Hurdles on the road to Doha

Sharp divisions among member-nations at the recent General Council meeting of the World Trade Organisation in Geneva prevent an agreement being reached to set an agenda for the Fourth Ministerial Conference in Doha in November.

THE spirit of Seattle continues to haunt international trade negotiations under the auspices of the World Trade Organisation (WTO). An informal preparatory meeting of member countries held in Geneva on July 30 and 31, failed to come to an agreement on the agenda for the WTO's Fourth Ministerial Conference in Doha from November 9 to 13. Countries were sharply divided on the fundamental question of whether to launch a new round of negotiations. The failure of the meeting, which was dubbed as a "reality check", leaves very little time for countries to evolve a consensus before the Doha Ministerial.

Although the United States and the European Union (E.U.) have fought bitter trade wars over beef and banana and over regulation of genetically modified food, there is a growing realisation that the developed countries will close ranks to initiate a new round of trade negotiations. A recent article in The Washington Post, written jointly by Pascal Lamy, E.U. Commissioner for Trade, and Robert Zoellick, U.S. Trade Representative, points out that trade disputes between the economic giants are but "inevitable". This conciliatory tone laid the basis for the authors' insistence that the E.U. and the U.S. "can and must work together to launch a new global trade round in November". A significant feature of the Doha Ministerial is that it will be held under the shadow of the ongoing global recession. Developed countries are perceived to be keen on a new round to prise open markets around the world for their products and services.

A new round of trade talks would mean fresh issues on the agenda. The unprecedented popular protests prevented these from being imposed on developing countries at the last Ministerial Conference in 1999 at Seattle (Frontline, January 7, 2000). Developed countries are seeking a comprehensive new round at Doha. They want to bring on the agenda moves to lower industrial tariffs further and impose rules for the protection of investment, a competition policy framework that levels the field for foreign companies that operate in domestic markets in member-countries, trade facilitation, norms for government procurement (so that domestic companies in member-countries do not enjoy preference), rules to harmonise the overlapping commitments of member-countries to environmental and trade agreements arrived at under multilateral auspices (for example, the Kyoto Protocol), e-commerce, and the issue of labour standards.

THE WTO has been the principal target of anti-globalisation protests across the world because it is perceived as the global policeman disciplining international trade. Indeed, recent reports indicate that after the spectacular collapse of the Ministerial Conference at Seattle, the WTO has been trying to refurbish its image.

Developing countries have argued that the WTO's agenda is already overloaded. They fear that new issues are being brought to the negotiating table when unimplemented issues, arising out of earlier commitments, are piling up. The developing countries argue that "implementation issues" must be on top of the Doha agenda.

One of the key areas of concern for developing countries is the backlog of unimplemented issues pertaining to the WTO's Agreement on Agriculture in 1995. Agricultural subsidies in the Organisation for Economic Cooperation and Development (OECD), whose members are among the economically advanced countries, increased from $247 billion in 1986-88 to $326 billion in 1999. This happened even as developing countries cut the tariffs on imported agricultural commodities as part of their WTO obligations. Statistics from the Food and Agriculture Organisation (FAO) show that agricultural exports by developed countries increased by more than 3 per cent between 1990 and 1997; such exports by developing countries grew by just 0.63 per cent during the same period. Agricultural imports into developing countries increased by nearly 4 per cent during this period compared to less than 2 per cent for developed countries. The U.S.-based Institute for Agriculture and Trade Policy complained in a recent note to the U.S. Trade Representative that American agribusiness corporations were "dumping" their products across the world because of the "export credit, insurance and transportation subsidies" that they receive from the U.S. government at the expense of the taxpayer.

ENFORCEMENT of intellectual property rights is an emotive issue that is threatening to assume serious proportions in the Third World. At the very least, developing countries want compulsory licensing of patents so that they are able to address their public health priorities. The development and availability of drugs for the treatment of Acquired Immune Deficiency Syndrome (AIDS) is among the most significant issues. African governments are under pressure to ensure that the drug monopolies are not allowed to override the need for treatment of life-threatening epidemics. Although some individual companies have offered concessions, developing countries would like the WTO to provide a more durable arrangement.

On the issue of trade in services, developing countries have time and again called for more liberal provisions for the "movement of natural persons" so that they could benefit from selling labour skills, priced cheaper, in advanced countries. This has met with stiff resistance although the value of trade in the "movement of natural persons" amounted to a mere $30 billion, compared to $820 billion in the case of the services trade via commercial presence. Developing countries also favour a more transparent and equitable dispute settlement mechanism at the WTO.

Although trade in textiles is of significant export interest to developing countries, very little has been done to remove the barriers to trade. Although member-countries are to remove all restrictions by 2005, till date only a fraction of such restrictions have been removed in the developed countries.

The Like-Minded Group (LMG), an informal group that includes India, Pakistan and other developing countries, has categorically rejected a new round. Srinivasan Narayanan, the Indian Ambassador to the WTO, said recently: "We are not ready for it (a new round). We will lose more than we gain."

India also articulated its concerns in its communique to the G-77 in mid-June. Union Minister for Commerce and Industry Murasoli Maran pointed out that the Uruguay Round, which laid the basis for the establishment of the WTO, had "resulted in serious imbalance and asymmetry to the detriment of the developing countries." He also pointed out that although the WTO's General Council had decided in May 2000 that all "implementation issues" would be resolved before the Doha Conference, developed countries now insist that these issues will be settled as part of a new round.

The LMG insists that the "implementation-related concerns" are a hangover from the pre-WTO days. The group claims that developing countries have already paid heavily by undertaking obligations arising out of deviations from the standard agenda of trade negotiations under the auspices of the General Agreement on Tariffs and Trade (GATT), the forerunner of the WTO. These obligations included those relating to intellectual property rights and Trade Related Investment Measures (TRIMS). Developing countries now demand that implementation issues be settled "up-front", before other issues are taken up for negotiations.

Indeed, Uganda's Ambassador to the WTO Nathan Irumba has argued that the demand for a new and extended round is flawed. "There is a systemic issue here," he said. Arguing that "the whole notion of rounds was before the WTO was created," Irumba claimed that the WTO is "supposed to be a continuous negotiating forum". Developing countries have called for a "realistic assessment"incorporating their concerns. They warn that if this does not happen, the "level of ambition will have to be lowered".

A confidential memo circulated among member-countries before the Geneva meet admitted that the "entrenched nature" of the differences among member-countries did not augur well for starting a new round at Doha. Mike Moore, Director-General of the WTO, could barely conceal his own position in favour of a new round, when he warned that another failure, at Doha, "would certainly condemn us to a long period of irrelevance". He asked member-countries "to get real" on the agenda for Doha.