No consensus on New Round or agenda for Doha

by Chakravarthi Raghavan

Geneva, 1 Aug 2001 -- A two-day informal meeting of  the General Council to review, assess and prepare an agenda and Ministerial Declaration for the Doha Ministerial ended 31 July, with positions as far apart as before among principal protagonists on either side on the core issues dividing them, with less and less time to compromise and avoid another Seattle.

Some decisions or proposed decisions at the General Council on ‘implementation’, including extension of time for implementing the TRIMs agreement for nine countries, were so minor and procedural that it did not change the viewpoints of none of the leading developing countries, particularly those in the like-minded group (LMG) of developing countries, whose real concerns have not been met.

Even the grant of time-extensions by the Council on Trade in Goods on TRIMs, which has been under negotiations for over a year, an official from one of the ‘beneficiary’ countries said, is hedged with conditions, including about presenting a programme for phase-outs, giving the majors leverage to deny it or apply pressures on the recipients to subserve the US-EC ‘game plan’ for Doha.

The General Council Chair, Mr. Stuart Harbinson of Hong Kong China, wisely refrained from  making any such claim at the General Council itself, lest he and the Council be made a laughing stock by critics over such an effusive characterisation.

But Mr. Moore (who has made  his secretariat and media office more partisan than any predecessor) was effusive, calling it a breakthrough in a WTO press release.

When the members get back to Geneva in September, after the Northern summer vacation, pressure will resume, with the EU playing some high stakes, and keeping the issues and subjects alive to take to Doha. If this results in another Seattle, it can blame the developing world (and the Cairns group for insisting on an expanded agricultural mandate). This will suit France, facing general elections, and Mr. Pascal Lamy. But if the developing countries yield, the EC can claim victory, and continue to stonewall on agriculture, until the US and EC strike a deal, and try to force it down on the Cairns Group (as through the Blair House accord), and gain benefits for its TNCs.

But the scenario ignores the rising tide of opposition from civil society, not merely those demonstrating at big events, but in many countries where the legislatures and domestic enterprises are being mobilised, and attempts to repeat the Uruguay Round could become a recipe for disorder.

The European Commission’s Peter Carl,  at a press briefing at the WTO on 31 July, insisted that there was now a growing support for a new round (and with new issues, including investment), and that only a few ‘traditional’ opponents like India were opposed. But Carl found himself hard put to answer the questions of the  western media who pointed to the views of others including the LDCs.

While some of the views presented in statements at the two-day informal (written and made available to the media), suggested a change from the formal positions presented at meetings here so far, in fact they represented positions that the countries have indicated they could agree.

Thus, in the case of Egypt (where as in many other countries, the government and its departments are divided), the position in reality about a new round and willingness to look into negotiating a multilateral framework based on a GATS approach is something that its Trade Minister, Mr. Yusuf Boutrous-Ghali tried to promote at Seattle (but was rebuffed by many of the LMG, as well as Africans), and since then at other conclaves,  in tandem with the South African Trade Minister Alex Erwin.

Some of the nuanced statements at the informals (30-31 July) could be used to claim support  for or a “growing momentum” for a new round , since many opponents started with such ‘disarming’ statements like ‘we are for a round, but need an agenda by consensus’ or ‘we aren’t demandeurs, but can go along provided our concerns are met’ (setting out some detailed views on implementation that neither the US nor the EC are willing to agree to – such as on textiles). But this would be misleading.

Even if, at Doha, these misgivings are suppressed and trade officials and ministers accept to launch such negotiations pointing to some phrases in the declaration - ‘special attention to development issues’ or ‘special interests of the LDCs and small economies’ or to work for elimination of reduction of poverty and rural unemployment, it will be misleading and won’t wash with critics and opponents in each country, and the growing upsurge against this form of economic globalization.

Mr. Moore believes in neo-liberalism, and during his economic watch, and a brief tenure as Prime Minister (until the electorate turned him out) in New Zealand, put through liberalizing policies, and with Argentina was held out as a model to be followed.

A report by Jeff Madrick in the New York Times of 2 August (about a June seminar at Harvard), critical of the Genoa G-8 views about world poverty and accusing them of arrogance, and faulting ‘mainstream’ economists of continuing to promote such models with ‘insensitivity to the stunning facts’ about world poverty and inequality, has this to say: “Today, Argentina and New Zealand, once models for the liberalizing policies so widely encouraged by economists and global investors, are in serious trouble. Argentina, which linked its currency to the dollar in 1991, amidst plaudits from disciplinarians, totters on the brink of a financial crisis that could sweep up Brazil as well. “New Zealand’s growth rates are among the worst in the OECD. Yet there is little public outcry about mainstream policies.”

Over the last 18 months or more, after recovering from the Seattle shell-shock to which he contributed, Mr. Moore has been criss-crossing the world to promote a new round with new issues, speaking to and ringing up minsters and others in leading countries, and writing letters and sending emissaries to smaller countries, including in Africa, suggesting that their envoys in Geneva should be ‘instructed’ to change their stance and support a new round.

Mr. Moore might genuinely believe that ‘liberal, free trade’ preached by the US and EC, while  practising ‘neo-mercantilism’ of promoting export interests and investment opportunities abroad of one’s own corporations, is in the best interests of the developing world, including the Africans who got  him elected. He may really believe that countries could launch a round, but block its conclusion until agreements satisfactory to them are reached.

However, as India pointed out bluntly, this is a luxury that only the rich and powerful have, and one that the developing countries were unable to exercise during the Uruguay Round. There is no reason to think they could do better now.

Or to be more uncharitable, and there are many trade diplomats who say so privately, Mr. Moore wants to end his term on the basis that he launched a round, and let his successor (with whom he had to agree to a split-term) take the discredit for stalemated talks.

He has been prophesying ‘doom and gloom’ scenarios if no round is launched, of the WTO becoming irrelevant as bilateral and regional initiatives are pursued, and the poorer nations having to pay a heavy price for it.

At his press conference Monday, a visiting editor asked Mr Moore whether, as head of the WTO, he was not irresponsible in making such statements.

Put on the defensive, Mr. Moore could only say that he needed to be frank with the membership.

But whether they launch a round or not, perhaps it is time that WTO members address some basic issues of governance inside the WTO. When the Marrakesh Agreement was signed, and a preparatory committee to bring the WTO into being was at work, all the WTO members decided they would not become a ‘specialized agency’ of the UN and sign an  agreement. Many of the developing countries were actually afraid that with all the talk of a UN Economic Security Council, the UN would also be used against them, and it was best if the WTO with its contractual relationship stood out.

Subsequently, an angry Secretary-General, Mr. Boutros Boutros-Ghali, told the WTO that since it was not a specialized agency, its staff could not travel on UN laissez passe, and the WTO would have to get into agreements with its members (and non-members) for transit. The US intervened, and Mr. Boutros-Ghali had an exchange of letters (not officially cleared through ECOSOC or the UN General Assembly) that the old cooperative arrangements between the UN and the old GATT (whose secretariat technically was a UN body) would continue.

However, the legal position, as two jurists who will be reporting this week to a UN body show, the UN Charter and its obligations supervene before anything else, before or after the signature of the Charter, and the moment the WTO  took on a ‘legal personality’ of its own under Art.VIII of the Marrakesh Agreement, not only the UN charter and its obligations are binding on the governments, but the WTO too.

But now the developing world is having the worst of all the worlds.

The developing world as members of the UN cannot use the UN to influence the WTO. But the UN and its secretariats, more so after the Global Compact, are deferring to the WTO and the big corporate interests promoted by the WTO secretariat.

The WTO  leadership is using its informal cooperative relationship with the UN and specialized agencies to promote a partisan policy.

The WTO head attends the UN Administrative Committee on Coordination (along with other heads), exercises influence in private on them, including by persuading Mr. Annan to promote a new trade round (as he did at Brussels, and at the ECOSOC), and ensure that the UN system toes the line.

Developing country diplomats, basing themselves on information to them here at New York, say that those speaking out against a new round with new issues, or helping developing countries formulate their agendas and papers, are being discouraged or moved out of their positions.

Perhaps it is time for the developing country members to revisit all these questions, including how the secretariat actually functions and promotes partisan interests.- SUNS4950

The above article first appeared in the South-North Development Monitor (SUNS) of which Chakravarthi Raghavan is the Chief Editor.

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