Insight: WTO: Where are we heading?

Iman Pambagyo, Geneva

APEC ministers responsible for trade have just completed a two-day meeting in the resort area of Boracay, the Philippines, on May 24. In keeping with a long tradition, the trade ministers discussed better ways for APEC to strengthen its support for the multilateral trading system and the World Trade Organization (WTO). The director general of the WTO, ambassador Roberto Azevedo, was invited to the meeting and briefed ministers on the latest status of defining post-Bali work programs and working toward a successful WTO Ministerial Conference in Nairobi, Kenya, later this year.

It seems all critical issues under the Doha Development Agenda have seen their respective comfortable landing zones, and ministers are now looking into ways to nicely pack them all by July for a final conclusion of the Doha negotiations in Nairobi.

Unfortunately, this is not the case. Developing countries’ trade envoys in Geneva have become more concerned these days that discussions on such important issues have been kept behind closed doors in meetings among the so-called G5-Plus countries — namely the US, the EU, China, India, Brazil, Australia and Japan, with the director-general as the chair. To make things even worse, the rest of the WTO members could get information on what has been discussed only from some publications such as the Washington Trade Daily and more recently, the Third World Network’s journal SUNS.

In its May 19 edition, SUNS reported how developed countries of the G5 put pressure on China and India to agree to a much-lowered ambition on market-liberalization of agricultural and industrial goods in a clear attempt to set the scene so that flexibility sought by developing countries would lose ground. Such a concerted effort by key developed countries is pursued in the spirit of what the US called a “recalibrated” approach and the EU idea of a “simplified” approach to defining post-Bali work programs, which should help concluding the Doha negotiations.

The report has raised even more concerns among developing countries as it became much clearer that developed countries did practically nothing to rectify the existing imbalances in global trade. These rich countries are allowed to provide a huge amount of subsidies in agriculture while developing countries needing to expand their support to poor farmers and addressing rural poverty are prevented from doing so by the existing agreements.

Developing countries also realize that with a much lowered ambition on market access combined with no commitment to reducing domestic subsidies, the developed countries will continue enjoying their unchallenged muscle to access markets in developing countries with heavily subsidized agriculture products.

Is this the terms on which developing countries will be willing to conclude the Doha negotiations and allow developed countries to introduce a new round of multilateral trade negotiations focusing purely on commercial issues?

When WTO trade ministers agreed to launch the Doha Development Agenda in 2001, it was understood that the agenda would be balanced: it will further improve global trade by lowering barriers and rectify the imbalances that have been in favor of rich countries, and at the same time provide additional flexibility for developing countries to address their development challenges.

This mandate has been reiterated by the 2004 July framework agreement, the 2005 Hong Kong ministerial declaration and the 2008 revised draft modalities in agricultural and industrial goods. While it is widely understood that they are not cast in stone, developing countries believe that the 2008 draft modalities provide the best basis to define a roadmap to conclude the round, and they are willing to consider recalibrating these draft modalities to make them more relevant to the current dynamics of the negotiations.

Ambassador Azevedo himself, as the Brazilian ambassador to the WTO, wrote in 2012 that “the December 2008 draft modalities are the basis for negotiations and represent the end-game in terms of the landing zones of ambition. Any marginal adjustments in the level of ambition of those texts may be assessed only in the context of the overall balance of trade-off, bearing in mind that agriculture is the engine of the round.”

He went on to argue that “the draft modalities embody a delicate balance achieved after 10 years of negotiations. This equilibrium cannot be ignored, or we will need adjustments of the entire package with horizontal repercussions. Such readjustments cannot entail additional unilateral concessions from developing countries.”

The questions the developing-country trade envoys have now are how could a few developed countries working with the director-general think that they could just focus on lowering the ambition on tariff liberalization and getting rid of all other issues which could be critical to developing countries? And do we abandon all the mandates agreed by ministers just to conclude the round in December and praise Africa as the land of the Doha conclusion?

It is obvious, however, that ministers from the developing world need to insist strongly that the conversations in Geneva should be inclusive and transparent, that flexibility for developing countries is a must and that there is no need to rush to conclude the Doha Development Agenda so long as there is no proper balance between improving the global trade for all and leveling the playing field for developing countries.

To countries like Indonesia and to members of a group of developing countries known as the G33 with its 47 members, this would mean that the group’s proposals on agricultural special products and a special safeguard mechanism should be accommodated as part of the Doha outcomes.

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The writer is the Indonesian ambassador in charge of the WTO. This is a personal view.