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Monday, Dec 19, 2005


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Doha and `development focus'

Ranabir Ray Choudhury

The weak, weaker and the weakest nations must get some special treatment so as to be able to catch up with the rest of the world. This is the basis of the approach of the multilateral trade negotiations where the developed economies are expected to make sacrifices vis--vis their immediate economic interests for the longer-term greater good of the international trading environment.

IF THE recent history of the sparring between, and among, the rich and the poor of the world under the auspices of the World Trade Organisation is considered, it will not be inappropriate to conclude that the coming together of about 110 countries at the just-concluded sixth ministerial meeting of the WTO was nothing short of a historic development. Indeed, as much has been conceded by all the major players in the Hong Kong battle, the coordinator of the G-20 group (which has got together with the G-33 and the G-90), Mr Celso Amorim, who is also the Brazilian Foreign Minister, describing the event as "a sort of revolution in the WTO"— a revolution which has got the developing economies united on "the need to keep the development focus of the Doha Round of trade talks" intact.

But what precisely is the "development focus" of the Doha Round? But before one tries to figure out what it precisely is, the point needs to be made that, despite the apparent homogeneity of the stands as espoused by the two principal rival camps, there are, in fact, deep divisions among all the groups that have raised their heads at the Geneva negotiations. The reason for these divisions is, of course, the inevitable differences in the resource-base and the comparative advantages of the economies that form the mosaic of the WTO.

The important thing is that there is a healthy awareness of the differences which run through the new omnibus G-110 group, the leaders of the grouping themselves making it clear that the joint statement they issued on Friday was no more than a common minimum programme. While this is an indirect acknowledgement that, in the event of specific and detailed negotiations, the cracks could very well become too prominent to be managed effectively, it is also a welcome sign that the realisation has dawned on these countries that the differences can be exploited by their economic rivals in an effort to weaken them when it comes to the crunch at the negotiating table. Against this background, the Egyptian Trade Minister, who heads the African Union, did well to have make it abundantly clear in Hong Kong that the G-110 "would try to resolve its differences and not let others do it for them".

The Commerce Minister has more than once stressed the point that the Doha Round must focus on "development", the inference being that the weak, weaker and the weakest members of the international trading community must get some special treatment so as to be able to catch up with the rest of the world. This, in fact, is the very basis of the "less-than-reciprocal" approach of the multilateral trade negotiations where the developed economies are expected to make sacrifices vis--vis their immediate economic interests for the longer-term greater good of the international trading environment. Further, the rich economies cannot argue that this is a sudden imposition on them because the principled focus on helping the developing world was contained in the 1994 Marrakesh Agreement (which set up the WTO), which they all signed.

Paragraph 5 of the Marrakesh Declaration, among other things, says: "Ministers recall that the results of the negotiations embody provisions conferring differential and more favourable treatment for developing economies, including special attention to the particular situation of least-developed countries. Basing itself on this stipulation, Paragraph 2 of the 2001 Doha Ministerial Declaration, says, in part, `The majority of WTO members are developing countries. We seek to place their needs and interests at the heart of the Work Programme adopted in this Declaration. Recalling the Preamble to the Marrakesh Agreement, we shall continue to make positive efforts designed to ensure that developing countries, and especially the least-developed among them, secure a share in the growth of world trade commensurate with the needs of their economic development'."

More specifically, on agriculture, Paragraph 13 of the Doha Declaration says, in part: "we... commit ourselves to comprehensive negotiations aimed at: substantial improvements in market access; reductions of, with a view to phasing out, all forms of export subsidies; and substantial reductions in trade-distorting domestic support. We agree that special and differential treatment for developing countries shall be an integral part of all elements of the negotiations and shall be embodied in the schedules of concessions and commitments and as appropriate in the rules and disciplines to be negotiated, so as to be operationally effective and to enable developing countries to effectively take account of their development needs, including food security and rural development."

On non-agriculture market access (NAMA), Paragraph 16 says, in part: "We agree to negotiations which shall aim, by modalities to be agreed, to reduce or as appropriate eliminate tariffs, including the reduction or elimination of tariff peaks, high tariffs, and tariff escalation, as well as non-tariff barriers, in particular on products of export interest to developing countries....The negotiations shall take fully into account the special needs and interests of developing and least-developed country participants, including through less than full reciprocity in reduction commitments"

On special and differential treatment, Paragraph 44 reads, in part: "We reaffirm that provisions for special and differential treatment are an integral part of the WTO Agreements. We note the concerns expressed regarding their operation in addressing specific constraints faced by developing countries, particularly least-developed countries... We... agree that all special and differential treatment provisions shall be reviewed with a view to strengthening them and making them more precise, effective and operational."

The point to be noted is that, in the Marrakesh and Doha Declarations, the "developing" countries have beenfirmly bracketed with the "least-developed countries". What this means is that the Doha Development Agenda should in the normal course extend to the requirements of both groups of economies and not only the LDCs. In view of the initiative taken by the Hong Kong Ministerial on the uplift of the LDCs, it will not be surprising if some of the developed countries cite paragraph 42 of the Doha Declaration and sit back smugly. (Paragraph 42 reads, in part: "We recognise that the integration of the LDCs into the multilateral trading system requires meaningful market access, support for the diversification of their production and export base, and trade-related technical assistance and capacity building. We agree that the meaningful integration of LDCs into the trading system and the global economy will involve efforts by all WTO members. We commit ourselves to the objective of duty-free, quota-free market access for products originating from LDCs".

Clearly, this would be a wrong thing to do. However, since there are always two sides to a coin, it will only be fair to see what the problems are from the perspective of the developed countries to concede as much to the developing economies as a whole as they have to the LDCs. Since the developing economies are stronger than their LDC counterparts — and some of them like India, China and Brazil, among others, are on the verge of being described as "advanced developing countries" — it stands to reason if the rich cite powerful domestic lobbies as disrupting their honest intentions of helping out the poor on a non-reciprocal basis.

This is one prism through which the Doha Development Agenda can be seen. The agenda is very clear but its implementation is fraught with problems in the developed world, which should be easily comprehensible to leaders of the poor economies because they themselves are hemmed in by similar economic and political lobbies. The Hong Kong Ministerial has been an important milestone in this struggle. It will be interesting to see how the contradiction unfolds in the months ahead especially in view of the fact that the stakes are high. If the Doha Round is on the verge of failure, so is the continued utility of the World Trade Organisation, which would be quite unacceptable to the multilateral trade interests of economies like India.

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