People's Democracy

Amit Sen Gupta

AS we go to press, the Fourth Session of the Ministerial Meeting of WTO at Doha is reaching its concluding stages. There are, as yet, conflicting reports regarding the outcome of the meeting. Three drafts have been circulated by the WTO Secretariat, and are to be finalised at the meeting. The drafts that are being discussed include:

• a draft Ministerial Declaration,
• a draft on Intellectual Property Rights (IPR) and Public Health, and

• a draft on Implementation Issues.

While the final outcome of the discussions will be known after the 13^th November, it would be interesting to examine the process that led to the Doha meeting.

Readers will recall that the Third Ministerial meeting at Seattle in 1999, ended in a fiasco, with no major decisions being taken. The blame, then, was put on widespread street protests that were organised at Seattle by different interest groups. The truth of the matter, however, is that the Seattle meeting ended in such a manner, partly because the two major players in world trade today, the European Union and the United States, were unable to reach an agreement on certain issues - especially on the contentious issue of large subsidies being provided to agriculture by countries in the European Union.

The other major reason was the suspicion among developing countries that all major decisions were being taken behind closed doors (the infamous "green room" process). As a result, on one hand the developed countries were unable to get their act together, and on the other, there was the forging of a kind of unity among developing countries against the machinations of the developed countries.

It is important to recall India’s role at Seattle. Many commentators had noted the surprisingly passive stance that India had taken at Seattle. Nowhere were they in the forefront in forging a unity among developing countries. In fact India’s Minister, Murosali Maran, had cause to comment at Seattle that it should not be taken for granted that India’s interests are necessarily co-terminus with those of other developing countries.

Since Seattle, the developed countries have approached the Doha meeting with a degree of trepidation. Not wanting to repeat the fiasco of Seattle, major preparations have gone into the Doha meeting. The battle lines were clearly drawn. The developed countries wished to push the WTO into a new round, a round that would bring the Uruguay Round of GATT (that led to the signing of the WTO agreement in 1995) to its logical conclusion. The new round would initiate negotiations on issues related to investment, competition policy, government procurement and trade facilitation.

Without getting into the specifics of each of these, it would suffice here to say that these areas constitute the "unfinished agenda" of the Uruguay Round. Once negotiated they would ensure the near complete dominance of the WTO over sovereign governments in decision-making on matters related to trade and capital flow. The last is of particular importance for developed countries.

The negotiations on investment under the aegis of Trade Related Investment Measures (TRIMS), seek to remove all barriers on capital flows. Negotiations on TRIMS have been resisted by developing countries since the WTO came into force, because it would be the final blow against the economic sovereignty of nation states. On the other hand, the economies of capitalist countries are today driven by finance capital that seeks avenues for short-term investments that are largely speculative. Such short-term flows are known to exit at the first hint of trouble and can ravage whole economies precisely because of their volatile nature (as happened in East Asia a few years back).

Similarly, a multilateral agreement on Competition Policy would seek to remove controls by country governments on the conduct of

Developing countries, on the other hand, have been insisting that the Doha Ministerial meeting should confine itself to discussing issues related to implementation of the WTO agreement. Their contention has been that these issues need to be discussed, as experience in implementation of the WTO agreement since 1995, point to a large number of asymetries that favour developed nations vis-a-vis developing nations.

It may be recalled that the WTO agreement was "sold" to developing countries with the promise that the developed countries' markets, in the two sectors that are crucial to them - agriculture and textiles - would be opened up for them. However they both continued to remain closed six years after the WTO agreement was signed.

In agriculture, developed countries continue to protect their markets through stiff tariff barriers - at times over 200 to 300 per cent. Moreover, developed countries, contrary to commitments given, have actually increased subsidies provided to domestic agricultural products, thereby rendering exports by developing countries uncompetitive. Domestic subsidies in OECD countries have risen from US $275 billion to US $326 billion in 1999 (according to OECD data).

In textiles, only very few items which the developing countries export have been taken off the quota list, even though more than half the implementation period has passed. According to the International Textiles and Clothing Bureau, in June 2000, only a few quota restrictions had been eliminated:

• 13 out of 750 by the US;

• 14 out of 219 by the EU;
• 29 out of 295 by Canada).

The developing nations want issues such as these to be discussed before entering into negotiations in new areas.

The other issue that has dominated the run-up to the Doha meeting has been the issue of access to essential medicines, in the context of the Trade Related Intellectual Property (TRIPS) agreement under WTO.

The widely evocative issue of access to anti-retrovirals, i.e., the drugs that are used to treat AIDS patients, has played a major role in the way the international community today sees the pharmaceutical industry. Treatment of AIDS with a combination of drugs - - called Highly Active Anti-Retroviral Treatment (HAART) - has decreased mortality from AIDS by 84% in developing countries. Unfortunately less that 5% of AIDS infected people across the globe, have access to such treatment currently, because the estimated cost of treatment by HAART is about $12,000 per person per year.

At the present rates Zimbabwe, Uganda and Ivory Coast would require to spend 265%, 172% and 84% of their respective Gross National Products, just to buy drugs to treat all their AIDS patients!

This issue has been the rallying point of a major global campaign that today is demanding a closer, critical look at the TRIPS agreement. Every country that has tried to interpret the TRIPS Agreement in a manner that allows access to cheaper drugs for its people, is faced with a hostile reaction from the US. But it has led to the building of an unprecedented global coalition against the use of TRIPS to deny the poor access to drugs.

The WTO has been forced to take note of the hostile global reaction to the inhuman effects of the TRIPS accord and has circulated a separate draft on this issue entitled, IPR and Public Health. This,in a manner, is a small victory for the global campaign on access, but the response by the WTO still falls short of the requirements. By circulating a separate draft on the issue, and not incorporating it in the draft ministerial text, the attempt is clearly to ensure that the basic TRIPS agreement is not "tampered with". At best the concession being offered is that the TRIPS agreement can be more "liberally" interpreted in the light of concerns related to public health. The developed countries, led by the US, continue to oppose even this small concession.

Let us now turn to the manner in which the drafts for the Doha meeting have been finalised by the WTO Secretariat. The final drafts circulated by the WTO Secretariat are the handiwork of just two persons - Chairman Stuart Harbinson and WTO Director General Mike Moore.

The drafts have been criticised by virtually every developing country as being biased and one-sided. In fact the drafts circulated on October 27, are even less sympathetic to the positions of developing countries than the earlier drafts discussed in the meeting at Singapore in September. The September drafts themselves were seen by developing countries as an attempt to bulldoze them into a new round without addressing their concerns regarding implemenation of the WTO accord.

Many developing countries, individually and collectively, had written in dissent to the WTO Secretariat regarding the September drafts. Murosali Maran, reacting to the draft on behalf of India, had written a letter to Harbinson objecting to a large number of formulations in the September draft. Curiously, almost on every single point where Mr.Maran has shown dissent, the October draft has moved in the reverse direction!

The September draft on the issue of new areas, for example, had two options provided - that they be negotiated in a new round, or that further studies be commissioned. The October draft has only one option—one that essentially calls for a new round for these areas to be negotiated. We thus have a situation where two bureaucrats sitting in the WTO Secretariat, in cynical disregard of submissions made by leaders of sovereign states, produce their own interpretation of what should be discussed at the ministerial meeting. They, in addition, have the temerity to state that the drafts represent "their best approximation of a compromise solution among the differing positions of the membership".

Clearly the WTO, given its utter disdain of the views expressed by sovereign nations, sees itself as a supra-national entity that can usurp the powers of decision making and governance.

In its effort to ram through a new round, the WTO has been greatly served by the September 11 events. In the present climate, where taking a position against the US is seen as a support to terrorism, Doha could not have come at a more opportune time for the western imperialists. The US is in a position to brazenly use the opportunity to bulldoze its way through the corridors of the WTO. It is now clear that earlier speculations that the Doha meeting would be postponed were premised on entirely wrong presumptions. The Financial Times in fact commented recently that the likely success of the Doha meeting and the launch of a new round, owes a lot to Bin Laden. It has even prompted some commentators to suggest that any new round should be named as the Bin Laden Round for the economic Talibanisation of the WTO trading system!

Let us now turn to the Indian response. In recent weeks the Indian government, led by Mr.Maran, has been busy blaming the WTO for not taking note of the concerns raised by developing countries. This in itself is a welcome step. Unfortunately, it may well be a case of too little and too late. Too late because India’s strong public reaction comes after years of kowtowing to the diktats of the developed nations in the WTO. It is a history that stretches back to 1989.

It is a sordid tale of perfidy and subterfuge, to which both the previous Narasimha Rao government of the Congress, and the present NDA government of Atal Behari Vajpayee, have been party. As mentioned earlier, even at Seattle in WTO, the Indian delegation chose to express its preference for siding with the US position rather than make common cause with developing countries. Before 1989, India was acknowledged as the leader of developing nations in GATT. It is a position that successive negotiating teams have frittered away. Time and again India has shown itself to be weak under pressure from developed countries, especially the US.

In such a situation lamenting that India is isolated in WTO is a gross misrepresentation of the negotiating history in GATT and WTO. India is isolated because it chose to break ranks and capitulate to pressure. Today smaller developing countries do not trust India to argue their case effectively and to its final conclusion. They thus feel that if they are to sell themselves to the interests of developed nations, they would rather do it directly than use the services of a middleman.

There is another reason why other developing nations view India with a degree of mistrust. They see India trying to be the US’s most faithful ally in the global arena. India’s shameless welcoming of the US’s National Missile Defence System is a case in point - an issue where even some of the US’s close allies were loath to come out in support.

In economic matters the Indian government has often gone far beyond what is required by the WTO:

• it brought in competition in the Insurance sector when the WTO agreement still does not require it to do so;
• it brought in competition in the Telecom sector well before it was required to do so;
• it relaxed Quantitative Restrictions on a large number of imported items much before it needed to;
• even in the area of investments, it has liberalised norms for foreign investors even before negotiations on TRIMS have been initiated.

So when other nations see India’s minister thundering against the WTO from public platforms, they understand that much of what is being said is posturing.

The present posturing is also too little. If and when a new round is initiated the Indian government is going to claim that it was dragged, kicking and screaming to the altar, against its will. What they will not say is that India had an option to do something further. At Singapore the Indian delegation could have insisted on a vote on the draft. Under WTO rules, if even a single country insists, any draft emanating from a meeting can be put to vote. It still can do it in Doha if it is not satisfied with the final text. But India will not do so because it has not done the necessary homework to mobilise other countries. It will not do so saying that it does not want to break the WTO practice of reaching decisions by a consensus. But today such a consensus is a manufactured consensus, and besides a consensus that goes against the will of the majority.

If the method of reaching decisions by this manner of "consensus" is not given a summary burial the likes of Harbinson and Moore will continue to thumb their noses at the collective will of a majority of nations in the world.