People's Democracy

THE fourth World Trade Organisation (WTO) ministerial conference, held during November 9-13 in Doha has been seen as a major gain for India by the government. But going by, the past experience of the WTO and by the current policy practice of the major developing countries, the fact of the matter is that the outcome of Doha is going to be proved as a case of false victories for India and other third world countries. The outcome of Doha is mostly a bag of empty promises and substantive losses.

The only area where the outcome of Doha offers some relief to the third world countries is the declaration issue on the subject of Trade Related Intellectual Property Rights (TRIPs) and public health. The Doha declaration says there is nothing in TRIPs that would prevent countries from taking measures to promote public health.

But the claim of the government that India has obtained a major victory due to the adoption of a declaration on TRIPs and public health in the Doha ministerial conference is exaggerated. The irony is that when there is no commitment to change the wording of the TRIPs agreement, the government is projecting this aspect as a major victory. The declaration that offers only a clarification on the members’ right to grant compulsory licences, and the freedom to determine the grounds upon which such licences are granted, is more in fact an indication of the weakness of the developing world governments. This particular elation of the third world represents the tragic situation that their governments feel totally helpless to even interpret by themselves the WTO agreements which they have negotiated and are dependent on the developed countries to offer clarifications.

However, when one evaluates even the overall results of the TRIPs negotiations, there is no reason for India to feel elated over the outcome. From the outcome of the TRIPs negotiations we come back again to the evaluation of the progress made in Doha on the implementation issues. It is evident that there are major lacunae left to be still addressed in respect of the TRIPs agreement on the issue of even compulsory licences.

The outcome of Doha also contains for India and other third world countries, the seeds of their potential recolonisation whose harvest would be nothing but economic and political subjugation without occupation. In Doha, India has lost the battle of not allowing the developed countries’ governments any success in extending the WTO mandate to new, non-trade issues.

It is not an ordinary defeat for the Indian people. Through this new, demonic step of expansion of the mandate to the issues of environment, investment, competition and government procurement, the developed countries’ governments have succeeded in clearing at the level of the international rule-making processes a big hurdle for their big businesses. The big business can now hope to achieve its long-cherished design of subordinating the lives and resources of the people everywhere to the goals of ‘free trade.’

While attempting to show the outcome of Doha as the wresting of a major advantage for the country, the government is in fact guilty of minimising the challenges the latest WTO outcome poses for the Indian people. The Doha agreement has all the trappings of a round built in it. The launch of the new work programme of negotiations is nothing but a new WTO round. It commits the developing countries to start the negotiations whose conduct, conclusion, and entry into force of whose outcome, would have to be treated as parts of a single undertaking. The agreement contains a time frame. The new work programme negotiations will have to be completed by the year 2005. Regarding the process, the text also contains that there will be an umbrella trade negotiation committee to span the entire range of agreed WTO negotiations under the new work programme.

Despite opposition from the Indian delegation, the Doha declaration initiates a vast expansion of the mandate of the WTO in the direction of several new, non-trade issues. The agreement arrived at Doha fudges on the deeply contentious issues of investment, competition policy and transparency in government procurement by getting the developing countries to the launch of pre-negotiations. Pre-negotiations on the issues of investment, competition policy and transparency in government procurement are to start immediately with the stated purpose of working out the specifics of the mandate of the full negotiations which are to take place at the next ministerial meeting in two years time. The mandates in respect of competition, investment and government procurement start with a phrase that the members recognise the case for a multilateral framework. Only a formal decision on the modalities of negotiations on these issues has been postponed to the fifth ministerial conference. Further work of the working groups in the form of pre-negotiations and study will be continuing in the case of investment on the aspects of scope and definition, transparency, non-discrimination, modalities of pre-establishment commitments, development provisions, exceptions and balance of payments safeguards. In respect of competition policy, work will focus on core principles, transparency, non-discrimination, procedural fairness, provisions for hard-core cartels, progressive reinforcement of competitive institutions in developing countries.

The inclusion of non-trade issues, in WTO negotiations like the environment and the "Singapore issues", viz., investment, competition policy and transparency in government procurement and trade facilitation, is a major gain for the developed countries. On the contrary, it is a deep assault on the economic and political sovereignty of the developing world as a whole, including India. The defence advanced by the Indian delegation is that it would be able to use the fifth ministerial conference as a ‘nuclear weapon’ to block the expansion of the WTO mandate to the aforesaid Singapore issues.

However, going by the past record of the negotiations at Marrakesh, Singapore and Doha, it is difficult to believe that India will be actually able to prevent full negotiations on the Singapore issues in the fifth ministerial conference. Its bargaining power in the fifth ministerial conference is going to be hardly better as it has already agreed to give in on the issue of environment as a trade-off for the inclusion of the possibility of the reduction of subsidies in agriculture - a conditional concession granted by the European Union (EU). With the implementation issues getting dragged into the new work programme, the developed world is going to be in fact in a far better position to use the negotiations on implementation issues as a weapon against the developing countries. After Doha, there are more trade-offs available to the developed world for the purpose of creating divisions within the developing world. The task of uniting the developing world against the start of full negotiations on the Singapore issues is now going to be even tougher.

The tragedy for India is compounded because, in Doha, almost the whole conference was devoted to the issues of interest to the developed world. The issues of vital importance to the developing countries did not get any attention. The developing countries had tabled 102 issues in the run-up to Seattle, which were to be dealt with as a matter of priority. These were issues about the commitments that have not been implemented by the developed countries, or problems with implementation faced by developing countries due to their lack of capacity or the adverse impacts on their development. The declaration includes only some non-binding encouragement for the developed countries to be sympathetic. The bulk of implementation issues have been incorporated without any commitment to favourably resolve them in the new work programme.

India had insisted upon a satisfactory solution of these issues as a pre-condition for any new negotiations. But there is no firm commitment from the developed world on any of the important issues. There is only a perfunctory statement on the need to review the implementation issues. Nor is there any commitment to an early phase-out of textile and garment quotas. The language used on the phasing out of agricultural subsidies is extremely weak. On electronic commerce, the zero-duty commitment has been further extended until the next ministerial meeting.

In the area of ongoing negotiations on agriculture, there is no recognition that the perspective of removing trade distortions is improper and useless for a country like India. The treatment of India’s concerns in the area of agriculture requires us to go beyond the mere insistence on the provision of differential treatment to developing countries in respect of tariffs, subsidies and improvements in market access for agricultural exports. India will not be able to offer subsidies to 60 per cent of her population even if concessions are obtained in this regard for the developing countries. India needs a provision for retaining her right to impose quantitative restrictions (QRs) on agricultural imports.

The negotiations on trade in services are to be conducted in all the areas without any commitment from the developed world on the subject of movement of natural persons, a major area of interest to the developing world. It merely mentions that the ministerial conference recognises the work already undertaken in the negotiations on movement of natural persons. It is also important to mention here that the framework of General Agreement on Trade in Services (GATS), the basis for continuing the negotiations, is itself tilted in favour of the multinational corporations and is against the people of the world as a whole.

The agreement on the industrial tariffs negotiations launched at Doha is a bitter pill to the most developing world members. Their argument has been that they should not be required to give up their protection for local businesses, given their stage of development and recognising that protection is being used by the developed countries to block exports from the developing world. Among the gains to developing countries is the promise that the negotiations shall aim to reduce or eliminate not only tariffs, but also tariff peaks and escalation, as well non-tariff barriers "in particular on products of export interest to developing countries." With the onset of recession it is doubtful that the developed world governments will keep their promise of liberalising their markets for the developing world.

There is an apparent commitment in the text to negotiate on the abuses of anti-dumping rules. The issue found a mention in the text due to the row between Japan and US on anti-dumping rules. However, on a close reading of the text it is also clear that there is actually little commitment to negotiate on stopping the abuse of anti-dumping against the developing world. The declaration is quite explicit that there will be negotiations while preserving the basic concepts, principles and effectiveness of these agreements and their instruments and objectives. This kind of caveat is indicative of the power of the US that has an interest in rendering the anti-dumping negotiations powerless.

In an unprecedented move for the WTO, in Doha members agreed to the launch of negotiations on three environmental issues. The first issue is the relationship between the WTO rules and specific trade obligations set out in multilateral environmental agreements (MEAs). On this issue, the signals from Doha are quite problematic. The text of the declaration includes the statement that "the negotiations shall not prejudice the WTO rights of any member that is not a party to the MEA in question." The agreement on environment reached in Doha is clearly an incentive for countries not to sign up to the MEAs. This confirms the worst fears expressed by the developing countries that the issue of environment is being raised in WTO mostly with the intention of using it as a new non-tariff barrier against their exports to the developed world markets. The agreement establishes free rider provisions to the benefit of the developed world governments who want to benefit from international action without being bound by any of its provisions.

The reason for its inclusion is not far to seek. The US government is responsible for forcing this caveat. This caveat gives the US a let-out clause on agreements it has not signed, such as the Kyoto Protocol on Climate Change and the Biosafety Protocol.

The second area of issues is of procedures for regular information exchange between MEA secretariats and the relevant WTO committees, and the criteria for the granting of observer status. So far, as the things stand, there has been no problem in regard to the exchange of regular information between MEA secretariats and the relevant WTO committees. The real problem is that the WTO agreements are bent on protecting the essential interests of multinational corporations. The WTO committees are enforcing agreements that are totally contrary to the requirements of sustainable development in the developing world.

The third area is the reduction or, elimination of tariff and non-tariff barriers to environmental goods and services. The developed world governments again dictate the approach to negotiations on this issue. Take the negotiations on fisheries, where the concern of developing world has been in regard to fishery subsidies that have caused major problems for small fisheries in developing countries. However, the Doha agreement promises only a fig leaf. The negotiations will only "aim to clarify and improve WTO disciplines on fishery subsidies," without aiming to stop their use by the EU to deplete the fisheries of West Africa and other regions.

The declaration on TRIPs and public health was required only because of the aggressive US attacks on the rights of countries to prioritise affordable treatment for health emergencies such as HIV/AIDS. In Doha this was one of the most hard-fought battles, pitting the NGOs and developing countries against the developed ones. However, even the said declaration on TRIPs and public health fell short of the expectations of its advocates because members missed the opportunity to force the decision on the question of imports of medicines for countries that do not themselves have the manufacturing capacity to produce such drugs. Developing countries and NGOs were forced to take up this issue and had to spend a lot of energy on it but got only the clarification that the existing agreement has enough flexibility for them on the issue of compulsory licenses.

Yet the TRIPs agreement urgently needs amendments in several areas like the patent term, patenting of life-forms, patent-holder’s obligations, licensing, transfer of technology, undisclosed information, copyright, geographical indications, etc. Even in the area of compulsory licensing the issue of freedom to determine the conditions to be attached to the licences, that can be used by the member countries, is still unresolved. The lack of amendments on this issue has serious implications for the developing countries. In the TRIPs agreement there still exist Article 31 provisions that require members to provide for an incorporation of certain conditions, eg, those related to the strict enforcement of the procedure of taking a decision on the individual merit of the application for each patent. Today, this particular clause alone is making India to abandon some of the important provisions concerning the "license of right", that treat licenses too to be a matter of right. If retained, these provisions will save the Indian nation and the interested local organisations a huge amount of resources. The country would not be required to provide for costly litigation that the big business is likely to impose on smaller organisations.

In sum, global capital backed by the governments of developed countries, has been successful in scoring a crucial victory in Doha. The poor of the world as a whole have been defeated. It is a product of the lack of exercise of effective leadership by the developing countries like India. Determined efforts to mobilise the developing world in the WTO ministerial meeting were not made in time. It also seems that the Africa Group and the least developed countries were lacking confidence in India. In Doha, the Indian government was hardly in a position to mobilise the rest of the developing world because of its own slavish policies in both foreign and economic policy spheres. The situation will continue if India does not give up its current policy of slavishly accepting the agenda the US and its partners are today dictating in the areas of FDI, technology import, agriculture, and many other areas.