WTO Ministerial Section • Volume 5 • Number 1 • January 2001

Doha: Round or No Round Is Not the Question

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Virtually all WTO Members, as well as numerous non- governmental actors, are seeking changes in global trade disciplines. While the proposed changes still run the gamut from making existing WTO Agreements less exacting for developing countries to negotiating a wide range of new liberalisation instruments and commitments, there is hardly a voice in defence of a total status quo. Whether you are for or against a “new round of trade negotiations” is therefore largely a question of semantics.

Speculation about new negotiations intensified when 15 countries announced in January that they supported the a rapid launch of a round of trade talks and asked WTO Director-General Mike Moore to seek agreement on a broad agenda for such negotiations by next July. Among those making the request were, predictably enough, the European Union, Japan, Korea and Switzerland, but also Argentina, Australia, Brazil, Egypt, South Korea, Mexico and Nicaragua.

In early March, WTO Members agreed to hold informal consultations in the General Council to set the agenda for the WTO’s fourth Ministerial Conference in Doha, Qatar, next November, including exploration of potential consensus on the scope of a “new round”. While the goal is to reach broad agreement by July, many trade sources predict that the process will continue at least until September. If no consensus on the contents of future trade talks can be found by then, Members are likely to conclude that the launch of a “round” is not an option rather than risk another Ministerial like Seattle, where a total lack of pre-conference agreement on what new negotiations should cover made for an impossible agenda and ultimately led to the suspension of the meeting with no results at all.

Potential Agenda Ingredients

What are the elements of a possible agenda currently on the table? First, the “built-in” negotiations mandated in various WTO Agreements, including in particular agriculture and services, as well as a review of the implementation of the Agreement on Trade- related Aspects of Intellectual Property Rights (TRIPs). These will either continue along the lines recently agreed by Members (see separate articles on pages 6 and 7), or be rolled into a larger context if agreement can be found on what that context should be.

Second, developing countries’ concerns and difficulties with regard to existing Agreements. In Doha, Ministers will consider the results of the implementation review currently underway at the WTO and provide guidance for further action. Among developing countries top priorities are changes to anti-dumping rules, exemptions from TRIPs and investment disciplines and the removal of restrictions in textiles trade.

Industrial tariff cuts are among the least-opposed other elements that have been proposed for future negotiations, which would then presumably qualify as a “round”.
More controversial negotiation topics, even among industrialised countries, include the development of new multilateral trade rules on electronic commerce, investment and competition policy. Still more controversial would be the clarification sought by the EU on the relationship between the international trade and environmental regimes. Any discussion on labour standards and trade rules appears unlikely. See next page for more details.

Implementation Demands

Led by India, Pakistan, Malaysia and Egypt, developing countries are seeking to address imbalances inherent in existing WTO Agreements, and many of them insist that this Πand not rule- making in new areas or further liberalisation Πshould be the focus of future work at the WTO. At the very least, they demand meaningful progress in the ongoing implementation review before considering taking on potential new obligations. For these countries, a tangible down payment in this area Πagreed before the Doha Ministerial Πis a sine qua non for the launch of compre- hensive new negotiations, which, they believe, would benefit industrialised countries most (see separate article on page 5).

Nevertheless, the persistent lack of substantive results in the implementation review may lead developing countries to conclude that, however legitimate their rebalancing demands, sufficient momentum for meeting them will not materialise without broader negotiations that would offer industrialised countries trade-offs in other sectors. During a visit to India in early January, WTO Director-General Mike Moore argued that it was “naïve” to believe that all of developing countries’ difficulties in implementing the Uruguay Round Agreements, as well as their “perceived iniquities”, could be dealt with in isolation. This, of course, is the credo of the most powerful advocates for new comprehensive negotiations, the European Union and Japan. While both have so far firmly rejected making major concessions or a “down payment” ahead of Doha, they have multiplied consultations with developing countries in order to convince them that implementation concerns can only be adequately addressed in the context of broad-based new negotiations now dubbed a “development round”.

“We don’t feel the remotest need to make a down payment,” the European Commission’s Peter Carl told the press after a meeting with senior developing country representatives in late March. Instead, he proposed an “early and clear distinction” on what was “doable” without modifying existing Agreements before the Doha Ministerial, and what could be addressed as part of wider negotiations. In the same vein, Japan’s Deputy Foreign Minister Yoshiji Nogami stressed that implementation demands involving “modification of agreed instruments” could only be achieved through negotiations. “How can we change these,” he asked, “if the countries that are requesting the modification are not willing to participate in the negotiations?”

Among the few concrete examples offered by the EU and Japan of what could be achieved through a “development round, both have proposed negotiations on anti-dumping disciplines and other trade remedies. In the implementation review, developing countries’ many detailed demands for changes in these areas have made no progress at all. The EU acknowledges that it has internal difficulties with addressing anti-dumping practices within the Union, but officials in late January said that there was a “clear acceptance” that trade policy instruments would have to be reviewed as part of the talks.

Trade Commissioner Lamy has also warned EU countries that they should be ready to make concessions in sensitive areas such as textiles and agriculture (the EU has already offered duty-free market access to products from least-developed countries, see page 18).

The EU’s and Japan’s promises of potential gains for developing countries notwithstanding, it would be a challenge to translate the development rhetoric into a meaningful negotiating agenda, particularly as the US remains extremely reticent, if not downright hostile, about opening existing Agreements or commitments to revisions (see below).

Investment and Competition Policy

Europe is also signalling new flexibility on the controversial “new issues” of investment and competition policy, which it previously insisted had to be an integral part of any future trade negotiations (in addition to the EU and Japan, many industrialised countries support negotiations in these areas, as do a few developing countries such as Chile and Costa Rica) . While the EU Council of Ministers has not given its official blessing to the idea, the European Commission is exploring developing countries’ responses to a plurilateral approach to investment and competition policy, which would allow them to stay out of the negotiations and unbound by any resulting commitments. Among EU governments, France is strongly opposed to this approach and so far no significant shifts have occurred in developing country positions, although some privately acknowledge that it would be easier to agree on the development of multilateral rules on investment than on competition policy. The US is also likely to continue its opposition to talks on competition policy, largely because they could provide an avenue to address anti-dumping.

Environment

Whether or not a new round is launched, environmental concerns are likely to figure most prominently in the agricultural negotiations. Environmental protection is one of the main “non-trade concerns” that the EU and its allies argue are legitimate reasons for subsidising agricultural production. The agriculture negotiations may also deal with approval processes for genetically engineered crops and Œ less likely Œ animal welfare. In the context of the broad-based new negotiations it is seeking, the EU wants Members to clarify three environment-related issues: the relationship between WTO rules and those of multilateral environmental agreements, the use of environmental and consumer safety labelling, and the application of the precautionary principle. Modest as this seems, it would be difficult to convince other Members to place these items on the negotiating agenda. For one thing, developing countries are suspicious about linkages between trade and environmental issues, because of their potential for green protectionism and other market access restrictions. Second, the WTO’s Committee on Trade and Environment has discussed the first two issues for five years with no result, and the EU’s February 2000 paper on the application of the precautionary principle raised serious questions from developing and developed countries alike.

Whether the US would bring in environmental concerns in the context of a new WTO round is currently a subject speculation, but the Bush Administration is widely expected to keep a low profile. At the national level, US green activists worry that mandated environmental reviews of trade agreements may not be carried out. A set of guidelines for such reviews was released in December 2000, and outgoing USTR Charlene Barshefsky said they would be used to evaluate the WTO’s ongoing agriculture and services negotiations. But most Republicans oppose environmental reviews Œ as well as the inclusion of environmental provisions in trade agreements Œ and the guidelines may not be implemented.

Labour

It appears all but certain that the trade and labour linkage, which contributed to the collapse of the Seattle Ministerial, is off the table in the present context. Unlike the Clinton Administration, the new White House team is opposed to the inclusion of labour provisions in trade agreements in general, and the same trend prevails in Congress. New US Trade Representative Robert Zoellick has categorically ruled out the use of trade sanctions for labour right violations, and the European Union has reaffirmed its opposition as well. Before Seattle, the EU failed to muster support for a joint WTO-ILO standing forum to examine the relationship between trade liberalisation, development and fundamental labour rights. It is presently advocating a separate, independent, forum where representatives of ‚relevant intergovernmental organisations’, including the WTO and the ILO, could examine labour and other social issues related to international trade. A meeting could be organised prior to the Doha Ministerial, but this may remain a one-off event rather than the launch of a more permanent forum.

US Position Remains Unclear

In general, much will depend on the Bush Administration’s international trade priorities. At his Senate confirmation hearing on 30 January, US Trade Representative Robert Zoellick said that the United States should reassert its leadership in shaping a new round of global trade talks, and vowed to move “expeditiously” on seeking fast-track negotiating authority for President Bush. Mr Zoellick and Pascal Lamy agreed on 9 March that the EU and the US would “work together” to ensure the launch of a new round this year, and said both were “committed to try to make it happen.” So far, however, most signs point to a stronger US focus on hemispheric concerns, such as the Free Trade Area of the Americas, as well as bilateral trade deals, and most WTO Members remain unsure of how committed the US really is to progress in the multilateral arena (see also page 15).

In addition, the key aspects of US trade policy are unlikely to change. No new flexibility can be expected with regard to intellectual property rights rules or textiles. And, as during the run-up to the Seattle Ministerial, the United States remains unswerving in its opposition to addressing trade remedy policies at the WTO.

Civil Society: “Call off the Offensive”

While civil society appears less massively mobilised against the Doha Ministerial than it was in the pre-Seattle days, 21 NGOs have issued a joint statement urging the proponents of a new round to “call off their offensive”. According the statement, the EU’s proposal, in particular, is “causing serious divisions and destabilising the multilateral trading system.” The groups oppose the introduction, even on a plurilateral basis, of investment, competition policy or transparency in government procurement into the WTO, where “negotiations on these issues would be particularly disastrous for people in developing countries, as their possibility for development would be closed.” The signatories also rebuke WTO Director-General Mike Moore for “actively campaigning for a new round” when most Members oppose it.

However, while urging governments to reject a new round, the statement does not close the door all new negotiations. For instance, the organisations call for changes in the TRIPs, TRIMs and Agriculture Agreements, including the removal of the TRIPs Agreement from the WTO altogether. This, they say, “should be the focus of the WTO talks in the next years.”