TWN Report by Martin Khor, Director, Third World Network
(Geneva, 31 July 2001).

The following is a report of the WTO General Council informal meeting held on 30-31 July.  The meeting conducted a stocktaking of the state of preparations for the Doha ministerial conference.  The conclusion is that the WTO membership is just as polarised, with some advocating a New Round with new issues, whilst many developing countries are either opposed or not prepared to accept negotiations on new issues.
This is a short report of the latest developments in the WTO in Geneva.  The WTO General Council held a 2 day informal meeting on 30-31 July for a “stocktaking” or reality check on the situation re Doha Ministerial.  It started with the Council chairman Mr Harbinson and the WTO DG Mike Moore saying the situation is sobering as countries are still polarised between those who want a “new round” and those that do not.

Many countries stated their stand.  It was clear that since the last such stocktaking exercise in June, there has not been any “convergence” of views.

The EC’s Director General of Trade Peter Carl gave a press conference on 31 July and tried to give an impression that there is now a convergence and most countries want a Round, mentioning only India and Malaysia being against.  He tried to express optimism.  But he did not fool any of the journalists, as they had heard not only Moore’s rather downbeat assessment but they also saw the statements from many developing countries that are against or not prepared to accept a New Round or the new issues associated with it.  Many journalists at the EC press conference asked Peter Carl why he was so “optimistic” or why he claimed convergence of views when so many countries are against it as is clear from their statement.

It is true that the US now appears more enthusiastic about a new round and the deputy USTR Peter Allgeier said the US is now prepared to go along with investment and competition as issues for negotiations.  His view seemed to be that this was the way to get the EU to agree to liberalise agriculture.

But he also admitted that some developing countries find difficulty with the new issues and that they have to be won over, for example by giving them technical assistance.

The real story, however, is that many developing countries spoke up against accepting new issues (investment, competition, transparency in govt. procurement, trade facilitation, new rules on environment, labour) at the Doha Ministerial.  They expressed great disappointment that their demands for treating “implementation issues”   (ie problems faced in meeting their obligations in existing agreements like TRIPS, TRIMS, agriculture, subsidies etc; and problems caused by the developed countries not fulfilling their commitments in opening their marketsto poor countries for example in agriculture or textiles) have not been met.  When they already face so many problems in implementing the existing agreements, why should they agree to enter negotiations in new areas that will land them with new obligations which they will then have more problems in trying to implement?

Countries that spoke up strongest along these lines included Pakistan, India, Malaysia, Indonesia, Jamaica.  But the LDCs and African countries also indicated their unpreparedness to take on new obligations in a new Round.

Pakistan Ambassador Munir Akram said: “There were 50 proposals for urgent action on implementation. Decisions may be likely on only three issues at present. This justifies the evaluation there has been no welcome advances, no positive developments, almost no headway towards positive decisions. Unless there are tangible results on implementation, we find it difficult to continue considering proposals to enlarge the negotiatingf agenda before, at or after Doha.  Under present circumstances there is very little prospect for agreement on the four Singapore issues.”

The India Ambassador, S. Narayanan, rejected investment, competition, transparency in govt procurement and trade facilitation as negotiating issues for Doha, saying the differences in views between Members cannot be narrowed by then.  “It is clear there is no consensus on even one of the new subjects proposed, nor of expanding the negotiating agenda. We are also terribly disappointed and distressed at the lack of progress and political will in dealing with implementation issues even at this late stage,” he said.

Malaysia’s  Ambassador Superamaniam expressed misgivings on how the Doha process had focused on the new issues as if these issues would make or break the Doha conference. He said: “It is abundantly clear the differences in positions are intractable. Clever drafting cannot resolve fundamental difficulties and this has to be recognised...We run the risk of a “Seattle Two” if we continue with the all-or-nothing course....It is clear we are in a state of impasse.  We characterise the situation as discouraging,  iscomforting, demoralising and even depressing. The reality is that the positions on a wide range of issues are sharply divided even at this critical phase.”

Ambassdor Halida of Indonesia made a strong statement.  She said: “Indonesia is deeply concerned over the initiativ by some Members to launch a “comprehensive” round which includes new issues.  Indonesia has learned a very good lesson from past experience, that a proposal that looks fair on the surface may have very different and serious  consequences. To understand what is really at stake we certainly need to unders fully all factors and implications...Insisting to include issues which do not reflect the interests of all Members would be a perfect recipe for failure....The unrealistic expansion of the agenda will place at peril the sucess of the Ministerial Conference.”

Stated Jamaica’s Ambassador Ransford Smith:  “Time is running out and we may be in danger of repeating recent history unless we focus first on necessary preconditions and secondly on what is possible at this time.  For us the resolution of implementation issues is a necessary pre-condition and unfortunately there is very little progress there. We do not believe that beyond the built-in agenda many issues fall into the realm of what is possible.  We should admit the reality as quickly as possible.”

Very importantly, the poorest members of WTO, ie the least-developed countries or LDCs (there are almost 40 of them in WTO) represented by the Tanzania Ambassador,  told WTO that the LDC Ministers at a meeting in Zanzibar last week had decided that they are not in a position to agree to negotiate new issues, and that the work of the Working Groups on these issues should continue instead.

Said Ambassador Ali Mchumo of Tanzania:  “The Ministers of the LDCs considered the so-called Singapore issues that include investment, competition policy, environment, transparency in govt procurement and trade facilitation.  Given the fact that the issues involved are complex and divergent viewsue to exist and that the new issues are yet to be fully understood, especially regarding their implications on LDCs’ development, the Ministers were of the view that the study process should continue in the working groups and that time is not ripe for LDCS to undertake negotiations for multilateral regimes on these areas.”

The Africa Group of countries, represented by Zimbabwe,  also indicated their reluctance to entertain new issues at Doha.

With so many countries expressing their misgivings on the “new issues” in the proposed “comprehensive New Round”, it is incredible that the EC can try to “spin” the view to the media and the public that almost all countries, except a couple of hardliners, have “converged” towards the launching of a New Round.

The truth is that a majority of WTO Members are opposed to or are not prepared to agree that the Doha meeting initiate negotiations towards new rules or agreements on new issues.  They are against the WTO increasing its mandate and through new rules that would land them with new burdens of obligations that could well block their development prospects further.

The WTO delegations will be taking a break in August.  In September the discussions continue.  In the weeks ahead intense pressure will be applied by the EU, the WTO Secretariat and most probably the US on the developing countries, to get the officials in the capitals and the Ministers to change their minds and accept the launch of a New Round.  Such pressures are really unethical, as many developing countries (especially the poorer ones) are vulnerable to pressure due to their dependence on aid and loans, and many are under IMF conditionality.

The lesson from this “stocktaking exercise” is that many developing countries (in fact the majority) are very uncomforatble with the New Round idea, and the developed countries should not cause more consternation and anxiety by intensifying the pressure on them, as this will lead to even more polarisation and frustration.   However it is also unlikely that this is the lesson the trade policy makers of the developed countries will take.  Thus there will be a big battle in the next three months before Doha.   If in the end there is a new round, it would mean that the pressures applied would have been tremendous.