Info Service on WTO and Trade Issues (Dec15/19)
23 December 2015
Third World Network
South suffers humiliating setback at Nairobi
Published in SUNS #8161 dated 22 December 2015
Nairobi/New Delhi, 21 Dec (D. Ravi Kanth) - India, China, Indonesia,
South Africa, and other developing countries have suffered a humiliating
setback on Saturday (December 19) at the World Trade Organization's
tenth ministerial meeting in Nairobi, Kenya.
The setback came after they nearly surrendered their negotiating space
to the United States, the European Union, and other developed countries
to start the process of bringing new approaches that could eventually
lead to "graduation", several ministers and trade officials
told the SUNS.
The US, the EU, and Brazil were ably assisted by the WTO Director-General
Roberto Azevedo and Kenya's Cabinet Secretary for foreign affairs
Amina Mohamed to bring about this result and effectively close the
Doha Development Agenda (DDA) negotiations on African soil.
The Nairobi Ministerial Declaration provided unambiguous language
for trans-Atlantic trade elephants to pursue their new issues.
[The final paragraph of the Declaration, though seemed to leave a
small chink for developing countries to impede "negotiations"
on the new issues. The declaration, on the WTO website in WT/MIN(15)/W/33/Rev.3
document, says: "34. While we concur that officials should prioritize
work where results have not yet been achieved, some wish to identify
and discuss other issues for negotiation; others do not. ANY DECISION
TO LAUNCH NEGOTIATIONS MULTILATERALLY ON SUCH ISSUES WOULD NEED TO
BE AGREED BY ALL MEMBERS. (Emphasis added)." SUNS].
The US, the EU, and Brazil managed to secure a substantive agreement
on export competition without having to pay for the balancing issues
covering a permanent solution for public stockholding programs for
food security, the special safeguard mechanism (SSM) for facing unforeseen
surges in imports of agricultural products supplied by heavily subsidizing
countries, and more crucially, the reaffirmation to continue the Doha
Development Agenda (DDA) negotiations.
India and China failed to stop the aggressive push by the US and the
EU, who were silently supported by Brazil, at the closed-door marathon
meeting that ended on early Saturday.
The two major developing countries yielded ground on one issue after
the other in the so-called Nairobi "deliverables" on agriculture
that included the outcomes on export competition, SSM, and public
stockholding programs for food security.
Finally, the two representatives of the developing world at the high
table conceded their negotiating ground by agreeing to vague and ambiguous
language that merely said work on the outstanding "Doha"
issues will continue, instead of saying clearly the remaining DDA
issues, in Geneva.
The NMD (Nairobi Ministerial Declaration) has created an ugly situation
where there will be protracted battles on whether there is a mandate
to pursue the DDA negotiations at all or commence work on the outstanding
issues with new approaches and new issues.
The Indian trade minister Ms. Nirmala Sitharaman cut a sorry figure
at the final concluding plenary meeting when she said, "I'm absolutely
disappointed that the ministerial declaration doesn't mention the
She went on to say that some of the amendments mentioned by her were
not contained in the final results. "I was surprised that a few
amendments that we have given have not gone through. I very clearly
had mentioned that under cotton we shall not accept that date. 2017
is completely unacceptable to me."
"What is the use in making such a statement when India is not
able to firmly stand up to pressure from the US and seek changes in
the final Nairobi Ministerial Declaration," asked an African
delegate present at the meeting.
India and China, though resisting the belligerent moves by the dominant
powers, finally agreed to language on agriculture and the post-Nairobi
work program in which the director-general and his secretariat played
a crucial role, said another South African minister.
Despite holding marathon meetings with the US, the EU, and Brazil,
the two major developing countries were unable to secure credible
language, if not concrete outcomes, on SSM and public stockholding
programs while agreeing to a substantive agreement on export competition.
More disturbingly, they let the trans-Atlantic trading partners have
their say on the future negotiating function of the WTO by ensuring
the entry of new approaches that could eventually terminate the existing
negotiating architecture based on special and differential treatment
and less-than-full-reciprocity based tariff and subsidy reduction
commitments in agriculture and tariff reduction commitments in industrial
goods of the DDA negotiations, an African trade minister lamented.
From now on, the two major developing countries will have to wage
a grim battle for stopping "graduation" - which could result
in losing their S&DT flexibilities and LTFR-based trade commitments.
While the Indian minister seemed disturbed with the outcome she negotiated,
the US Trade Representative Ambassador Michael Froman celebrated the
final Nairobi outcome. Froman captured poignantly the shift that he
along with the EU, the WTO director-general Azevedo and the chairperson
Mohamed had brought about at the tenth ministerial conference.
"As WTO members start work next year, they will be freed to consider
new approaches to pressing unresolved issues and begin evaluating
new issues for the organization to consider," said Froman in
a statement issued by the USTR's office.
Ambassador Froman's message marks a victory for the US which started
in 2008 for change in the negotiating approaches. His deputy Ambassador
Michael Punke gets the credit for decisively changing the entire negotiating
framework by resorting to constant diversionary tactics to shift the
focus from the central farm subsidy issues in the DDA negotiations,
according to several trade envoys.
At the final concluding press conference, the EU trade commissioner
Cecilia Malmstrom suggested that Brussels strongly believes in "differentiation"
- suggesting that China and India cannot be treated like other developing
countries despite some problems of underdevelopment in certain areas.
The crucial paragraphs in the NMD (Nairobi Ministerial Declaration)
that gave the US and the EU a decisive victory are contained in 30,
31, and the last paragraph 34.
Paragraph 30, for example, reads: "We recognize that many Members
reaffirm the Doha Development Agenda, and the Declarations and Decisions
at the Doha and at the Ministerial Conferences held since then, and
reaffirm their full commitment to conclude the DDA on that basis [language
proposed by China, India, South Africa, Ecuador, Venezuela, and the
African Group of countries]. Other members [the US, the EU, Japan,
and a handful of other countries] do not reaffirm the Doha mandates,
as they believe new approaches are necessary to achieve meaningful
outcomes in multilateral negotiations. Members have different views
on how to address the negotiations. We acknowledge the strong legal
structure of the Organization."
In the face of the divide between the two sides, paragraph 31 says
ambiguously and vaguely: "Nevertheless there remains a strong
commitment of all Members to advance negotiations on the remaining
Doha issues. This includes advancing work in all three pillars of
agriculture, namely domestic support, market access and export competition,
as well as non-agriculture market access, services, development, TRIPS
and rules. Work on all the Ministerial Decisions adopted in Part II
of this Declaration will remain an important element of our future
Effectively, by saying Doha issues and not the DDA issues, the NMD
(Nairobi Ministerial Declaration) has created an ugly situation for
the WTO members who will now spend their time interpreting the Nairobi
They will know the debilitating/destructive effects of the NMD when
they resume work in Geneva to pursue the remaining "Doha"
issues, according to a capital-based trade official who asked not
to be quoted.
The European Union trade commissioner Cecilia Malmstrom said the Nairobi
ministerial declaration vindicated the significance of multilateral
outcomes to address global trade issues. She said the EU is satisfied
with the outcome on export subsidies, export credits, and state-trading
The only two areas where there was no progress was on the improvements
in the special and differential treatment flexibilities as proposed
by around 90 developing and least-developed countries, and the transparency-related
improvements in fisheries subsidies proposed by Peru and the ACP group,
and anti-dumping (by Brazil) and subsidies and countervailing measures
(by the EU and Australia).
The meeting was extended by one more day beyond December 18 to enable
the United States, the European Union, China, India, and Brazil to
reach an agreement on export competition that includes the elimination
of farm export subsidies and diluted disciplines on export credits.
It also includes best endeavour outcomes on food aid, and new disciplines
on state-trading enterprises. The G-5 meeting also witnessed several
stalemates on Friday night, a source said.
The deal was ultimately reached only after India and China conceded
ground on the language pushed by the United States, the European Union,
and Brazil, said several participants familiar with the meeting.
The agriculture package mentions special safeguard mechanism for developing
countries with a reference to the Hong Kong Ministerial Declaration
but not the DDA negotiations. Both SSM and the permanent stockholding
programs for food security do not have a definite timeframe. The cotton
outcome for the four West African countries contains immediate elimination
of export subsidies, enhanced market access, and modest commitments
to reduce trade-distorting domestic subsidies.
The package on LDC issues for the least-developed countries includes
non-binding rules for preferential rules of origin and implementation
of preferential treatment in favour of LDC services and services suppliers
in services trade.
In short, the Nairobi ministerial meeting opened "the road to
a new era for the WTO," as claimed by Ambassador Froman. The
future for the developing countries at the WTO remains utterly bleak
as they failed to assert their priorities when the push came to shove