Less than 100 days are left before trade ministers meet at Doha, Qatar on the occasion of the 4th WTO (World Trade Organisation) Ministerial Conference.
Mike Moore, director-general of the WTO already cautioned members “to get real” over agreeing an agenda for new trade talks. A second failure to launch a global trade round, following the failure in Seattle in 1999, “would certainly condemn us to a long period of irrelevance”, he further warned.
His speech at a recent meeting of the WTO’s general council was intended as a “reality check” on the prospects for agreeing at Doha to an agenda for a new round of trade talks.
Still, there is no consensus on an agenda. Once again agriculture seems to be a major bone of contention between the two trading giants – the EU and the US.
If one could foresee an agenda, implementation is surely going to be at the top of it. In case a new round is launched, which looks most likely, the agenda may include competition, investment and other Singapore issues like government procurement (a plurilateral agreement already exists) and trade facilitation.
At present, apart from traditional differences on agriculture, launching of a new round of multilateral trade negotiations is another important issue on which members are divided. India along with Pakistan, Malaysia and Indonesia are strongly against launching of any new round unless implementation issues are resolved satisfactorily.
Though there is no complete consensus among the WTO Members, but if one looks at the balance, it seems that many of them are in favour of a new round. The question is not whether you support it or oppose it. What would a country do if a new round is launched? Can a country afford to sit outside the negotiating table in that situation?
Today’s realpolitik/geo-politics demands that it cannot as their interests lie in the progress of the rules-based multilateral trade regime under the WTO.
At the same time, a number of hard facts are to be addressed if it is decided that a new round of trade negotiations will be launched at Doha. The Doha meeting should be looked at as an opportunity to get beyond rhetoric, static positions, and make progress on the substantive agenda.
The following are some thoughts on how one could construct an agenda for a new round by taking into account various ground realities for development as well as consumers’ interests.
1. Implementation: Implementation issues have got enough push for being an important item on the agenda. Before the Seattle Ministerial Conference, a group of like-minded developing countries submitted two documents containing lists of implementation issues. These issues figure in paragraphs 21 and 22 of the text of the Draft Ministerial Declaration of 19 October 1999 prepared by Chairperson of the WTO’s General Council. Recently a group of seven developing and developed countries have submitted a paper on implementation issues to the General Council.
There has to be a practical approach on implementation. The list is a huge one. All cannot be resolved before the Doha Ministerial. They need to be categorised and prioritised. Some of them, which can be resolved before Doha, are issues related to textiles, anti-dumping, sanitary and phyto-sanitary measures, and green box flexibility in the Agreement on Agriculture to address non-trade concerns such as food security and rural employment.
2. New Round: There is a lack of consensus among the WTO members but balance seems to be in favour of a new round. The US Trade Representative Robert Zoellick during his recent visit to India indicated that 60 percent of WTO Members are now in favour of it.
Opposing a new round may sound good in principle but a practical approach is much more desirable than a hard-line approach. It is especially in the interest of developing countries to see the progress of multilateral trade negotiations under the WTO. Developed countries will not make concessions on implementation, agriculture and other key issues if developing countries do not at least agree to talk about some of the ‘new issues.’
The alternative to multilateralism is bilateral and regional trade agreements. Under such circumstances rich countries may be in a position to dictate much more stringent conditions, for example in relation to labour and environmental standards, than in multilateral agreements.
Lack of negotiating capacity could be a hurdle but that can be overcome if countries cooperate among themselves and move forward unitedly.
3. Agriculture: There is disagreement between the Cairns Group of agricultural exporting countries and Least Developed (LDCs) & Net Food Importing Developing Countries (NFIDCs) on the issue of agricultural subsidies, particularly in the EU. The latter group fears possible negative effects of the EU agricultural reform on them. There is a fear that prices of farm products in the international market may go up at least in the short run.
However, in the long run NFIDCs will also gain if agriculture sector is liberalised. In fact these countries should put more emphasis in the implementation of the Special Marrakesh Declaration concerning food security. Article 16 of the AoA says “Developed country Members shall take such action as is provided for within the framework of the Decision on Measures Concerning the Possible Negative Effects of the Reform Programme on Least-Developed and Net Food Importing Developing Countries”.
4. Services: At present the three sectors with Agreements under GATS reflect the interests of developed countries. The Agreements on Basic Telecommunication, Information Technology and Financial Services have so far helped developed countries in increasing their market share in developing countries. Still there is hardly any progress on trade in services through mode 4 (movement of natural persons), where developing countries hope to gain. The agenda for a new round may include a call for negotiations on a stand-alone agreement on movement of natural persons.
5. WTO Rules: Rules, particularly sanitary and phyto-sanitary measures and technical barriers to trade, are posing the greatest barriers to developing countries in getting proper market access in the developed countries. Already on several occasions these rules have been misused. Concerns of poor countries should be taken into account while setting standards. They should also have proportionate say in the standard setting process. Existing rules should also be reexamined.
6. Tariff Escalation: The practice of tariff escalation is not confined only to exports from poor countries to developed countries but several developing countries are also practicing it. WTO Members should work for reversing the process of tariff escalation, i.e. there should be progressive reduction in tariff rates with processing and value addition.
7. Competition: A multilateral agreement on competition may be useful to put some checks on cross-border anti-competitive practices like international cartels, mergers and acquisitions having adverse affect on competition in developing countries’ market etc. The necessity for a multilateral agreement becomes particularly important in light of the fact that competition authorities of many developing countries are not capable of dealing with cross-border competition abuses, which in this era of free trade is causing significant harm to their economies and consumers. Developing countries should be proactive on this issue and set their own agenda, instead of reacting to developed countries’ agenda only.
8. Labour: There are indications that labour standards may not be a part of an agenda but the hardcore protagonists/trade unions (mostly in the industrialised countries) are still demanding their inclusion in the agenda for world trade talks. Even the US administration and the EU have only declared that social clause should not be used for protectionist purpose. They are not very vocal about the policy of no linkage between trade and labour standards.
Linking trade with labour standards and at the same time saying that they will not be used for protectionist purposes looks contradictory. Hence any complacency on the part of those who campaigned hard for the last several years against linking trade with labour standards may prove costly.
Opinions suggest that issues of social clause should be dealt in the International Labour Organisation and this must continue.
9. Environment: Many developed countries including those in the EU are still very vocal on trade and environment linkages. The EU has once again come forward with the three-point agenda on multilateral environment agreements, eco-labelling and precautionary principle.
They have overlooked the concerns of developing countries regarding market access. International community should work for the establishment of a separate world environment organisation.
10. TRIPs: The developing countries could very well choose ‘competition’ as a trade-off element to renegotiate TRIPs, in general, and Article 27.3b, in particular. As well as concerns surrounding access to medicines, developing countries should press for greater protection for traditional knowledge and geographical indications. In any case they should resist patents or any other intellectual property protection to life forms.
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