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Home > Programs > Trade and Agriculture > WTO Meeting: Doha > Neither a Victory for the North, Nor a Loss for the South |
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Neither a Victory for the North, Nor a Loss for the SouthANJU SHARMA WITH S S JEEVAN  The choice of venue was clever and the September 11 attack on the World Trade Center added to the security paranoia. The result was that it combined to give trade negotiators somewhat of a breather when they met in Doha, Qatar, for the fourth ministerial conference of the World Trade Organisation (WTO). The massive street protests that marked the Seattle round were non-existent at the Doha ministerial. In the aftermath of the terrorist attacks against the us, anti-globalisation protesters were suddenly disoriented, and several plans for protests at Doha were cancelled. "Are we talking about anti-capitalisation, anti-globalisation or anti-Americanism? It didn’t matter before September 11; now it does," says Tom Spencer, director of the European Centre for Public Affairs. Besides, the organisers were not taking any chances, and the conference venue looked like a fortress. The perceived threat of terrorism was used as an effective way of stopping anyone opposed to the WTO — out of sight, and perhaps out of mind. With the debacle of Seattle looming large, the negotiators were under pressure to come up with results. And at the end of the six-day marathon meeting, a deal was struck. It was agreed to start negotiations on a new trade round to culminate in 2005. For the North, which was keen to bring issues of investment and competition into global trade negotiations, it was a "given". Most importantly, they got an agreement for a new round of negotiations. The South lost most battles, but was relieved to still be in the reckoning. Most gains were in the backroom "bilateral deals" — a euphemism for arm-twisting. Give and take!The biggest gain for developing countries was on patents and drugs. Countries were granted the right to break the monopoly over patented drugs in case of health emergencies like epidemics. Analysts feel that the issue was clinched only due to the us’ predicament over anthrax drugs. But the drug industry has dismissed Doha as a political statement and not legally binding. The European Union (EU) brought an agreement within reach by making a concession on agricultural subsidies. It agreed to "reductions, with the view to phasing out", of agricultural export subsidies — something it had always resisted. However, a qualifying phrase was included in the agreement, which said the EU’s concession was made "without prejudging the outcome of the (final) negotiations". "It was clear from the very beginning that we have to give and to take also something," said European agriculture commissioner, Franz Fischler. In return, WTO members accepted EU demands that investment, competition and environment rules be put on the agenda. The us agreed to relax some import curbs. And it got an assurance on the anti-dumping issue. The us has given assurance of greater discipline in imposition of anti-dumping provisions. But on the issue of greatest concern to the South, textiles, the us refused to advance the deadline for quota reduction from January 2005. It has, in fact, threatened to impose non-tariff barriers on other imports if pushed. In return for the concessions made by the EU, negotiators wanted stronger language on trade and protecting the environment. Developing countries, however, did not want the environment to be linked to trade rules. They felt that environmental concerns would be used as an excuse for renewed protectionism. For now, the issue has been put on the backburner. The EU has won the right to talks within two years on how to improve the investment climate for international companies abroad, and how to introduce competition policy into trade law. The Indian act: deal breakeriIndia made all the right noises at the meeting, but came back with very little. Indian commerce and industry minister Murasoli Maran, who called WTO "a necessary evil", was seen as the champion of developing countries. He was also the biggest stumbling block during negotiations. India, which has just a share of 0.7 per cent of world trade, was wary that a clause on competition would allow foreign companies too much freedom to operate in the country. India’s intransigence led to the extension of the conference by a day. Till the last day, the minister seemed to block a declaration. In an effort to reach an agreement, many trade ministers held several closed-door meetings with Maran. But nothing worked. Media reports suggest that the issue was clinched only when the Qatari chief negotiator Yousef Hussein Kamal held a one-to-one meeting with the minister. That meeting changed everything. India finally fell in line. What transpired at that meeting, however, remains unknown.
India’s poor showing at international negotiations is also due to the lack of consistency on issues. For instance, take its contradictory stands over the issue of trade and environment. It fought tooth and nail at Doha not to link the two. However, at the Convention on International Trade in Endangered Species (CITES), it wanted to use trade sanctions against countries trading in ivory or rhino horns. Maran is being showered with encomiums for holding his ground at Doha. In reality, he has only bought more time with regards to issues such as investment and competition. The delay is being seen as a victory — typical of Indian bureaucracy’s shortsightedness. The strategy is to block a proposal without proposing a new one. But as countries tighten the noose in the forthcoming negotiations, India will be forced to accept what it fought all the while.
The EU had made it abundantly clear even before the ministerial that inclusion of environmental concerns was in effect a sine qua non for the EU’s agreement to ambitious negotiations on cutting back state supports for agriculture. The EU move is perceived as a means to retain some green barriers to its agriculture markets when its agricultural subsidies are eventually phased out as envisaged in the Doha declaration. It is pushing for recognition of the ‘multifunctionality of agriculture’. Under this concept, agriculture does not just serve the purpose of providing food but also helps in maintaining rural communities, protect the environment if non-intensive methods are used, preserve culture and promote sustainable development. This possible connection between agriculture and environment is seen as one of the reasons why the EU is pushing environment at the WTO.
The South opposes bringing the issues related to environmental protection into the mainstream of multilateral trade talks, saying their potential abuse as green protectionism cannot be ruled out. In the past, the demands for linkages between trade and environment have come not only from Northern non-governmental organisations (NGOS), but also from Northern industry and labour unions, which stand to benefit if environmental standards are applied to trade. Developing countries also fear the huge costs associated with greener technologies, which will be unbearable by their domestic industries. It could make their goods uncompetitive in western markets. This unequivocal opposition to greening of trade is what brings the motley crew of poor countries together. "If there’s one thing that unites developing countries, it is opposition to negotiations on trade and environment," said a developing country official before the meeting. "If the EU says it’s a deal-breaker, so be it. There are just too many people against it." The Republican Bush administration shares these views (unlike the democrats), and would rather the green issues remain outside the purview of the WTO, as they could harm the interests of US industry. For instance, US biotechnology firms stand to lose out, due to the wariness against genetically modified (GM) food. Despite this opposition, the EU threat that it would negotiate on liberalising agricultural trade only if other WTO members agree to talk on trade and environment, eventually worked. The final ministerial declaration controversially proposes negotiations to enhance "mutual supportiveness of trade and environment". The declaration reiterates the EU demand seeking clarification on the relationship between the WTO rules and "trade obligations set out in multilateral environmental agreements (MEAS)" instructs the WTO’s committee on trade and environment (CTE) to give special attention to, among other things, ecolabelling suggests reduction and even elimination of trade barriers to environmental goods and services, a move that has been mutely welcomed by developing nations seeks to further strengthening the links between trade and environment by proposing negotiations on "procedures for regular information exchange" between the relevant MEA bodies and their counterparts in the WTO. Indian industry minister Murasoli Maran dismissed the environment provisions in the declaration as "the price we have to pay for something in agriculture". "We have marginally agreed on environment, which to a large extent, is a political acknowledgement of its importance rather than rebalancing of rights and obligations," he said. The environmental measures listed in the Doha declaration are not new. They have been part of the discussions at the CTE for several years now, and have been discussed in by the WTO’s dispute settlement mechanism before that. CTE was set up in 1995 and is composed of all WTO members and a number of observers from inter-governmental organizations. It functions with the understanding that "it does not modify the rights and obligations of any WTO member under the WTO agreements." A ten-point agenda forms the basis of the committee’s work, which includes decisions on environment measures for trade, ecolabelling, environmentally unfriendly subsidies and intellectual property rights. CTE has not reached any conclusions due to the controversial nature of the issues. In 1996, it presented an inconclusive report at the Singapore ministerial due to the fact that its members had failed to reach agreements on most of the issues under discussion. The ministerial made note of the "the breadth and complexity of the issues covered by the committee" and "further work needs to be undertaken on all items of its agenda". The committee was directed to carry on its work.
Although CTE discussions have been unfruitful,
the trade and environment debate is being addressed in other fora. As the pressure from
Northern civil society to take on board environmental concerns increases, the dispute
settlement mechanism has come out more and more in support of green issues. In a recent
ruling on the shrimp-turtle case, a WTO appellate body (AB) endorses a US ban on shrimp
imports from countries that do not use turtle excluder devices to prevent harming sea
turtles (see box: In through the backdoor).
These judgments cannot be taken lightly, since they are making law by setting precedents.
Morevover, as the EU faces pressure from its
civil society on the issue of genetically modified organisms (gmos), the Union is unlikely
to let go of issues such as the primacy of public health, the precautionary principle, and
process and production methods (PPMS) (see box: In
favour of health).
Developing country concerns over green protectionism are legitimate, but they cannot simply continue to oppose negotiations on the links between trade and environment — they have to take them head on to make sure their concerns are addressed through legitimate multilateral negotiations, rather than through the back door, by a few people on a dispute settlement panel or appellate body. Conflict with environment treatiesFor instance, the discussion on the relationship between trade rules and MEAS has been uneasy to say the least. While the WTO currently allows importing countries the freedom to choose their own standards in the interests of public health and the environment in their own countries, they are not allowed to impose standards aimed at improving health or environmental practices of exporting countries. But can environmental standards be imposed on another country if a multilateral treaty has been signed to this effect? The EU considers it necessary to ensure that when there is dispute concerning environment-related trade measures, linkages between trade and environment are taken into account so that one does not jeopardise the fulfillment of the other. Developing countries see the debate on MEAS as a non-trade issue, but it is in fact in their interests to sort out the issue once and for all, rather than leave the issues open for interpretation by the WTO’s dispute settlement mechanism. Several feasible options have been suggested in the past, such as moving environment-trade conflicts to tribunals provided specifically under MEAS; or moving such disputes to the International Court of Justice. But even before agreeing to a venue, developing countries must insist on clarification on a set of overarching rules. For instance, they should insist on a provision that forbids the use of trade sanctions to conserve the global environment, since such sanctions can only be used by the more economically powerful nations against the less economically powerful. Extra-jurisdictional and unilateral action should not be possible even within a multilateral agreement. Northern green activists were not entirely happy with the outcome at Doha, though for reasons other than those troubling developing countries. The declaration states that negotiations on the relationship between trade and MEAS shall not prejudice the WTO rights of any Member that is not a party to the MEA in question. Greenpeace fears that this phrase would prove a powerful disincentive for countries to sign the MEAS. The declaration also states that negotiations on the effect of environmental measures on market access and the Trade Related Intellectual Property Rights (TRIPS) accord shall not add to or diminish the rights and obligations of Members under existing WTO agreements. These environmental activists feel that the final outcome of the negotiations on these points could end up as footnotes rather than effect any change in the WTO rules.
Marks of shame? Ecolabelling requires that products be marked environmentally friendly not just because they do not directly harm the environment but also indirectly. At the centre of the debate is the ppm criterion which looks at the environmental-friendliness of the technologies used to make a product rather than the superficially judge the product, the final outcome of the process. Life cycle criterion is another specification applied for ecolabelling. This looks at the ppm, the product and how the product will be eventually disposed, making ecolabelling an even more stringent requirement. This is has raised hackles in the developing world where state-of-the-art green technologies are seldom considered for their prohibitive costs. Insisting on ppm for labelling would bar most of poorer countries’ exports from the northern markets. At the moment this agenda has only been put on a fast track, but it is not for negotiations.
Precautionary principle The WTO had judged the case by the 1996 agreement on sanitary and phytosanitary measures (SPS), which favoured a more scientifically demanding risk assessment to the precautionary principle. The US also proved that its beef hormones met standards set by Codex Alimentarius Commission, a world body that develops standards for food additives, pesticides, chemicals and contaminants. The precautionary principle has since become pet issue that the EU pushes in every WTO meeting. Doha was no exception. On the fourth day of the talks the EU broached the subject, but intense opposition kept it out of the final declaration. At the insistence of the Philippines, the US and Iceland the Doha text pushes for negotiations on clarifying and improving WTO disciplines on fisheries subsidies. Fisheries subsidies have been seen as a major cause for the depletion of fish stocks due to overfishing. Apart from the environmental impact the subsidies-caused depletion also undermines the livelihood of those dependant on fishing. This is particularly the case in many developing countries as the text also points out. Though fisheries subsidies have figured in the WTO debates and in its predecessor GATT, no agreement was earmarked to cover the issue during the Uruguay Round. At the Seattle 1999 meeting a proposal was made to tackle environmentally harmful and trade-distorting fisheries subsidies but disagreements over which WTO body should cover the subject halted progress. The EU is one of the leading providers of subsidies to its fishermen and hence has been shying from bringing the issue into WTO forum. The presence of the subject vindicates the view that much give and take has transpired to prevent Doha ending up as a disaster. ### |
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