The multilateral trading system will be judged in coming months on the concrete results it delivers on developing countries’ implementation proposals, the UNCTAD Secretary-General has asserted in a recent presentation which evaluated the development implications of the WTO’s Doha work programme and outlined the main features of his organization’s technical assistance plans.
GENEVA: 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 United Nations Conference on Trade and Development (UNCTAD) Secretary-General Rubens Ricupero on 4 February in an assessment of the Doha Ministerial outcome.
These issues and proposals of the developing countries, which were put forward in the lead-up to the 3rd Ministerial in 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.”
Ricupero’s assessment was given at the opening session of UNCTAD’s Commission on Trade in Goods and Services and Commodities. 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, Ricupero, besides spotlighting the implementation proposals and how they would be a test of the system, also mentioned the Doha Ministerial Declaration being permeated with references to special and differential (S&D) treatment in favour of developing countries and the proposals for “binding” the S&D measures, the declaration on TRIPS and public health and further negotiations envisaged on traditional knowledge and biodiversity, as well as the establishment of working groups (though not with negotiating mandates) on trade, debt and finance and on trade and transfer of technology.
The references to S&D treatment in the Ministerial Declaration, he noted, reversed the conventional wisdom that prevailed in the immediate post-Uruguay Round period, which tended to downgrade its importance.
On the TRIPS-and-public-health declaration, Ricupero 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. He envisaged further negotiations on TRIPS on ensuring inclusion in the Agreement of issues reflecting the interests of some developing countries, such as protection of traditional knowledge and biodiversity.
However, the decision of the WTO’s Trade Negotiations Committee (TNC) on 1 February on the structures of negotiations does not seem to have accorded 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 on 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 Communities’ statement at the agriculture negotiations in the special session of the WTO Agriculture Committee on 5 February suggests that as in the Uruguay Round, it will attempt to divide and split the developing world - as between the least developed countries, the African, Caribbean and Pacific (ACP) group, the other developing countries and the Cairns Group of agricultural exporters (mentioning Brazil, Argentina and Thailand and their demands in the talks).
(The EC suggested that the interests of the Cairns Group and those of developing countries in promoting a “Development Box” in the Agriculture Agreement were not consistent with each other. If the developing countries in 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-price 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 decision on negotiating structures approved by the TNC has a part on implementation, it does not go beyond the Doha Ministerial Declaration and the Decision on Implementation-Related Issues and Concerns of 14 November 2001 - of proposals remaining on the table to be dealt with through “three instruments”, as Ricupero put it. In terms of the TNC decision, the implementation issues are to be pursued in the relevant WTO bodies.
In providing his assessment of the development implications, Ricupero sidestepped the more fundamental issues that were swept under the carpet at Doha but which are 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 the Doha work programme being a “Development Agenda”.
In terms of the crux of development economics, US academic and development economist Alice Amsden, 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 subsidize company formation and necessary learning processes”, a freedom that has been critical to most economic modernizations that have had 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 through some intellectual rethinking (rather than asking ‘wise men’ to repeat the old Washington Consensus in new language, as was done by the UN for the upcoming Financing for Development Conference), more technical assistance, even if tailored to the needs of various countries, may not help.
And the problem of technical assistance is also complicated by the fact that such assistance has to be financed and run from out of contributions of donors, whose funds come with a price, namely use of the technical assistance programmes to promote their own objectives and agendas.
If the burgeoning Enron/Andersen affair shows 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 scandal exploded and as late as November, on the eve of the WTO’s Doha meet, the George W Bush administration had been 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 its 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 members of which have had very close links with Enron) in promoting its agenda abroad. At a recent press conference in Geneva, US Trade Representative Robert Zoellick tried to sidestep the issue (about what he raised and did not raise 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 inclusion of energy services in the Doha agenda. Documents being brought into the public domain in the US (through NGOs invoking the Freedom of Information Act) and the stalled US Congressional inquiries into the role of Enron and others in shaping US energy policy (through Vice-President Dick Cheney’s group) show these ‘hidden hands’ using the ‘invisible hand’ of the market.
In his speech, Ricupero highlighted the two main opportunities in the post-Doha work programme: firstly, 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”. Secondly, 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 with references to S&D treatment 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 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 Doha 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 from 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.”
The establishment of the two new working groups on trade, debt and finance and on transfer of technology, and their inclusion in the WTO institutional framework, provide 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, with the idea of a ‘development box’ in the Agreement on Agriculture, or 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” (investment, competition, government procurement and trade facilitation), 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 needs 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, however, became diffused, partly due to the neoliberal 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.
Ricupero’s focus, more so in the context of widespread disillusionment in Latin America (after the Argentine crisis) over neoliberal policies, may bring a different outlook to UNCTAD work in this area, which, over the last few years, 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 (as raised by Prof. Amsden), which implies that multilateral trade rules to “harmonize” domestic policies in developing countries may need to be rethought.
Ricupero welcomed the inclusion in the Doha work programme of trade rules on regional trade agreements and underlined 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 the following main features of UNCTAD’s own technical assistance plan, identified as a result of widespread consultations:
l it is designed on the basis of requests from countries that are potential beneficiaries, using “demand-driven” modalities;
l in accordance with UNCTAD’s own mandate from the Bangkok Plan of Action, it highlights the 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;
l assistance to be modulated and adapted to specificities of beneficiaries, “a heterogeneous 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;
l assistance to respond to both short- and long-term needs, support needed by 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 ongoing negotiations on agriculture and services, to be seen in parallel with capacity-building to assess the 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, the UNCTAD-ITC-WTO joint programme in the Joint Integrated Technical Assistance Programme (JITAP) and the Integrated Framework.
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 are 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 determines 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)