There’s Both Good And Bad News From Geneva

Published: Financial Times, August 26, 2002
By Pradeep S Mehta

When the WTO went into summer recess end of July there were some good news and a few bad ones. First, the good news. The US President got the Trade Promotion (fast track) Authority to negotiate trade pacts, not only at the WTO but also other bilateral agreements and a regional one involving both South and North America. It’s unfortunate that the trade world revolves around the US, but that is realpolitik. With such a tool, the US President can negotiate a trade deal, which can either be approved as it is or rejected in its entirety by the US Congress. Fortunately, the other big economic power – the EU – doesn’t have this kind of check.

It’s the lack of a TPA that the US trade negotiators pussyfoot around, as they are never too sure of what they will be able to commit to. Getting the TPA itself was an arduous task for the US Administration. Basically, there are strong textile and steel lobbies in the US which are not prepared to reconcile to even fair competition from abroad. That’s the reason when the TPA was being debated, these lobbies wanted that the same be granted on a conditional basis, i.e., with a carve-out on trade remedial measures. That would have meant that there would be no negotiations, even though it was agreed at Doha that the applicability of trade remedial measures, such as anti-dumping and safeguards on a special and differential basis to exports of developing countries, should be clarified. More on this later.

The other good news was the end of Mike Moore’s term and the coming in of Supachai Panitchpakdi, the former Thai deputy minister, as soon as the summer recess ends. Developing countries expect a more sympathetic Director- General, as Moore has been pushing a very partisan view.

Even before Supachai joined, he went hammer and tongs at multinationals. He suggested that there should be a code of conduct to regulate their undue influence on the world trading body. “Supachai can afford the luxury of making such statements until he actually becomes the WTO DG”, commented Pascal Lamy, the EU trade supremo. We hope that Supachai will act on his desires, as it would certainly restore the confidence of a large number of civil society actors, who are plainly against globalisation as they feel it is the MNCs who are gaining much more than people. That was at the heart of the street demos during the Seattle ministerial conference. Now the bad news. In my column on this page (Aug 5), I had written that the rich countries have been dragging their feet on negotiating the issue of implementation, an issue that is close to India’s heart. At Doha, the WTO members signed a separate declaration on implementation issues. It was agreed that the Committee on Trade and Devel-opment would come up with recommendations to be placed before the General Council on July 31, the last working day before the recess. That did not happen and the matter has now been dragged until the 2002 end.

At the July 31 General Council session, developing countries noted their disappointment in missing the Doha-mandated target of reporting “with clear recommendations for a decision by July 2002” on the review of special and differential treatment. United in their feelings of frustration on the perceived lack of will to move this agenda item forward, they proved that they are able to withstand attempts by a number of developed countries to push the new timeline into 2003. The EC had initially attempted to force a March 31, 2003 deadline (thus aligning this issue with the agriculture and services negotiations).

That was not the only battle at the July 31 General Council meeting. A continuing rift over textiles liberalisation also featured heavily, leaving developing countries asking where the ‘development’ aspect had gone from the so-called ‘Doha Development Agenda’ and dampening hopes on progress in other WTO negotiating areas.

According to the negotiating mandate agreed to in Doha last November, the Chair of the Council for Trade in Goods (CTG) was to have made recommendations to the General Council by the end of July for action on freeing up import restrictions – principally growth in quota levels – on textiles and clothing in importing countries (primarily the Canada, the EC and the US). Textiles and clothing are products of major export interest to many developing countries, which are the demandeurs in this area.

Ambassador Stuart Harbins-on (Hong Kong, China), on behalf of the textile exporting members, called the textile debate in the CTG “a charade”, and demanded redress for the lack of meaningful benefits from the ATC to developing countries. He cited the decreasing share of industrialised countries in the textile and clothing import total of the US, unjustified anti-dumping actions, and changes in the rules of origin as hurting developing countries.

India’s delegate, Ambassador K M Chandrasekhar, who joined him, said “the Doha work programme constitutes an overall package, with an emphasis on development. The message that is coming out is that the development message is being jettisoned”. He continued, saying, “If the development aspects are sidelined…it will inevitably have an impact on other aspects. Any attempt to drive the work programme forward at two speeds would lead to an unravelling of the package”.

More fireworks are expected when the WTO resumes in September after the summer recess, and the war will go on until the Cancun summit, which will take place just one year later.

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