WTO: Trade warriors under heavy fire

Issue 

BY SEAN HEALY

While the choice of an autocratic Persian Gulf shiekdom as venue will prevent a repeat of the massive protests which dogged its 1999 Seattle summit, trade negotiators from the world's richest nations are in for no less stormy a time at the Qatar ministerial meeting of the World Trade Organisation, which begins on November 9.

Third World governments and non-government organisations have expressed shock and outrage at a draft declaration which was supposed to bridge the enormous gaps between WTO members over the content of, or even the need for, a new round of trade liberalisation talks. Debate at the summit over the declaration and its attached annexes is likely to be acrimonious and could easily break down.

After two years of still-unsuccessful arm-twisting and cajoling to get Third World countries to back a new round, and even after seeking to use the "war on terrorism" to their advantage in trade talks, the world's most powerful countries, led by the United States, have no more than a 50/50 chance of being successful in Qatar.

WTO director-general Mike Moore has admitted that, if Qatar fails to launch a new round, the WTO is threatened with "irrelevance".

At the heart of the dispute is the priority focus of any new round.

Most Third World countries want it to be a "development round", focussed on what in WTO-speak is called "implementation issues" — fixing the North-South imbalances in the existing WTO agreements and making them less onerous and restrictive for the underdeveloped world.

Some countries, such as the Like-Minded Group led by India, Malaysia and Pakistan, have been opposed to a new round altogether, saying that the "implementation issues" should be dealt with beforehand.

But the powerful quad — the United States, the European Union, Japan and Canada — wants a round to focus on the so-called "Singapore issues" — issues which haven't previously been on the WTO's agenda, including new rules on investment, competition policy and government procurement.

There are also strong demands, from the US but also from the Cairns group of agriculture-exporting countries (which includes Australia), for more negotiations on phasing out, or even eliminating altogether, certain categories of agricultural protections, such as export subsidies.

The second draft declaration, released by WTO General Council chairperson Stuart Harbinson on October 27, was supposed to bridge these gaps — but seems to have failed.

Third World governments are anything but happy with it. In the first official response by a Third World country, Nigeria criticised the draft as being "unsatisfactory because it is one-sided" and as "show[ing] not much regard for our countries".

At a General Council discussion of it in Geneva on October 31, some countries were so infuriated with it that they walked out of the meeting, while Harbinson did likewise during a meeting with the Like-Minded Group after a full and frank exchange of views.

The declaration's treatment of implementation issues has been the most heavily criticised aspect of the draft: they have been largely taken out of the declaration itself, and instead placed in another, separate annexe. Many Third World observers believe the relegation of implementation issues to a secondary document is likely to sideline them once the round gets underway.

Making matters worse, the separate annexe includes few concessions of any substance. For example, a long-standing demand that poor countries be allowed to protect their food security by being able to designate certain forms of agricultural protection as "green box" measures, and therefore safe from challenge, has found its way into the text as a proviso which "urges members to exercise restraint in challenging [such] measures".

Many of the most keenly sought Third World proposals are not in the draft annexe and are consigned to a separate "compilation" document which will be considered by WTO committees at some point in the future.

On this list are amendments to agreements which would ban patents on life-forms, restrict Western use of "anti-dumping" measures against Southern imports and introduce a near-blanket Third World exemption from the highly restrictive terms of the Agreement on Trade-Related Investment Measures.

Similarly controversial with many Third World countries is the treatment of their demands on the Agreement on Trade-Related Intellectual Property Rights (TRIPS). Brazil, India and African nations have sought a "clarification" that TRIPS' protection of pharmaceutical companies' patents cannot stop countries from taking public health measures such as mass-producing patented anti-AIDS drugs. The US and Switzerland are refusing any such amendment.

The rich nations, meanwhile, are more than happy with the Harbinson draft, especially as it accords pride of place to the deeply controversial "Singapore issues", such as investment and competition policy.

With the outcome of the Qatar summit evenly poised, Western governments led by the US are seeking desperately to split opposition to the round.

In an effort to make the bitter pill of negotiations on the "Singapore issues" easier to swallow, for example, Harbinson has advanced a two-stage "opt-in, opt-out" process.

Under the procedure, all-member WTO committees on investment and competition policy would spend the next two years, until the Fifth Ministerial, "clarifying elements of a possible multilateral treaty". At the end of that period, members would have the choice as to whether to opt in or opt out of formal negotiations on such a treaty.

The proposal is cleverly designed to neutralise opponents: they can always choose to opt out. But some analysts have warned that the proposal is a trap.

Writing for the Third World Network, Bhagirath Lal Das argues that countries that opt out initially may soon be forced to opt back in: either by the International Monetary Fund, as a stipulation in a future structural adjustment plan, or by international creditors, who may charge higher rates of interest to those who haven't signed such a treaty.

Further, talks on investment and competition policy would widen the WTO's already great powers, something to be avoided at all costs, Das urges.

This strategy, described by some Third World countries as "divide and conquer", seems to have already had some success. Brazil and other Latin American countries have begun to signal support for the "Singapore issues", viewing concessions on them as useful leverage to gain in negotiations on agriculture.

Meanwhile, two of the strongest critics of the round, Malaysia and Pakistan, also seem to have softened, leaving India as the main country opposing a new round altogether. Malaysia has signalled that it may support the "Singapore issues" if they include "opt-out" clauses, while Pakistan has been notably quiet on WTO issues since the start of the US "war on terrorism" and the attached financial aid to the country's military regime.

If the rich nations are able to launch a new round at Qatar, it would certainly be a considerable victory: with 16 topics covered by the Harbinson draft, such a round would be even larger in scope than the Uruguay Round from 1986-94, which formed the WTO.

But world public attention on a body which hardly anyone had heard of at its formation in 1995 has now never been greater, the Third World's capacity and will to resist the imperialist powers is much stronger than before Seattle and, even in spite of the repressive venue of the summit, protests are expected all around the world from November 9.

If the rich countries fail in Qatar, it may set them back years, but even if they succeed, they may find their problems only just beginning.

From Green Left Weekly, November 7, 2001.
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