G-20 Meet Creates Grand Alliance of the Third World Countries

The two-day G-20 ministerial summit which concluded in Delhi on March 19 endorsed the view that discussions on agriculture are central to the WTO negotiations. It conveyed the message of a need for maintaining unity in the Third World for fighting for justice in global trade.

The G-20 summit could strengthen the cord of unity. The coordinators of the African group, ACP countries, CARICOM group, G-33 and least developing countries (LDCs), though invited as observers, were allowed to actively participate in the deliberations. These groups found G-20 “as a natural ally.” Uruguay was welcomed as a new member of G-20.

Wisdom prevailed to accommodate the interests of various diverse group in preparation for the battle. The G-20 responded well to the sensitivities of the LDCs and other groups. Though the Delhi declaration called for phasing out of export subsidies within 5 years and with front loading commitments, it also “recalled the need for making operative the July Framework-2004 provisions for special and differential treatment including state trading enterprises and the concerns of net food importing developing countries (NFIDCs) as provided in the Marrakesh decision.”

It stressed the need to develop new disciplines on export credits, export credit guarantees and insurance and food aid so that these instruments are not used in a way as to displace exports or to promote surplus disposal. It expressed concern over non-tariff barriers by developed countries which are acting as impediments to the export interests of developing countries.

The declaration recoginsed the special needs of the LDCs and highlighted G-20 support for provisions exempting them from any reduction commitments and for steps to be taken to promote their export capacities, including the need to address their supply constraints.

The fears of possible erosion of preferences in exports given by developed countries to some developing countries and the LDCs through tariff rate quota (TRQ) regime was also addressed in the Delhi declaration. The declaration called for that preference erosion should be addressed in both regional and multilateral negotiations in accordance with the provisions of the July Framework-2004. It called for expanded market access for products which are of vital export importance to the preference beneficiaries, effective utilisation of existing preferences and additional financial assistance and capacity building to address supply constraints, promote diversification and assist in adjustment and restructuring. “The modalities for fullest liberalisation of tropical products by developed countries are long overdue commitments, which remain to be addressed and honoured,” the declaration said. The declaration expressed concern over decline global cotton prices and urged for development assistance for African cotton growers and urgent reforms in trade-distorting measures.

The Brazilian minister of external relations and co-ordinator of G-20, Celso Amorim said “the preferences can be maintained if redesigned in the interest of the beneficiaries and not just to protect the interests of the developed countries.” He suggested that “dependency is not good for development. The developing countries and the LDCs should come out of dependency as soon as possible. A smoother way is to have more South-South trade.”

The Delhi declaration emphasised the concepts of special products and special safeguard mechanism as integral elements of special and differential treatment for developing countries and reiterated the commitment to work together with G-33 and other interested groups to operationalise these instruments. It said that SSG (Article 5 of AoA) was conceived as a transitory exception and therefore should be eliminated.

Without creating any new categories of developing countries, the Delhi declaration agreed that the concerns of small, vulnerable economies must also be effectively addressed as part of the Work Programme mandated in para 35 of the Doha Ministerial Declaration. It suggested that the concerns of the recently acceded members of WTO must be effectively addressed through specific flexibility provisions in all pillars. Disciplines on export prohibitions and restrictions in Article 12.1 of AoA should be strengthened. With regard to each of the three issues mentioned in para 49 of the July Framework-2004, the declaration reaffirmed that “there was no agreement to include them in the negotiations.” The G-20 ministerial meet has thus resulted in creation of a Grand Alliance of the Third World. G-20 has promised to intensify its efforts to coordinate with other groups and “agreed that G-20 ministers participating in other events would take these opportunities to meet among themselves at the margins of such meeting and keep their colleagues informed of the deliberations”

As an interesting part of the negotiating process, the declaration underlined the need for a “bottom-up” approach “so that texts will evolve from a participative negotiating process.” The G-20 co-ordinator and the Brazilian external relations minister, Celso Amorim said “The participation of the civil society is essential. They had played a remarkable role in negotiations on TRIPS and public health.” The declaration, however, called for determining the base periods and initial and final numbers for overall trade-distorting domestic support in a technically consistent and “politically credible manner”. This “politically credible manner is not clear to the point.