Developing countries must ensure no new issues are taken up at the WTO and that the Trade Facilitation Agreement does not enter into force until the US and EU agree to fulfil their commitments under the Doha Development Agenda
When the World Trade Organisation’s Nairobi Ministerial Conference (MC10) ended on December 19, Director-General Roberto Azevedo and Amina Ahmed, Kenya’s Cabinet Secretary for Foreign Affairs were beaming for they had pulled off a coup of sorts in the form of a successful conference – with a declaration and decisions to which both the United States and European Union were happy to acclaim.
The world trade editor of the Financial Times gleefully proclaimed at the end of MC10 the ‘Death of Doha and birth of new WTO’, while the newspaper’s editorial celebrated the Doha round’s “merciful death.” Dutifully, even some columnists in the Indian media have taken this conclusion as gospel and echoed it.
The WTO’s Doha Work Programme, as it was formally called, was formally adopted at a ministerial conference in November 2001 as a Single Undertaking, meaning the West could not cherry pick which parts to prioritise. As the US and EU tired of the utility of this approach, the FT and others have been calling for the end of the Doha round.
Well, as Mark Twain famously said about the news of his own demise, reports about the death of individuals or principles may sometimes be prone to exaggeration.
Challenging the FT’s view of MC10 in a letter to the editor, Timothy Wise wrote: “In fact, Kenyan chair Amina Mohamed, in her post-closure press conference, went out of her way to say quite the opposite. She was asked if this meant that the Doha round is over and new issues can be brought on to the agenda. She stated quite clearly that the language of the declaration specifically prioritised “outstanding Doha issues” and that no new issues, such as investment and public procurement, could be taken up unless all WTO members agree. She presented that language as a firewall intended to keep new issues from supplanting the many outstanding Doha issues – domestic support, manufacturing and so on.”
On her return from Kenya, Indian commerce minister Nirmala Sitharaman sought to reassure her domestic constituency that all was well by posting the letter of the Indian Permanent Representative, Anjali Prasad to the WTO Director-General on India’s disagreement with parts of the Nairobi Declaration. Some of her own party supporters in Twitter comments appeared to be questioning its utility, including on whether it was before or after the declaration was declared adopted.
However, newspaper headlines and social media posts aside, former trade negotiators and long-time trade observers have, in comments to this writer, suggested that when the trade delegations and ambassadors return to Geneva and begin to consider the Nairobi Ministerial Declaration and engage in trying to reach consensus, they can still retrieve ground.
Behind all the hype (of the US Trade Representative and the EU) and gloom and doom elsewhere, a careful reading of paragraphs 30, 31 and 34 of the Nairobi Ministerial Declaration (NMD) seem to bear out these views.
The three paras suggest that neither side has walked away from Nairobi with success, but that in the three paras of the NMD, they have merely acknowledged the stalemate and reflected the reality of their deep divides; and both sides return to Geneva to continue their fight – whether on the Single Undertaking’s negotiating agenda of the Doha Work Programme (DWP) or the “new issues” that the West wants to start work on. Nor can any conditional (non-MFN) plurilaterals (as envisaged by the US and EU) be incorporated into the WTO treaty framework, except when there is a consensus on it at a ministerial conference.
True, key developing countries, particularly the major ones of Asia and Africa, have returned from Nairobi empty-handed, insofar as their efforts at rectifying the inequities of the Marrakesh accords, in particular on agriculture, through decisions at Nairobi have not borne fruit.
While WTO DG Azevedo and, to some extent, Kenya cabinet secretary and MC10 chair Amina Mohammad have flaunted the various “decisions” out of Nairobi on the so-called “deliverables”, these are not enforceable at the WTO until and unless a protocol is adopted incorporating all the results into the WTO framework, and accepted by all members.
Brazil breaks ranks
Brazil, which joined hands, or was a silent supporter of the US and EU in the final days of the Nairobi negotiations, against its G-20 group, will soon realise the wisdom of Raúl Prebisch, who, in 1963 and 1964, repeatedly advised Brazil and other members of the Latin American group of nations at the time of UNCTAD-I, not to view themselves as stronger or superior, and that they need Afro-Asian groups and their support, and not the other way around, since politically Africa and Asia had collectively more clout.
It was this wisdom of Prebisch that Brazil (under President Lula and his foreign and trade minister, Celso Amorim) remembered and understood in 2003, on the eve of the WTO’s Cancun MC.
At that time, the US and EU joined hands to ditch the entire WTO agriculture reform agenda (a treaty commitment), accommodate each others farm subsidy programs, and join hands to attack developing countries and their agriculture sector from development or future competition. Lula, Amorim, and Brazil’s then ambassador to the UNOG and WTO, Luiz Felipe de Seixas Correa, fell back on the Prebisch line, and approached China, India and South Africa to form the G-20 alliance, and tabled alternative proposals.
This alliance, and the need to maintain it, prevailed in Itamarty – home to the Brazilian foreign office – during the tenure there of Amorim and his successor, Antonio Patriota. However, on the eve of Nairobi, Brazil unilaterally abandoned the G20 alliance to join US and EU in trying to act against China and India. In time, they will find it “a costly error.”
Core of Nairobi declaration
Shorn of verbiage, the core of the Nairobi Ministerial Declaration is in paras 30, 31 and 34. And the three paras merely reflect the existing deep divisions within the membership, including on the DWP and its Single Undertaking, where negotiations are at an impasse. In short, there is no roadmap or agreed way forward out of Nairobi on the impasse.
The NMD, operative paras 30-34 stipulate:
30. We recognize that many Members reaffirm the Doha Development Agenda, and the Declarations and Decisions adopted at Doha and at the Ministerial Conferences held since then, and reaffirm their full commitment to conclude the DDA on that basis. Other Members do not reaffirm the Doha mandates, as they believe new approaches are necessary to achieve meaningful outcomes in multilateral negotiations. Members have different views on how to address the negotiations. We acknowledge the strong legal structure of this Organization.
31. Nevertheless, there remains a strong commitment of all Members to advance negotiations on the remaining Doha issues. This includes advancing work in all three pillars of agriculture, namely domestic support, market access and export competition, as well as non-agriculture market access, services, development, TRIPS and rules. Work on all the Ministerial Decisions adopted in Part II of this Declaration will remain an important element of our future agenda.
32. This work shall maintain development at its centre and we reaffirm that provisions for special and differential treatment shall remain integral. Members shall also continue to give priority to the concerns and interests of least developed countries. Many Members want to carry out the work on the basis of the Doha structure, while some want to explore new architectures.
33. Mindful of this situation and given our common resolve to have this meeting in Nairobi, our first Ministerial Conference in Africa, play a pivotal role in efforts to preserve and further strengthen the negotiating function of the WTO, we therefore agree that officials should work to find ways to advance negotiations and request the Director-General to report regularly to the General Council on these efforts.
34. While we concur that officials should prioritize work where results have not yet been achieved, some wish to identify and discuss other issues for negotiation; others do not. Any decision to launch negotiations multilaterally on such issues would need to be agreed by all Members.”
The status of the DWP or Doha Development Agenda (DDA) remains the same. However, its status as an indivisible package has been considerably diminished, though not altogether buried for good. There is still some scope to retrieve ground lost and uphold its ‘single undertaking’ (SU) character.
The text in para 31, notwithstanding the contradiction on that score in the text of para 30, gives scope to breath some life into the SU.
The real problem for developing countries is that they gave up the single most effective leverage they had in the negotiations by conceding at Bali 2013 the Trade Facilitation Agreement (TFA) as an separate accord, and agreed at Geneva in 2014 to a protocol for its incorporation into WTO Annex I-A, without resolving other issues of concern to them or tying it into the SU.
The fight from here
However, if developing countries don’t band together now to enforce the SU nature of the mandate of the Doha Declaration, the developed countries would have managed to change the basic character of the Multilateral Trade System as it has been known since 1948 (when GATT came into being as a provisional agreement, arising out of the Havana Charter).
It was rather strange, and difficult to explain, why in the 5-nation “green room” at Nairobi on December 18-19, India and China seemed unable to say “No” and to refuse to make any concessions to the US-EU, aided by Brazil, Kenya and the WTO DG. If China-India-South Africa at least now do not stand together, and mobilise other developing countries, particularly in Asia and Africa, against the neo-mercantilist onslaughts of the US and EU, they would have betrayed their people.
If the WTO and its multilateral trading system are allowed to take on the new “shape” that the US and EU, and their media shills are now pushing, the major players will only pick up issues of interest to them one by one from now onwards.
If and when that happens, the legitimacy the WTO sought to establish at its second ministerial conference in Geneva in May 1998 by claiming lineage from Havana, will also be at an end. And one more nail would have been hammered into the coffin of the post-War Order – an order whose principal pillars in the UN Charter and system, the US and EU have been so busy dismantling through their regime change interventions in the Middle East, eastern Europe and elsewhere.
The collapse of the multilateral trading system will hit the US and EU too, notwithstanding the flamboyance of USTR Froman. For, in the 21st century, no trade and investment rights can be enforced anywhere through the exercise of military power or gunboat diplomacy, unlike in the 18th and 19th centuries. The only thing that counts are international accords – negotiated, concluded and implemented in good faith.
Developing countries thus have to ensure that no consensus gets developed at WTO headquarters in Geneva on new issues – either by taking them up for study or placing them on the agenda at the General Council – and that no negotiations are allowed to begin at the WTO. They can do this by withholding their “unanimous agreement”, as stipulated in the last sentence of para 34 of the NMD, until the successful conclusion of the Doha agenda. They also have to resist the temptation to get their issues addressed by paying a further price for them through new issues. Developing nations have paid enough since Marrakech to the US, EU and their allies, whether in the developed or developing world.
They have to use their leverage in the various processes in Geneva, including budget processes, to call the secretariat to order, and ensure it does not continue with its partiality and advocacy role on behalf of the United States.
As stated earlier, the only conclusion from paras 30, 31 and 34 in the NMD is that the Single Undertaking is diminished, but not dead, though China, India and others have a strong fight on their hand in Geneva.
At Nairobi, the Kenyan Cabinet Secretary for Foreign Affairs and Trade hyped up the benefits of the TFA and repeatedly appealed to all those nations who have not yet done so to ratify its protocol and bring it into force.
However, in its editorial on the Nairobi outcome, Kenya’s leading newspaper, The Daily Nation, said the TFA “… would allow Africa and other developing nations to access markets in Europe and the United States. On paper, this would be a boost to the developing world, but, in reality, it is not. Most exports from Africa are largely agricultural and raw. They hardly fetch good prices on the international market. At any rate, agricultural subsidies in the West mean products from Africa have little chance to compete in those markets. Not surprisingly, the West has resisted attempts to eliminate subsidies because they give their farmers a competitive advantage.”
As noted earlier, the developing nations have given away the leverage they had by agreeing to the TFA at Bali, and as China said before Nairobi at Geneva, enabled the US and EU “to pocket the TFA” and walk away. However, if enough of them withhold depositing their instruments of ratification/acceptance of the TFA until they secure their own demands and incorporate all the results (including the decisions on Nairobi “deliverables”) into a single protocol incorporating the results of the DWP, they could thus ensure that the two protocols are accepted by a sufficient number of members to bring them both into force.
It is a difficult task, like trying to catch an elephant by its tail, but not impossible.
Chakravarthi Raghavan is Editor-Emeritus of ‘South-North Development Monitor SUNS’, and has been following and monitoring negotiations at the WTO and the old GATT 1947, since 1978. He is the author of several books and publications on trade and development issues. His latest publication is Third World in the Third Millennium CE (2014), Vols 1 and 2, with Vol.2 devoted to trade issues