is to say, it was optional for member-countries to join it. Government procurement is sizable in Third World countries. It serves economic and social objectives. Through this means incentives can be offered to indigenous industry, public distribution of essential commodities can be ensured, and even prices can be influenced to meet the social goals. Global capital is making the first move to neutralise ultimately this powerful weapon in the hands of governments. Although the proposal limits itself to transparency, it is clear that transparency cannot be a goal in itself as far as the interest of global capital is concerned. The move would be followed by demands for "liberalisation" in due course.

In the negotiations on the "new issues", more often than not it is the developing countries that would be "paying" in the sense of accepting new obligations and paring down their autonomy in economic decision-making. It would only enhance the imbalance that characterises the outcome of the Uruguay Round of agreements and the functioning of the WTO. Hence developing countries legitimately asked for the existing imbalances to be removed before entering into negotiations on new issues. This was the celebrated "implementation issue". Here too, the record of Doha is niggardly. Improved access for textile exports under the agreement on textiles, preventing the abuse of anti-dumping provisions by industrialised countries, particularly the U.S., and the loopholes left in the agreement on agriculture regarding subsidies given by developed countries were some of the issues flagged. There was no substantial progress on this and the issues have now been incorporated as part of the new negotiations, thus ensuring that the existing imbalance worsens.

Two issues need special reference here. The agreement on Trade-Related aspects of Intellectual Property Rights (TRIPS) and the system for settlement of disputes in the WTO. The working of the two has presented several difficulties for developing countries. TRIPS was found to be responsible for the non-availability of life-saving drugs at affordable prices. It also has been perceived as a constraint on the dissemination of technology for development. The dispute settlement system was perceived as being biased, undemocratic and unaccountable even to the WTO's highest legislative body. The situation called for a thoroughgoing review of the two agreements. This has not received attention in the Doha Declaration. The hoopla about the declaration on "TRIPS and Public Health" is misleading. The Declaration, in its cautious and emaciated form, does not add to or subtract from TRIPS. It is at best a public relations exercise. It does not add to the armoury of the poor countries in need of some effective mechanism to ensure the supply of essential drugs at affordable prices.

In the area of agriculture and services, the outcome of Doha is no better. In agriculture, the perspective of negotiations will continue to be informed mainly by trade concerns of temperate-zone, capital-intensive, heavily subsidising, trade-oriented, agriculture-exporting countries. There is no recognition that for a country like India, that perspective is inappropriate and harmful. There is no hint that India would insist on retaining its right to impose quantitative restrictions (QRs) on imports of agricultural products as necessary, without qualifications and without prior consultations in the WTO. All that is there in the Doha text of some interest is that differential treatment for developing countries shall be so elaborated as to be operationally effective and "to enable developing countries effectively to take account of their development needs, including food security and rural development." This by itself is totally inadequate to meet the crisis that Indian agriculture is facing.

The E.U., more particularly France, got away with diluting the provisions regarding the "phasing out" of all forms of export subsidies, further reducing the prospect of any substantial reduction in such subsidies in the course of the negotiations.

In services, there is a re-affirmation of the member's right to "regulate and introduce new regulations on the supply of services and of the articles in GATS that were designed to meet the concerns of developing countries. But there is no departure from the very narrow approach regarding the movement of labour. Moreover, no cognisance has been taken of the far-reaching issue raised by the U.N. Sub-Commission on Human Rights, about the fundamental importance of the delivery of basic services, particularly health and education, as a means of promoting human rights, and the likely adverse implications of a market-oriented and "liberalising" approach in respect of such services on the promotion of human rights.

All in all, the Doha Declaration is a clear gain for the developed capitalist world. It has catered to the needs of global capital in crisis. And this has been done in conformity with the way capitalism has reacted to its crisis all along in its history, except perhaps in its short, so-called "golden age". That is to say, by further building upon the world order in which global capital can expand its field of operation, avail itself of new opportunities for appropriation and intensify the rate of exploitation.

IT is time to turn to the third question about Doha: Why did it happen the way it happened? One of the main contradictions of the times is the WTO. It has a facade of democratic structure and rules of functioning. It is at the same time a non-transparent, non-participative, and undemocratic institution. Its very birth was occasioned by the processes and motivations characterised by those attributes. It talks of one vote for one member and decisions by prescribed majorities. It never flinches from forcing the will of the two powerful capitalist entities on the unwilling and screaming majority of Third World countries. It swears by consensus, but it reaches the consensus by suppressing or ignoring dissenting voices. It markets its predatory designs in the name of liberalisation and freer exchanges. The fundamental reason why things happened the way they happened in Doha is our failure to recognise the contradiction and seize the opportunity that the contradiction itself provides to turn it upside down.

The point is that India has to recognise that it is firmly situated in the South, which accounts for the majority in the WTO. India has to disabuse itself of the fashionable illusion that it is about to emerge as a great power and soon would be hobnobbing with the two capitalist giants. Neither logic nor the history of capitalism supports such a conclusion. More particularly, India has to regain credibility with the countries of the South in the WTO. It cannot do it by indulging in the luxury of issue-based, opportunist coalitions. It has also to realise that, more than any other country in the South, by virtue of its size, stage of development and its resources, it has better potential to bear the cost of leading the challenge to the inequitable order represented by the WTO.

Unfortunately, India's policies and reactions in the last few years have been at variance with that kind of approach. It has been, and so seen by the whole world to be, eager to gain the favours of the big powers. India has taken unilateral measures to offer its markets, be it in telecommunications or in thermal power generation, to impress the big powers or convey the good tidings to the rulers of the country to be visited by Indian leaders. India's eagerness to help the U.S. in its war against Afghanistan has not gone unnoticed by a large majority of developing countries. New Delhi's somersault on the question of the U.S.' national missile defence (NMD) surprised many. In that background, the Third World countries are not easily convinced of India's determination to withstand big-power pressures and fight out the battle in the WTO to the bitter end. The prophecy of isolation thus becomes self-fulfilling.

In short, the Doha debacle cannot be torn out of its wider context. Nor can one expect to see an alternative outcome without changing the context. Murasoli Maran held on to his guns and did his best in trying the brinkmanship. One week's performance, howsoever impressive it may be, cannot alter the trajectory of events determined by a whole lot of factors. The performance has to be informed by a vision of the new world order based on equity. It has to be backed by a strategy of building solidarity of the South. It has to be credible to the South in terms of the totality of external and domestic policies. Once the strategy in the WTO is founded on the solidarity of the South, the formal democratic representation that is mandated in the constitution of the WTO can be converted into a powerful strategic weapon to challenge and moderate, if not to halt and reverse, the onslaught of the process symbolised by the Doha meeting. Without that, Murasoli Maran could only do so much and not more.

S.P. Shukla was formerly India's Ambassador to GATT and Secretary in the Commerce and Finance Ministries of the Union Government.