Majority of developing countries rejected text on new issues even midway through Doha

When the discussion at Doha turned to the contentious ‘new issues’ (investment, competition, transparency in government procurement, trade facilitation), it was evident, as the report on this phase of the Ministerial makes clear, that a majority of the developing countries rejected the draft Ministerial Declaration committing WTO members to negotiations on these issues.

by Martin Khor

A MAJORITY of developing countries that spoke at a plenary consultation meeting in Doha on 11 November to discuss the ‘new issues’ strongly indicated their rejection of the draft Ministerial Declaration committing WTO Members to negotiations on all four Singapore issues: investment, competition, transparency in government procurement and trade facilitation.

Developed countries, including the EU, Japan, the US, Australia and Switzerland, supported the draft and the start of negotiations.

The meeting thus confirmed that WTO Members are just as split (if not more so) on the new issues halfway through the Doha Ministerial as they were at discussions at the WTO in Geneva.

Among the countries and groupings which spoke up against the Ministerial Declaration committing Members to negotiations on the new issues (and which asked that the study process on these issues be continued instead) were Nigeria (which chairs the Africa Group of countries at the Doha Ministerial), Kenya (which chairs the African, Caribbean and Pacific (ACP) group), India, Zimbabwe, Jamaica, Cuba, Senegal, Malaysia, Indonesia, Thailand, Pakistan, St Vincent, Philippines and Botswana.

The main themes in the statements of these countries were that a decision to begin negotiations would have to be by consensus and that there was obviously no consensus among WTO Members to do so; that they could not accept the substance of the text committing Members to negotiations; that the study process in the working groups had not been completed and should continue; that developing countries did not have the capacity to understand the implications for them of the proposed agreements; and that they could not undertake new obligations, especially since the implementation problems from the existing obligations remained unresolved. Some also expressed objections to the substance or appropriateness of the issues. Many opposed the proposal for an ‘opt-in opt-out’ approach (under which Members could decide whether or not to join negotiations on the new issues and the final agreements reached).

Some developing countries said any decision on whether to begin negotiations should be deferred to the Fifth Ministerial Conference. Some Latin American countries said they were not demandeurs but could accept the text if they were satisfied with negotiations in other areas. A few developing countries supported the commencement of negotiations.

The new issues are covered in paragraphs 20 to 23 of the draft Ministerial Declaration dated 27 October. On investment and competition, the text commits Members upfront to decide on modalities of negotiations at the Fifth Ministerial in 2003 (whilst preparing the ground with work ‘focusing’ on clarifying elements of a framework in the two years before it). In the text on transparency in government procurement and trade facilitation, Ministers agree to begin negotiations immediately.

The consultation meeting, chaired by the ‘facilitator’ on the new issues, Canadian Trade Minister Pierre Pettigrew, was held from 11am to 1pm on 11 November and was open to all delegations.

(At the opening of the Committee of the Whole on 10 November, the conference Chairman, Qatar Economy Minister Youssef Kamal, had appointed six ‘friends of the Chair’ or ‘facilitators’ to head consultations on six issues, one of which was the ‘new issues’. Since then the ‘facilitators’ have been holding consultations. It is unclear what methodology has been used by each facilitator, or which countries they have consulted with and on what basis.)

Pettigrew opened the meeting by informing participants that he had been holding bilateral meetings and would be holding more bilaterals after the open-ended meeting. He did not disclose with whom he had or would be having the bilaterals.

India’s representative stated that his delegation opposed the current text and would like the study groups to continue their work and report to the Fifth Ministerial, and that there should be no prior conclusion on having negotiations.

Zimbabwe (which chairs the Africa Group at the WTO in Geneva) reminded the meeting that the African Trade Ministers at their meeting in Abuja in September had decided not to accept negotiations on the Singapore issues. It also said the Doha meeting should not go against the Singapore mandate that a decision to negotiate can only be taken on the basis of consensus. Thus, the study process should continue and a report can be made to the Fifth Ministerial.

Nigeria, which chairs the Africa Group at the Doha Ministerial, said it did not accept negotiations on the four new issues. It mentioned the need for capacity-building to understand the issues. It asked why the proponents were pushing negotiations so strongly on these issues when there was no consensus.

Kenya, speaking on behalf of the ACP countries, said it wanted to continue the educative work on all the Singapore issues. The countries lacked capacity and were also not convinced of the benefits. As the Singapore Ministerial Declaration had stated, there has to be consensus in order to decide on negotiations, but there is no consensus at present. It was also against the ‘opt-in opt-out’ approach.

Senegal was unhappy with the draft Doha declaration and supported the position that there should be no negotiations now.

Botswana said there was not enough information yet to enable a decision to launch negotiations; the study process should continue; and the ‘opt-in opt-out’ approach was a non-starter.

Malaysia said it could not accept the text. It did not want binding rules on the new issues. It could not accept language that alluded to negotiations.

Indonesia said it was yet to see the results of the study process to assess whether fears (of agreements) were justified. There should be no decision now whether or not to go into negotiations.

Thailand was not convinced of the benefits of an investment agreement especially if it is to cover investments beyond foreign direct investment. It wanted the study group to continue its work.

Egypt said the apprehensions of countries of going into a new area for negotiations in the WTO could not be ignored, given the TRIPS experience (where Members began negotiations on counterfeiting and did not anticipate the end result of a full-blown agreement on intellectual property rights). It wanted to continue the study process with a mandate to study elements in a possible agreement, with the next Ministerial deciding on the appropriateness of a multilateral framework to address the issues. It strongly opposed the ‘opt-in opt-out’ approach.

Jamaica said it did not want to move to negotiations and the study should go on. Cuba supported India and Jamaica that the working groups continue their work and it would not accept negotiations.

St Lucia only wanted the study group to continue without any further commitment than that and was also against the ‘opt-in opt-out’ approach.

St Vincent said it did not support the text and also did not like the ‘opt-in opt-out’ approach.

Belize said it agreed with India and other developing countries against negotiations and said it was very annoyed to be pushed on these issues.

South Africa said there was a need to take account of the concerns of developing countries on their lack of capacity and there was need for a binding commitment to provide assistance, and this could be the way forward.

The Philippines, partly responding to South Africa, said their biggest objections to negotiations were fundamental and not related to capacity-building nor subject to tradeoffs. A decision could be taken later whether to have negotiations.

Peru felt the text was a good basis for negotiations but understood the concerns of other developing countries; it also criticised the ‘opt-in opt-out’ approach. It proposed that at the Fifth Ministerial, a decision could be taken on how to proceed, including the possibility and modalities of negotiations in this area.

Colombia said, like other Latin American countries, that it was not a demandeur but it could agree with the text if it was satisfied with negotiations on other issues. Uruguay expressed similar views but thought the ‘opt-in opt-out’ approach was a bad idea.

Morocco strongly supported the text. It was frustrated that the study had continued for too long and it was not acceptable to continue the study.

As expected, the developed countries spoke in support of the text. The European Union said it recognised the hesitation of developing countries and had identified solutions, i.e., capacity-building parallel with the discussions until the Fifth Ministerial when negotiations would start. Its proposal of an ‘opt-in opt-out’ approach was also a way to meet the countries’ fear of commitment. To boost business confidence, there was need for an agreement.

Japan also expressed the need to start negotiations as soon as possible. Korea said it preferred the negotiations to begin sooner, and that the text can be further clarified by putting in the ‘opt-in opt-out’ idea. Hong Kong-China was not convinced of the need for an investment agreement but could agree to the text to get a round going.

The US said it was appropriate to have negotiations in the new areas to complete and complement negotiations in market access. Australia and Switzerland also spoke in support of launching negotiations.

Later, at a meeting of the Committee of the Whole, the facilitators of the six issues reported on the progress in their consultations.

In reporting on the Singapore issues, the Canadian Minister said he could make the following points from his first round of consultations:

Firstly, not enough account had been taken of the capacity problem of developing countries to negotiate.

Secondly, many LDCs and other developing countries wanted to have more study on whether to agree to negotiate or not.

Thirdly, many countries did not want the ‘opt-in opt-out’ approach in the event of negotiations. Perhaps, instead of that, a longer transition period could be thought of as a solution in the event of negotiations.

Fourthly, many countries expressed concern on how this issue was related in the whole package.

Finally, there had been more views expressed on investment and competition than on the other two issues.

Some diplomats, speaking privately, said the facilitator had not included in his report some important points. He failed to report that some countries had objections in principle to the topics becoming the subject of rules, thus giving the impression that their problem was only one of lack of capacity to understand or negotiate the issues. He also did not report what many countries had said about the need for an explicit consensus if negotiations are to start, in line with the Singapore decision. Also, many countries had serious concerns against negotiations on transparency in government procurement and trade facilitation besides investment and competition.

It is not clear whether the next draft will include the views expressed by the many developing countries that object to the start of negotiations, or how they would be laid out in the text.

Some delegations are concerned that negotiations may take place on the basis of the existing text which itself is highly imbalanced as it had ignored the views of these many developing countries despite requests by them to include their views (which in many cases had been submitted in writing). The Chairman of the General Council had however neglected to include their views, even as options or in a cover letter to the Chairman of the Doha conference, despite the requests and appeals of many of the countries.

Their fear is that whilst they were able to voice their opinions in the open-ended group meetings, once again the next draft would be imbalanced in reflecting mainly the views of the proponents of negotiations.