TRADE: Developing Countries Not Ready to Make the Rounds

By Gustavo Capdevila Reprint | | Print |

Gustavo Capdevila

GENEVA, Aug 11 1999 (IPS) - While industrialised countries are ready for a new round of multilateral trade talks, many developing nations are still complaining about poor compliance with the commitments assumed in the Uruguay Round.

The decision to hold new negotiations is be debated at the Nov 30 to Dec 3 World Trade Organisation’s (WTO) ministerial conference in the U.S. city of Seattle, Washington.

The last round, which decided the creation of the WTO, began in Punta del Este, Uruguay in September 1986 and concluded in Marrakesh, Morocco in April 1994.

But while the United States and the European Union concur that a new round would favour their interests, they differ with respect to the content of the talks.

It is clear from the declarations of officials from the two big trading powers that the Europeans are aiming at a broad agenda that covers controversial aspects such as the total liberalisation of investment and the interaction between trade and competition policies.

The United States, on the other hand, wants negotiations focused on specific issues, mainly involving high-tech economic sectors.

But for now, the developing countries prefer to ignore the possibility of new talks, and focus their efforts on demanding compliance with the commitments assumed in the Uruguay Round.

A document submitted to the WTO by Honduras, Indonesia, Pakistan and the Dominican Republic warns that “until these pending objectives are realized, any talk on new rounds is premature.”

“These expectations remain unfulfilled,” stresses the document, which has the backing of other developing countries as well.

The paper points out that over one-third of the expected benefits were to come from the lifting of restrictions applied by industrialised nations to imports of textiles and garments from the developing South, while the liberalisation of trade in farm products was expected to contribute another 10 to 30 percent.

Secretary-General of the United Nations Conference on Trade and Development (UNCTAD) Rubens Ricupero told IPS that “despite all the promises regarding the liberalisation of trade, the reality has been very disappointing.”

The document presented by Honduras et al states that “the problems with implementation of the two major Agreements on Agriculture and Textiles have contributed greatly to the non- realisation of the overall objectives of the Marrakesh Agreement.”

Only by granting priority to implementation problems “can we ensure that the multilateral trading system results in mutual benefits for all countries and is truly equitable,” the paper adds.

But the actors involved in the multilateral talks are not limited to the blocs of industrialised and developing nations.

The Group of Cairns, comprised of countries that share an interest in the total liberalisation of trade in farm products, is an important player today, with the imminent renewal of the agreements on agriculture.

The Marrakesh Agreement established that negotiations on the opening of trade in agricultural products were to be continued in the year 2000, along with talks on services.

While industrialised countries like Australia, Canada and New Zealand form part of the Group of Cairns, most of the members pertain to the developing world.

But in order to obtain redress for its long-standing demands, the Group of Cairns could tip the balance of the debates in Seattle in favour of talks along the lines desired by the industrialised countries, trade negotiators in Geneva conjectured.

The position of the Group of Cairns will become more clear after a ministerial meeting scheduled by the group for the last week of August in Buenos Aires.

If the developing countries obtain a satisfactory response to their demands for implementation and agree to hold a new round, the debate in Seattle will focus on the issues to be negotiated.

The United States, backed by the European Union, is expected to insist at the last minute on making trade conditional to compliance with certain environmental and labour norms.

At the 1996 ministerial conference in Singapore, Washington resorted to the surprise effect, presenting its proposal on the Agreement on Information Technology at the 11th hour, pointed out a trade negotiator who preferred not to be identified.

But whatever their name – the Millenium, Development or Seattle Round – the talks will lack the spectacular nature of the Uruguay Round, which set forth grand ideas, said Ricupero.

Prior to the Marrakesh Agreement, the scope of the predecessor to the WTO, the General Agreement on Tariffs and Trade (GATT), was limited to goods.

But the Uruguay Round incorporated services and intellectual property, while developing countries contributed two major innovations to the international system of trade, with the accords on agriculture and textiles.

“Grand ideas no longer exist, and the few that survive are complicated,” remarked Ricupero, alluding to the issues of investment, competition and labour and environment standards.

The General Council of the WTO, in charge of preparing the ministerial declaration to be adopted in Seattle, has asked the WTO Secretariat to submit a draft containing ideas by its next meeting, on Sep 22.

By the time the WTO went on summer recess, in late July, its 134 member states had submitted 140 documents with proposals to be included in the Seattle declaration.