Global Trends by Martin Khor

Monday 19 December 2011

Divisions beneath a relaxed WTO Ministerial

A relaxed atmosphere marked last week’s ministerial meeting of the World Trade Organisation but the deep divisions among the members on many issues were evident.

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The World Trade Organisation’s Ministerial Conference was held in a calm and relaxed atmosphere in Geneva last week.

Past WTO ministerials had been tension-filled, with some Ministers (usually from developed countries) often aided by the Secretariat, trying to push for mandates to launch talks on new rules or treaties, and Ministers of developing countries resisting.

The decisions would be made by a small group of 20, usually selected by the Secretariat or the host Minister, and there would then be great tension to as to whether the whole membership would agree to what the small group of 20 had decided.  Sometimes the small group could not agree among themselves.

Thus, WTO ministerial, or more recently “mini-Ministerials” of 30 or so members, could end in induced success or inglorious failures, with the failures exceeding the successes.

In the past two to three years, these tensions have instead been absorbed by trade negotiators and their senior officials in an endless series of informal and formal meetings in Geneva, rather than by Ministers in a conference.

These meetings have made it evident that there is no agreement on how to conclude the Doha talks launched in 2001, nor on what the WTO should be doing in the next few years beyond its regular work.

To avoid another tension-filled Ministerial, the diplomats designed last week’s Ministerial to be a simple combination of formal speeches and informal discussions among the Ministers.

There was to be no Ministers’ declaration and thus no intense negotiations over texts.  At the end, on 17 December night, the conference Chairman, Nigerian Minister Olusegun Olutoyin Aganga, presented his own Chairman’s statement. The first part was on what the diplomats had already prepared before hand, and the second part summarized the Ministers’ discussions.

However, below the meeting’s calm surface, deep differences of views were evident both on the Doha impasse and on the way forward.

All profess to be still committed to concluding the Doha agenda.  While most want it finalized based mainly on December 2008 texts on agriculture and industrial goods, the United States

wants the big developing countries to open up their markets by even much more than that, which the latter do not consider fair.

Most developed countries have proposed a new method for Doha, that the talks and outcomes on some issues be conducted on a plurilateral basis (involving only those members that are willing).

But this was firmly rejected by a hundred developing countries which in a statement (entitled Friends of Development) said it went against the principles of multilateralism and inclusiveness.

Another proposal is to have an “early harvest” of some issues first rather than wait for all issues to be agreed on.   Though many countries are amenable to this, there is no agreement on which issues should be “early harvested.”

Earlier this year, a quest to announce an early harvest at the Ministerial failed. Almost all members agreed there would be a “package” for least developed countries, so that Doha could deliver results first for the poorest members.

However, two of the key issues (duty free market access for LDC products and reductions in cotton subsidies) were not acceptable to the United States.

Next year when the Doha talks resume, developed countries want a trade facilitation treaty to be an early harvest.  But most developing countries insist that any early harvests should be on their development issues, including an LDC package, enhanced special and differential treatment and resolving problems arising from implementing the WTO agreements; as well as reducing agricultural subsidies.

In the Ministerial discussions on issues not on the Doha agenda, there is also a deep divide. Developed countries want to launch discussions on new issues, possibly leading to new rules.

These include investment and competition (which had already been discussed for years but then removed from the Doha agenda in 2004), climate change, energy security and food security.

However, a majority of developing countries were opposed to a top-down introduction of new issues.  The “Friends of Development” declaration said that   any trade-related issue should be discussed at appropriate WTO bodies in accordance with due process and consensus.

Many also believe that introducing new issues now would distract from the development components of the Doha agenda, and that the proposed issues are not in the developing countries’ interests.

Instead, the developing countries proposed work to enhance the development aspects of the WTO, including strengthening the trade and development committee and having a development review of the special and differential treatment provisions of the WTO.

The Ministerial conference was conducted in a friendly and relaxed atmosphere, but the underlying differences and tensions will still be there when the WTO resumes work next year.