Hedging by the WTO

Print edition : September 26, 2003

The draft declaration of the WTO Ministerial evades the entire issue of protecting the biological resources of the Third World - an indication that divisions remain deep within the organisation.

REJINA BARLA, Subhadra Bindhani and Ajamani Marandi live in Orissa's tribal lands at a safe geographical distance from Geneva. They have little time or inclination to track the arcane bargains and intricate machinations that animate the meeting halls and corridors of the World Trade Organisation.

Chairman of the General Council Carlos Perez del Castillo, who presented the report of the trade negotiations committee to the Council, with WTO Director-General Supachai Panitchpakdi (left), at the WTO headquarters in Geneva.-MARTIAL TREZZINI/AP/KEYSTONE

And yet the WTO is a body that looms large in the lives of these three women. Meeting in Bhubaneswar recently under the banner of the Orissa Nari Sanghatan - a body of tribal women - they gave expression to a deep disquiet about a future governed by the WTO rulebook: "We will be exploited more. Water and electricity charges will be raised. Forests will recede. Our medicinal plants will go".

Few of the participants at the two-day colloquium of tribal women on the WTO and food security had purchased the seed for their annual crop from government sources. None had had any experience of selling their produce to official procurement agencies. Arguments about subsidies, the "aggregate measure of support" for agriculture, export credits and food aid were totally superfluous to their existence. But they are fighting what they perceive as a losing battle to safeguard a traditional mode of subsistence. And what is promised as the superior alternative of market-oriented agriculture is visibly a tarnished model, whose encroachment into their lives has brought little but misery.

Most, however, have won their entitlements to the periodic lottery of the "below-poverty-line" card issue. Their autonomy as producers and income-earners lost, they are expected to fall back on the fickle magnanimity of the state, which could fluctuate rather wildly in accordance with the mood swings of its functionaries.

What the struggling cultivators of Orissa's tribal belts require above all is radical agrarian reform that restores their dwindling base of physical and ecological assets. The damage to assets that they have endured is, of course, beyond the WTO's powers of restitution. But in the absence of domestic policy action to address their concerns, the small cultivators of India would like to see a vigorous defence of their interests from extra-territorial threats. And the WTO's encroaching jurisdiction over intellectual property is a clear and present danger for them.

At a rally in New Delhi on September 2, where farmers from various parts of India protested against the WTO and the government's policies towards the trade body.-RAFIQ MAQBOOL/AP

As the WTO prepares for the fifth in its cycle of Ministerial conferences in Cancun, Mexico, the legacy of the fourth such meeting in Doha, Qatar, is still an area of contention. Arguments about terminology have persisted despite all the efforts to invest the mandate handed down at Doha with a degree of clarity. Issues like geographical indications for products other than wines and spirits, traditional knowledge, the informed consent of local communities for the use of their plant and animal genetic resources, and the sharing of benefits, have remained at the fringes of the negotiating process. A multiplicity of draft proposals have been submitted on these issues, though the draft Ministerial text that has been prepared prior to the Cancun meeting, fails to take on board any specific suggestions.

On geographical indications, the draft ministerial text speaks of continuing the discussions that have been under way to establish a multilateral register for wines and spirits. There is no mention of agreement on the degree of protection that will be given to geographical indications, with the WTO membership known to be divided between two views.

While the U.S., Canada and other countries are in favour of using the multilateral register as an information source, the European Union insists on a strong degree of protection. The insistence by India and Sri Lanka, among other developing countries, to extend the geographical indications register to cover other products, have been cursorily placed in the basket of "implementation issues", where the Director-General of the WTO would be obliged to "continue the consultations he has undertaken". The General Council of the WTO would "review progress" at an unspecified future date so that "appropriate action" could be taken at an unspecified deadline.

A more explicit omission in the draft declaration is connected to the working of the agreement on trade-related aspects of intellectual property rights (TRIPS). The Doha declaration had mandated a review of the relationship between the TRIPS agreement and the Convention on Biological Diversity, particularly as it pertained to "traditional knowledge and folklore". And in this exercise, the "development dimension" was to be "fully" taken into account.

Submissions have been placed before the TRIPS Council by the Africa group and India on behalf of a number of other countries including Brazil. The African proposal calls for the exclusion of plants, animals and microorganisms from patent legislation. The more moderate Indian proposal would require patent applications to disclose the source of the biological resource that is sought to be protected, and prove in the event that traditional knowledge is being tapped, that the affected communities have given their "informed consent" and been assured a share in the benefits.

The evasion of this entire issue in the draft declaration is definitive evidence that divisions remain deep. In the deliberations at Cancun, both geographical indications and the protection of traditional knowledge are likely to be subsumed within the hard bargaining on trade in agriculture.

The draft Ministerial text's offerings in this area have for obvious reasons, been the most eagerly awaited, since it is widely recognised as the potential deal-breaker at Cancun. The U.S. and the E.U. had by mid-August, managed to paper over their differences and present an agreed framework. India, China, Brazil and 11 other countries had responded quickly with proposals that sought to retain the focus on the enormously bloated subsidies in the developed countries as the single most important distortion in world agricultural trade.

The draft declaration walks a tightrope between the two rival proposals. On domestic support, it leans towards the U.S.-E.U. text in allowing a certain degree of latitude. It tightens the schedule of reduction commitments in requiring that the total support given as direct payments to the farm sector be within 5 per cent of the total output value at a date to be specified. It then calls for annual reductions over a definite number of years, of a magnitude to be determined at Cancun.

In market access in agriculture, the draft declaration puts a relatively larger burden of adjustment on the developed countries, which would be obliged to reduce duties using a blend of three different formulae. In certain tariff lines, a fixed average and minimum reduction would be necessary, while others would be subject to the "Swiss formula" that reduces higher duties by a proportionately larger magnitude. The tariff lines that are not covered in these reduction commitments would be duty free.

"Special and differential treatment" for developing countries is integral to the proposals on agricultural trade. With this principle in mind, the draft proposes three different orders of tariff cuts for developing countries. In the first of these, covering the most sensitive products, the requirements would be relatively less stringent and the flexibility to reserve higher duties for certain "Special Products" would be ensured. The two other segments of agricultural products would be subject to certain average and minimum reductions. Alternatively, a "Swiss formula" could be adopted for these.

That the draft declaration provides certain concessions to developing countries in agriculture is not surprising, since pressure had been building up relentlessly over the years. But this does not obscure other areas in which the developing countries have received less than their due.

Implementation concerns over the existing trade agreements have, for instance, been summarily dismissed in a paragraph. The Doha declaration had unambiguously placed implementation within the "overall work programme" of the WTO. Developed countries had then sought to distinguish between two categories of issues: one for which an explicit mandate for negotiations was granted at Doha and the other for which the mandate authorised consultations rather than negotiations.

Developing countries had argued that all implementation issues should go before the Trade Negotiations Committee (TNC) of the WTO for decision by the stipulated deadline of December 2002. The developed country bloc, however, had insisted that only a limited number of issues should go before the forum. The draft declaration now seems to tilt the argument in favour of the latter, by instructing the TNC, among other "negotiating bodies and WTO bodies concerned" to redouble their efforts and find "appropriate solutions as a priority". This effectively downgrades the negotiations on implementation and places it on a different footing.

The four Singapore issues - investment, trade facilitation, competition policy and government procurement - afford little room for compromise. The developed country proposal "takes note" of the work done in studying the nature of the relationship between these issues and international trade and urges that negotiations commence in accordance with specified modalities. The developing country submission records that "the situation does not provide a basis for the commencement of negotiations" in these areas. How this most explicit contradiction in the WTO will be resolved at Cancun, would of course depend upon the bargaining in other areas.

The E.U. and Japan have vital stakes in the investment area and are known to grudge any concession in agriculture with a special passion. Given the manner in which WTO negotiations are conducted, it is entirely feasible that they could hold the breakthrough in agriculture hostage to their compulsions in the area of investment. That would bring a great deal of pressure to bear on India and other developing countries. A pre-emptive manoeuvre that the developing countries could deploy would be to bring implementation issues, geographical indications, biological diversity and other such special concerns to the foreground well before Cancun kicks off with all its coercion, intrigue and bargaining.

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