Revised framework won’t make serious changes

Geneva, 20 July (Chakravarthi Raghavan) The informal WTO Heads of Delegation meeting, which discussed in two sessions, Monday evening and this morning, the Oshima-Supachai framework for a July package, ended with the Chairman, Amb. Shotaro Oshima of Japan announcing that he would hold further consultations - presumably to come up with a revised text.

There is every indication that such a text, tailored for US-EC acceptance, will be sought to be pushed through on the basis, voiced yesterday, by the WTO head, Dr. Supachai Panitchpakdi that if the text is not adopted and Doha negotiations restarted, it may take years to restart the negotiations.

Interestingly, this view was also repeated, subsequently, by the EC Ambassador Carlo Trojan at the informal HOD meeting.

Whether developing countries will fall into this trap, and why, is not clear.

At the informal session, no one appears to have rejected the draft text, but many said that the text could provide a basis for further work.

A number of delegations, speaking individually and also for some group views, said they were awaiting instructions from capitals, offered some preliminary comments of their own, with suggestions and criticisms of parts of the ‘Draft Decision’ and the Annexes.

However, in line with the rules-based WTO culture of negotiations and decision-making, there are no records of informal meetings, and not even of who were present.

Many delegations spoke, and particularly from the developing countries, expressing their concerns at the way in the agriculture text, the ‘sensitive’ products of developed countries had been dealt with while the ‘Special Products’ and the ‘Special Safeguard Mechanism’ are handled more vaguely, as also about the new blue box tailored for the US, and the market access formulae that would work against the developing world.

But everyone insisted that it was only their preliminary view.

And Brazil, for the G20, said Tuesday that the paper could provide ‘an appropriate basis’ for further negotiations - which seemed to suggest that there are different pulls within the group, between the supporters of the US line and those against it.

A number of countries also spoke against the new classification or concept of ‘weak and vulnerable’, despite the stipulation that it should not be a new classification.

At a press conference, Oshima and the WTO Director-General, Supachai Panitchpakdi complained that there were too many suggestions and proposals for change and that, if these were to be taken on board, drawing up a revised text could not be done over the next few days in July (with 30 July indicated as the final date for adoption) but would need weeks and months.

The WTO leadership appears to believe that though delegations here, in preliminary comments, have been critical and at the moment a consensus around the Oshima-Supachai text seems difficult, senior officials and/or key ministers in capitals would provide suitable instructions.

The United States, the main beneficiary of this text (at least in Agriculture) is busy using its influence in various capitals to get the trade and agriculture ministers to fall in line.

There is some indication that ministers or top officials from several of the key countries, and groups - including Brazil, India, Mauritius (where the G90 meeting was held recently), the US and EC - would be here next week to agree on a package.

The US and the EC, and the WTO leadership are also playing very cleverly the game of creating divisions within the developing world. The paragraph in the draft General Council decision about ‘Development questions’ - which has no operational content whatsoever - has been drafted with a view to further such divisions.

Though it is generally made to appear that at Cancun, the talks failed over the Singapore issues, some of those present at Cancun and key participants in the talks there, have now written or spoken to the effect that in fact the division there was really over agriculture - and neither the US nor the EC were willing to talk or compromise.

As Michael J. Finger, a former World Bank consultant and currently Resident Scholar at the Washington-based American Enterprise Institute, said at a post-Cancun UNCTAD meeting this year, the EC had put the Singapore issues on the Doha work programme, only to enable the EC to trade “nothing (in agriculture) for nothing (on Singapore issues),” and that the only instruction to Zoellick from the White House was not to do anything to raise the heckles of US supporters in Iraq.

Since Cancun, both the US and EC have been very busy trying to create divisions among the developing countries, in particular between the G90 (a grouping of LDCs, the African Union, and the ACP countries) and the other developing countries, including the G20 etc.

And the EC has dangled before the G90 the ‘political concept’ (as Lamy now describes it) of a “Round for free” for the weak and vulnerable economies.

This has been picked up by the Mauritius meeting of the G90.

Supachai and Oshima in their draft framework have brought in this concept, in some non-operational but declaratory views, under ‘Development’ in the draft decision by the General Council. The draft in various places has brought in several concepts - ‘preference-receiving’ countries (which includes not merely some of the poorest and the LDCs, but Colombia, and several others who got EC preferences for their role in combatting narcotics), and ‘commodity-dependent’ countries (Argentina, Brazil and a few others too could qualify in this category as commodity-dependent).

How this imperialist, divide and rule game will play out over the next few days remains to be seen.

Trade diplomats said that the WTO head and the other leading actors, tried to pressure countries to complete their preliminary comments even by Monday night, and reluctantly had to agree to a continuation of the meeting today.

The WTO, with some old hands like Rufus Yerxa as Supachai’s deputy and Stuart Harbinson as his chef de cabinet, appears to believe that some pressure and continuous meeting could produce some agreement on the framework paper - even though some very strong views against it have come from key capitals, including from New Delhi.

While Supachai and Oshima are planning and hoping to do some fine tuning of the texts, starting with some preliminary discussions in green-room type meetings on agriculture and then NAMA, the Groser agriculture text has slipped in some wording that unless removed, and delegations formally go on record against it, may come to haunt them later in the detailed negotiations, and at some future point as ‘negotiating history’ before the WTO’s Star Chamber - the DSU’s dispute panel and Appellate Body processes.

In conveying a hidden message that unless the Groser agricultural package is agreed to, there would be no Doha negotiations, Annex A of the Oshima-Supachai draft begins in its first para about the ‘starting point’ of the agriculture negotiations in terms of the mandate set out in the Doha Declaration, and that the “level of ambition” set by the Doha mandate “will continue to be the essential point of reference.”

Though the details on the three pillars set out later are really defining a ‘Doha minus’ - by for example envisaging an augmentation of the ‘blue box’ and its reduction harmoniously with the EC (but not elimination), the Groser text sets out a paragraph 2, which begins with the sentence, “The final balance will be found only at the conclusion of these subsequent negotiations and within the Single Undertaking...”

The Doha Declaration itself talks only about ‘a single undertaking’.

By now particularising the term in using ‘the’ instead of ‘a’, and in using Capital letters, a new legal concept is enshrined.

To understand its implications, one has to go back to the Punta del Este Declaration which talked of the negotiations on goods in the Uruguay Round declaration as a single undertaking.

Subsequently, but when some of its architects were still around, the EC, India and Brazil used to argue about it, but all agreed that it was a political commitment to start and end the negotiations in all the issues at the same time.  No more, and no less.

At the end of the Uuguay Round negotiations, it was agreed that the signatories should join on to and accept all the agreements - and not do any cherry picking.  And developing countries were persuaded into thinking that this was a great benefit to them - with some who did the persuasion rewarded with high offices.

Later, in the DSU process, with its ‘negative consensus’ rule for accepting the rulings, the panel in the Indonesia car dispute, and the Appellate Body subsequent, brought in an erroneous reading of the Vienna Law of Treaties and gave a view of ‘single undertaking’ to mean not only everyone should agree to every agreement, but the General Interpretation to Annex A in the Marrakesh treaty was got round with the view that panels and appellate bodies could interpret and reconcile the various agreements in a way that everyone had to implement all the agreements.

Now, through the Grosser text, a new legal doctrine is being brought in by particularising ‘single undertaking’ and elevating to the status of single accepted meaning by capitalising it.

The way these drafts and texts are coming out, and ‘negotiated’ in green room type discussions in the evenings and at nights, when minds are not at their optimum, and this will set the framework for a Doha-minus negotiations, if and when serious negotiations begin (no one need expect this to happen well after the US elections, and a new administration), developing countries may be committing the same folly that they did in the Uruguay Round and the Marrakesh Treaty.

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