Threat of another trade round

Published : Oct 27, 2001 00:00 IST

At the "mini-ministerial" of the WTO, India's insistence that the existing trade agreements needed close attention before a new round of negotiations began apparently failed to gather enough support.

ANXIOUS to avoid a repeat of the Seattle ministerial conference which ended in fiasco, the World Trade Organisation (WTO) convened in mid-October an informal meeting of some of the heavy hitters in global trade negotiations. The purpose of the meeting in Singapore was to prepare the ground for the forthcoming ministerial conference at Doha and to bridge the more serious divergences that could prevent an agreement. By all reports, with the lonely exception of India, Singapore produced a virtual consensus on the need to begin a new round of global trade negotiations with a broad-ranging agenda.

India has, in league with a group of developing countries, been insisting that prior to the opening of a new round of negotiations, issues in the implementation of existing trade agreements needed close attention. The negotiations concluded in 1994 - known as the Uruguay Round after the venue where they were launched - produced agreements that covered a large number of areas. And in many of these the subsequent experience of the developing countries has been far from happy.

India's insistence that these glitches, both major and minor, need to be ironed out as a matter of priority apparently failed to stem the tide of defections to the cause of a new trade round. Singapore reportedly produced what has delicately been described as a "quasi-consensus" on implementation issues: to discuss these in most part within the framework of a new round of trade negotiations. Indeed, in an elaborate concession to global sensitivities on the issue, Singapore Trade Minister George Yeo, as the host of the meeting, sought consciously to steer the discussion away from talk of a new round. Future negotiations, he said, would seek to move towards working out a global "development agenda".

At a formal media briefing after the mini-ministerial of October 13 and 14, Yeo claimed that "75 per cent" agreement on the new negotiating mandate had been reached. The basis for this agreement was a draft ministerial declaration that had been jointly prepared prior to the Singapore meeting by the Chairman of the WTO General Council Stuart Harbinson of Hong Kong (China) and WTO Director-General Mike Moore. This text provided the basis for a virtually complete agreement on the future direction of negotiations in the thorny area of agricultural trade. On anti-dumping measures, the situation remains more ambivalent, while on implementation issues, there still remains some distance to be covered.

The Harbinson text proposed that implementation issues could be considered under two broad categories. Annexure I in the text listed out a range of matters that needed immediate action by the WTO Council. Another set of issues was grouped together in Annexure II, for which the WTO Council would be obliged to develop recommendations for final decision at the Doha ministerial meeting.

The Singapore "mini-ministerial" has reportedly decided to merge the two annexures into a single list of issues on which decisions would be made before the Doha meeting. These would be subject to ratification by the full 145-nation conference of Trade Ministers, but all other concerns related to the implementation of the Uruguay Round would be left for the new round of negotiations.

This is not a situation that is much to India's liking, since it would need to enter into the new round of negotiations while its most basic concerns with existing agreements remain unaddressed. India's most insistent demands over the last few years have been to review the agreements on agriculture, trade-related aspects of intellectual property rights (TRIPS) and textiles and clothing. Union Commerce Minister Murasoli Maran, who represented India at Singapore, apparently was told by U.S. Trade Representative Robert Zoellick that the only way to ensure that this range of concerns was assuaged was to enter into a new round of negotiations.

In the area of agriculture, the Singapore meeting witnessed the beginnings of a compromise between the three main blocs. The European Union and Japan, by virtue of similar practices of subsidising agriculture, constitute one bloc in the context of the agriculture negotiations, while the U.S. constitutes another. The third major player is the Cairns group of agricultural exporters, which consists of 17 countries, including developed countries like Australia and Canada, as also developing countries such as Guatemala, Indonesia and the Philippines.

In contrast to the interests which these three blocs have been urging, developing countries have been pressing a different charter of demands. India, with a group of similarly placed countries, has submitted a proposal demanding that a "development box" be allowed under the agreement on agriculture, which would permit developing nations to increase subsidies on certain products. It has argued that the inherent asymmetry in the existing agreement, which allows subsidising countries to continue doing so - subject only to a long-term commitment to reduce subsidies - worked against developing country interests. In demanding the complete scrapping of export subsidies, India has a partial identity of interests with the Cairns group. But in insisting that developing countries should be at liberty to subsidise agriculture under certain circumstances, India goes beyond the Cairns group position.

At Singapore, the three major blocs apparently agreed that the "complete elimination" of agricultural subsidies will not be on the agenda of the Doha conference. If anything, the issue will only be taken up under the scope of a comprehensive new round of trade negotiations. And there, it would be part of a much broader bargain, which could take the matter well beyond certain other of India's compelling interests.

The Singapore bargain on TRIPS has also fallen well short of India's expectations. The two annexures to the Harbinson text bear only the most cursory reference to this concern, enjoining all WTO member-states to file regular reports on the degree to which they are in compliance with a clause that requires technology transfer to least developed countries. In contrast, the proposals submitted by India to the TRIPS Council of the WTO called for a range of possible exemptions to the application of patent and other intellectual property disciplines, mostly connected to public health concerns.

India had in association with other developing countries, strongly urged the WTO to restrain member-states from invoking its dispute settlement powers, when the matter concerned impinged on public health. It had also recommended changes to the law on compulsory licensing of production, allowing sovereign governments the broad discretion to decide when it would be appropriate to seek recourse to this provision. Another specific suggestion made by India was an extension of the transition period available to developing countries for bringing their patent regime in line with WTO norms.

NONE of these concerns has been met. If anything, the Draft Ministerial Declaration (DMD) that has been circulated among WTO members banishes this entire spectrum of issues to the jurisdiction of a future round of negotiations. And here too, the references are too broad and general to be of much solace to India. There is a specific reference to the extension of geographical indications to certain categories of wines and spirits and possibly to other products, which could partly allay India's concerns about the hijacking of its "basmati" rice variant by overseas food and seed companies. Then there is a cursory reference to the "protection of traditional knowledge", which could have a bearing on the hard-fought battles that India has had to fight to quash patents granted on neem and turmeric. But to gain on these fronts, India would have to enter into the negotiating track on a wide range of issues, threatening its competitive position in diverse sectors.

At a general level, the DMD mentions two issues on which India has had serious reservations. It "takes note" of the work under way in the International Labour Organisation (ILO) on the "social dimensions of globalisation" and affirms the declaration made at the Singapore ministerial conference of 1997 on "internationally recognised core labour standards". It then resolves, on the issue of trade and environment, to entrust the job of identifying the linkages to a committee, which would report back to the Fifth Ministerial Conference of the WTO, that is, the one that would follow Doha after a lapse of two years.

The 1997 Singapore ministerial meeting had agreed on the desirability of core labour standards, but deprecated their use for any protectionist purposes, since the competitive advantage of low-wage developing countries needed to be protected. But there is no way of ensuring that the study under way at the ILO will not in future years provide a basis for pushing this issue into the trade agenda. Such an effort was made by the advanced economies with surpassing crudity at the Seattle ministerial meeting. It did not quite work, not so much on account of resistance from the developing countries but because the advanced countries remained divided on other issues. The mention of trade and environment in the DMD similarly could be the opening salvo in a sustained campaign to bring this item onto the trade negotiations agenda.

The Singapore mini-ministerial does not of course yet represent the final agreement on the scope of a new trade round. All of Africa and the entire bloc of least developed countries remain opposed to a new round. But these countries have not traditionally been able to offer very sustained resistance within WTO councils. That leaves India as the sole hold-out, which would have to mobilise energetically among a constituency that it has not traditionally had much familiarity with, if the threat of a new trade round is not to become a reality.

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