Tuesday, December 20, 2005

WTO update from IBON

December 17, 2005



Hong Kong-- On its fourth day (Dec 16) the WTO’s 6th Ministerial Conference (MC6) apparently still is not making progress towards the minimum it needs to avoid being called a failure. There are still no agreements on key issues in agriculture, non-agricultural market access and services. There are also criticisms of the “development package” that the developed countries are using to bribe neocolonial country governments to agree to deals; the “package” is also a deceitful farce so that the WTO can claim to be meeting development objectives of the “Doha Development Agenda”.

Nonetheless, the informal small group “Green Room” meetings dominated by the advanced industrial powers continue with sessions lasting until the early hours of the morning (the latest began at 7:00 pm of Dec. 16). These may still produce enough results in the last two days that prevent a third Ministerial collapse that would undermine the WTO’s credibility further and boost the anti-neoliberal “globalization” movement. The next round of talks may be in March or April 2006, towards a final set of agreements and a conclusion of the Doha Round by end-2006.

The key areas for negotiation are agriculture, non-agricultural market access and services as well as some kind of “development package”.

The WTO’s target in agriculture for the MC6 is just for general agreement on the main elements of liberalization with the more definite details for further negotiation in 2006. This general framework is apparently not being reached with the US and EU not committing any real cuts in the subsidies they give to their farmers, on one hand, and the underdeveloped countries not committing further liberalization to the extent desired by the developed countries, on the other.

The target in non-agricultural market access is also just for general agreement on the main elements of liberalization with the more definite details for further negotiation in 2006. Apparently there are still divergent views on the extent, depth and pace of liberalization (i.e. on product coverage and exemptions, formulas/coefficients for tariff reduction).

In services, unlike in the previous two key areas, the WTO’s target for MC6 is for definite guidelines and procedures that intensify services sector liberalization. In particular, the target is for a change in the guidelines and procedures that had already been agreed on in 2001 for new ones that intensify services sector liberalization. The developed countries are not satisfied with the existing procedures that in principle still give underdeveloped countries the right to refuse to open up service sectors for liberalization; moreover, they want to require countries to liberalize in a minimum number of sectors and in particular “modes”. (In WTO-speak: the developed countries want to change the existing voluntary bilateral request-offer approach with a mandatory plurilateral and sectoral/modal approach; moreover, they want quantitative and qualitative “benchmarking”.)

On Thursday (Dec 15), however, a group of six countries (Cuba, Indonesia, Kenya, Philippines, South Africa and Venezuela) sent a letter to the Conference chairman saying that the proposed services agreement in the draft Ministerial text coming into Hong Kong is not in any way an agreed text and is not an acceptable basis for moving forward. A few hours after that, the G-90 comprising the majority of underdeveloped country members also submitted an alternative text on services that proposes more moderate liberalization. The extent of real conflict between the “opposed” positions – draft services text and G-90 proposal – will become clearer after the actual negotiations on them tonight.

Outside of these three key areas, a “development package” is being cooked up in the WTO. This package is mainly about: 1) five “concessions” to the least-developed countries (LDCs) basically about not expecting them to open up as much as other countries and giving them preferential access to developed country markets (particular issues being raised are: “special and differential treatment” in terms of duty free and quota free access for LDC products and exemption from TRIMS obligations; reducing US subsidies for American cotton producers to benefit West African cotton producers); and 2) underdeveloped countries being given “aid for trade”. There may also be a show of resolving issues on TRIPS and public health
so that underdeveloped countries can have access to cheap medicines.

On the concessions to LDCs, the US and EU are at the moment using a combination of legalistic arguments and outright refusal so as not to concede anything. On the “aid for trade”, there are doubts that the US, EU and Japan really mean to give the approximately US$10 billion dollars in loans and grants that they are dangling or, indeed, if there is really that much “aid” to begin with (with this “aid” actually just going to making it easier for the developed countries to open up). On TRIPS and public health, there is no substantial change in the agreement so far.

Finally, the announcement on Friday (Dec 16) of an alliance of underdeveloped countries comprised of the G-20, G-33, ACP, LDCs, African Group and the Small Economies – encompassing 120 countries and four-fifths of the world’s population – is being interpreted as making it harder for the developed countries to pressure the world’s poor countries to open up. The real test though is if this “G-120” will be able to muster the collective will to defy the big powers of the US, EU and Japan. As it is, all this “G-120” has done so far is make a show of underdeveloped
country solidarity and reaffirm long-stated requests on key agricultural issues instead of making stronger and more definite demands.

The direction of the talks for now is towards failure due to seemingly inflexible positions of country delegations. However the situation is still very fluid and things will probably be much clearer by tomorrow (Saturday) especially with the drafting of the latest proposed Ministerial text.

The main devices that the imperialist powers can use to manufacture consensus include: giving key underdeveloped countries what they want in one area of negotiation (ex. agriculture) in exchange for agreeing in another area (ex. services), using the ploy of benefits from a “development package”, threatening to increase developed country protections and support to the further disadvantage of the underdeveloped countries, raising the bogey of a global economic crisis if the overall negotiations fail, or outright political pressure.

Also, many underdeveloped country delegations (including the Philippines) seem to think that “a bad deal is better than no deal,” because they feel that the WTO gives underdeveloped countries the venue to ask rich countries like the US to reduce their farm subsidies and tariffs. This kind of thinking means that they can adopt “critical” positions but still at the end of the day agree because they don’t want to risk the collapse of what they think is a basically desirable institution that ostensibly puts them on the same level as the imperialist powers. (end)

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