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Face-saving device

By Ratnakar Adhikari

Published on November 24

As things stand today, the prospects for the Hong Kong Ministerial Conference of the World Trade Organization (WTO) does not look that promising since developed and developing member countries continue to maintain entrenched positions. Modali-ties for conducting negotiations on three core market access issues, namely agriculture, non-agricultural market access (NAMA) and services are not likely to be adopted by the Hong Kong Ministerial. After the Director General of the WTO, Pascal Lamy mentioned on 10 November that there may be a need for the WTO members to "recalibrate" their expectations for the Hong Kong, there is an"atmosphere of uncertainty" in Geneva.
The already postponed deadline for the conclusion of the Doha Development Agenda (DDA) too is not very far; and a success of the Hong Kong Ministerial in at least agreeing to the modalities would have left exactly one year time for negotiations. This would have still helped the WTO members meet their target of concluding the Doha Round by December 2006. With the Hong Kong Ministerial failing to deliver more than what July Package has promised, this deadline may need to be pushed further. This does not augur well for the WTO, because it has already been postponed once.
In a scenario like this, what would be a face-saving device for the WTO membership and the new Director General of the global trade body, who has made it clear that development should be at the heart of the negotiations under the DDA? Fortunately, there is one such issue, on which there is no consensus as yet, but the same could be achieved prior to the Ministerial, provided there is a necessary political will to do so. This relates to five specific proposals of the LDCs on special and differential treatment (S&DT).
Though the negotiations on 88 S&DT proposals that are on the table ever since the Doha Ministerial Conference will not be addressed in the near future, the five proposals of the LDCs, which have taken the centre stage at the recent discussions being held in WTO Committee on Trade and Development Special Session (CTD-SS), merit special attention. This is not only to ensure better integration of the LDCs in the multilateral trading system, but also to provide the WTO with much needed moral platform to prove its credibility as an institution that at least it cares about development. Agreeing to these proposals will be perfectly within the mandate provided by the DDA to make S&DT provisions "precise, effective and operational". The General Council too is of the view that trade and development issues such as S&DT are an area that could potentially yield an "early harvest" agreement in Hong Kong. The first among these proposals is the issue of providing duty-free and quota-free access to LDCs products. However, the current text prepared by the Chair of CTD-SS on 2 November limits itself to the following formulation: "developed country Members shall, and developing country Members declaring themselves in a position to do so should provide duty-free and quota-free market access for products originating from LDCs in a stable and predictable manner". The LDCs have been demanding that these commitments be bound at the WTO in order to provide stability and predictability of market access and all the products originating from LDCs be covered. However, the Chair's text does not make explicit mention of these issues.
The second proposal concerns the waiver, which would require the General Council to decide within 60 days on request by non-LDC Members to have certain WTO obligations waived to allow them to take measures exclusively in favour of LDCs. However, Latin American developing countries are of the view that such a blanket approach may open the possibility for repeating the banana trade experience. As per them, the waiver requested by the European Union to provide trade preference to the African, Caribbean and Pacific (ACP) countries, which provided legitimacy to the banana regime, resulted in severe losses to them in terms of market access.
The third proposal seeks exceptions for the LDCs under the Agreement on Trade Related Investment Measures (TRIMS). The Chair's text allows the LDCs to maintain or introduce any measure, notwithstanding their inconsistency with the Agreement, will have to be based on temporary notification and exemption procedure. Since developed countries are opposed to blanket exemption, they seem to have convinced the chair to make such an exemption conditional.
The fourth proposal relates to the capacity of the LDCs to fulfil the obligations and commitments they undertake during the multilateral trade negotiations. However, the binding nature of the proposed text on this issue, which will only oblige the LDCs to undertake commitments to the extent consistent with their individual development, financial and trade needs, or their administrative and institutional capabilities, is being opposed to by one powerful developed country.
The final issue is about maintaining coherence between the policies of the donors, and international financial institutions vis-à-vis LDCs' obligations under the WTO. The text calls upon these related institutions not to impose conditionalities on loans, grants and official development assistance that are inconsistent with LDCs' rights and obligations under the WTO. This is the only issue in which there is a near consensus among the WTO members.
There are other equally burning issues from the perspective of so-called "development dimension" within the multilateral trading system. They include cotton subsidies; the amendment of the TRIPS Agreement to ensure better access to medicine in the countries without sufficient manufacturing capacity; the disclosure requirement as a condition for patentability to prevent biopiracy; and the need to tighten the rules to prevent the abuse of trade remedy measures. The purpose of this column is not to negate the significance of any of these issues. However, if these issues are not likely to be resolved in time for the Hong Kong Ministerial, WTO members should aim at achieving a breakthrough on S&DT. This is probably the only face-saving device for the WTO!

[Opinions expressed in this column are personal. For comments and feedback: ratnakaradi@yahoo.com]
Source: http://www.kantipuronline.com

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