The WTO post-Doha agenda: Squeezing the South under an inequitable work programme

The developing countries emerged from the WTO Doha Summit bitter that their pressing concerns were not reflected in the Ministerial Declaration. In the aftermath, they are now confronted with the prospect of having to negotiate within the framework of a work programme which is lopsided in favour of the developed nations.

by Martin Khor

The post-Doha WTO work programme

1.          Summary of the outcome

The World Trade Organisation (WTO) held its Fourth Ministerial Conference in Doha on 9-14 November 2001.  The outcome included three main documents: a Ministerial Declaration (WTO 2001a); a Declaration on the TRIPS Agreement and Public Health (WTO 2001b); and a Decision on Implementation-Related Issues and Concerns (WTO 2001c). There is also a subsidiary document linked to the third, on outstanding implementation issues (WTO 2001d).

2.      The preparatory phase and the Doha process and decisions

Before Doha the developing countries were strongly arguing the case that the WTO membership should in the coming years focus on resolving the problems arising from the Uruguay Round of negotiations (which resulted in the establishment of the WTO) and the institutional and systemic issues which have arisen in the short life of this important institution.   These problems include: 

·        The lack of anticipated benefits to developing countries largely due to the lack of or inadequate implementation by developed countries of their commitments to provide greater market access for the products of developing countries, especially in agriculture and textiles; 

·        The increasing problems facing developing countries from their having to fulfil their own obligations in the many WTO agreements; 

·        The unsatisfactory system of decision-making and internal transparency within the WTO;

·        Besides these WTO-related issues, many developing countries have also been facing other trade problems, particularly the continuous decline in commodity prices; and the inability of many poorer developing countries to diversify or upgrade their exports due to supply-side constraints as well as limited market access.

These problems are part of the imbalances in the WTO and the trade system as a whole, and the developing countries have been advocating an improvement to the system, so that they are able to get their fair share of benefits and (perhaps more importantly) to reduce or eliminate their losses.  Progress in resolving the problems would also reverse the trend of disillusionment with the system, a feeling that has been increasing among the public and policymakers alike.

However, the developing countries encountered great difficulty in getting their message across. The developed-country partners, whilst acknowledging that there are problems, did not see the need for a systemic consideration of rebalancing the rules and the system.  The discussions were relegated to a case-by-case consideration of problems of implementation, and after some years of discussion, hardly any items in the long list of problems submitted by developing countries were resolved before or at Doha. Thus the requests by developing countries that these problems be first resolved before attempting to introduce negotiations in new areas were not entertained.

Instead, the major developed countries pushed very hard to have the WTO expand its negotiating and rule-making mandate, including to incorporate new areas, such as investment, competition policy, government procurement, and trade and the environment.  This attempt at expansion was strongly resisted by a majority of developing countries (including by regional groupings), which argued that:  (a)  they were not yet ready to enter negotiations or consider agreements on these issues; (b) they did not adequately understand the implications of the proposed issues; and (c) from the limited understanding they did have, they were very concerned that new agreements or rules in these areas would add to their already heavy obligations and would further restrict their development policy options and constrain or reduce their development prospects.  They therefore proposed that these new issues be continued to be studied or discussed but not be accorded the higher status of negotiations as this would imply agreeing to establish new agreements or rules.

Due to a series of unusual or even unique procedures, the views and positions of many of the developing countries in key areas and topics were not adequately reflected (or not reflected at all) in the drafts of the Ministerial Declaration that were prepared in Geneva (where the WTO is headquartered)and transmitted to the Doha meeting.  This failure to reflect their views added to the frustration of the developing countries, which felt that the drafting process was untransparent and that the drafts were unrepresentative.  They  requested that the draft to be transmitted to Doha should contain the different positions of various countries or groupings (instead of being a clean draft which would give the mistaken impression that it was a consensus document) or that these differences be at least made clear in a covering letter.  However, these requests were rejected and a clean text that reflected the views of the proponents of the new issues became the basis of negotiations in Doha, placing the developing countries at a great disadvantage.

At Doha, two new drafts were produced, and again many developing countries were upset that their views were not properly reflected, and that the negotiating and decision-making process (especially the convening of a marathon exclusive Green Room meeting to which only a few countries were invited) was inadequate, not transparent and thus not fairly reflective of their views and positions.   [A description of the Doha events and the Doha preparatory process is provided in Khor (2002).]

This was especially in relation to the sections of the Declaration on the Singapore issues (investment, competition, transparency in government procurement and trade facilitation) as well as on the environment.  The final Declaration implies that negotiations (towards new agreements or new rules) have been agreed to on the Singapore issues (so called because they were first introduced as subjects for study - though not for negotiations - at the 1996 WTO Ministerial Conference in Singapore) following the Fifth Ministerial (scheduled for 2003) on the basis of an explicit consensus on modalities.

However, due to objections and requests for reformulation of this language at the last informal session at Doha, the Declaration was tempered by a clarification by the Conference Chairperson at the final official session to the effect that the consensus referred to would be required for negotiations to begin (the implication being that the required consensus would not be only for modalities). The interpretation of the Declaration and the Chairpersons clarification can be expected to generate intense discussion in the months ahead.  In any case, the Declaration does commit WTO Members to discussing a list of elements and topics within each of the Singapore issues, which will have major implications for whether a consensus can be reached either on modalities or on the larger issue of the desirability of negotiating new agreements on these issues in the WTO.  Therefore, there is a heavy workload for developing countries on these topics in the present new work programme before the Fifth Ministerial, to be held in Mexico, in 2003.

3.      The post-Doha work programme: Overview

According to some experts, the work programme is effectively an agenda for multilateral negotiations in at least 19 areas, larger and more intrusive, in terms of national economies and politics, than even the Uruguay Round agenda.  The post-Doha work programme is extremely heavy as it includes several key elements, each of which is complex and difficult and involves much time, human resources and technical expertise, which developing countries do not have.  (See box)

As B L Das (2002) points out:  It is a programme much heavier than that of the Uruguay Round of Multilateral Trade Negotiations. Almost all the major items of the Uruguay Round, like agriculture, services, subsidy, anti-dumping, regional trading arrangement, dispute settlement, industrial tariff and some aspects of TRIPS, form part of the negotiations in the Work Programme. Environment has also been included in the subjects of negotiation. Besides, intense work is envisaged on Singapore issues (i.e., the new areas of investment, competition policy, transparency in government procurement and trade facilitation) as well as in the area of electronic commerce. The short time span of three years set for this work makes the task particularly arduous for the developing countries.     

According to Das, the new work programme significantly enhances the imbalance in the WTO system. Instead of eliminating the existing imbalance, it has in fact enhanced it by giving special treatment to the areas of interest to the major developed countries and ignoring the areas of interest to the developing countries. Negotiations have been launched in a new area, viz., environment, and the level of work has been enhanced and intensified in the areas of Singapore issues and electronic commerce. All these have been the subjects of deep interest to the major developed countries, while the developing countries have been resisting their being taken up in the WTO. The main proposals of the developing countries were those grouped as ‘Implementation Issues’, where practically nothing has been done.  The issues of great importance to many of them, e.g., textiles and balance of payments provisions, do not feature in the main text of the Work Programme.

Even the inclusion of the subjects of finance and technology is hardly significant for the developing countries as the work envisaged in these fields is of a very general and broad nature. Similar is the situation regarding the [clause] on special and differential treatment for the developing countries, which aims at making the relevant provisions [on such treatment contained in the WTO agreements] more precise, effective and operational. There are very few special and differential provisions reducing the substantive levels of obligations of the developing countries. Hence this [clause] in the Work Programme is hardly of great benefit to the developing countries.

The Work Programme is a gain for the major developed countries, but they have given nothing in return to the developing countries. This is totally contrary to the GATT/WTO process where reciprocity is expected to be the main guiding principle in negotiations. Reciprocity should not be assessed only in terms of specific commitments in agreements, but also in selection of items for special attention in the work. Sadly, the new phase of the WTO has started with an enhancement of the imbalance. 

Ironically the Work Programme has been sometimes termed as a ‘development agenda’, which is quite erroneous...The agenda of the Work Programme has been totally set by the major developed countries guided by their own economic interests. The priority of the development of the developing countries is not reflected in it (Das 2002).

The following is a description of some of the issues in the work programme.

4.          Implementation issues

On implementation issues, the Doha decisions are very disappointing.  Das (2002) points out that the Ministerial Decision on implementation issues has only a few substantive decisions: (a) a clarification that the reasonable period referred to in the agreements on Sanitary and Phytosanitary Measures and Technical Barriers to Trade (between the publication of a measure or a standard and its coming into force) shall not normally be less than six months;  (b) the longer time frames for compliance referred to in the Agreement on Sanitary and Phytosanitary Measures in respect of products of interest to the developing countries is now clarified to be not normally less than six months; and (c) a concession in the Agreement on Subsidies and Countervailing Measures, that regarding subsidies in  developing countries which have a GNP per capita of less than US$1,000 per year, a developing country will continue to be in this list until it reaches this level of GNP for three consecutive years; and also, a country which has been excluded from this list will be re-included when its GNP per capita falls below this level.   

The rest of the Decision has merely operative phrases like: reaffirms, (a particular WTO body) is directed to give further consideration, urges Members, takes note of, (a particular WTO body) is instructed to review, requests (a WTO body) to examine, confirms the approach, shall examine with special care, recognises, underlines the importance, agrees that...interim arrangements... shall be consistent, agrees that (a WTO body) shall continue its review, directs (a WTO body) to extend the transition period, (a WTO body) is directed to continue its examination, etc. (Das 2002). 

Thus there has been hardly any progress on substantive issues despite several years of concrete proposals by developing countries to resolve the deficiencies and imbalances that have already given rise to problems.  There is real concern that these implementation issues will be given low priority in the post-Doha work programme as other issues (especially the issues already mandated for negotiations, and the Singapore issues which now have greater potential of approaching negotiation status) are taken up more urgently and detract from the task of resolving existing problems.   Developing countries should therefore maintain their previous position, that in the sequencing of the completion of negotiations and discussions in the post-Doha programme, the first order of priority is the resolution of implementation issues.

5.          Agriculture

The negotiations on agriculture in the coming years will be part of the WTOs built-in agenda (i.e., mandated in the Uruguay Round).  The Doha Ministerial  Declaration states that the negotiations will aim at reduction of export subsidies with a view to phasing (them) out and substantial reductions in trade-distorting domestic support. This will enable developing countries to demand that the developed countries curb their subsidies.   However, Das (2002) also points out that the qualifying term trade-distorting can be used by the major developed countries to suggest that the so-called green box domestic support measures, listed out in Annex 2 to the Agreement on Agriculture and exempted from reduction commitment in the Uruguay Round, are not to be covered by the negotiations on reduction. These high subsidies, if allowed to be exempted and to increase further, will continue to enable high protection in the developed countries, and continue to damage developing countries domestic production and export prospects.   

The Doha Declaration also states an intention to enable the developing countries to effectively take account of their development needs, including food security and rural development.  It specifies that special and differential treatment for the developing countries shall be an integral part of all elements of the negotiations and shall be operationally effective by embodying it both in the rules and in the schedules of Memberscommitments. Developing countries should make full use of these by advocating that, to enable the continuation of the livelihoods of their small farmers, those countries that would otherwise be adversely affected by liberalisation can be exempted from the disciplines of import liberalisation and the prohibition of domestic subsidies with regard to their food products for domestic consumption.   Farmers in many developing countries are already experiencing threats to their livelihoods and incomes resulting from an increase in imports of cheaper (and often subsidised) foods.  A comprehensive assessment and continuous monitoring of the effects should be undertaken.  The major focus of negotiations should be the quick operationalising of special and differential treatment for developing countries to prevent the continuation and worsening of the threat to farmers in developing countries as resolution of this problem is urgently required.

6.          Services

Negotiations on services as part of the built-in agenda are also a major part of the post-Doha programme. The WTOs General Agreement on Trade in Services (GATS) and implementation thereof also contain basic imbalances.  The developed countries have far greater capacity in the services sector whilst most developing countries are unable to take advantage due to weak capacity and supply constraints. Thus liberalisation would lead to uneven benefits and costs.  Moreover, much of the liberalisation has been in areas and modes of supply of interest to developed countries  (for example, financial services, telecommunications) whilst areas or modes of interest to developing countries (for example, Mode 4 or export of natural persons) have not seen progress.

Another problem is that there is a lack of data on services trade and thus it is not possible to quantify the benefits and costs of liberalisation for individual countries or for developing countries as a whole or by region.  This makes an assessment (of the effects and of the benefits and costs) of previous liberalisation very difficult and does not allow for a basis on which to evaluate proposals and options for future action.  Developing countries are expected to come under heavy pressure to open up more, and in more sectors, than they have so far committed.  Recent revelations of a draft of the European Commissions list of requests show that developing countries will be asked to liberalise rapidly on a wide range of services.  

The Doha Declaration reaffirms the guidelines for the services negotiations adopted on 28 March 2001, and also aims to achieve the objectives in Articles IV and XIX of the GATS which contain specific provisions for the developing countries.  The former Article calls for liberalisation of market access in sectors and modes of supply of export interest to the developing countries. The latter provides for flexibility for the developing countries to liberalise fewer sectors and fewer transactions.   Developing countries whose services enterprises and sectors are as yet unable to withstand competition  can make full use of the development principles and provisions in GATS in their response to the requests from trading partners, as they are fully entitled to.  They should not be under any pressure from other Members to liberalise further; instead, they should be given full flexibility to choose whether to liberalise, in which areas, when and how much to offer.  They can also insist that an adequate system of data be established and that an adequate assessment be made so that the future negotiations can be guided by information on previous actions and possible future options.

7.          Industrial products

The Doha Declaration has also launched negotiations on a new round of reductions in tariff and non-tariff barriers on industrial goods, under the term market access for non-agricultural products.  The main interest of developing countries is that developed countries bring down their tariff peaks and tariff escalation on products of export interest to developing countries.  Some developing countries could expand their export earnings should developed countries increase their market access.  However, there are also poorer developing countries that are unable to take advantage due to weak supply capacity. 

The main interest of developed countries in the negotiations is that developing countries reduce their industrial tariffs.  However, many developing countries are concerned about this, as they have already experienced closure or reduced production of local firms and even whole sectors, as well as significant job losses, as a result of previous liberalisation (many of them under structural adjustment or loan conditionalities of the IMF and World Bank). Recent studies have shown the negative effects of over-rapid liberalisation, and the process of de-industrialisation.  [See the article Rethinking trade policy and the multilateral trade system in this issue for a discussion on the de-industrialisation effect in several countries.]

In the negotiations, developing countries (especially those with a weak domestic industrial base) should be careful to safeguard their interests so that they are not pressurised to liberalise at a rate or in a sequence which their remaining local industries are unable to bear.  The Doha Declaration states that the coverage will in particular be on products of export interest to the developing countries, that the negotiations shall take fully into account the special needs and interests of developing and least-developed country participants and that there will be less than full reciprocity in the reduction commitments by the developing countries, including the least developed countries.   These three points should be fully made use of by developing countries so that they may seek to minimise the costs and obtain some benefit.

The first stage of negotiations in the post-Doha programme will be on working out the modalities. The positions for this important stage should be worked out, for the modalities (including the principles, the approaches and formulae) will largely determine the outcome of the negotiations.  An assessment of the effects of previous liberalisation on developing countries domestic firms, employment and government revenue should be made, as the first phase of the process.

8.          Trade and environment

This issue has been under discussion in the WTO in its Committee on Trade and Environment.  However, the Doha meeting made a decision for the first time to include this topic as part of the negotiating agenda, signifying that on this issue some amendment of rules or establishing of new rules or both are intended. This is a new area of negotiation included in the WTO as a part of the work programme.  Thus, Doha has for the first time placed trade and environment as a new issue for rule-making in the WTO, and the mandate of the WTO has correspondingly been expanded.  For the moment a few areas have been designated for negotiations; however, the negotiating agenda under the broad environment umbrella may expand in future, with implications that may not now be foreseen.

Some aspects of this issue (contained in para 31 of the Doha Declaration) are for negotiations while other aspects (para 32) are not mentioned for negotiation but for discussion. Aspects for negotiation are:  (a) the relationship between WTO rules and specific trade obligations in multilateral environment agreements (MEAs);  (b) reduction of tariff and non-tariff barriers to environmental goods and services;  and (c) procedure for information exchange between the Secretariats of MEAs and WTO committees.    Aspects for discussion include:  (a) effect of environmental measures on market access;  (b) the relevant provisions of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS);  and (c) labelling requirements for environmental purposes. 

The first negotiating issue (MEA-WTO relation) is a complex one.  The intention of the EU is to give automatic or more automatic endorsement in the WTO for trade measures adopted in MEAs.  At present any explicit endorsement is on an ex-post basis, and such measures can be challenged by a Member in the WTO.  However, there has not been a challenge so far.   The concern of many developing countries is that if a blanket approval is given (by a change of rules), then there is a much greater potential (and temptation) of MEAs being made use of (or even being established) for trade-protectionist rather than genuinely environmental purposes. The question of what constitutes a legitimate MEA (including membership) that is eligible for automatic or near-automatic endorsement has also not been satisfactorily answered.  The fear that automaticity can and will be used as a disguised protectionist device is legitimate and real, given the increase in protectionist sentiments in developed countries. 

On the other hand, there is also concern that the name of the WTO or its rules and free-trade principles have been invoked inappropriately by some countries in environment or trade policy fora in attempts to prevent or dilute measures to address genuine environmental and health issues.  Such attempts do give the WTO and the trade system a bad reputation among officials and citizen groups involved in environment and health issues. 

A central concern therefore is the need to prevent the misuse of environmental issues to serve protectionist purposes, and the need to prevent the misuse of so-called free-trade principles to proscribe legitimate and appropriate measures to protect the environment, safety and health.

On the second negotiating issue, Das (2002) has pointed out that the reduction of barriers to environmental goods and services should not be included under the heading environment as there are already negotiations on market access for industrial products which will cover the so-called environmental goods.  Similarly environmental services can be covered under the GATS negotiations.  In any case, there is no clear definition of environmental goods and services.   If environmental goods are defined as products produced in an environmentally sound way, then the concept of differentiating products according to their processes and production methods (PPMs) would have been smuggled into the trade negotiations and trade system, and this holds dangers for developing countries whose environmental standards are generally not as high and which may thus be placed in a situation of disadvantage.

The three discussion issues are also important.  This is especially so because since the environment as a topic has already made a breakthrough into a negotiation mode, these discussion issues may well graduate also into the negotiating mode at a future date.  Developing countries have a particular interest in the TRIPS-environment-sustainable development relationship.  Some of them have brought up environmental problems generated by the TRIPS Agreement, for example the facilitation of biopiracy (or the corporate patenting of plants, animals and genes) and the hindrance posed to the transfer of environmentally sound technology.  Developing countries should actively participate in the discussions on the three issues.

9.          Intellectual property (TRIPS)

The WTOs TRIPS Agreement has generated a great deal of concern and controversy.  Issues that have emerged include:  the high prices of medicines and other consumer products;  the facilitation of biopiracy (patenting of life forms, including plants and their functions which have already long been in public use);  obstacles to technology transfer and upgrading due to the intellectual property right (IPR) holders monopoly over technology;  and the promotion of monopolistic and anti-competitive practices and structures and their effects.  On a systemic level, the issue is raised as to whether a treaty on  intellectual property, which is basically a device that enables monopoly and anti-competitive practices, should even be located within a trade organisation whose purpose is supposed to be the promotion of free trade and competitive practices;  and if not, then what to do about it.  Moreover whilst the WTO is supposed to be based on the principle of reciprocal benefits, TRIPS has proven to be inherently and in practice very imbalanced, as developed countries (with their greater technological capacity and with greater ability to use the IPR system) have reaped the overwhelming share of benefits amounting to large values, whilst developing countries are carrying the heavy burden of costs.

The post-Doha work programme provides an opportunity to deal with the many problems arising from TRIPS.   The Doha Declaration in its three paragraphs (17, 18, 19) on TRIPS mentions the following issues:  TRIPS and medicines;  geographical indications;  the relation between TRIPS and the Convention on Biological Diversity; protection of traditional knowledge and folklore and other relevant new developments.  It mentions the review of Article 27.3b (which deals with patenting of biological materials) and the Article 71.1 review (the review of TRIPS);  both reviews are mandated in TRIPS.  A separate Declaration on TRIPS and Public Health was also adopted in Doha, and it directs the WTOs TRIPS Council to find a solution to problems faced by countries with insufficient pharmaceutical manufacturing capacity in effectively making use of the TRIPS Agreements compulsory-licensing provisions.  In addition, there are many issues relating to TRIPS in the compilation of implementation issues to be resolved.

Developing countries have argued forcefully that they face many problems in attempting to implement (or in actually implementing) TRIPS.  They should therefore make full use of the post-Doha work programme to raise all their concerns and advocate solutions.  Meanwhile, in the overall review of TRIPS itself, the issue of the grave imbalances in the agreement and in its implementation, and the issue of the appropriateness or otherwise of TRIPS being in the WTO should be raised; and progress made to resolve these issues.             

References

Das, Bhagirath Lal (2002). The new WTO work programme. Paper presented at a forum organised by Third World Network in Geneva, April 2002.

______ (1999).  Some Suggestions for Improvements in the WTO Agreements. Penang, Malaysia: Third World Network.

Hong Kong, China (2000).   Statement by Hong Kong, China at special session of the WTO General Council on 22 June 2000 on behalf of International Textiles and Clothing Bureau. WT/GC/W/405.  

Khor, Martin (2002). An analysis of the WTOs Fourth Ministerial Conference in Doha, 9-14 November 2001.

OECD (2000).   Agricultural Policies in OECD Countries: Monitoring and Evaluation 2000.   Paris: OECD Secretariat.

Third World Network (2001). The multilateral trading system: A development perspective.   Report prepared for UNDP.

World Trade Organisation (WTO) (2001a). Ministerial Declaration, adopted 14 November.

_____ (2001b). Declaration on the TRIPS Agreement and Public Health, adopted 14 November.

_____ (2001c). Implementation-Related Issues and Concerns. Decision of 14 November.

_____ (2001d). Compilation of Outstanding Implementation Issues Raised by Members. General Council document JOB(01)152/Rev.1, dated 27 October 2001.

_____ (2001e).      Implementation-Related Issues and Concerns.  General Council document JOB (01)/14 dated 20 February 2001.

____ (1999).  Preparation for the 1999 Ministerial Conference:  Ministerial Text, Revised Draft. 19 October.

Martin Khor is Director of Third World Network.