Financial Express, December 4, 2001
By Pradeep S Mehta
INDIA has reasons to celebrate after securing major gains in the hard fought agenda of the fourth Ministerial Conference of the World Trade Organisation. A dispassionate analysis of the Ministerial Declaration from the perspective of Indias basic trade interests reveals that it bargained hard on agriculture, implementation, TRIPs, trade and transfer of technology, and succeeded.
However, there are concerns that these gains might be watered down by the inclusion of environment in the agenda, that also leaves an open window for including labour standards. The final Declaration includes some substantive aspects of trade and environment agenda, including that of Multilateral Environmental Agreements (MEAs). This, in itself, might not be against the interests of developing countries, but the way the trade talks took a swift turn in Doha, signals a bumpy road ahead.
The developing countries were, at the last moment compelled by the European Union and others to agree on environment as a precondition for negotiation on agriculture. One should bear in mind that labour standards might as well follow the same route. The trade and environment agenda included the WTO rules and specific trade obligations set out in the MEAs as well as reduction or elimination of trade barriers in environmental goods and services.
Just before the Doha meeting, the European Union supported by Switzerland and some other countries, pushed hard for their three-point environmental agenda of clarification of the WTO rules on the MEAs, eco-labelling and precautionary principles. Despite vociferous opposition from developing countries on account of potential for protectionism, the EU succeeded in pushing ahead at least one, and the rest are perhaps only a matter of time. There is, on the other hand, the impression that the issue of labour standards clauses in trade regime is out and, even, dead. A closer look at the draft ministerial declaration prepared before the meeting and the final document reveals that there are grey areas.
One has to keep in mind that organisations such as the International Confederation of Free Trade Unions (ICFTU), with direct or indirect support of many western countries, are still vociferous on trade-labour linkages. Just before the Doha meeting, the ICFTU issued a statement insisting that trade agreements contain labour standards and enforced by the threat of sanctions. The final declaration of Doha meeting states, We reaffirm our declaration made at Singapore Ministerial Conference regarding internationally recognised core labour standards. We take note of work under way in the International Labour Organisation (ILO) on the social dimension of globalisation.
A careful analysis of the statement, however, reveals it rules out a possible role for the WTO on social dimensions of globalisation. More important, a significant line recognising the ILO as a more suitable place to discuss labour standards that appeared in the revised draft declaration of October 27, has been removed from the final declaration perhaps on the insistence of those demanding the inclusion of the social clause. The line stating that The ILO provides the appropriate forum for a substantive dialogue on various aspects on the issue would have had a different impact altogether.
Given this, countries such as India should keep their fingers crossed and, at the same time, prepare a game plan, if there are any attempts at strengthening the link between the WTO and non-trade issues. The Western countries, because of domestic compulsions or otherwise, are still interested in bringing in these issues, including environment, labour standards and human rights.
While India has to still create a consensus at the domestic level on its ongoing labour reforms, it should also keep in mind the accession to the WTO of China, and chalk out plans of action accordingly. On the other hand, New Delhi has to raise issues of real concern vis-`-vis the labour standards that is, free labour mobility across countries. In fact, the issue of movement of natural persons might turn out the trump card for us, if used effectively in international trade negotiations.
On environment issues, while India, prima-facie, should not have any problem on the MEAs, it should ask for more market access for environment-friendly products, and strengthen its own labelling schemes. India can still argue in negotiations on the MEAs that as far as predictability and flexibility are concerned, the existing practices and disciplines in the MEAs and the WTO do not seem to be deficient. Article XX of the GATT allows for the MEAs to take measures necessary for the protection of the environment.
Therefore, India should demand a clear definition as to what constitutes an MEA in future negotiations and then push for the setting up of a committee to decide the desirability/necessity of trade measure in any existing MEAs as well as new ones. India should also use every opportunity to push for the case of developing countries.
It should go ahead with a proactive agenda on trade and environment, demanding discussions on issues of trade in domestically prohibited goods (DPGs) and toxic waste, and the relationship between environment and the TRIPs Agreement. The commitment made by rich countries at the Earth Summit held at Rio de Janeiro in June 1992 for additional resources of over $480 billion, out of which only $2 billion has been actually mobilised, is a point worth raising in the debate.