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Tale of Two Approaches – the WTO Torn Asunder?

Ravi Kanth Devarakonda

GENEVA, Mar 24 2012 (IPS) - Trade envoys of India, Brazil, and South Africa have warned industrialised countries not to hijack the Doha multilateral trade negotiations by adopting the controversial plurilateral approach to liberalise trade in services.

A plurilateral agreement allows member countries to voluntarily agree to new rules. In contrast, in a multilateral agreement all members have to be in agreement.

This, they say, could ultimately undermine “the possibility of resuscitating the Doha Round.” The Doha Development Agenda was launched almost 11 years ago to correct the historical imbalances and asymmetries in the global trading system and was designed to enable poorer countries to integrate into the system.

A closed-door Enchilada meeting was convened on Mar. 21 by the chair for Doha services trade negotiations, Ambassador Fernando de Mateo of Mexico. According to sources present at the meeting, the trading bloc known as IBSA (India, Brazil, South Africa) stated that while they are willing to explore new approaches to advance the Doha trade negotiations towards an early outcome, they would oppose any attempt to weaken the multilateral negotiations.

Over the last three years, the industrialised countries have changed the terms of the Doha negotiations without addressing the central issues. They seem determined to extract a high price involving steep cuts on industrial goods and sweeping market access for services from the four developing countries – China, India, Brazil, and South Africa – for meagre concessions to reduce their subsidies and market access for agriculture products.

The Enchilada provided the first encounter between industrialised countries and the IBSA countries in the face of sustained attempts by 16 industrialised and some developing countries to part with the Doha trade negotiations.


Thirty-three countries were invited to the Enchilada including: the United States, Argentina, Australia, Brazil, Canada, Chile, China, the European Union, India, and Singapore among others.

De Mateo said that it is important to fully explore different negotiating approaches based on the guidance provided by trade ministers at the eighth ministerial meeting of the World Trade Organization (WTO), while respecting the principles of transparency and inclusiveness. He said it is important to advance negotiations where progress can be made and asked the participants to suggest whether a plurilateral approach can be adopted to do this.

The three IBSA members warned that the existing methodology of negotiations, which involved inclusiveness and transparency, must not be replaced by an exclusive format of plurilateral negotiations involving select members.

“We are willing to explore new approaches to reinvigorate the Doha Round as directed by ministers at the WTO’s eighth ministerial meeting, but this has to take place within the framework of multilateralism, inclusiveness and full transparency based on the Doha mandate which has stipulated that negotiations to be conducted on the basis of Single Undertaking,” South Africa’s trade envoy Ambassador Faizel Ismail told IPS.

The Doha Round was launched on the basis of single undertaking in 2001 to enable the WTO members to address all the issues across- agriculture, industrial goods, services, rules, environment, and intellectual property rights – on a fair and balanced framework.

But the negotiations are facing a grave impasse due to untenable demands raised by some industrialised countries in market access for industrial goods. Trade ministers have repeatedly called for concluding the round based on a “fair and balanced” outcome that members could live without much pain.

However, powerful domestic lobbies in some major industrialised countries have raised the bar exceedingly high in areas like industrial goods and services beyond what is prescribed in the Doha mandate while turning their back on agriculture and movement of short-term services providers as demanded by developing countries.

At the WTO’s eighth ministerial meeting, ministers asked their envoys to explore new approaches to overcome the prolonged impasse in the Doha negotiations. But, the industrialised countries, along with some developing countries like Singapore, Colombia, South Korea, Hong Kong, Mexico, and Chile, are insisting on plurilateral negotiations that would exclude the participation of majority of countries.

The South African envoy argued that “the so-called plurilateral approached that has been proposed by some of the major developed countries is designed to raise the level of ambition beyond the capacity of the majority of developing countries and to change the existing methodology of negotiations of trade in serves as a stand-alone issue.”

“Any attempt to create new approaches would have the effect of undermining the Doha Round and further marginalising the smaller and poorer countries at the WTO,” he said.

Brazil’s trade envoy Ambassador Roberto Azevedo said, according to sources at the Enchilada meeting, that his country is ready to work on any multilateral approach in the context of the Doha Round that could make progress and help conclude the Round.

“Market access is an integral part of agriculture, industrial goods and services,” Azevedo told his counterparts. According to sources he was suggesting that some members are aiming at market access in services in total disregard to agriculture and industrial goods, which would be tantamount to a “business as usual approach” and which would not succeed.

According to sources, the Indian trade envoy Ambassador Jayant Dasgupta said his government is willing to discuss any issue in services under the Doha mandate at the special committee on trade in services.

Supporting the South African proposal for concluding the negotiations on a waiver for least-developed countries from undertaking any services commitments as well as duty-free and quota-free market access for the poorest countries, the Indian trade envoy cautioned against a plurilateral approach for services.

Even among the industrialised countries, there is no unanimity on a service plurilateral agreement outside the Doha. The European Union said at the Enchilada meeting that Brussels wants members to pursue an information and communications technology services agreement in parallel with the ongoing ITA- II (Information Technology Agreement) goods review.

But, the United States and Canada, two major drivers for the services plurilateral agreement among the 16 countries, kept mum at the Enchilada meeting. Significantly, the 16 countries – who call themselves the Real Good Friends of services liberalisation – hosted their own meeting on Wednesday and Friday to discuss how they must cobble their plurilateral agreement.

In a nutshell, the WTO is torn asunder by the two conflicting approaches. “The plurilateral approach will have the effect of excluding developing countries while undermining the possibility of resuscitating the Doha Round,” Ismail cautioned.

 
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