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To Doha, with concern

Published : Nov 10, 2001 00:00 IST

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Will the developing countries be manoeuvred into making further concessions at the conference of the World Trade Organisation in the Qatari capital?

AN upbeat Mike Moore, Director-General of the World Trade Organisation (WTO), announced on October 22 that the ministerial conference of the WTO would go ahead as planned in Doha between November 9 and 13. Somewhat grimly and, perhaps, tempting fate, Moore added: "If something seismic or catastrophic happens we will reconsider." Indeed the risk of exposure to terrorist attack in the tiny Gulf state has troubled the minds of many as they prepare for what was already a dubious enterprise. Doha as a summit venue has scarcely excited confidence that the WTO has regained equilibrium after the debacle of the last summit in Seattle, where failure to agree among national delegations and the violent street confrontations had left an indelible impression of the WTO being an international organisation going nowhere.

Nowadays there are few offers to host international conferences and Qatar's offer to host the WTO summit was accepted reluctantly. More depressing has been the lack of progress on the substantive issues for the agenda. At the heart of the matter is the abiding inability of the WTO to convince sceptics that it is anything other than a "rich men's club" whose agenda is set by Western transnational companies (TNCs) which have a self-interested definition of what constitutes "trade".

Whereas Western countries are eager to press ahead with "trade-related" issues such as investment and intellectual property rights, where they feel they have a competitive advantage, the West remains stubbornly resistant to "free trade" in the more traditional areas of agricultural goods and textiles, where liberalisation would certainly help developing countries but to the disadvantage of vested interests in the European Union (E.U.) and the United States.

In short, the developing countries feel that they have had a raw deal from the much-vaunted launch of the WTO in 1995. Much of the discontent centres on the issue of "implementation" where developing countries find no statistical proof that liberalisation of markets has indeed led to economic growth. The array of measures to be implemented is still beyond the absorption capacity of many countries which have only a fraction of the bureaucratic capacity of large trading countries.

The developing countries, led very much by India, one of the few that are able to field a team adequate in quality and quantity to keep up with the frenzied round of negotiations at the WTO, remain sceptical of the West's intention.

The task of trying to get the agenda sorted out for the Doha summit is that of the General Council of the WTO, chaired by the much-respected Stuart Harbinson, the Hong Kong representative.

UNFORTUNATELY, the Draft Ministerial Declaration circulating in Geneva adds fuel to the suspicions of the developing countries, a suspicion deepened by the seeming behind-the-scenes manoeuvring involving the WTO and the two biggest players, the E.U. and the U.S. To use the parlance of current international negotiations, it is the question of environment which is proving to be the "deal-breaker". The E.U. is under severe domestic pressure for, in addition to the by now established presence of the "Green" lobby, a sensational series of public health scares ranging from BSE (bovine spongiform encephalopathy) or the mad cow disease to the foot-and-mouth disease have made the European public wary of the risks to public health from a rapacious market economy. For E.U. negotiators to leave the WTO summit without a mention of environmental issues and linking them with trade is unimaginable. However, for developing countries, environmental conditionality in trade is seen as yet another clever way of protecting Western domestic industries and burdening potential exporters to rich Western consumers with additional and punitive standards. Stalemate looms.

Until very recently the U.S. was reluctant to go along with the E.U.'s concerns on environmental issues, for indeed they have a related potential dispute looming about the E.U.'s ban on hormones in U.S. meat exports. However, at the recent informal gathering in Singapore to try to make progress on the WTO agenda, the U.S. was indicating a slackening of opposition, for what may be a reciprocal easing of E.U. reluctance to listen to U.S. concerns on anti-dumping issues. If the two giants can cook up a deal, then they can steamroller through their agenda and Geneva is alive with tales of strong-arm tactics by the E.U. on its African clients to abandon solidarity with other developing countries.

If the talks nonetheless break down, then blame can be attached to those developing countries which stand out against environmental conditionality. The E.U. is playing for high stakes. It is the world's leading trading entity and the WTO represents the only international arena where the E.U. can face the U.S. with some degree of parity.

In contrast, the U.S. remains somewhat suspicious of multilateralism in international affairs. The size of its economy gives it more options. Madeleine Albright said in the analogous political sphere: "We proceed multilaterally where we can and unilaterally where we must" - the same holds in trade. The U.S. has the prospect of a continental American free trade area, the prospect of Atlantic free trade arrangements, a trans-Pacific dialogue (Asia-Pacific Economic Cooperation) and an already blossoming North American Free Trade Agreement (NAFTA). U.S. trade tactics have been neatly encapsulated as "pushing on all doors and then going through the one that opens". The U.S. can conceivably walk away from the WTO and pursue its own interests by other means.

Ironically, this brings the argument full circle. Developing countries were originally reluctant to sign up for the WTO and many only did so because they saw it as a way of having some, albeit small influence, over the major players.

Keeping the E.U. and U.S. on board at Doha really may not be in the developing countries self-interest, though they may be manoeuvred into the dilemma of making further concessions, or being blamed for any breakdown.

A Labour Party member of the European Parliament from 1984 to 1999, Michael Hindley recently visited Geneva with a delegation from the United Kingdom Industry Forum.

(This story was published in the print edition of Frontline magazine dated Nov 10, 2001.)

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