Ricupero’s assessment of Doha, outlines technical assistance plans

by Chakravarthi Raghavan

Geneva, 5 Feb 2002 -- The key test for the multilateral trading system, set by the work programme of the WTO’s 4th Ministerial Conference will be in terms of the ‘concrete results’ over the next few months on proposals of developing countries on implementation issues, said UNCTAD Secretary-General, Mr. Rubens Ricupero Monday in an assessment of the Doha Ministerial Conference and outcome.

These issues and proposals of the developing countries put forward in the lead-up to Seattle, Ricupero added, remain on the table and are to be dealt with in the framework of the negotiations and “potentially part of an eventual single undertaking.”

Mr. Ricupero’s assessment was given at the opening session of UNCTAD’s Commission on Trade in Goods and Services and Commodities, and he largely focussed on “the development implications” of Doha and UNCTAD’s assessment of this, as also the UNCTAD programme for technical assistance to the developing countries.

In his assessment, Mr. Ricupero besides spotlighting the ‘implementation’ proposals and how it would be a test of the system, also mentioned the Ministerial Declaration being permeated by references to the ‘special and differential’ (S&D) treatment in favour of developing countries and the proposals for ‘binding’ the S&D measures, the TRIPS and Public Health declaration and further negotiations envisaged on traditional knowledge and biodiversity, as well as establishment of working groups, though not with negotiating mandates, on trade, debt and finance and transfer of technology.

The references to S&D in the Declaration, he noted, reversed the conventional wisdom that prevailed in the immediate post-Uruguay Round, which tended to downgrade its importance.

On the TRIPS and Public Health declaration, he saw it as a “first step” in a process to ensure that multilateral trade agreements are not applied in a manner that neglects basic social needs, and envisaged that there will be further negotiations on TRIPS on ensuring inclusion in the Agreement of issues reflecting interests of some developing countries, such as protection of traditional knowledge and bio-diversity.

However, the decisions of the Trade Negotiations Committee on 1 February, on the structures of negotiations, does not seem to have provided a high priority to these - in effect having the S&D issue and the framework for it dealt with by the Committee on Trade and Development, and focussing as part of the negotiations in TRIPS only the negotiations for a multilateral system of notifications and registration on Geographical Indications of origin for wines and spirits.

[And on the S&D issue itself, the European Community’s statement Tuesday at the Agriculture negotiations in the Special Session of the Agriculture Committee, suggests that as in the Uruguay Round, it will attempt to divide and split the developing world - as between the Least Developed, the ACP, the other developing countries and the Cairns Group (mentioning Brazil, Argentina and Thailand and their demands in the talks).

[The EC suggested that the interests of the Cairns group and that of developing countries in promoting a development box were not consistent with each other. If the like-minded group want their existing or even high level of protection in their domestic markets, how will they compete with the Cairns Group for the lower priced markets in the developed countries? And while no one could deny developing country status to small island developing countries and single commodity exporters, “how are we to safeguard their interests when the markets to which they have preferential access become more competitive as tariffs are reduced?”]

Though the negotiating structures approved last week has a bullet point on implementation, it does not go beyond the Doha declaration and decision - of proposals remaining on the ‘table’ to be dealt with through “three instruments”, as Mr. Ricupero put it. In terms of the TNC decision, they are to be pursued in the relevant WTO bodies.

In providing his assessment of the development implications, Mr. Ricupero side-stepped the more fundamental issues that were swept under the carpet at Doha, but is now coming to the fore again - thanks to the civil society movements redoubling their campaign against corporate globalization, and sharply focussing on the claims of ‘Development Agenda’ in the Doha work programme.

In terms of the crux of development economics, Alice Amsden (a US academic and development economist), in an Op-Ed page contribution in the New York Times of 31 January (‘Why are Globalizers So Provincial?’), has raised the more fundamental issue that developing countries under the WTO system are being asked to give up their policy autonomy and accept ‘harmonization’ of their domestic policies to achieve a ‘level playing field’.

For the large majority of developing countries, Amsden has pointed out, the advantage of accepting the doctrine and rules of a level playing field is ‘access to markets’. However, the disadvantage is “loss of freedom to subsidise company formation and necessary learning processes”, a freedom that has been critical to most economic modernizations that have had a lasting success“A level playing field may thus entail a false equality,” she said.

For UNCTAD to come to grips with this core issue of development and development strategies is perhaps more difficult in the current climate, more so when the Third World governments themselves do not raise these issues forcefully and focus on intellectual inputs from secretariats as well as intergovernmental and international policy dialogues. However, without coming to grips with some of these issues, with some intellectual rethinking (rather than asking ‘wise men’ to repeat in new language the old Washington Consensus as was done by the UN for the Monterrey Conference), more technical assistance, even tailored to the needs of various countries, may not help.

And the problem of technical assistance is also complicated by the fact that these have to be financed and run from out of contributions of donors - whose funds come with a price, namely use of the technical assistance programs to promote their own objectives and agendas.

If the burgeoning Enron/Anderson affair, and revelations, show one thing, it is that it is not unique to one company or one country, and that the basic problem is of the system, of enterprises ‘corrupting’ the legislative and regulatory processes within countries by having regulations rewritten to suit their ends and/or not enforced, and getting governments to promote their interests abroad, both bilaterally (as over Enron ‘contracts’ in India and elsewhere), as well as in rewriting the trading rules on what governments can and cannot do.

In the Enron case, documents released by NGO actions, show that before the Enrol scandal exploded, and as late as November, on the eve of the WTO meet, the George W Bush administration was weighing how the US Treasury could be used to get the IMF and World Bank to put pressure on India over the Enron affair, and whether it could be raised with Indian Prime Minister Atal Behari Vajpayee during his meeting with Bush. (Ultimately it was not raised - the scandal was out in the open, and Indian aides opposed it being raised).

Even the inclusion of Energy services (both in the services negotiations, and in market access) in the Doha work programme, it is now becoming apparent has been due to the efforts of the US administration (many of whom have had very close links with Enron and others) in promoting its agenda abroad. At a recent press conference in Geneva, Mr. Robert Zoellick tried to side-step the issue (about what he raised and did not during his visit to India) by saying he had ‘recused’ himself in the decisions relating to Enron. However this did not answer the question of the Energy services in the Doha agenda. The documents being brought into public domain in the US through NGOs exercising the freedom of information act, and the stalled US Congressional inquiries into the role of Enron and others in shaping the US energy policy (through Vice-President Dick Cheney’s group) show these ‘hidden hands’ using the invisible hand of the market.

In his speech, Mr. Ricupero highlighted the two main opportunities in the post-Doha work programme:

First, that all issues put forward by developing countries in the lead-up to the Seattle Conference are still on the table and “potentially part of a single undertaking”. Second, various deadlines have been agreed upon, making it imperative for progress to be made on the main interests of developing countries before the next Ministerial Conference, “if negotiations are to address broader areas.”

“The top question for the international community now is whether it will be able to make the best possible use of those new opportunities,” he added.

On development, the Doha Ministerial Declaration is permeated by references to S&D in favour of developing countries, and a provision for considering the binding of S&D measures. “This revival of S&D is a major achievement,” compared to the post-Uruguay Round conventional wisdom and which has now been reversed, “at least in the language of the work programme,” strengthening the relevance of S&D treatment in all topics and through specific paragraphs.

The implementation proposals are to be addressed within the framework of the Ministerial Decision on Implementation Related issues and concerns, the document on outstanding implementation issues and the Ministerial Declaration’s mandate on WTO rules.

The proposals, Ricupero said, are basically aimed at eliminating important market access barriers facing developing countries or at reflecting development needs not taken into account when existing provisions were formulated.

That developing countries were able to secure inclusion of these items, and prevent them falling out of the package (at Doha), added Ricupero, “is evidence that they have consolidated their influence during the two years since Seattle... developing countries should expect to obtain some concrete results over the course of 2002. This strict time-frame means that the next few months will be a key test for the multilateral trading system.”

By succeeding in getting the establishment of the two new working groups (on trade, debt and finance, and transfer of technology) and their inclusion in the WTO institutional framework, provides the opportunity to widen the consideration of the topics being treated at the WTO by looking at linkages between trade rules and development implications.

Lack of access to financing and technology, Ricupero said, is a major handicap to developing country producers and exporters, and inhibits developing countries from deriving full benefits from their trade rights. “Debt burdens discourage investment, and many solutions offered in the post-Doha programme will be viable only if financing is available. This is the case, for example, of the idea of a ‘development box’ in the Agreement on Agriculture, or of the desired contribution of liberalization of trade in environmental goods and services to sustainable development that should be envisaged together with access to new technology. These two new working groups provide an opportunity to examine how transfer of technology and financing instruments can be taken into account in trade negotiations in an operational fashion.”

The work launched at Doha on the ‘Singapore issues’, Ricupero said, can succeed only if, while expanding the scope of the current WTO agenda, the development content of these issues is clearly established from the outset. “The policy space for national development strategies need to be ensured,” he added. He recalled that investment and competition issues had been raised by developing countries in UNCTAD in the 1970s, and suggested that UNCTAD work in these areas could concentrate on identifying elements of “viable solutions” most compatible with the interests of developing countries.

The investment issue, in terms of disciplining investors and the transnational corporations, and the competition issue (Restrictive Business Practices Code), raised by developing countries in the 1970s, and UNCTAD’s consideration of them within its framework, became diffused, partly due to the neo-liberalism policies of developing countries, particularly in Latin America, and in recent years was difficult to distinguish from the European agenda for investment rules and competition policies for countries to become competitive.

Mr. Ricupero’s focus, more so in the context of widespread disillusionment in Latin America over the neo-liberal policies (after the Argentine crisis), may bring a different outlook to UNCTAD work in this area over the last few years - which became an investment promotion exercise. The new focus, would need to look at why the thinking and policies lost their original focus, and how to address development in terms of preserving national autonomy of policy- and decision-making raised by Prof. Amsden, which implies that multilateral trade rules to ‘harmonize’ domestic policies in developing countries, by giving up policy autonomy may need to be re-thought. Mr. Ricupero welcomed the inclusion in the Doha work programme of trade rules on regional trade agreements and the need for “strategic vision” when preparing parallel negotiations (multilateral and regional) that would go “beyond the narrow technicalities of erosion of preferences or formulation of rules of origin”.

Ricupero also outlined five main features of UNCTAD’s own technical assistance plans, identified as a result of widespread consultations:

·        it is designed on the basis of requests from countries that are potential beneficiaries, using ‘demand driven’ modalities;

·        in accordance with UNCTAD’s own mandate from the Bangkok Plan of Action, it highlights needs of the 77 ACP countries in their forthcoming post-Cotonou negotiations with the EU, as also the negotiations on WTO rules applied to regional trade agreements;

·        assistance to be modulated and adapted to specificities of beneficiaries, “a heterogenous group (of developing countries) at all levels of economic development - from poorest LDCs to transition economies.” As in previous UNCTAD programmes, it is tailor-made in consultation with beneficiaries, including sectoral specificities of topics such as services;

·        assistance to respond to both short- and long-term needs - support needed to trade negotiators being very different from that to be provided for capacity building in academic institutions etc.

“The urgent need is to provide assistance for on-going negotiations on agriculture and services, to be seen in parallel with capacity building to assess overall post-Doha process from the development standpoint.”

The assistance plan, while underpinned to UNCTAD’s specific mandate on trade and development, is to be in partnership with the WTO, the International Trade Centre, UNCTAD-ITC-WTO joint programme in JITAP, and the Integrated Framework.

Mr. Ricupero also mentioned an understanding to be signed with the Agency for International Trade Information and Cooperation (AITIC). This was set up as a Swiss-government financed NGO, to provide information for LDCs (making use of Swiss Government information and access at the WTO talks).

The UNCTAD technical plan is ambitious, Ricupero said, but the negotiations agreed at Doha is more ambitious. The plan reflects urgent, real and complex needs to be addressed seriously.

“However, we should not expect too much of technical assistance to support the negotiating capacity of developing countries, even if those skills may be decisive in shaping the provisions on market access, for instance, and their impact on development... Trade negotiations are necessary but in themselves not a sufficient condition for development. Even when they are concluded, they create first and foremost opportunities, but opportunities are useless if countries lack means to take advantage of them. At the end of the day, for all developing countries, the capacity to overcome supply constraints is what really determined the quality of their participation in the trading system. It is crucial to build linkages between trade negotiations and steps needed to develop productive sectors. Otherwise, the trade opportunities emerging from the negotiations will have no development impact.” - SUNS5054

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