Global Policy Forum

By G. Srinivasan

Trade experts contend that the Cancun Ministerial may turn out to be an eventful affair if attention is focussed on access to medicine, special and differential treatment for developing countries and liberalisation of agricultural trade so as to lessen the highly skewed world grain market that drives down the prices of agricultural exports of developing countries.

In less than a month, the fifth Ministerial Conference of the World Trade Organisation (WTO) will get underway at Cancun, Mexico where Trade Ministers of member-countries will take stock of the progress in the Doha Development Agenda (DDA) that was chalked out in November, 2001. The Doha agenda was comprehensive in sweep and set up a bold programme of negotiations which covered hot and contested subjects such as investment, competition and the environment.

Though these subjects were new for the negotiators they had already been discussed extensively in various global fora such as the OECD, UNCTAD and the WTO. Besides these subjects, several items will also fill the agenda at the Cancun: Subjects linked to market access, with the associated issues of liberalisation of services and tariff reductions, both agricultural and non-agricultural; subjects approached from a new angle, such as that of trade facilitation, the discussions of rules and anti-dumping and subsidies, the vexatious issue of the liberalisation of agriculture and the much-talked about special treatment and differentiation for developing countries.

The timetable adopted in Doha clearly stated that the negotiations, which are to be balanced for all and in all respects by means of "a single undertaking" (meaning thereby there is agreement on nothing until there is an agreement on everything) should be finalised by January 1, 2005.

So, the task on hand for the trade ministers is daunting and given the momentum and concession swapping, the outcome of the Cancun Ministerial will only be definitive — be it positive or negative.

Considering that in the intervening period of 21 months after Doha Ministerial several deadlines for evolving modalities on such issues as agriculture, trade-related intellectual property rights (TRIPs) and public health, on special and differential treatment, on services, and industrial tariffs (non-agricultural market access talks), had been missed do show that the remit of the ambitious Doha Development Round is likely to suffer reverses.

However, trade experts contend that the Cancun Ministerial may turn out to be an eventful affair if attention is focussed on access to medicine, special and differential treatment for developing countries and liberalisation of agricultural trade so as to lessen the highly skewed world grain market that drives down the prices of agricultural exports of developing countries.

Though the WTO is supposed to be a member-driven association, trade majors such as the US and the EU with an amalgam of powerful and vocal interests represented by Brazil, India and a handful of developing countries (China being the latest entrant to this body) always held their say and way exceptionally, prompting protests from excluded countries which assail WTO of taking decisions behind their back.

This schism came to the fore at the 1999 Seattle WTO Ministerial which ended half-way because of transatlantic troubles between the US and the EU, and also on account of outburst of expression of exclusion by a number of members from WTO-decision-making.

Though the matter was somewhat resolved at the 2001 Doha Ministerial by a wider participation among members with the entire course of setting off new negotiations for liberalisation of trade in goods and services under the rubric "development agenda", the current state of play and postures of different countries with missed opportunities to evolve modalities on several areas for negotiations do indicate that Cancun Ministerial may turn out to be a tough conclave, taxing the acumen of trade ministers in evolving solutions to the host of tough issues that they have put in the Doha basket.

The US Trade Representative, Mr Robert Zoellick, in a recent article in the International Information Programmes electronic journal American Internationalism, maintained that the US is fully committed to completing the DDA by the agreed deadline of 2005 as his country had already tabled far-reaching proposals in agriculture, industrial and consumer goods and services which encapsulate the basic goal of the WTO: To open access to markets and to spur growth and development. While stating that the Doha negotiations did include "customised treatment" for developing countries, Mr Zoellick did not mince words stating, "flexible transitions and special needs should not degenerate into perpetual protectionism". In a stinging tone, he said, "Good intentions that cover up trade barriers raise prices for the poorest people, profit cosseted interests, increase costs for competitive businesses and block exports from productive firms and workers to other developing countries."

So developing countries such as India which have their own compulsions to go at their own pace and pattern in pruning import duty for revenue considerations had to listen to the music of the messiahs of free trade who launched their broadside against policy space being legitimately sought by sovereign developing countries to cope with competing demands of development of their economy in general and the need to feed the millions of their people.

Critics of US policy of proclaiming free trade while raising all sorts of safeguards for goods that are of special concern to its domestic industry and other barriers to the movement of natural persons as service providers in the information technology (IT) industry remind Washington that trade liberalisation does not end with tariff barriers. The US and other trade majors should be munificent in their proposals to reduce subsidies to their farmers and eliminate non-tariff barriers (NTBs) in the garb of sanitary and phyto-sanitary standards on low cost agricultural imports from the developing countries.

Even on issue of TRIPs and pubic health, Mr Zoellick recalled that "we agreed at Doha that the flexibility in the intellectual property rules could be used to allow poor countries to license medicines compulsorily to deal with HIV/AIDS, tuberculosis, malaria and other epidemics."

In the same vein he said, "we are also committed to helping those poor regions and states obtain medicines produced abroad — if they cannot manufacture them locally — as long as other countries with pharmaceutical industries do not carve these special terms into loopholes to circumvent the intellectual property protection that rewards research on the medicines of the future."

Countries, such as India and Brazil, and now China, do not share the latter view because the moral dimension of the issue — as it directly concerns the lives of human beings — surpasses the purely economic facet of intellectual protection and any limitation imposed or written undertaking sought from well-developed pharmaceutical industries of India and Brazil that their export will not be diverted to other markets is a betrayal of not only the essential goodness of mankind but also a manifest mercantilist mindset.

Rightly did Mr Jean-Marie Metzger, Head, OECD Trade Directorate, pose the query in the OECD Observer thus: "Who in all decency could allow themselves to persist in blocking an agreement aimed at saving millions of human lives? The debate over the kinds of diseases that could be covered by such an accord, even its limitation to pandemics such as HIV-AIDS, malaria and tuberculosis, seem somewhat surreal when one realises that each year the developing world incurs more deaths from pneumonia, diarrhoea and flu than from any of these three illnesses."

So on this issue India, which has been consistently seeking a favourable result, would not be disappointed, as it appears quite inconceivable that delegates can depart from Cancun without resolving the uncertainty over the health care policies of the countries that need it the most.

It is not only on the issue of TRIPs and Public Health, the stakes are high for many a developing country to remain complacent and to buckle under pressure from the powerful pharmaceutical lobby from the US; there are equal number of issues of consequence to them such as special and differential treatment and also implementation-related issues of the Uruguay Round which need to be addressed on a priority basis.

For India, the issues go far beyond these as in the crucial agricultural agreement, India has repeatedly stated the need for a satisfactory resolution to the manifest distortions in global grain trade.

This could be feasible only if both domestic support and export subsidies in the developed countries were drastically reduced even while ensuring food security and requisite protection to the poor farmers in the developing countries for whom agriculture remains the main avocation.

India also stressed the need for sufficient special and differential treatment provisions for developing countries, such as the use of special safeguard measures in case of surge in imports.

On the so-called Singapore issues of investment, competition, transparency in government procurement and trade facilitation, the general impression among the developing countries is that there is a divergence of views among them and in some cases there were differences within the trade majors themselves to prompt any plunge into these new areas that are sought to be added to the overloaded WTO agenda.

In the run-up to the Cancun a reality check does point to rough edges and loose ends. Hence, the September meeting of the WTO is in effect a touchstone to the very concept of multilateralism and its survival, provided the rich live up to their promises of the past and deliver concrete results to developing countries in a cooperative spirit.

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