IBON Reach Expansion Department, ibonred@info.com.ph
IBON Features #44
Through manipulation and blackmail, developed countries have managed to use the recently concluded WTO conference to extract more liberalization commitments from third world countries.
By Jennifer del Rosario-Malonzo
(IBON Features) - Despite efforts to cloud the issue, developed countries led by the United States and the European Union successfully launched a new round of trade talks at the World Trade Organization (WTO) Fourth Ministerial Conference in Doha, Qatar, a month ago.
Although the WTO refrained from calling it a round, the Ministerial Declaration's "work programme" practically amounts to the same thing. People's and nongovernment organizations observed that through brazen techniques such as the widely criticized "Green Room," developed countries were able to extract more liberalization commitments from third world delegations.
Initially, underdeveloped countries rejected the demands of the US and EU and insisted on reviews of existing agreements. Observers say that their resistance was eventually crushed because of manipulation and blackmail.
First World vs. Third World
Long before Doha, the US and the EU were pushing to transform the WTO Fourth Ministerial Conference into a comprehensive new round with so-called new issues like investment, competition policy, government procurement, and trade facilitation, among others.
Meanwhile, many third world governments were demanding an assessment and overhaul of the trading system. They were very vocal about their concerns on the implementation of existing agreements and their opposition to another round of talks to liberalize more economic sectors.
The first draft of the Ministerial Declaration, prepared by WTO General Council Chairman Stuart Harbinson, and a draft decision on implementation-related issues, prepared by Harbinson and WTO Director-General Mike Moore, drew flak from underdeveloped countries and nongovernment organizations.
The draft declaration was "cleverly worded but highly imbalanced" and in effect proposed to launch a new round more massive than Uruguay. On the other hand, the draft decision on implementation was replete with promises and nothing else.
Succeeding drafts angered many governments because their suggestions for changes had been clearly disregarded. Finally, despite strong objections from several third world countries, Harbinson sent the drafts to Doha even without consensus.
Philippine stand
The Cairns Group and ASEAN, both of which the Philippines belongs to, argued for "progress" in agricultural trade reforms by removing provisions that have allowed production and trade-distorting support by developed countries. Cairns gave various submissions on market access, export subsidies and domestic support.
But one analyst noted that countries belonging to Cairns went to Doha knowing they would only be successful to whatever extent if they accepted a new round. This included trade-offs in other sectors that their major counterparts in agriculture negotiations were eyeing.
Thus, they were practically prepared to give in on intellectual property (TRIPS), services, investments, competition, etc., in exchange for the US's and EU's commitments on subsidies and market access for agricultural products.
Such is not anymore surprising because most governments of underdeveloped countries, being representatives of the ruling elite, are really more interested in getting the best possible deal from major players in corporate globalization than in protecting the people's interests.
'Development Round'
The Philippine delegation swallowed the US' "Development Round" scheme hook, line and sinker. It was the US who promoted the concept of a Development Agenda, which developing countries supportive of a new round mouthed to counter local opposition. The EU also used the line in an effort to project a positive image for its aggressive campaign for a new round.
In a statement read by Philippines' Trade and Industry Secretary Manuel Roxas II during the session, he called the Ministerial the "Doha Round." According to him, the challenge was to make it "truly a Development Round."
Despite strong protests back home, which called for radical changes in the trading system, Secretary Roxas merely asked for "negotiations which provide safety nets." And contrary to the clamor to take out WTO from Philippine agriculture, he called for the "full integration of agriculture into the WTO framework."
The struggle against a round
Many underdeveloped countries stood up against the launching of a new round, and especially against the four Singapore issues (investment, competition, government procurement and trade facilitation). India, Pakistan, Malaysia and Indonesia were among those who spoke up against starting negotiations.
The Africa Group, the least developed countries (LDCs), and the African, Caribbean and Pacific (ACP) countries voiced their objections even at the November 13 heads-of-delegation meeting and put forward a joint proposal for an alternative draft saying the study process should continue and negotiations should not begin.
But things changed overnight; the notorious "Green Room" happened. Only 20 countries were invited to the "informal meeting" which lasted from 9 p.m. of November 13 to around 4-5 a.m. of November 14.
By the next day, a number of developing countries had been "neutralized" so they would not oppose another new draft Declaration which critics said was far worse than the previous day's. But even then, at the final heads-of-delegation plenary, India, Jamaica and at least 10 other countries spoke up against the language of the new issues. They wanted to clarify that the Fifth Ministerial will decide whether negotiations would start (and not just what kind of modalities).
However, it was only India that said it would withhold consensus of the whole Declaration if its suggestions for changes were not accepted. In the end, the compromise was the Chairman's "Understanding" that indeed the Fifth Ministerial will decide on consensus basis whether negotiations would begin, and that any member could prevent consensus.
Many concerned organizations believe that this compromise amounts to nothing as the US and EU can argue that the Chairman's Understanding does not carry legal weight compared with the Ministerial Declaration.
A new round is launched
The final draft of the Ministerial Declaration, which emerged in the early hours of November 14, essentially launches a new round of trade negotiations although developing countries, which constitute majority of the WTO members, consistently rejected such a round.
As tired delegations left Doha after six days of hectic, confusing and heated negotiations, it was clear to third world countries that the WTO is definitely dictated by the interests of powerful countries, especially the Quad (EU, US, Japan and Canada).
The declaration refers to it as merely a work program, but the requisites of launching a new round are all present. For instance, negotiating mandates on various subjects have been elaborated and the traditional mechanism that goes with the start of a new round (the establishment of a "Trade Negotiations Committee" to supervise and direct the process of negotiations) has been provided. Furthermore, the entire negotiations will be treated as a "single undertaking."
On TRIPS
Critics say the decision on the Agreement on Trade-Related Intellectual Property Rights (TRIPS) and Public Health is hardly a victory for underdeveloped countries. Although it is being trumpeted as such, the resolution did not offer anything that would redress the inherent imbalances and inequities stacked against the Third World.
While it was recognized that there was nothing in the TRIPS that would prevent countries from taking measures to promote public health, there is no commitment to change anything in the TRIPS, which can only serve as basis for future legal challenges to countries that override patents in the interest of the people's health.
In addition, there is no commitment to revise the TRIPS to outlaw biopiracy and patents on life - a major concern of third world countries.
In the face of a growing campaign to take out intellectual property from the clout of the WTO, the so-called "success" only amounts to palliative action by developed countries that benefit from keeping the intellectual property issue within the trade body in the guise of it being "trade-related."
On GATS
In spite of widespread critique of the General Agreement on Trade in Services (GATS), the WTO has decided that the current negotiations that are part of the built-in agenda will continue.
Many third world countries have called for an assessment before they commit more services sectors to liberalization. Once again, their demands have been pushed aside to give way to the interests of the US and EU who wanted further commitments in the GATS.
The decision also disregards the issues raised by the United Nations Commission on Human Rights (UNCHR). The UNCHR is in the process of reporting on the human rights implications of trade in services. It raised the importance of delivery of basic services, particularly health and education, as a means of promoting human rights, and the adverse implications of liberalization and market-oriented approach.
On AoA
In agriculture, again there is hardly anything except feeble language, such as the willingness "to take into account" the "development needs, including food security and rural development." Indeed, negotiations on the Agreement on Agriculture (AoA) will continue to be focused on removing so-called trade distortions - meaning, extracting more liberalization commitments from underdeveloped countries.
On the other hand, the EU emphasized that the outcome of negotiations on reducing their subsidies on agriculture will not be prejudged. The EU, as well as Japan, South Korea, Switzerland, Norway and the US maintain systems of heavy state subsidies for their farming sectors.
Furthermore, members were only "urged" to restrain from using the Green Box, which allows developed countries to support domestic producers. This results in artificially reduced market price and thus paves the way for export dumping.
On "Singapore Issues"
The work program on the four Singapore issues already entails "pre-negotiations." As the Doha Declaration states, "we agree that negotiations will take place after the Fifth Session of the Ministerial Conference on the basis of decision to be taken, by explicit consensus, at that Session on modalities of negotiations."
Preliminary work on negotiations detailing the aspects of the to-be-negotiated agreements in investments, competition policy, government procurement, and trade facilitation will already start. This means that by the Fifth Ministerial, a working outline or perhaps even the draft texts of the agreements will already be finished or substantially advanced.
On implementation issues and the "Development Agenda"
Contrary to the claims of the US and EU, Doha did not launch a "development round." There was just a noncommittal acknowledgment of the need to review implementation issues, the main agenda of developing countries in Doha. Even the demand for a "development box" to promote food security and development, pushed by a number of developing countries, was completely ignored.
More important, the bulk of implementation issues, whose satisfactory solution developing countries had insisted upon as a precondition for any new negotiations, have been incorporated as part of the new negotiations. Clearly, trade-offs would have to be made, i.e., access for agricultural goods in exchange for commitments on the Singapore issues.
Moreover, developed countries did not give any commitment on access for developing countries' exports of textile products. There is no commitment to an early phaseout of textile and garment quotas because the US adamantly refused it. The issue of abuse of antidumping provisions as neoprotectionist measures has been made part of the new negotiations with little or no flexibility for reopening basic elements of the existing instruments currently being used by the US.
Other new issues
Other new issues were also touched such as "core labor standards" (so-called social clause) and electronic commerce.
It was noted that the declaration does not say that the International Labor Organization (ILO) is the appropriate forum for a substantive dialogue on labor rights and thus implies that the WTO could bring up the issue later.
On e-commerce, the zero-duty commitment, which the US had extracted earlier from the rest of the countries, has been extended until the next ministerial meeting. This means that foreign competition can still virtually come in even in sectors not yet officially liberalized.
Battle continues
Concerned groups and social movements critical of the WTO say that instead of dampening the spirit of dissent and clamor for critical change, the Doha Round serves to focus their energy to core issues at the trade organization.
Among the important issues to be addressed are the fight to take out intellectual property, the assessment and change of damaging agreements such as the General Agreement on Trade in Services, the battle to take WTO out of agriculture and to prevent the trade body from expanding further.:
