Southern business opposes new issues

Geneva, 11 Oct (Chakravarthi Raghavan) - - The business and industrial community of the South have taken an overall negative view of the Draft Ministerial Declaration (DMD) for the WTO Doha Ministerial meeting and have opposed any WTO negotiations on new issues of investment, competition policy, government procurement and trade facilitation, and instead have called for continuation of the study process.

The Southern business perspective and assessment of the DMD for the Doha meeting, Job(01)/40, put forward by the General Council Chair, Mr. Stuart Harbinson of Hong Kong China has come after a two-day round table/preparatory meeting in Cairo (7-8 October) of the Group of 15 Federation of Chambers of Commerce, Industry and Services (FCCIS).

The FCCIS meeting has also made comments on the draft decision on implementation put forward by Harbinson and the WTO Director-General Mike Moore - Job(01)/39.  FCCIS said, in a trenchant comment, “the implementation text is an empty package without any substantive content or benefits to the developing and least developed countries,” the FCCIS said.

The FCCIS views and comments put to rest the propagandist view at the WTO, and in the media of the leading trading entities (the US and EU in particular), and the organizations of their business and industrial community which claim also to be representing the views of the Southern businesses in demanding more liberalization and opening of Southern markets for the Northern corporations and for multilateral rules on investment and other new areas of economic activities in countries. The stands of developing country delegates at Geneva are often portrayed as opposition from a few WTO delegations that are misconceived, and not the view of their countries’ private sectors or even of the governments in the capitals.

The much better organized groups of US and Europe, the Paris-based International Chamber of Commerce (ICC), and other industry and service groups and coalitions, in promoting their views at the WTO (with the blessings and help of the WTO secretariat) have been spreading the view that they represent the global business and industry groups.

While the G-15 FCCIS believes that the DMD contains “a few positive features like call for negotiations aimed at clarifying and improving existing WTO rules on trade defense measures, overall the DMD is formulated in such a manner that it fails to address and reflect the concerns, needs and priorities of the business communities in the G-15 countries,” and needs several amendments to the DMD to make it acceptable as a basis for a balanced text for the Ministers at Doha, the FCCIS said.

The FCCIS has also taken a less exuberant view of the WTO and its contribution to growth and development of developing countries, than in the paras 1-8 of the Harbinson text, and said the WTO multilateral trading system has contributed to economic growth, development and employment, but the distribution of benefits of the system has to be more balanced and equitable. The WTO has to ensure therefore that developing and least developed countries secure a share in growth of international trade.

International trade “can” play a key role in alleviation of poverty, but developing countries are yet to reap full benefits from the functioning of the system including inadequate realisation of promised expansion of market access in developed countries, imbalances in the present set of rules and problems relating to implementation of the Uruguay Round Agreements (URA), the FCCIS said and asked the Ministers at the Doha meeting to pledge to rectify the asymmetries and imbalances, and accord the highest priority to a development-oriented agenda.

The FCCIS complained that the para 10 of the DMD, relating to implementation, seemed to be a ‘stand-alone programme’, and there should be clarification to make it a time-frame for resolving implementation-related issues and concerns.

In other comments, on the subject of ‘Market access for non-Agricultural Products’ (para 13), the FCCIS called for the deletion altogether of this paragraph.

Alternatively, they suggested either focussing the negotiations in this area for reduction or elimination of tariff and non-tariff barriers “currently practised and imposed by the developed countries”, and for a study process through a working group to determine the issues of market access for non-agricultural products. Such a study process should examine among others the effects of previous rounds of import liberalization and tariff reductions on domestic firms and employment, impact of tariff peaks and tariff escalation in developed countries on the trade prospects of developing world, and their implications for future policy initiatives. Based on this study, recommendations could be made for guidelines and modalities for any future negotiations.

On the issues relating to the TRIPS agreement (paras 14-17 of the Harbinson text), the Southern business and industrial community asked the Ministers at Doha to call:

·        for strengthening and options for negotiations on extending additional protection of geographical indications to products other than wines and spirits;

·        for an affirmation that each provision of the TRIPS Agreement shall be read and interpreted in the light of the objectives, principles and purposes set out in Articles 7 and 8 of TRIPS;

·        for developed countries, in view of the mandatory nature of obligations under Art.66.2 of the TRIPS, to put into immediate effect meaningful incentives for promoting and encouraging technology transfer and for instructing the TRIPS Council to implement by January 2002, a process of notification by developed country members of the incentives being provided by them;

·        to instruct the TRIPS Council to complete the review process of Art.27.3(b) by year 2002, and clarify the article to remove the artificial distinction between plants and animals, and micro-organisms, and between essentially biological and micro-biological processes;

The Ministers should instruct the TRIPS Council that: “the review process shall therefore to clarify that plants and animals, micro-organisms and all other living organisms and their parts, cannot be patented, and that natural processes which produce plants, animals and other living organisms shall also not be patentable.”

·        instruct the TRIPS Council to clarify (in relation to protection of plant varieties) that members have the right to determine the appropriate sui generis system best suited for their countries, and that the transition period for implementing 27.3(b) shall be extended by another five years from the date of the completion of the review process;

·        in the review of the TRIPS agreement under Article 71.1, for the TRIPS Council to work out necessary amendments of TRIPS to ensure ability of developing countries to fully meet the objectives and principles of the TRIPS Agreement set out in Articles 7 and 8.

On the DSU review, the Cairo meet called for negotiations for clarifying, improving and amending the Dispute Settlement Understanding in the light of the experience of the working of the DSU (and not merely on the work done thus far, as envisaged in the Harbinson text, para 26).

The work in the Committee on Trade and Environment (para 27) should, in addition to the two issues listed in it, should also examine the possible adverse effects of environmental measures on market access for products of developing countries and examine, and the possible adverse implications of the TRIPS agreement on efforts and capacity of developing countries to adopt environmentally friendly policies and measures.

Also (para 28), the WTO Committee on Technical Barriers to Trade should be directed to take particular care to ensure that the process and production methods (PPMs) not related to products, are not made a basis for standards.

This appears to be a reference in some of the industrial countries to use the TBT accord to introduce socalled social and other labels that would have the effect of keeping out products of developing countries on the grounds of their domestic social and other policies.

On the question of organization and management of the work programme, the Cairo meeting said the negotiations and other work “shall be conducted” in the existing bodies of the WTO, under the supervision of the General Council, and for the GC to report to the 5th Ministerial Conference which would take stock of the progress, provide political guidance and direction, and take decisions as necessary. The negotiations should be directed to be conducted in a fully transparent manner and an appropriate table to facilitate effective participation of the members. The outcome of the negotiations should also ensure benefits to all Members and result in an overall balance, taking into account the existing imbalances against the developing countries.

On the implementation question, the FCCIS underlined that no action had been taken so far on the implementation issues, listed early in the year in a secretariat note.

The FCCIS has analysed the Harbinson-Moore draft in the context of the way the issue has been dealt with at the WTO - beginning with these concerns raised in the runup to Singapore in 1996, through the Geneva ministerial and the runup to Seattle, the post-Seattle decisions at the General Council for ‘confidence-building’ measures - by creating confidence in the developing countries on implementation concerns, on ensuring internal transparency as well as participation in decision-making of all members, and the May 2000 decision of the General Council to resolve all implementation issues no later than the 4th Ministerial Conference.

Against this background, the draft decision is “extremely disappointing” to many developing countries and their private sectors, the FCCIS said and called for appropriate modifications and improvements in the Annexes I and II of the Harbinson-Moore draft. They also called upon the Doha Ministerial not to relegate these issues to a future work programme.

“Concerns of the business community in the G-15 are, inter alia, related to several areas including TRIPS, TRIMS, agriculture including net food importing countries, the TBT and SPS measures, agreement on textiles and clothing, LDCs, WTO rules on anti-dumping, subsidies and countervailing measures and rules of origin.”

The Cairo meeting added: “The FCCIS calls for a firm and clear commitment on the draft decision to deal with all outstanding implementation-related issues and concerns by the time of the Doha Ministerial, in accordance with the General Council decision of 3 May 2000.” – SUNS4986

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

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