Monday October 1, 2012
Divided WTO at a crossroads
By MARTIN KHOR
A panel of developing country ambassadors recently discussed problems with WTO talks and what they expect will follow.
MANY world leaders are still calling for the successful conclusion of the stalled Doha negotiations at the World Trade Organisation. But these calls have not succeeded, and a debate is growing on the WTO’s future role.
Last week these issues were aired at a session I chaired at the WTO’s Public Forum in Geneva.
The Sept 26 session on “Doha and the Multilateral Trade System: From Impasse to Development?” was organised by the Our World Is Not for Sale (OWISFS) network, the International Trade Union Confederation, the Third World Network, and the South Centre as part of the WTO’s three-day annual forum debating topical issues in multiple discussions.
In my introduction, I commented that the impasse in the Doha talks, launched in 2001, had been due to a fundamental conflict since the birth of the WTO in 1995.
The developing countries felt at the end of the Uruguay Round (which led to the WTO’s formation) that WTO rules were unfairly tilted in favour of developed countries, and they wanted to review and reform them to make the WTO more development-friendly as well as to get developed countries to cut their heavy protection in agriculture.
However, the developed countries, which had succeeded in bringing non-trade issues like intellectual property and services into the trading system, were not interested in the proposed reform.
They wanted to push the WTO into taking on even more treaties and rules on new issues such as investment, competition and government procurement, as well as to continue opening markets in developing countries while protecting their own agricultural sector.
Although the Doha Round was supposed to promote the developing countries’ interests, most development aspects had been eliminated or marginalised in the past decade. Meanwhile, developed countries kept insisting on opening the markets of developing countries, especially in industrial products and services.
In recent years, the United States made increasingly extreme demands that could not be accepted by key developing countries, resulting in the present deadlock.
The WTO is now at a crossroads, as to whether it should focus on the unfinished agriculture and development issues, or ignore these and instead create new rules on yet more new issues that would make the system even more unbalanced.
India’s ambassador to the WTO, Jayant Dasgupta, said developed countries were now aggressively pushing new rules in trade facilitation which would result mainly in facilitating more imports into rather than exports from developing countries. That would also be costly, and the promised funding is not forthcoming.
The developed countries were also pushing for other new ways to open up developing countries’ industrial markets, through a second Information Technology Agreement and tariff elimination of what is termed environmental goods, with a wide definition of both, thus involving many sectors and goods.
And after that, we can expect more pressures to negotiate new issues in the agenda for a new round, the ambassador said. At the same time, the developed countries would not accept cuts in their agricultural subsidies or providing greater market access, thus their proposals would lead to even more unfairness.
Dasgupta stressed that the WTO faced a real crisis of reconciling the different demands and ambitions of countries which have up to US$80,000 (RM244,456) per capita income and those with as low as US$500 (RM1,528) per capita income.
“How do we reconcile these? How do we reconcile the development needs, the aspirations, the pressing need of providing employment? We need to look at trade not only from the mercantilist angle of more profits but through the prism of social justice,” he said.
Ambassador Angelica Navarro of Bolivia advocated a fair, balanced multilateralism where everyone had a say on an equal footing, but the reality is quite different.
“We started this century with a mirage, the idea of development and re-balancing the trade system at the centre of the WTO, but now we realise that those promises were nothing more than a means to ensure greater opening of our markets,” she said.
In her view, the impasse is due to the lack of a political will to ensure that the multilateral trade system is adjusted in favour of the poorest.
Trade agreements, she said, must not impose conditions with adverse effects on human rights and the environment or bring an end to the values of our societies.
Ambassador Faizel Ismail of South Africa gave a critique of the concept of Global Value Chains advocated in the WTO by those who wanted to promote further trade liberalisation in developing countries.
He said this argument was flawed and did not offer a way out of the current crisis. He proposed a different dialogue to base the system on fair trade, equal opportunities, and building the developing countries’ capacity to produce and export.
The rules should be fair and allow for development, he said. They should not close off opportunities for development and policy space, but should be inclusive and allow for the participation of countries.
He criticised the promotion of the plurilateral route, where some countries negotiate new rules and then try to impose these on the rest. This was not a correct principle for multilateralism, he stressed.
Other speakers on the panel were Andrew Cornford, a finance expert concerned about how the WTO’s services rules might hinder countries from having stronger financial regulations needed in the crisis.
Deborah James of the OWISFS network called for mechanisms for developing countries and development-oriented NGOs to participate in discussions on the future of the trade system, instead of giving opportunities mainly to leaders of big business concerns.