Comprehensive Round may lead to comprehensive failure, warning

by Chakravarthi Raghavan

Geneva, 26 June 2001 - - Advocates and proponents of a comprehensive round of trade negotiations to be launched at Doha “should also be prepared to accept responsibility of a comprehensive failure at Doha,” Malaysia has warned in a presentation at the informal General Council meeting this week.

In other interventions, India categorically rejected the idea of negotiating on the Singapore issues, while Brazil said that demandeurs should adjust their level of ambitions. While Brazil was ready to consider matters not on its agenda, this depended on the willingness to explicitly and seriously tackle the “development deficit” in the WTO and agree to substantial improvements in agriculture liberalization.

The US Deputy Trade Representative, Mr. Peter Allgeier, said the US was committed to the successful launch of a new round at Doha. He spoke of a ‘changed international environment’ favourable to the launch of a new round and said that such a round must have a “balanced” agenda, in the sense of enabling countries with different interests to pursue their priorities in negotiations, and convince the negotiating partners of the merits of the substantive positions. The US was willing to work pragmatically identify the elements of such an agenda, and a balanced agenda to meet all their needs could be found, “if we avoid the temptation of pre-negotiating results in the preparations.”

A balanced agenda, to attract wide-spread support, would need to have:

·        ambitious negotiating mandates for the built-in agenda items of agriculture and services;

·        negotiations for market access in non-agricultural products;

·        immediate and continuing efforts on implementation issues of concern to many developing countries;

·        appropriate measures to address issues on which substantial work has been done, including trade facilitation, transparency in government procurement, investment and competition policy; with views varying on how to address them; the US was open to exploring how to treat these topics in the context of a new round;

·        further development of the dispute settlement understanding in the light of the experience so far, “with particular attention to transparency in proceedings” (presumably a reference to the US demand to open it to NGOs);

·        treatment of intersection of trade and environment issues to assure citizens that trade liberalization was not in conflict with protection of environment;

·        any mandates from Doha should give countries confidence that they understand the dimensions and degree of ambition in each of the areas addressed;

·        Doha should direct active ongoing work in the Committees on Trade and Environment, Trade and Development and the councils and committees to implement the agreements;

·        provide for ‘institutional reform and coherence’, with ministers being attentive to broader concerns about “relationship of trade and social development” and the challenges to the system as a result of the “globalization debate, the issue of transparency, the outreach to the public, and WTO’s cooperation with other international institutions”;

Mr. Peter Carl of the EU Commission’s trade directorate, said the EC’s position was close to that of Japan, On the substance of the issues and the Doha declaration, the EC wanted a ‘balanced’ agenda, meaning the inclusion of enough issues of interest to all, with the EC agreeing to the “principle” of a better balance for developing countries with regard to their economic and other interests.

The Doha declaration should have the Punta del Este-type format and approach, “avoiding pre-negotiating or pre- empting negotiating outcomes, and develop mandates which were “short, general or permissive, and not limiting except to provide safeguards or parameters.”

The EC wanted a single undertaking, though it was agreeable to carefully limited exceptions in investment and competition.

The listed subjects, among others are:

·        market access in agriculture, industrial tariffs, services and market openings in government procurement;

·        clarifying, updating and improving Uruguay Round agreements on trade defence rules (generally viewed as safeguards and anti-dumping), trade and environment, TRIPS, and various proposals made in the implementation debate, environment and related health and safety issues.

While the EC was not frankly enthusiastic to address trade remedies, because of the potential gap between ambitions of proponents and the EC, it recognized the need to clarify provisions and rules “without modifying the balance of existing rules”.

·        the Singapore issues - extension of rules to trade facilitation, investment, competition and e-commerce.

Investment and competition were both “indispensable” to the EC. They were systemic and not mercantalist or zero-sum issues. The EC could not imagine a Round without both issues, and there should be multiliateral rules to ensure common approaches within carefully circumscribed parameters. The EC favoured a GATS-like approach focussing on FDI and preserving the right of countries to regulate investments. . * institutional issues including improvements in the functioning of the WTO, such as transparency, capacity building and improvements to the DSU. The EU would support measures to improve internal and external transparency, reflecting the interests of all members, but with changes consistent with efficiency and the intergovernmental nature of the WTO.

On Labour, the EC referred to the ILO Director-General’s efforts to strengthen the role of the working party, and hoped the discussions at the Governing Body would soon take more concrete form and establish a forum for wide-ranging, permanent dialogue among all interested parties in the ILO, including international organizations.

Japan noted a “growing momentum” towards the launch of a new round at Doha, and wanted progress to be promoted on implementation issues to keep the momentum.

Ongoing, built-in agenda Negotiations on agriculture and services should be recognized as part of a new round, with non-agricultural market access also to be a part of the round.

Japan wanted considerable attention to be paid to the issue of investment, trade and competition, trade facilitation and transparency in government procurement.  These should be covered in the new round.

India’s Commerce Secretary, Mr. Prabhir Sengupta, said during six years of implementation many concerns and difficulties were plaguing countries like India - non-realization of anticipated benefits as in textiles and clothing and agriculture; inequities and imbalances as in TRIPS, Subsidies, Anti-dumping etc; and non-operational and non-binding nature of the Special and Differential Treatment.

After Seattle, there was recognition of the need for a confidence-building process and a special implementation review mechanism was set up. Regrettably its results so far had been “very modest and below our lowest expectations.” India, like others, attached highest priority to the meaningful resolution of implementation issues and concerns through appropriate decisions.

The WTO was already engaged in mandated negotiations - agriculture and services, and mandated reviews of agreements like TRIPS, TRIMS etc. Most of the distortions in international trade in agriculture were caused by major developed countries, and developing countries were victims. At the same time, developing countries like India had to take care of their food security and livelihood concerns. In services, little had been done on mode-4 delivery (by movement of natural persons) and in the negotiations this should be addressed.

The mandated negotiations in agriculture, services, and geographical indications protection to products other than wines and spirits, as also the mandated reviews of TRIPS and TRIMS,. “by themselves constituted a very big and complex agenda” and going beyond them would place an undue burden on developing countries.

As for non-agricultural market access, India was reluctant to go along with the proposal, more so in view of the noticeable reluctance of developed countries to deal with implementation issues and concerns. Also, the Seattle experience showed that the developed countries wanted these negotiations without a commitment to address tariff peaks and escalation.

As for Singapore issues, India had already explained its position (opposing negotiations) on a number of occasions. The only purpose of an investment negotiation appeared to be to protect the interests of foreign investors and take away the flexibility available to developing countries. India was also similarly opposed to the negotiations on competition issues.

As for trade facilitation, the WTO would not be credible “if it talked about negotiating new rules for trade facilitation when an important trade facilitation agreement, that on Rules of Origin, was languishing for lack of implementation.” As for government procurement, the proponents of a transparency agreement see it as a prelude to full-fledged agreement on government procurement. For valid policy reasons, India was not in a position to go along with the idea of the opening of government procurement to foreign suppliers, and even a transparency agreement would place undue burden on procurement entities.  The burden wold be particularly heavy on entities below the sub-federal level, and even translation of procurement documents would be heavy.

As for the environment, existing WTO rules were sufficient to protect the environment. And on non-trade issues like labour, India would avoid talking about them in the WTO.

On the reality check, India said, by July end there should be a finality on the Doha agenda, and the period from September should be utilized for drafting the declaration. “July should be the absolute deadline,” the Indian official insisted. India had shown sufficient flexibility, and “all of us will be taking a risk if we do not finalise the elements of the agenda by July end.”

As for the process and the declaration, India’s primary concern was not about the length or level of detail, but about clarity and specificity. There should be no ministerial declaration or mandate with ambiguities. It was India’s experience that whenever there were ambiguities, described as constructive or otherwise, whether in declarations, mandates or agreements, “it is the developing countries who suffer”.

“We will not accept any language which is not supposed to mean what it says and which is not supposed to say what it means,” India added.

Sengupta added that trade negotiators in Geneva used the round to mean “comprehensive” or “broad-based” round. Public opinion in many countries including India was getting restless in the absence of meaningful results from the WTO, and “any open-ended fresh round of negotiations should only further compound the problems.” India hoped no member would make the launching of a new “comprehensive round “ of negotiations at Doha a precondition for participating in mandated negotiations, seriously and in good faith.

Malaysia’s Ambassador to the WTO, Mr. M. Supperamaniam, said the decision on the work programme to be agreed at Doha should not imperil the multilateral trading system or allow inertia to set in. There should be recognition that there was already a lot of unfinished business and need to attend to things like implementation and mandated negotiations and reviews. From the perspective of developing countries, these by themselves were major undertakings that many of them were not able to cope with.

There were differences in positions towards the level of ambitions for the future work programme. While as the chair said positions were quite well known, “it is equally vital that the difficulties of countries to some of the subjects being proposed are fundamental and these must be recognized and respected. The situation was not however static, and was bound to evolve, but should not be pushed in a manner leading to undesirable political and economic consequences.

The Doha ministerial was not an end in itself. In the old GATT ministerial meetings were rare and were needed to launch huge undertakings like a new round.  It was different in the WTO.

The progress towards Doha should not be measured by the quantity of subjects that delegations would like to initiate negotiations on. By accepting that the playing field is not level and there were fundamental difficulties for certain countries, “there has to be a measured level of ambition”. Progress should be achieved in a gradual manner and a balanced and measured approach to what was realistically achievable would help generate confidence in the WTO. What was important was there should be no slide backwards, as happened two years ago (for the Seattle meeting). The repetition and extension of the Uruguay Round process towards deeper obligations should also be avoided.

Nevertheless trade liberalization in a multilateral scale would be useful. Hence non-agricultural market access should be added to agriculture and services.

Malaysia has fundamental difficulties with starting negotiations on investment, competition and transparency in government procurement. These were complex and sensitive issues with serious economic, social and political implications. It was important to fully comprehend and appreciate the desirability, degree of appropriateness and implications on the socio-economic and political objectives and priorities of developing countries. In Malaysia’s view, discussions in working groups had not been complete and conclusive. And many questions and concerns remained to be addressed. Malaysia therefore supported the continuance of the work programme in these areas.

Malaysia was also opposed to negotiation of rules on the environment.

It seemed from the statements of some developed countries, especially Japan and the EC that they seem determined to push developing countries to liberalise their trade regardless of whether their economies or ready are able to cope with the process. They continue to pressure developing countries to negotiate rules on new issues despite the clear lack of consensus.

“To push for an ambitious and comprehensive agenda at this time will not help our collective efforts to work for a successful outcome at Doha,” said Mr.  Supperamaniam. “I would like to remind those who are advocating a comprehensive round of negotiations, that they should also be prepared to accept the responsibility of a comprehensive failure at Doha.”

Brazil’s vice-Minister, Amb. Seixas Correa said that Brazil was in favour of launching a new round, but it should be for strengthening the system and drive it forward to benefit all. The development dimension should find adequate reflection in collective endeavours. In addressing the development deficit, priority must be given by Doha not only to the crucial issue of implementation, in which discriminatory barriers and trade distorting practices persist - textiles is a notorious example - but also to the issue in the forefront now of the international agenda, namely, relationship between TRIPS and affordable medicine. Tariff reduction and bindings were continued to be jeopardised by abusive resort to trade defence measures.

An agenda for a new round must look into ways of clarifying and strengthening the multilateral disciplines on anti-dumping and subsidies.

Differences over the scope and depth of the agenda of the new round must be narrowed. There were issues clearly outside the purview of the WTO and must remain outside. On Trade and environment, convergence of views were still to take place. And while there should be room for compromise, legitimate concerns with disguised protectionism need to be taken care of.

As for the Singapore subjects, “the level of ambition on the part of the demandeurs should be adjusted, specially with regard to investment and competition, if the existing gaps are to be bridged.

For Brazil, agriculture and implementation were priority issues. On agriculture, Brazil supported the Australian proposal to take up consultations on the basis of the Seattle text. While Brazil remained open to other subjects, “we will find it impossible to contemplate a broad based round with a narrowly based mandate for Agriculture.”

Brazil said in terms of ‘flexibility’, that it was willing to contemplate an agenda for Doha to encompass matters not finding a place in its own list of priorities, “if and when different dimensions of the development deficit are explicitly and seriously tackled, including the need for substantial liberalization in agriculture and in areas of special interest like anti-dumping and export credits.”

Pakistan said that the key to building a momentum to Doha was visible and early progress on implementation. It was also necessary to have an early agreement on agriculture, with a basic objective of commitment to full liberalization. With this, the food security concerns of developing countries had to be addressed.

The new issues being pressed by certain countries posed major problems, and proponents needed to make realistic assessments. Negotiations for new agreements on Singapore issues seemed unfeasible. One area where agreement could be reached was non-agricultural market access, provided there was a categorical commitment to address tariff peaks and tariff escalation. – SUNS4924

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

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