People's Democracy

HE Doha ministerial conference of the World Trade Organisation produced a long overdue acknowledgment that agreements concluded in the Uruguay Round of trade negotiations had yielded few benefits for the developing countries. But the commitment to review the implementation of these agreements came bundled as part of a deal on a comprehensive new round of trade negotiations.

In just under seven years since it came into existence, the WTO has acquired a unique reputation as an intrusive body that leaves few areas of autonomy for national governments and specially targets small producers for its predatory attention. A flavour of how it manages to continually expand its ambit is conveyed by the manner in which it addressed the issue of the implementation at Doha.

WTO Director-General Mike Moore in pre-conference remarks, seemed to think it expedient to acknowledge developing country concerns on implementation. But he did so in a thoroughly disingenuous fashion. "Member governments have worked very hard on the issue of implementation and there is a growing recognition that implementation is central to our work. Developing countries have won," said Moore. But the trophy of victory he handed out seemed distinctly like a poisoned chalice: "It is also clear that further efforts to rebalance past agreements in any significant way will require new negotiations. Implementation can thus become another key building block in our future work".

At the time that the ministerial conference of the World Trade Organisation was scheduled to conclude at Doha, capital of the gulf kingdom of Qatar, delegates were bargaining furiously over the declaration that would set the terms for global trade negotiations into the near future. The clock was stopped on the evening of November 13 and the haggling continued late into the night. On the morning of November 14, delegates were presented with another draft declaration by the WTO secretariat, a document that set new a new high in diplomatic effrontery, even by the WTO’s infamous standards.

The November 13 draft declaration had proposed that negotiations could begin within the WTO on government procurement and trade facilitation immediately. On investment and national competition policy, it deferred the decision on opening negotiations to the next ministerial meeting, which would have to be held before the end of 2003. These four issues are collectively known as the "Singapore issues", since the 1996 ministerial meeting of the WTO in Singapore had sanctioned a study programme on them. The developing countries were unhappy with the November 13 draft and did not hesitate to state their reservations about the attempt to rush into negotiations while the study programme remained inconclusive.

Rather than work towards a compromise, the November 14 draft only raised the stakes. It deferred a decision on all four issues, but preempted the question of "whether" negotiations should take place at all, leaving only the decision on "modalities of negotiations" to the next ministerial conference.

Developing countries were outraged. This was altogether too high a price that the European Union was demanding for agreeing to the formulation that export subsidies in agriculture would be "phased out", and the U.S. for conceding that its persistent abuse of anti-dumping rules could be subjected to WTO scrutiny. But the developing country ranks had been divided in the course of the bargaining. The Africa, Caribbean and Pacific (ACP) grouping had won a commitment that a special waiver of WTO rules they enjoyed in exports to E.U. would be sustained. And the least developed countries (LDCs) and the Africa bloc had been assured that they would be given technical and financial assistance that would help them to meaningfully participate in the negotiations on the Singapore issues. This left India well and truly isolated.

Crunch time had arrived and Commerce Minister Murasoli Maran, as the leader of the Indian delegation, informed the conference that India would not be party to a consensus. The next step in the battle engagement called for blocking the process of placing the declaration before the ministerial conference. And finally in the contingency plans that were being hatched in those feverish hours, the Indian delegation would complete its pull-out from Doha, wrecking the pretence that the WTO is a body that invariably functions by consensus.

Finally, it was the conference chairman, Qatar’s minister for industry and commerce, Sheikh Youssef Hussein Kamal, who came up with the formulation that clinched the deal. While placing the declaration before the ministerial conference, Sheikh Kamal issued a clarification of two paragraphs, to the effect that the Singapore issues would be taken up for negotiations after the next ministerial conference only on the basis of a decision to be taken then "by explicit consensus". This meant that each WTO member would be at liberty to take "a position on modalities" that could "prevent negotiations from proceeding … until that Member (was) prepared to join in."

Ironically however, no sooner had the conference concluded than the US delegation began casting doubt over the long-term negotiating consequence of the Chairman’s declaration. The final declaration, said a. trade official, is the "governing document" of the conference. It alone will set the agenda for the future work of the WTO.

Similar polarities in interpretation were also evident on the declaration on agriculture. The Cairns group of major agricultural exporters called it an unequivocal triumph against E.U. recalcitrance. The E.U. likewise claimed victory in having secured the insertion of the clause that the outcome of negotiations in agriculture would not be "pre-judged", i.e., that the "phasing out" of export subsidies could not be taken for granted.

These rather mixed assessments highlight how the WTO agenda is always a work in progress, continually flowing into new areas and ebbing away from others in response to the compelling needs of its most powerful members. A momentary lapse of attention on the part of the developing countries may be all that is required for every manner of inconvenient issue to make its appearance as a full-blown item for negotiations on the WTO’s slate.

With all these risks remaining unabated, it is clear that the gains on the implementation agenda are nowhere near a good bargain for the developing countries. There is an undertaking that geographic indications could be extended to cover products other than wines and spirits. Thus the WTO will be cognisant in future interpretations of the agreement on trade related aspects of intellectual property rights (TRIPS), of not merely the unique territorial associations of cognac and champagne, but also potentially of basmati rice, the alphonso mango and Darjeeling tea. These remain to be negotiated, since the Doha declaration as yet constitutes only a weak mandate.

On TRIPS issues, there is also an acknowledgment that any interpretation which is contrary to the spirit of the Convention on Biological Diversity (CBD) will not be permitted. This provides India with a provisional assurance that biopiracy, like with the recent efforts to take out patents on the curative and medicinal properties of neem and turmeric, will not pass muster. This again, still remains to be fought for.

Little has been gained on the implementation of the Uruguay Round agreement on textiles and clothing (ATC). The advanced countries which maintain restrictive quotas had then agreed most grudgingly to dismantle them in accordance with a back-loaded schedule, i.e., one which defers almost half of the job in quantitative terms, to the year 2005. And secondly, shortly before the agreement came into effect, they notified a number of quota restraints on items that were earlier free of such fetters. This allowed them to pretend that they were dismantling quotas in compliance with the ATC, when they still remained secure in their old ways.

Since Geneva in 1998, the developing countries have kept up the pressure, insisting that the rich nations have not been showing good faith in meeting their commitments under the Uruguay Round. The draft decision on implementation that was circulated prior to the Doha conference embodied five proposals in the area of textiles and clothing. Of these, the only one of interest to the main textiles exporters including India, was one that applied the quota growth rates applicable for the years between now and 2004, retrospectively to the year 2000.

This would have meant immediate export gains for developing countries, estimated in volume terms at an average of 4.37 per cent. Neither of these concessions required an amendment to the ATC. Rather, they only implied that the flexibility available under the agreement would be fully exploited in a gesture of good faith to the developing countries. The U.S. Congress was not prepared to look at the matter in that fashion. When US Trade Representative Robert Zoellick arrived in Doha, he undoubtedly had the admonitions of the U.S. Congress ringing in his ears, insisting that no further concessions be granted in textiles, "beyond those already agreed in the Uruguay Round".

On day two at Doha, the US and Canada, which have generally been adopting similar methodologies in dismantling textiles quotas, placed on record "significant difficulties" in accepting the draft decision on textiles. In bilateral interactions with delegates from other countries, the US and Canada took the plea that the proposal to abolish quotas on an accelerated basis would put many jobs at stake. No such concerns for jobs in developing countries attended their insistence that issues as diverse as investment and competition policy should be part of the WTO agenda.

Subsequent bargaining produced an agreement on referring the entire matter to the Council on Trade in Goods. But the developed countries had yet again squandered an opportunity to restore the faltering confidence of the poorer nations in the WTO. The far more decisive test will come in 2005 - significantly enough, the year following the U.S. presidential elections - when quotas are expected to be finally eliminated.

In relative terms, the only cause for satisfaction for the developing countries at Doha was the declaration on TRIPS and public health. This again was an ambiguous triumph. The draft declaration that was circulated prior to the conference put forward two declaratory options. The first, which was advocated by India, Brazil and other developing countries, declared that "nothing in the TRIPS agreement shall prevent Members from taking measures to protect public health". The second option, promoted in the main by the U.S., was a weaker formulation, which affirmed that Members were at liberty "to use, to the full, the provisions in the TRIPS agreement which provide flexibility to address public health crises such as HIV/AIDS and other pandemics" In a strongly worded address to the ministerial plenary, U.S. Trade Representative Robert Zoellick, likened the clause that India was urging to an effort to "eviscerate" the TRIPS agreement through an exception for "vague ‘public health objectives’." Brazil and India however, were not about to accept the U.S. proposals. "We need a political signal to ensure that we can do what the U.S. and Canada have just done (in providing low-priced doses of antibiotics to combat the anthrax scare)", said Celso Amorim, Brazilian ambassador to the WTO. The significance of this political signal would lie in its future legal and juridical value. And there was little to be gained from a weak declaration that would hobble future juridical interpretations. The formulation that was finally agreed in consultations within a nine-member sub-group, stated that "the TRIPS agreement does not and should not prevent Members from taking measures to protect public health".

Developing countries as also the NGOs that had rendered them invaluable sustenance, were not entirely satisfied. To say that TRIPS "does not" prevent members from protecting public health, they said, is a negation of facts. Similarly they said, to say that the Members "should" utilise all available flexibilities within the TRIPS agreement to safeguard public health, is too weak a formulation, not amounting to a legally binding commitment or obligation. A better formulation would have been couched in the legal and moral imperative of "shall" rather than "should"

After much further bargaining, even the strongest advocates of option one decided to accept the compromise text. It was clearly the most that the US would yield. And secondly, the E.U. had once again sought, in its self-appointed role as the honest broker, to capitalise on the ambivalent situation and push its own self-serving agenda. When developing countries were seeking to confer on Member governments a stronger mandate for overriding drug patents in the public interest, the E.U. proposed a compromise solution which seemed suspiciously akin to the US’s discredited option two. It read: "Having examined the flexibilities of some provisions of the TRIPS agreement we agree that WTO members can use these flexibilities to address public health crises, such as HIV/AIDS without prejudice to the rights and obligations of members".

Further resistance may have only cemented the tacit collusion between the EU and the US in imposing the weakest political mandate on the campaign for essential drugs. And relatively strong language on compulsory licensing made this compromise a viable one in the estimation of many developing country delegations. The Doha declaration confers on every member the right to "grant compulsory licences and the freedom to determine the grounds upon which such licences are granted".

The Doha conference was otherwise notable for the accession of China and Taiwan to the WTO, culminating in the former case, a 15-year process of negotiations that ended last September. The entry of the world’s largest nation is expected to radically alter the internal balance of power in the WTO. Equally crucial would be the demonstration effect that Chinese actions would have. India for instance, has only bound, i.e., accepted binding ceilings on the duties that would be imposed, on about 61 per cent of its tariff lines. And it still maintains a relatively high average bound tariff of 58 per cent on industrial goods. In comparison, China comes on board the WTO with all its tariff lines bound and a commitment to bring down the average bound tariff for industrial products to 8.9 per cent. In future negotiations on market access for industrial goods, the Chinese example is likely to weigh heavily upon India. And since comprehensive negotiations on market access for industrial goods is perhaps the most unambiguous mandate conferred by the Doha conference, the immediate outlook is for a period of wrenching adjustment in Indian industry - not to mention a prolongation of the agony in agriculture.