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TRADE: ”Divide and Rule” Manoeuvre Planned for WTO Doha Round?

Analysis by Aileen Kwa

GENEVA, Jan 24 2008 (IPS) - Process issues have once again risen to the fore in the World Trade Organisation (WTO) as members brace themselves for the release of a new set of negotiating texts for agricultural and industrial tariff liberalisation at the end of this month or early February.

Delegates are concerned that WTO Director General Pascal Lamy might wrest the negotiation process out of the hands of the chairpersons of the negotiating groups when the texts become available, take control of the process and involve only a small group of delegations in the negotiations.

The corridor talk in Geneva is that Lamy might bring the new texts directly into a closed-door, selective ‘‘Green Room’’ negotiating process. ‘‘Green Room’’ refers to closed-door negotiations held among a limited number of delegations.

This would be a ‘‘horizontal process’’ where the negotiations of agricultural and industrial tariff liberalization are dealt with together so that exchanges can be made between these issues. Other issues, especially services, will also be brought on board quickly – if not at the same time.

A lunch meeting has apparently been scheduled to take place in Davos on the sidelines of the World Economic Forum on January 26. Invited is a select group of ministers. The issue of how to proceed after the revised texts have been released is expected to take centre stage at the meeting.

There seems to also be plans for a mini-ministerial meeting in the not-too-distant future. It was supposed to have taken place by February. But as a result of the slow progress, some are speculating that it may only materialize by the end of March or later, if it takes place at all.

As one major developing country delegate in Geneva put it, ‘‘progress is incremental. But we will need some more movement at some point (in order to conclude the negotiations), and this will have to come from the political level, not from here’’.

Commenting on the process, another developing country delegate said: ‘‘Lamy and, to some extent, the European Union, want to take the revised texts directly to the Green Room. This is going to be dangerous. We think that the texts need to come back to the membership for discussion and if necessary, to have a second revision.

‘‘If you listen to the majority, this was made clear at the final General Council meeting in December and at the recent open-ended agriculture meeting. Delegations were asking for the revised texts to be discussed in their specific committees. Lamy, however, wants to move to the horizontal process immediately,’’ said the delegate.

Another representative added, ‘‘Lamy thinks that the technical people in Geneva have finished their discussions. He doesn’t want any more special sessions (negotiating sessions on single issues). We don’t think this should be the case.’’

Delegations that are not usually invited to the Green Room are worried that their voices may be completely marginalized if the negotiations are to take place only in the Green Room.

An African delegate commented, ‘‘it has been a tradition within the WTO to place great emphasis on a process that is not transparent enough and that is not inclusive. This is what happens when they try to make a selection of a few delegations, numbering 30-plus, to decide on key issues.

‘‘They seem to be in discussion on improving texts but in fact the rest of the membership is then used as a rubber stamp. We have complained for years about lack of transparency, about exclusion, about divide and rule and about declarations from chairpersons (which do not reflect fairly the views of the membership),’’ the delegate told IPS.

‘‘A lot of members have raised their voices. If we have a perverted process when the texts are released, the entire multilateral trading system could be endangered.’’

Despite what some regard as progress on certain issues, there are still huge divergences. The membership is no nearer on deciding how much the U.S.’s trade distorting agricultural subsidies are to be cut.

There is still no agreement on the treatment of certain ‘‘special products’’ in agriculture for developing countries – whether and to what extent some of these should be excluded from tariff cuts. There is also disagreement on the ‘‘green box’’: billions of dollars of subsidies provided by the U.S. and the EU which they pass off as ‘‘non-trade distorting’’ and therefore ‘‘WTO-legal’’.

In recent months there has also been no movement on the level of tariff cuts to be undertaken for industrial products (the non-agricultural market access or NAMA talks). As a delegate said, ‘‘we are totally stuck in NAMA’’. Several delegations interviewed said that there does not seem to be any intention to change the very deep cuts reflected in the last negotiating text of July last year.

Some of the critical issues for the smaller developing countries, including the African members, seem to have been left by the wayside. For example, cotton, commodities and preference erosion. The latter refers to the removal of trade barriers reducing the price advantages of existing trade preference schemes that poor countries benefit from.

The ‘‘biggest question mark’’ for most negotiators at this point, however, is what Washington will decide. An insider summed it up as, ‘‘they do not seem to be pushing for anything’’. If the harsh NAMA demands of the EU and U.S. are maintained, the inside source said, the U.S. will have to go deeper with its subsidy cuts. ‘‘The two issues are related.’’

A delegate from a major developing economy said that he was ‘‘not very hopeful’’ that the talks could come to a conclusion. ‘‘However, we still have to keep at the negotiations,’’ he said. ‘‘Even if we have a break in negotiations (until after the U.S. elections), you have to be very careful about what is on the table and what is at stake.

‘‘If texts produced now are used as the basis of negotiations later on, they would trump everything else, including the Doha mandate. So we continue to be very vigilant because we might otherwise be laying down the imbalances of the future,’’ the delegate said.

He highlighted his concern regarding what he saw as an increasingly inward-looking U.S.: ‘‘I am not clear that they are ready to make ‘effective’ cuts in their overall trade-distorting subsidies (in agriculture). My definition is that ‘effective’ should be well below applied rates.

‘‘Their policies seem to be increasingly inward-looking, even when they are talking about bilateral or multilateral negotiations. They put their national interests first. Whilst there is nothing wrong with that, we have a commitment (in the Doha Round) to transform the trading system so that less developed countries can do better in their production and trade.

‘‘That would require deliberate policies, including special and differential treatment. But there is a tendency now to treat us at the same level, as if we have the same muscles. This is a big problem.’’

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