South demands credible, developmental outcomes at Nairobi

Developing countries have opposed moves to push through an outcome at the forthcoming WTO Ministerial Conference that is light on development-friendly content.

by D. Ravi Kanth

GENEVA: In what seemed to be a strong rebuff to WTO Director-General Roberto Azevedo and the United States, a large majority of developing and least-developed countries on 17 September rejected ideas floated by them for cobbling a small package of deliverables for the 10th WTO Ministerial Conference (MC10) in Nairobi, Kenya, in December, several trade envoys told the South-North Development Monitor (SUNS).

At an urgently convened meeting of heads of delegation (HoD) to discuss possible deliverables for MC10, trade envoys of the developing countries and least-developed countries (LDCs) demanded “credible” and “developmental” outcomes based on the Doha Development Agenda (DDA).

In nuanced interventions, developing countries such as China, India, Brazil, Argentina, Indonesia (on behalf of the G33 farm group), Venezuela, Pakistan, Lesotho (on behalf of the African Group), Uganda, Rwanda and Cuba said they will not accept the proposal from the US for voluntary contributions by all to reduce domestic farm subsidies nor allow efforts to weaken special and differential treatment.

The developing and the poorest countries said categorically that regardless of the outcomes in Nairobi, the DDA negotiations shall continue until there is resolution of all unresolved issues.

They expressed concern over attempts by the major developed countries, particularly the US, to bury the DDA negotiations at Nairobi without addressing the developmental goals, laid out in the ministerial decisions since the launch of the negotiations in 2001 in Doha, Qatar.

In the face of such unprecedented unanimity among the developing countries and the LDCs to ensure that there are credible outcomes at MC10 and that the DDA negotiations are not declared dead at Nairobi, Azevedo concluded the HoD meeting without indicating the way forward. The Director-General (DG) merely said the picture is clear, according to a trade envoy present at the meeting.

“This is one of the rare meetings in which some developing countries who have remained on the sidelines came out in full blast against the ongoing efforts to close the round with a small package,” the envoy said.

Turnaround

Azevedo had commenced the meeting with his introductory remarks that there is a turnaround from the first semester (January-July) in exploring possible outcomes for the Nairobi meeting.

“The view emerging from many of the [recent] meetings in which I have participated is that a set of deliverables is within reach, [and] has the potential to make the [10th] ministerial [conference] a success and help us move our work forward,” the DG said. “And crucially there is the common view that those deliverables should have development and LDC issues at their heart.”

“Once we have a clear picture of what the Nairobi outcomes might look like, then we can work hard to deliver them,” Azevedo maintained, instead of suggesting or identifying the issues that need to be resolved at Nairobi based on the Ministerial Declaration at MC9 in Bali, Indonesia.

The Bali Ministerial Declaration clearly stipulated accords for binding the so-called best-endeavour decisions concerning the specific issues of the LDCs, and for resolving the remaining issues of the DDA in agriculture, market access for industrial goods, services, rules and development by MC10.

Although the post-Bali agenda was to be finalized by end-July this year, it was successfully scuttled by a major developed country (the United States) on one pretext or another because of the country’s Farm Bill that was enacted last year.

The US Farm Bill provides for subsidy programmes and outlays well beyond what was envisaged in the 2008 revised draft modalities for the DDA agriculture negotiations. The US was clearly not in a position to fulfil the $14.5 billion limit set out in the revised draft modalities because of its latest farm law. To cover up this ugly reality, the US disingenuously brought forward one obstacle after another to ensure that there was no post-Bali work programme, according to several developing-country trade envoys.

Instead of naming and shaming the country that is responsible for wreaking havoc in the DDA negotiations, the DG went along, merely acquiescing to the demands made by that country for a small package of deliverables for the Nairobi meeting, the trade envoys said.

At the HoD meeting, the DG referred to the small package involving LDC issues, outcomes on the export competition pillar in the Doha agriculture package (while remaining silent on the market access and domestic support pillars) and a number of provisions to improve transparency in several issues. The DG also spoke about the need for voluntary contributions from members in the domestic support pillar.

The DG’s remarks were echoed by the US, which called for a package of outcomes involving LDC issues, export competition in the Doha agriculture package and transparency provisions.

The US also spoke about its “non-paper” on domestic support (see following article), arguing that the underlying rationale is that all members must voluntarily contribute to reducing their domestic farm subsidies.

The European Union made an ambivalent statement to the effect that it is ready to work for a package of issues, while acknowledging that all unresolved issues in the DDA must be addressed in a comprehensive framework.

Japan said there is no appetite for the Doha negotiations after the Nairobi meeting. (The Doha negotiations were launched in 2001 by the EU and the US with support from Japan.)

Switzerland surprised the participants at the HoD meeting with its strident criticism of the small package involving the issues in the farm export competition pillar, particularly the elimination of export subsidies. Switzerland said it will not accept deliverables only in the export competition pillar without respecting the “parallelism” with other areas as laid out in the 2005 Hong Kong Ministerial Declaration.

The Swiss statement came as a rude shock at the meeting, as it brought to the fore specific concerns by individual countries over the small package, according to a developing-country trade envoy.

Strong statements

In sharp opposition to the DG’s and the US interventions, the coordinators of various country groupings such as the G33, the African Group, the LDC Group, and the Africa, Caribbean and Pacific (ACP) Group, as well as trade envoys of China, India, Brazil, Argentina, Venezuela, Cuba, Pakistan, Rwanda and Uganda, among others, issued strong statements denouncing the efforts to construct a small package on a pick-and-choose basis.

Indonesia, on behalf of the G33, said “we do not have clarity yet on what concrete and meaningful DDA deliverables would be doable and acceptable to all of us.”

“The Group is of the view that any ideas on the deliverables for MC10 must pass the test of faithfulness to the development dimension of Doha, especially for developing members and LDCs,” Indonesia emphasized.

“For the G33 and as enshrined under the Hong Kong Declaration,” said Indonesia, “meaningful Special Products and accessible and effective Special Safeguard Mechanism are critical development deliverables for developing country members, SVEs [small and vulnerable economies] and LDCs.”

Indonesia also drove home the message that “members must continue following up the Bali mandate to find a permanent solution for public stockholding programmes.”

The African Group issued the strongest statement yet that it will not accept a set of ideas, on the pretext of a small package, that are inconsistent with the development dimension of the Doha negotiations.

Rwanda said the developing and poorest countries were promised that they would be integrated into global trade through the DDA but now all efforts are directed at taking the life out of the negotiations.

Uganda said the poorest countries will not allow a situation of “status quo or perish” at this juncture, demanding credible and comprehensive outcomes based on the Doha agenda.

China said it would accept neither voluntary contributions nor a small package without laying out the roadmap for concluding the Doha negotiations.

India denounced “a call by some members, who want to maintain the ‘status quo’ at any cost, for taking a final view one way or another on the DDA.”

Without naming the countries, India said some members who were ready to live with a “recalibrated outcome now seem to be in a position to contribute nothing to an outcome as envisaged in the DDA and ministerial decisions thereafter.”

“It seems to us that the attempt therefore is to selectively pick out the elements on which they have some comfort and package them for an outcome at MC10,” India maintained, expressing concern over the latest narrative of these countries “to set terms for post-Nairobi negotiations in the WTO.” According to India, “a selective package plus a post-Nairobi agenda which would ironically cover the core issues of the DDA seems to be emerging among such members.”

India demanded “a comprehensive and balanced outcome in all the three core negotiating areas viz. Agriculture, NAMA, Services, as well as internally on all three pillars of Agriculture, even if a downward recalibration of ambition is a necessary condition for fulfilling the development mandate of this Round.”

Even if a “comprehensive” outcome at Nairobi is not possible due to paucity of time, India said, it will reject calls to “declare that the DDA is concluded in the extreme – dead.” (At a meeting of seven major industrialized and developing countries held at the Australian mission earlier in the week of 14 September, the US had described the Doha negotiations as being “like a ‘patient’ which is dead but needs a doctor to certify the death.”)

Multilateral negotiations such as those envisaged under the DDA are an ongoing process since they are aimed at deep-seated reforms to correct inequities, India maintained.

New Delhi said it will test new ideas or proposals presented by some members as to whether they are “equitable and do not impose unreasonable expectations on or specifically target a handful of members.” India called for urgent discussion on a proposal made by G90 members for “strengthening the Special and Differential provisions in the current GATT and WTO rules.”

Brazil spoke about negotiating as well as political deficit to address the outstanding issues in the DDA. Brazil said it would press for progress vis-a-vis the status quo on all three pillars of agriculture, particularly domestic support.

In crux, the HoD meeting provided the writing on the wall about the growing anger and frustration of developing and poorest countries which increasingly feel that they are being misled and denied developmental outcomes as set out in the DDA, several envoys concluded. (SUNS8096)                                          

Third World Economics, Issue No. 600, 1-15 September 2015, pp6-7