Minor triumph for multilateralism, says Supachai

Geneva, 1 August (Kanaga Raja) - As the General Council of the World Trade Organization ended early Sunday morning its week-long intense day and night consultations, green rooms, informals and finally a formal session to adopt a decision and annexes, there was a note of caution and sobriety, and little hype, in assessments.

Even the Financial Times, normally the flag-waver and cheer leader for the WTO, in its report viewed the outcome as one of ‘sketchy blueprints and exhortations” and that years of wrangling lay ahead in years to come on the details of the accords.

At a media briefing, after the General Council adopted the decision on the Doha work programme, WTO Director-General Dr. Supachai Panitchpakdi viewed the outcome as a “minor triumph” for multilateralism, but that the “major triumph” would emerge only after the successful conclusions of the negotiations.

However, Supachai would not set a new deadline or date for the completion of the talks, merely saying that member countries hope to finish “in the foreseeable future.”

The challenges facing members after the failure in Cancun, he said, had been overcome due to the commitment and constructive work in Geneva, supported by the capitals of members, and in the ten months since Cancun, members had achieved what they had failed to do there.

Among the decisions, he cited the commitments to work towards elimination of export subsidies in agriculture, with the end dates to be agreed upon, and commitments to substantially reduce domestic subsidies, and the attempts to be made to get real gains in market access in agriculture and industrial goods.

He also spoke of the breakthrough on Singapore issues, with work to start on trade facilitation that could help advanced and developing countries to reduce costs in their trade activities.

The Director-General also claimed that there was “real commitment” to address the cotton issue, important for the least developed countries, and is a “courageous step” for developed countries to take up negotiations on this and also promote development assistance “to facilitate process of adjustment in the cotton growing areas.”

The Indian Commerce and Industry Minister, Kamal Nath, talking to media outside the meeting hall, said that “it was recognized here that the developing countries cannot be taken for granted.” The accord is a long-awaited acknowledgement that farm subsidies of wealthy nations were unfair, and “it has finally dawned on everyone that our farmers can’t compete against subsidized crops.”

He viewed as a distinct gain for India and other developing countries, the total exemption from de minimise cuts of the payments to marginal and resource-poor farmers, the provisions for Special Products and Special Safeguard Mechanism for developing countries, and the requirement for negotiating the criteria before enabling the new blue box for the US to be made operational, and the dropping of three Singapore issues from the Doha agenda.

The Brazilian Foreign Minister Celso Amorim, leading the G20, said the accord was a milestone for Third World farmers who could never compete against the developed nations’ subsidized crops and were going out of business by the millions. “This is the beginning of the end of subsidies,” he said.

Amorim was also quoted as saying that the G20 was considered as a destructive force in Cancun but is now considered as an essential part of the deal.

Later, at another briefing by the EU (by Trade Commissioner Pascal Lamy, Agriculture Commissioner Franz Fischler and the EU President, Dutch Minister J.L. Brinkhorst) Lamy said the Doha Round was back on track and the results achieved were good for the EU both in terms of its offensive and defensive agenda, but also good for the developing countries and others.

In terms of the EC’s offensive interests in the negotiations, Lamy said that in agriculture, “for the price of the EU reform of the agricultural policy, we brought about a reform of the US Farm Bill to the benefit of our farmers.” The EU had made sure that all trade-distorting elements of export credits, food aid or state trading enterprises are eliminated, just like the EC export subsides.

Precise guidelines have been adopted to cut tariffs on industrial products, and in services, a date, May 2005, had been fixed for the new round of negotiations.  He also mentioned the negotiations to simplify customs procedures (the negotiations on Trade Facilitation).

In terms of defensive interests, the EU will be able to continue to protect sensitive products for its farmers. The other concessions made by the EC and locked into the WTO, are the EU agricultural policies including export subsidies. The EC regretted having to drop three of the four Singapore Issues out of the Doha agenda, “but the time was not right.”

In a reference to his ‘round for free’ offer to some of the G90 countries, in the efforts to split the developing countries, Lamy said that the “G20 countries will have to negotiate” to get benefits, while the G90 “will have the round for a modest price”.

EC Agriculture Commissioner Franz Fischler said the EU’s own reforms provided the key to making progress in the Doha round, and the framework accord ensured that other countries would follow the EC on the reform path. For the EU, the outcome was within its own reform framework and did not go beyond. The green box had been kept, and so was the blue box, but with capping.

At his briefing, US Trade Representative Robert Zoellick said the WTO negotiations have been put back on track, with “a map for the road ahead”. Speed limits have now to be negotiated - as to how far and fast “we will lower trade barriers,” he added.

In his view, the agricultural framework “envisions” the complete elimination of agricultural export subsidies and new disciplines on export credits and on state trading enterprises; preserved “disciplined food aid programmes for humanitarian and development needs”; and a global commitment to harmonize global trade-distorting farm subsidy programmes, to ensure that countries with higher subsidies are subject to deeper cuts.

It would cut allowed domestic support in agriculture more in the first year than during the entire Uruguay Round. It would also open markets for farm products, with a commitment to the concept that higher tariffs should face bigger cuts and for substantial improvements in market access for all products.

Emphasizing the ‘harmonizing principle’ in domestic support reductions of developed countries and according to a tiered formula as a big plus for the US, Zoellick also added, “we are obviously still working with the blue box concept”.

In a reference to the US counter-cyclical payments linked to prices, but not production, Zoellick said the US was trying to move some subsidies from the amber to the blue box, but this was not done yet.

On industrial products, members had agreed to work towards an expanded market access in everything from cars to computers to consumer goods and for “broad cuts in tariffs through a formula that would cut higher tariffs faster, supplemented by the possibility of complete elimination of tariffs in key sectors,” and new work to address non-tariff barriers.

In services, Zoellick said that members have agreed to intensify negotiations to open services markets, which “now account for over half of most of our economies, both developed and developing. And importantly, we’ve made clear that services are on par with agriculture and manufacturing as a ‘core’ market access area.”

Martin Redrado, Argentina’s chief trade negotiator, said, “There’s been a tremendous advance” in the text, assuring “substantial reform in world agricultural trade.”

An IPS report by Gustavo Capdevila in Geneva quotes Redrado as saying that “The playing field has been marked out, and now we have to play the game, but the field is marked in favour of developing countries.”

That is true for the first time in 50 years, he added, referring to the birth of the General Agreement on Tariffs and Trade (GATT) in 1948.

Redrado said that in an initial reading of the document, he saw no clause that hurt developing countries.

Civil society groups reacted cautiously, with some like Focus on the Global South, sharply critical of the accord, and charging the US and the EC with having applied pressures.

Both Oxfam and Christian Aid said they had serious concerns over the agreement and the timetable for the promises made. Andrew Pendleton from Christian Aid said, “if everything that is written down in that text was agreed, it would be beginning to look better for a lot of the poorest countries.” But while the commitment to end export subsidies is pretty clear and explicit, “there is no timetable.”

Oxfam’s Celine Charveriat said there was little in the WTO’s deal to guarantee reforms that would help the poorest countries. Although there was strong language on the issue of subsidies, the overall agreement was “disappointing”.  Three years into the negotiations, the results of this meeting fall far short of what is needed to reform world trade rules, and ensure that they work for the poor. “The lives and jobs of millions of people depend on these talks but rich countries are still failing to show leadership, pandering instead to vested interests and forcing developing countries to adopt a strategy of damage limitation.”

The apparent concessions by the US on cotton were not legally binding and would not guarantee an end to the harmful regime. Negotiators may trumpet breakthroughs on export subsidies and cotton “but there are no cast-iron commitments, no clear timeline for reform.” If the rich countries do not immediately put their promises into action, the declaration will become just one more stage “in a long journey of disappointment and deception.”

Aileen Kwa from Focus on Global South viewed the outcome as a catastrophe for the poor, and charged the rich countries with arm twisting, and dividing and excluding countries. The outcome is a framework protecting the interests of the strong, and maintaining their subsidies.

Says Kwa: “All in all, the text is a raw deal for the South. It is the makings of a Round that will be catastrophic for the poor.” The press release mentions some of the countries, and their ministers, who were subjected to pressures and threats, and ‘bribes of aid’ by the majors to divide the developing countries. – SUNS5628

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