People's Democracy

Jayati Ghosh

FOR a while it seemed as if the Doha meeting would not go through. After all the United States continues its saturation bombing of Afghanistan which has already killed thousands of defenceless and impoverished civilians, and must surely feel a little nervous of dealing with Islamic states during such aggression, despite all its bravado.

So, at first there were fears that Qatar would not be able to provide adequate security, and even now the US may send a smaller and less important delegation. But eventually the sheer embarrassment at having to postpone such a meeting which is formally mandated by the GATT accord and which has been planned for two years, as well as the need to make up for the failure of the Seattle meet, seem to have dominated over more immediate security concerns as the far as the developed countries are concerned.

And simultaneously there have also been other, more insidious, attempts to treat the September 11 attacks as a means of pushing even more external liberalisation down the throats of developing countries. The pretext is that such terrorism is an attack on free trade which will supposedly deliver prosperity for all. And the US Trade Representative made it very clear that he saw the need for even greater and more comprehensive trade talks because of, not despite, the terrorist attacks and the subsequent war.

But just as it is both possible and correct to be anti-terrorist and against the US-led war against Afghanistan, so it is possible and correct to oppose archaic and revanchist reactions to globalisation, even while condemning the current phase of imperialist globalisation and its international institutions including the WTO. And certainly, the attitude that to preserve any sort of order in the world economy today we must also support greater powers given to the WTO, and to push all sorts of other issues into the trade agenda, must be fought.

For once, the Indian government stand thus far at the WTO has been a correct one, that all further trade negotiations must be postponed until a proper and democratic review of the past agreement and its implementation has taken place. Such a review would immediately expose that most developing countries have gained little or nothing, especially in the areas of agriculture and textiles, while they have opened up their own markets and adversely affected their own incomes and employment.

But while the Indian position initially had a lot of support among other developing countries, it has recently become isolated as the developed countries, especially US and European Union, have arm-twisted or bribed other countries such as Malaysia and Pakistan to fall into line. It now seems likely that a new Round may well be announced at Doha after all, and this will in turn introduce many issues which most developing countries strongly feel are against their interests and should anyway be kept out of trade talks.

Given the way things have gone in the previous Round, not only are subjects introduced only at the behest of the major capitalist powers and the large corporations which now dominate economic activity, but they tend to be pushed through in ways which militate against the interests of the majority of the world’s population, and even the workers of developed countries.

The WTO negotiations in Geneva are now at their most critical stage, before the Doha Ministerial meeting. Perhaps the most important decision is whether new issues (investment, competition, government procurement, trade facilitation) will be accepted or not accepted in Doha as subjects for negotiations towards new agreements. Because of strong opposition from India and concerns voiced by other countries, this had become a very controversial issue.

At Geneva, the latest development is a formula worked out by the developed countries (especially the European Union, but also the United States) for a kind of plurilateral agreement (an agreement where not every country has to join in) for investment and competition. This is now known as the "opt in, opt out" and two-stage approach.

Their plan is that in Doha, all countries will approve (in a Ministerial declaration) that there will negotiations towards agreements on investment and competition. The negotiations will be in two stages. In Stage One, lasting two years, all countries take part in discussions or pre-negotiations (on core principles and elements of the agreement). In Stage Two (to be launched at the next Ministerial conference in 2003), negotiations will begin on the rules in the agreements for investment and competition. At the start of this second stage, countries will be allowed to "opt out" of the negotiations, indicating that they do not want to be part of the agreements.

Although this approach appears to be "flexible" in allowing countries not to be part of agreements they do not like, in reality it is more like a trap. In fact this is what is likely to happen :

Many countries that are now opposed to (or not ready to have) a new round of trade negotiations, such as India, are likely to face pressures from their developed-country partners in bilateral or regional arrangements, and from international financial institutions, to join or "opt in" to the two agreements. Those countries that are not so dependent on donors or the international financial institutions may have greater leeway to "opt out" of the negotiations.

However, they may also come under persuasion from representatives of the major countries, and pressure from the market and the media on these countries to join the rest. For instance, it would be put to them that if they do not join in, then creditors and foreign investors will consider them to be less credit worthy or investment worthy.

Developing countries that are reluctant to have agreements on these areas will be in a dilemma. If they "opt out" and stay away from the negotiations, then they would be worried that in the event that they are pressurised to join in later on, they would not have been able to influence the negotiations and the agreement. But if they want to influence the negotiations, they have to "opt in", and thus join an agreement that they do not want. Thus, they will be put in a very uncomfortable position, whichever option they choose.

DISTORTION  OF SYSTEM

Moreover, once this tricky device is used to bring investment and competition issues into the WTO, a precedent would have been set. In future the same opt-in-opt-out device can be used by developed countries to bring in other non-trade issues as well, such as labour standards, environment standards, or the need for harmonised tax systems. They can argue that countries that do not like such topics entering the WTO system should not stop others from establishing negotiations and agreements that they like.

This means that the whole system would lose its multilateral character, and the system would also be distorted by the incorporation within it of non-trade issues that are inappropriate to be included in a trade organisation. The entry of these non-trade issues are very likely to be against the interests of developing countries.

NEED FOR BROAD PROTEST

This is an extremely dangerous scenario, and developing country governments should be aware of it in order to ward off this possibility. Furthermore, it is also time for governments to realise that this kind of external pressure need not be the only one that they have to respond to and deal with. In fact, it is more necessary than ever for citizens in India and other countries also to put pressure on their governments, to prevent them from succumbing. And that makes a broad movement of protest against this current international regime all the more urgent.