READING THE ENTRAILS: DIVINING DOHA

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READING THE ENTRAILS: DIVINING DOHA

The most significant single achievement of the Doha Ministerial Conference was to endorse the accession of both Chinese Taipei, and the People's Republic of China. Both jurisdictions passed the necessary ratifications immediately following their acceptance, and therefore will be formally members of the WTO by mid-December 2001.

Of course, the higher purpose of the meeting was to formally launch a new round of multilateral trade negotiations. Six days of negotiations in Doha, Qatar produced the necessary agreement to proceed with a new round. Remarkably, the Doha meeting came within a hair of failing to produce a consensus on a new round. Crafting a consensus ran over the planned meeting deadline by a full day. India followed through with a vigorous effort to overturn the inclusion of investment, competition and the environment in the upcoming round, and to accelerate reductions in textile barriers. The Indian resistance, and the balking by France over agriculture subsidy draft language, brought the meeting to the edge of failure.

The Ministerial Declaration sets out a modest plan slated to conclude by January 1 2005. The Trade Negotiations Committee is to hold its first meeting not later than 31 January 2002, and establish appropriate negotiating mechanisms as required, as well as supervise the progress of the negotiations. The Declaration identifies areas that will be negotiated, including agriculture and services, intellectual property protection, and the environment. The negotiation is styled as a single undertaking, with the possibility agreements reached at an early stage to be implemented on a provisional or definitive basis.

Implementation issues attached to a specific negotiating mandate are to be addressed; all other implementation issues are to be addressed as a matter of priority under relevant WTO bodies, and report to the TNC by the end of 2002 for appropriate action. No commitment is made to make recommendations to the TNC, and there seems none evident regarding what if any action TNC might eventually take. This is clearly not helpful language for developing countries, and therefore the only certainty on implementation issues is that which is specifically included as a negotiation mandate in the Ministerial Declaration.

A good deal of the Declaration touches upon commitments for technical cooperation and capacity building in developing countries. It endorses the New Strategy for WTO Technical Cooperation for Capacity Building, Growth and Integration, and commits the Director-General to pursue both a budget and coordinated initiatives with other organisations to ensure an appropriate level of assistance is available to developing countries. Least developed countries were treated to warm assurances and serious commitments, though nothing of a concrete actionable nature is identified. Exhortation evidently has the power to move mountains. The work programme on special and differential treatment sounds like a throwback to 1958, but we'll have to see whether it will garner developed country support for more precise, effective, and operational provisions.

The agriculture negotiations will feature special and differential treatment for developing countries encompassing not only scheduled concessions and commitments but also rules and disciplines. Modalities for the further commitments, including provisions for special and differential treatment, are to be established no later than 31 March 2003. Participants shall submit their comprehensive draft Schedules based on these modalities no later than the date of the Fifth Session of the Ministerial Conference. The negotiations, including with respect to rules and disciplines and related legal texts, shall be concluded as part and at the date of conclusion of the negotiating agenda as a whole.

Services negotiations will be proceeding with the guidelines agreed to in March 2001. Participants have agreed to submit initial requests for specific commitments by 30 June 2002 and initial offers by 31 March 2003.

Tariff negotiations on goods may offer developing countries an opportunity to break the back of industrial market practices including tariff escalation, high tariffs, and tariff peaks. However, there is no clarity in the Declaration regarding the extent to which tariffs will be eliminated by developed countries or merely reduced as has been past practice. It is curious that the elimination standard almost imposed upon the EU in regard to agricultural subsidies was not even considered in relation to the elimination of industrial economy protectionist tariffs that constrain developing country trade expansion.

Developing countries scored at least one potential victory when WTO Ministers agreed in a separate declaration that licenses could be granted to generic manufacturers to produce drugs needed to combat public health crises. This did not address the least developed countries that do not have the capacity to produce their own generic drugs. It is arguable that the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) gives countries the right to regulate for public health protection, but the United States had threatened South Africa and Brazil with legal challenges to their production of generic drugs to fight HIV/AIDS. Though unstated, most developing country delegates at Doha were more than aware of the implicit contradiction represented by US consideration the previous month of proposed licensing generic production of Bayer's Cipro in case of an anthrax attack. In its initial reaction to fear of a mass anthrax attack, Canada also overrode patent legislation by placing an order with a generic manufacturer.

It was agreed that negotiations on a multilateral framework for investment, particularly foreign direct investment, as well as a multilateral framework for competition policy, and a multilateral agreement on transparency in government procurement will take place after the Fifth Session of the Ministerial Conference on the basis of decisions to be taken, by explicit consensus, at that Session on the modalities of each negotiation.

In the meantime, enhanced technical assistance and capacity building for developing countries will be addressed. In addition, the Working Group on the Relationship Between Trade and Investment will focus on the clarification of key issues such as scope and definition; transparency; non-discrimination; modalities for pre-establishment commitments based on a GATS-type, positive list approach; and other boiler plate matters. Similarly, the Working Group on the Interaction between Trade and Competition Policy will focus on the clarification of core principles, including transparency, non-discrimination and procedural fairness, and other provisions and modalities.

Anti-dumping, subsidies and countervailing measures, and disciplines and procedures applying to regional trade agreements are to be negotiated. No specific date is given for results, though the Dispute Settlement Understanding is to be further negotiated by May 2003 and the results implemented soon thereafter. The result on dispute settlement is explicitly deemed to be outside the single undertaking.

A very limited negotiation was agreed to regarding the relationship between existing WTO rules and specific trade obligations set out in multilateral environmental agreements (MEAs). Virtually all other environment issues are laid over to the Fifth Ministerial Conference.

In yet another non-event, the Declaration agrees that Members will maintain their current practice of not imposing customs duties on electronic transmissions until the Fifth Session, and the Work Programme on Electronic Commerce will continue. Work programmes are envisioned for small economies, debt and finance, and technology transfers.

Apart from the meager substance of the new round, there are clearly concerns about the timing, and capacity of the WTO to hit the ground running in January 2002. Dr. Supachai looms in the wings awaiting the approach of September 2002, and the introduction of a new management team with a distinct vision for the future of the international trading system. The senior management of the WTO Secretariat brought in by Mike Moore can be expected to be focusing on preserving their jobs, finding new ones elsewhere in Geneva, or moving back to national capitals.

The Free Trade Area of the Americas talks are slated to intensify next May. This hemispheric track will introduce an interesting dynamic as the FTAA is set to conclude at the same time as the new WTO round. Apart from the US, and perhaps a handful of other countries in the region, none are able to field full teams to negotiate in both fora.

How far either negotiation can proceed in the absence of US Congressional trade negotiation authority for the Bush Administration is an open but critical question. Although USTR officials have already called for a rapid start to the three-year round, it is not going to have any serious momentum if the authority is not in place.

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