Global Policy Forum

Clean Text for WTO Ministerial; Dirty Slap in Face of Africans

By Tetteh Hormeku

The Draft Ministerial Declaration prepared by the Chairman of the General Council of the World Trade Organisation as a basis for preparations towards the forthcoming Fourth WTO Ministerial Conference has earned the reputation of being a "clean" text. That is to say it is uncontentious, with few of the brackets and alternative formulations associated with texts for international negotiation. For African countries, however, this "clean" text constitutes a dirty slap in the face.

As it to be expected most developed country representatives have celebrated this "cleanliness" of the draft declaration. In a typical statement, the European Commission representative described it as "clear, to the point, and avoids the mistake of pre-negotiation of its contents". But as trade experts in Geneva have pointed out, the text is clean is because the text ignores the strong positions expressed by developing countries on several subjects, especially the ones on which they have been in disagreement with the developed countries.

African countries have come out worst in this situation. All the concrete and specific demands that African countries, collectively and individually, have made for correcting the current damaging imbalances of the Uruguay Round Agreements have been virtually ignored. On the other hand, the demands by developed countries for negotiation on new rules - on investment, competition, and government procurement - enjoy a pride of place in the text, even though African countries, together with many other developing countries, have consistently expressed their unreadiness to engage in negotiation over such issues.

The Chairman's text was supposed to have emerged from consultations with all members of the WTO. That being the case, one would be forgiven for thinking that African positions found their way out the draft text due to the proverbial failure of Africans to stand up and be counted. Not so. African countries have been speaking since before Seattle, and have continued speaking out with even more firmness after Seattle.

This year alone, they have spoken out collectively at the highest levels across the continent - at ministerial meetings from Addis Ababa to Zanzibar, from Cairo to Abuja. And their Ambassadors have reflected their positions in the halls and chambers of the WTO, in formal and informal meetings.

All this chorus of positions were simply brushed aside in the draft declaration. The extent of the disregard for Africans interests thus expressed by the Chairman is easily gauged by placing the declaration by the side of the many statements, declarations and formulations made by the African and their ambassadors both inside and outside the WTO.

The draft declaration submitted by the Chairman appears in two parts. The first part is the main draft declaration, which contains the issues and programme for the future work of the WTO. The second part is a separate document, dealing with the issues of imbalances in the WTO agreement and the difficulties of implementation which has been the main focus and concern of African and other developing countries.

The first part contains language signalling that the Ministerial Council attaches great importance to the questions of implementation raised by developing country governments, including African countries. But the main proposals on the how to deal with the implementation problems appears in the separate document, with two annexes. The two annexes divide the implementation issues into those that (a) over which immediate action can be taken, and (b) those that should be subject to further negotiation during the Ministerial.

As has been pointed out by B.L Das, the very fact of separating the implementation issues from the main text of the draft declaration runs the risk that these issues will be put on separate, possibly slower, track. The issues of importance to the developed countries, being part of the main declaration, will be put on a fast track.

This is already contrary to the way African and other developing countries approached the implementation issues. For them, the questions of implementation as of prior importance, and must constitute the primary focus of the future work of the WTO. For instance, in the declaration from the Conference of African Ministers of Trade in Abuja in September this year, African countries stressed "that implementation issues are a priority for African countries in the run-up to the 4th Ministerial Conference of the WTO. We, therefore, affirm the need to resolve outstanding implementation issues".

But it is in the substance of the proposals for addressing the questions of implementation that the draft declaration constitutes the gravest affront to the demand of African countries. The two annexes to the document on implementation covers mainly such issues as sanitary and phytosanitary measures, subsidies and countervailing measures, anti-dumping and textiles, TRIPS and TRIMs. In all these, all the substantial proposals by African countries have been left aside, and the Chairman's text contains what has been described as "extremely meagre" proposals.

Here, the Chairman's declaration falls way short of the points contained for instance in the Zanzibar declaration adopted July by LDC trade ministers, which expresses the collective concern on implementation issues by the most vulnerable members in international trade 34 of whom are in Africa.

To begin with the question on special and differential treatment. The chairman's text simply affirms Article of XVIII of GATT 1994 as a providing for S&D for developing countries and that recourse to it should be less onerous than to article XII of GATT 94. By contrast the Zanzibar declaration, affirms the need for a Binding and full implementation of S&D, including adoption of new S&D measures to take into account problems encountered LDCs in implementation. The Zanzibar document proceeds further to point to specific areas that S&D can be enhanced. For instance, under market access, it states that existing S&D provisions should be improved in an effective manner with a v view to ensuring the duty-free access is not nullified by non-tariff measures.

This position has been further underscored by the Conference of African Ministers of Trade in Abuja. Affirming that S&D is a core principle of the WTO, it emphasises the need to ensure that S&D provisions are made meaningful and operational by adopting a decision at Doha to make them legally binding.

Another area of glaring difference between the draft declaration and the positions of African countries is in the areas of Agriculture. In the declaration, the main elements of a future position on Agric remain to be elaborated. For the immediate, the declaration has two proposals. The first is that the general council takes note of the report by the Committee of Agriculture on the administration of f tariff rate quotas and endorses the decision by the Committee to keep the matter under review. Secondly, it "urges members to exercise restraint in challenging measures notified under the green box by developing countries to promote rural development and adequately address food security concerns". It is ironic that in view of the extreme difficulties that developing countries have expressed in the area of agriculture, especially the LDCs, all that the Chairman's text could offer is a non-binding language: urge developed country members to show restraint.

By contrast the Zanzibar declaration is full of specific proposals for addressing the problems of agriculture for LDCs. These include: (i) Immediate implementation of bound duty and quota free market access conditions to exports originating in LDCs, covering agric products in their primary, semi-processed and processed forms; (ii) full and effective implementation of the decision NFIDCs.

With regard to the built-in agenda and future work in the area of Agriculture, the Zanzibar declaration also proposes: (i) maintenance of article 15.2 of AoA, to protect LDCs against having to undertake commitments on domestic support, export competition policies and market access throughout the agricultural reform process; (ii) abolition of export subsidies for agric products of special interest to LDCs within the special sessions of the CoA before the review of second phase in March 2002; (iii) duty free and quota free market access; (iv) consultative group within the relevant Committees to receive requests for technical and financial assistance in the areas of SPS and TBT; (vi) contractual and operational provision under TRIPS to facilitate LDC access to appropriate technologies and practices; (vii) coherence between Breton Woods c conditionality and WTO commitment; (viii) inter-agency revolving fund to support specified LDC difficulties and challenges; (ix) progressive reduction of trade- and production- distorting domestic support measures in developed countries;

The issue of Trade Related Investment Measures (TRIMS) is next. According to the Chairman of the General Council of the WTO, members of the WTO are satisfied by the action taken by the Council for Trade in Goods in regard to requests from some developing country members for the extension of the five-year transitional period in Art 5.2.

This falls far short of straightforward desire of the LDCs as expressed in the Zanzibar Declaration: that LDCs should be exempted from the disciplines of TRIMS

The case of TRIPS is the most glaring example of the Chairman ignoring the positions of developing countries. This is what the draft ministerial declaration contains. First, that the General Council requests members to submit information regarding measures implementing article 66.2. Submissions shall be subject to review in the TRIPS council and serve as a reference point in drawing illustrative list of incentives. Secondly, that Ministerial Conference directs the TRIPS Council to continue its examination of the scope and modalities for complaints of the types provided for under sub-paragraphs 1(b) and (c) of article XXIII of GATT 1994 and make recommendations to the 5MC. In the meantime, members will not initiate such complaints.

And this is what the Zanzibar declaration demands. Under implementation, they state the (i) implementation of all provisions dealing with technology transfer to LDCs, in particular art. 66.2; (ii) members conduct a review and monitoring, to ensure full and effective implementation of 66.2; (iii) Access to medicines and TRIPS: LDCs affirm the flexibility contained in the TRIPS agreement whereby nothing precludes right of members to take action allowing for easy access to medicines to combat HIV/AIDS etc; (iv) extension of transitional period for LDCs to match their capacity to implement and benefit from TRIPS agreement based on assessment of technological capacity of LDCs by year 2006; (v) re-affirmation of flexibility embodied in the TRIPS agreement.

In relation to the built in agenda, the LDCs further demand that: (i) 27.3b review should clarify that plants, animals and parts thereof, including gene sequences and biological processes for the production of plants, animals and their parts, must not be patented. Also clarification that members have option to select their own sui generis system, recognising traditional knowledge and the rights of farmers to use, save and exchange seeds; as well as be in line with the OAU model law, the CBD, and the FAOs International Undertaking; (ii) Essential drugs included in the WHO list be excluded from patentability; (iii) geographical indication should encompass protection to other products than wines and spirits; (iv) there is need for legal instruments for the protection of intellectual property on genetic and biological resources, traditional instruments and folklore.

As in TRIPS so also in services. In the first instance, the draft declaration declares that it is satisfied with the pro Satisfied with progress of negotiations since Jan 2000, including on movement on natural persons; and with the negotiating modalities adopted for the purpose. It sees this as capable of leading to economic growth of all trading partners and the development of developing countries. Beyond, that it simply recall and reaffirm the provisions of GATS, and agree that administrative practices should not impede full and faithful implementation of commitments under GATS, particularly supply of services under mode 4, that is the movement of natural persons.

Here the language of the draft declaration follows closely that used in the Zanzibar declaration, showing perhaps that the Chairman and Director-General were aware of that declaration when they were preparing theirs. But as if simply to re-emphasise their determination to ignore the spirit of the demands of the LDCs, they leave the rest, and possibly more important aspects of the LDC demands. This is to the effect that there should be full and effective implementation of Article IV of GATS, to strengthen LDC domestic services capacity, through access to technology and distribution channels and information networks, to enable LDCs participate in the trade in services in the modes of supply and sectors of special interest to them, such as tourism, construction, transport, etc. And finally under the issue of Subsidies and Counter-vailing measures. The Chairman's text makes provision that a member excluded from Annex VII shall nevertheless be re-included if its GNP per capita falls back below US1,000. It also affirms that Annex VII(b) includes members that are listed therein until their GNP per capita reaches US1,000 in constant 1990 dollars for three consecutive years. Finally it instructs Committee of SCM to review provisions of the agreement on SCM regarding duty investigations, and report by the 4MC.

For further work, while awaiting finalisation of decision on article 27.4 in the light of work in the Committee on Subsidies and Countervailing Measures, the declaration asks the Ministerial Conference urges members to apply, where possible, higher de minimis level in counter-vailing duty investigations of products originating in developing country members, etc.

As B.L Das points, out this is a meaningless proposal as it only urges members, and then undermines this appeal by asking them to take the action it urges only where possible. And who determines where possible?

By contrast the LDCs have demanded, among others, an agreed interpretation of Art 27.10 of ASCM to increase the threshold for imports from LDCs from 4% to 10% and exempting them form cumulation. In addition they have demanded simplified procedures for taking anti-dumping and anti-subsidy actions should be devised for the use of LDCs to enable LDCs to defend their industries against dumped and subsidized imports nor protect the legitimate interest of their exporters.

It is difficult to justify these glaring differences between what the African countries want and what the Chairman of the General Council, with the support of the Director-General see as the possible elements for consensus towards Doha. It cannot be because the Chairman and Director General are not aware of the views of African countries. The Chairman of the General Council could not have been unaware of these positions. Most of these positions were stated in the formal bodies of the WTO, convened by the Chairman himself. For instance, at the end of July, the Chairman convened the so-called reality-check meeting of the WTO members. That was a meeting for all members to assess the state of the preparations for Doha, and see where the positions were converging or diverging. The Chairman's report for this occasion was rebutted firmly by developing country representatives, with LDCs for instance stating exactly how their positions were not covered by the Chairman's report. The Chair of the LDC group took the opportunity to re-state in essence the entirety of the Zanzibar declaration

One possible explanation is given by an African diplomat. In his view, the Chairman division of the implementation issues into what is realisable immediately, and what needs further work may have one purpose. By presenting what is realisable now, he may have hoped to convey the impression that there is consensus for progress. Developing countries may therefore be trapped into believing that there is some gain now, and there is basis for more gains in a future round. As the diplomat puts it, this would then trap developing countries into a readiness to negotiate further, a trap, in short, for developing countries to give up their fundamental issues for illusory short term gains, with a promise of gains in the future.

So far it is trap into which the developing countries have refused to fall.

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