Business Times (Malaysia) | December 10, 2001 | By Maisara Ismail
DEVELOPING countries will have to prepare themselves for another gruelling battle at the next World Trade Organisation (WTO) ministerial meeting in two years' time.
With the possible inclusion of the new issues for negotiations - investment, competition, trade facilitation and government procurement - the developing nations have to be doubly prepared to make sure the commitments they might be getting into are not damaging for their social and economic standing.
The first of the big battles may start from the conflict that will almost certainly arise between the official declaration of the Doha ministerial meeting and its chairman's statement.
According to the Third World Network president Martin Khor, the text in the official declaration pertaining to the inclusion of the four new issues may be contradictory to the statement of the meeting's chairman.
This comes about when the developing countries voice their disagreement on the wordings of the declaration tabled at the last day of the meeting. Khor said that the text did not meet the agreement that was achieved during the closed-door meeting involving 24 countries that stretches in the last two days of the meeting.
Among the countries participating are the US, the European Union, India, Pakistan, Malaysia, African nations representative Nigeria, least developed countries (LDC) representative Tanzania, and Egypt, among others.
Prior to the ministerial meeting, many of the developing nations voiced their concern about being pressured by the richer counterparts into agreeing to begin negotiations on the new issues.
Many of them did not want to commit to the four new treaties, saying they are not ready, preferring to continue the study process of the possible impact instead.
According to Khor, until Doha, there is no study process to fully understand the impact the new issues would bring.
But after much haggling and struggling, on November 14, the developing nations finally agreed "to recognise the case for four multilateral framework" on the new subjects, meaning that they will agree to discuss, but not necessarily include the new issues for the new negotiation rounds.
"It was not a firm commitment to negotiate. (But while) there was still room for manoeuvre, it was like half-hanging ourselves," said Khor.
However, the declaration document put forward to WTO members for their agreement on November 14 stated something different, which Khor described as a trick from the side of WTO secretariat and developed nations that were pushing the new issues.
The text regarding all the new issues reads, "We agree that negotiations will take place after the 5th Ministerial Conference on the basis of a decision to be taken, by explicit consensus, at that Session, on modalities of negotiation".
Khor pointed out that by adding the word "modalities" before "negotiation", the declaration is basically saying that a consensus is to be achieved on the modalities of negotiation - the timeframe, scope - and at the same time implying the inclusion of the new subjects has already been agreed upon.
"This text implied the principle for negotiation of the new treaties is already excepted, and by signing this, the countries would inadvertently agree to include the new issues for negotiation and the consensus would only be needed to determine its modalities," said Khor.
"This is a major setback to the efforts of developing countries, as (inclusion of the new subjects) is exactly what we were trying to stop."
As a result, in the last session of the conference, India spoke up, supported by 14 other counties, saying that the draft does not meet what they have proposed in the meeting. They requested further clarification with regard to explicit consensus being needed. Some asked for the word "modalities" to be removed.
In the end, a compromise was worked out between the countries.
While the Doha declaration remained the way it was, the chairman of the ministerial conference, Yusuf Hussain Kamal who is also Qatari's Finance Minister, made further clarification on the "explicit consensus" needed in his closing statement.
"... my understanding is that, at (the 5th Session of the Ministerial Conference), a decision would indeed need to be taken by explicit consensus, before negotiations on trade and investment and trade and competition policy, transparency in government procurement, and trade facilitation could proceed," he said in his closing statement.
"In my view, this would also give each member the right to take a position on modalities that would prevent negotiations from proceeding after the 5th Session of the Ministerial Conference until that member is prepared to join in an explicit consensus."
Taking the chairman's statement, this would mean the four new issues would only be opened for negotiations in the next ministerial if they get a consensus agreement from WTO members to start negotiating, as opposed to a consensus just on the modalities of the negotiations as stated in the declaration.
But Khor said this may just cause a conflict, because while the chairman's statement may win some points for those who are not keen to include new issues, it may not have the same legal weight as the official declaration.
"Politically, the chairman's statement carries substantial weight, but the developing countries still lost a lot of ground from the declaration," said Khor.
The countries that favour the inclusion of these new issues might refer strictly to the official declaration, while the countries opposing to it may choose to uphold the chairman's statement.
Even if the chairman's statement is accepted by all, the threat of the new issues is now very imminent, as they are already included in the agenda for the next ministerial.
"For the next two years, we would need to get all our knowledge, skill and negotiating ability together and work to fully understand what implications these issues will have on our future," said Khor.
He said the developing countries need to have discussions to ensure as much as possible that they will not face threats on their economic and social standing, and if the new issues are adopted, it will come with a set of contents that does not do damage to the countries.
Some of the more advanced countries are pushing for the removal of trade barriers in the four new areas as it will allow them greater market access, but developing countries, including Malaysia, view this as something dangerous.
For all the new issues, the main thrust is a same treatment given to the local and foreign companies.
Khor earlier said that the rules could restrict the rights of the Government in making domestic economic and social policies, as the Government's laws and private sector's decision have to conform to a certain outside principle.
The Government would be prohibited from favouring local companies over the foreign ones, for instance, in the case of buying supplies, or concessions of government projects, even as a means to stimulate domestic economy.
"Even an interim agreement on transparency in the government procurement would result in tremendous administration and judicial changes and headaches," he said.
Developing nations are often at a disadvantage as they do not have the same resources as the developed countries, with some countries cannot even afford trips for negotiations in Geneva. But this time, the countries need to be extremely prepared.
"We need to formulate our own reasons on why it is our development rights not to accept the proposed piece, and for us to prepare the alternative proposal and principle of our own."
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