Another Ministerial Again….

CWmbNiRUwAAHpdDKorean Protesters outside Hotel Intercontinental in Nairobi expressing their dissatisfaction with WTO talks

1. Negotiations Symbolic Timelines

In 2001, the Doha Development Agenda was launched.

The Development dimension was included for the first time in trade negotiations. This novelty was related to the emotional impact of the 9/11 terrorist attacks in the United States. The attacks had mobilized the international community, and created a common goal : fighting poverty through trade and trade negotiations.

Negotiations have continued since 2001.

In 2008, the informal July Ministerial Meeting held in Geneva attempted to move the talks forward. It collapsed . The collapse was mostly due to disagreement on the Special Safeguard Mechanism (SSM), and the G2‘s (the United States and China) disagreement on industrial sectors openings, which went beyond the Doha Development Agenda (DDA).

In 20015, the 10th WTO Ministerial Conference took place in Nairobi (from 15th to 18th December). Some of the organizers and participants to this event were saying that Nairobi was chosen as a symbolic place as the 10th WTO Ministerial was to be the Conference for Africa and Development.

Africa, the continent with the highest economic growth potential.

Africa is the continent that faces the biggest social challenges, including pulling people out of poverty.

2. Context of the 10th WTO Ministerial in Nairobi

« The slow and uneven recovery from the severe economic and financial crisis of 2008 resulting in lower global economic growth, depressed agricultural and other commodity prices, raising inequalities, unemployment and signifiantly slower expansion of international trade in recent years » was noted with concern by WTO Members.

The 10th Ministerial Conference took place in a context of world economic instability. Inequalities within and among countries are widening.

The world political environement is currently charaterised by highly tensed international relations and shaky grounds for peace.

Since 2001, when the Doha Development Agenda was set as a sort of international community shout for a better world, terrorism has expanded and conquered. The 10th WTO MInisterial was to be part of that shout for a better world.

Indeniably, the international trade negotiations are complex and need time to unfold. The political economy of trade makes trade negotiations multidimentional as international trade agreements impact national constituencies’welfare. Trade liberalization negotiated internationally, through more flexible rules, lower tariffs or less stringent barriers to movement of professionals in services sector affects jobs and revenues nationally.

Trade liberalization through international negotiations can result in national political conflicts and poverty, unless countries are well prepared to face the adjustment changes in their economic structure resulting thereof. Negotiators have constantly in mind how international concessions in the framework of the WTO negotiations will affect their national constituencies, and impact political responses nationally. This explains, for example, India’s position in agriculture subsidies as its population of farmers amounts to 6 over 600 million farmers who fought hard for the three pillars of agriculture, namely domestic support, market access and export competition.

The present economic context remains gloomy.

Industrialized economies, particularly European economies, are not growing enough to create employment. Unemployment rates remain high. The US economy structure although more dynamic remains reliant on lobbies that do impact government positions in the WTO negotiations, and it is constantly looking for new market access opportunities.

The developing world continues to face development challenges. Africa’s industry remains infant or inexistent. Therefore, African industries are not competitive enough.

The Nairobi talks have continued over Saturday 19 December as developed and developing rift threatened the negotiations. Ms. Amina Mohammed, Cabinet Secretary Ministry of Foreign Affairs, made major efforts to bridge gaps between developing and developed countries.

The Doha Development Agenda (DDA) issues, such as Trade Distorting Subsidies (TDS) to be phased out by 2020, cotton subsidies elimination, public stock-holding, SSM, food aid were key issues on the agenda.

The G33 led by India has been fighting as in 2008 to save the SSM as a tool to protect developing countries markets from inflows of subsidized products.

India continued to play a leading role in advancing developing countries’ including Africa’s interests.

3. What the Text of the Ministerial Declaration Says : Key (selected) points

« We recognize that many Members reaffirm that the DDA, and the Declarations and Decisions adopted at the Doha and Ministerial Conferences held since then, and reaffirm full commitment to conclude the DDA on that basis. Other Members do not reaffirm the Doha mandates as they believe new approaches are necessary to achieve meaningful outcomes in multilateral negotiations. Members have different views on how to address the negotiations. We acknowledge the strong legal structure of the Organization ».

Paragraph 34 of the Declaration also states that : « while we concur that officials should prioritize work where results have not yet been achieved, some wish to identify and discuss other issues for negotiation ; others do not. Any decision to launch negotiations multilaterally on such issues would need to be agreed by all Members.“

Progress on cotton market access remains limited. Duty-free and quota-free market access « to the extent provided for in their respective preferential trade arrangements in favor of LDCs, as from 1 January 2016, duty-free and quota-free market access for cotton produced and exported by LDCs ». Developing country Members declaring themselves not in a position to grant duty-free and quota-free market access for cotton produced and exported by LDCs shall undertake, as from 1 January 2016, to consider the possibilities for increased import opportunities for cotton from LDCs. Developed country Members, and developing country Members declaring themselves in a position to do so, shall grant, to the extent provided for in their respective preferential trade arrangements in favor of LDCs, as from 1 January 2016. Reform of domestic cotton policies to reduce trade distorting subsidies were acknowledged.

The language of the Ministerial text is vague. It leaves a large margin for not taking any action in respect to duty free quota free cotton market access. The SSM issue remains unsolved. TDS subsidies are to be reduced by 2020.

Fourteen years after the launching of the Doha Round, the stallmate remains. Systemic disagreement on major issues between developing and developed countries not only persists but it has widened.

Beyond the official enthusiasm for the Declaration, in reality when one looks at the text carefully, the matter of fact is that the DDA is not finalized and the Doha Round as launched in 2001 is dead.

The whole idea of the « single undertaking » has been jeopardized by the Nairobi Declaration. Industrialized countries have made it clear in the negotiations that if the DDA must be still relevant that can only happen if new issues are taken up in the negotiations.

Including new issues on the agenda means to change the mandate of the DDA. Furthermore, advancement through « plurilateral agreements » as it has been proposed during the Nairobi Ministerial is a way to step out of multilateral commitments and of the single undertaking. If we add to this trend, the increasing number of regional trading Agreements a serious doubt might raise on the future and the relevance of the WTO and of the Multilateral Trading System (MTS).

In fact, the evolution of the Nairobi Conference has opened the way to a new round of negotiations. What that round will be for remains to be seen.

« I have a dream »

Any trade or economic analyst, who has followed international relations and trade negotiations in particular is aware of challenges posed by a system based on an unequal economic world sharing of wealth. Trade negotiations mirror world economic imbalances. Unequal world power relations are embedded in the trade regime. As it is at the moment, the results can only be skattered and chaotic. In fact, the reflection has now to be rather on the following :

  • Can economic and welfare issues still be tackled in the multilateral system ?
  • Looking for market access and business opportunities in compliance with national interests remain a key engine of trade negotiations. Can this be reconciled with development ?
  • If the pursuit of self-interests is the only way, where this trend going to take the world ? Up to which extent only national interests can be pursued ?
  • Does it mean that there is no more space for solidarity ?

Although rationally, these answers contain the replies in themselves, « I have a dream » that at one point the world relations could change to result in a more peaceful world. We are far away from the realization of my dream.

With Authority from Maria Rosaria Iorio – Diva International

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