Trade truce

It was neither a victory for the North nor a defeat for the South. Environment took centrestage as the main bargaining chip, but the discussions remained inconclusive. The World Trade Organisation meeting in Doha set the tone for the future of global trade without clear victors

 
By Anju Sharma
Last Updated: Sunday 07 June 2015

Trade truce

-- (Credit: AP /PTI)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 breaker
India 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.

And all of a sudden, India was party to a declaration that it was fighting all along: a new round of negotiations on trade, investment, procurement and competition policy.

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.

 

INDIA : GAINS AND PAINS
ISSUE INDIA'S STAND WTO DECISION
Investment,competition policy
No negotiations, study process to continue
Next ministerial to decide by 'explicit consensus' on modalities
TRIPs and public health
Patent waiver in case of national emergency Declaration adopted
Agriculture

Reduce subsidies, address rural development, food security concern Reduce and phase-out subsidies
Environment
No enlargement of existing window No decision till next meeting
Labour standards No link with trade ILO to continue work



Can green mean free?
The debate reached a boiling point in Doha, but remained inconclusive

midway through the Doha meeting, eu trade commissioner Pascal Lamy visited Rainbow Warrior , the mascot ship of the international environment activist organisation Greenpeace, anchored in the Qatari seawaters. "Some balance between the trade rules and environmental protection is to be struck, that is why we are here," Lamy said on board his high-visibility platform. The gesture might have struck a chord back home in Europe, but most countries from either side of the economic divide did not agree.

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.

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