Published: The Financial Express, November 19, 2002
By Pradeep S Mehta
“The World Trade Organisation (WTO) is like a bicycle, which collapses, if it does not move forward”, said, C. Fred Bergsten, a noted trade expert. It did happen once when the Seattle fiasco happened in 1999. The successful conclusion of Doha Ministerial Conference last year brought it upright. But due to lack of progress in negotiations over the last one-year on several fronts, the ’bicycle’ seems to be losing its balance (if not collapsing) once again.
To seek solutions to some of the problems, trade ministers from twenty-five countries (seventeen of them are developing countries, including India), representing a comprehensive cross-section of regions, levels of development and interest groups, and the new WTO Director-General Dr. Supachai Panitchpakdi met at Sydney in a “Mini-ministerial” on 14/15 November. Whether they were able to provide the necessary momentum required to carry forward the Doha round of trade negotiations is suspect.
Australia had called the ’Mini-ministerial’ session to tackle sticking points in the WTO’s so-called Doha Development Round, which began a year ago and are due to end in 2005. The Australian trade minister Mark Vaile observed that the meeting is about reconciling positions so that we can provide the political momentum for the process to move forward in Geneva.
The meeting had two primary aims: to agree on ways for developing nations to gain access to low-cost drugs for HIV/AIDS and other diseases, and to press key agricultural producers like the European Union (EU) and Japan to cut farm subsidies.
On the issue of cheap medicines, the main campaigners: Oxfam and Medicines Sans Frontieres were quite disillusioned with the outcome. “This is a setback in the fight to put public health before corporate profit, but the battle is not over”, said their press release. “Many people in the Third World were hoping that Sydney will act in the spirit of WTO commitments made at Doha. As it is, they have been disappointed to see their trade ministers pressured by powerful countries into accepting a political fudge in a behind-the-closed-doors meeting”.
Just on the eve of Sydney “Mini-,ministerial”, the EU had come out with a controversial proposal on Trade-related intellectual properties (TRIPs), which tried to force a limited and narrow solution to the issues raised in paragraph 6 of the Doha Declaration on TRIPs and public health. The EU proposal states that any exemption to existing TRIPs rules should be limited to the production of medicines “where the gravity of public health problems afflict developing and least-developed countries, especially those resulting from HIV/AIDS, tuberculosis, malaria and other epidemics”.
The proposal further adds that countries benefiting from the exemption should only cover least developed countries (LDCs) and developing countries classified as low income economies by the World Bank. The proposal aims to bar high-income developing countries such as Brazil from benefiting from the new rules unless they faced a national emergency. This would also completely exclude other high-income countries such as South Africa, India, Thailand, China, Egypt, Hungary and Singapore. These countries argue that the attempt to differentiate among the potential beneficiary countries is an attempt to rewrite the mandate agreed to by the ministers in Doha for these negotiations.
But this ploy is not surprising as on many occasions such tactics have been used to divide the developing world.
In a true sense it seems that developed countries do not have good intentions towards the fruitful implementation of the Doha mandate. This is clear from US assistant trade representative Rosa Whitaker’s letter to African governments on Doha paragraph 6 negotiations. USTR was asking (pressuring) African countries to support a narrow ’solution’ to paragraph 6 that excludes most diseases and most countries.
As regards agriculture, the overarching focus of the Doha round, the issue took a back seat, without any signs of reprieve from either side. The deal between France and Germany on the eve of the Brussels summit had sunk even the little hope of reforming the Common Agriculture Policy (CAP) in the near future. Following this, the EU has agreed to cap the agricultural spending (nearly half its total budget) at 2006 levels until 2013. But the deal effectively froze reform proposals until 2006 as well.
It is a victory for France, a defeat for pro-reform countries including Britain and a personal snub for Tony Blair. It is a setback for countries who are about to join the EU and for millions of impoverished farmers in the developing world. It threatens the viability of the current round of WTO trade liberalisation talks. Central to the Doha declaration are pledges by rich countries to stop the subsidised dumping of surplus production on world markets and start opening up their markets to developing countries’ agricultural exports. With the US recently passing a highly protectionist new farm bill and Europe agreeing to maintain its farm subsidies for the next 10 years, developing countries have every reason to feel let down, rather badly.
The EU’s position further strengthened when Japan came out with its plan to propose an increase in the number of agricultural products subject to emergency import curbs by all WTO members. Japan will make the proposal at a special WTO session on agricultural products, starting November 18 in Geneva, as per government sources.
Such type of provision is prone to be misused by both developed as well as developing countries. Japan’s proposal is expected to face opposition from big agricultural exporters such as the Unites States and Australia, which have already proposed sharp tariff reductions for farm products to the WTO.
Meanwhile, the 18-country Cairns group in their ministerial meeting, which was held at Bolivia last month, reaffirmed that there would be no progress on the Doha round unless there was an acceptable result for agriculture. Ministers pointed out that the absence of proposals from key negotiating partners (EU and Japan) greatly complicated the negotiating process. The group has already submitted two negotiating proposals on market access and domestic support. They supported the US proposal of cutting down tariffs significantly by applying the “Swiss-formula”.
Other matters, such as tariff peaks, tariff escalation etc were also raised at the meeting. The 20 yard movement on TRIPs and public health may have reduced some tensions, especially coming from the civil society. But the major issues of market access and trade and development to solve some of the deep-rooted problems of the world trading system were not addressed substantially except in ministerial speeches. “Ministers had a useful exchange of views on ’bread and butter’, but still vital issues of improved market opening for agricultural products, industrial goods and services”, noted the EU press release issued after the meeting, rather lazily, but asserted: “The DDA is a single undertaking and underlined the commitment adopted at Doha to begin negotiations after the Cancun Ministerial in September, 2003”.The world had some hopes from this meeting, but the glass does not even appear to be half-full.