Doha Can Survive A Severe Blow If Developing Nations Unite – Analysis

By Chakravarthi Raghavan*

When the WTO’s Nairobi Ministerial Conference (MC10) ended on December 19, WTO Director-General Roberto Azevedo and Kenya Foreign Affairs Cabinet Secretary Amina Mohamed were beaming that they had pulled off a coup of sorts in a successful Conference, with a Declaration and decisions – with the U.S. and the EU, acclaiming both of them.

And the Trade Editor of the Financial Times gleefully proclaimed at the end of MC10 in a news report headlined, “Trade talks lead to ‘Death of Doha and birth of new WTO’”, while its edit said in the title: “The Doha round finally dies a merciful death” And dutifully even some columnists in Indian media have taken it as gospel and echoed it (column by Vivek Dahejia in Mint , New Delhi of December 21).

“The report of my death was an exaggeration,” Mark Twain famously said in a cable from Europe to the Associated Press (published in the New York Journal of June 2, 1897).

The FT and its reports and writers (including its Martin Wolf), who once promoted the Doha Work Programme (as the Doha Ministerial of November 2001 characterised the programme of multilateral trade negotiations launched at Doha in November 2001, and decided it would be a “Single Undertaking”), has for some time now declared it to be dead, and advocated its formal closure – since it no longer suited the U.S., the EU and U.S.-British financial interests behind the FT (and more recently, Japan’s, after ownership passed from the Pearson publishing to the Japanese Nikkei group).

Challenging the FT report and view, in a letter to the FT, published on December 22, Timothy Wise (of the Global Development and Environment Institute, Tufts University, Medford, MA, USA) has said: “In fact, Kenyan chair Ms. Amina Mohamed, in her post-closure press conference, went out of her way to say quite the opposite. She was asked if this meant that the Doha round is over and new issues can be brought on to the agenda. She stated quite clearly that the language of the declaration specifically prioritised ‘outstanding Doha issues’ and that no new issues, such as investment and public procurement, could be taken up unless all WTO members agree. She presented that language as a firewall intended to keep new issues from supplanting the many outstanding Doha issues – domestic support, manufacturing and so on.”

The Indian Minister, Nirmla Sitaraman, on return from Nairobi, has sought to reassure her domestic constituencies, including the more nationalistic party faithfuls, via the social media, twitter and facebook, by posting therein the letter of the Indian Permanent Representative, Anjali Prasad to the Director-General on India’s disagreement with parts of the Declaration. Some of her own party supporters in twitter comments appeared to be questioning its utility, including on whether it was before or after the Declaration was declared adopted.

However, newspaper headlines, posts on social media like twitter and facebook aside, former trade negotiators and long-time trade observers, in comments to this writer suggest that when the trade delegations and ambassadors return to Geneva, and begin to consider the Nairobi Ministerial Declaration, and engage in trying to reach consensus, they can still retrieve ground.

Beyond the gloom and doom

Behind all the hype (of the U.S. Trade Representative and EU) and gloom and doom elsewhere, a careful reading of paragraphs 30, 31 and 34 of the Nairobi Ministerial Declaration (NMD) as published on the WTO website [WT/MIN(15)/W/33/Rev.3], seem to bear out these views (see further below).

The three paras suggest that neither side has walked away from Nairobi with success, but that in the three paras of the NMD, they have merely acknowledged the stalemate and reflected the reality of their deep divides; and both sides return to Geneva to continue their fight – whether on the Single Undertaking’s negotiating agenda of the Doha Work Programme (DWP) or the “new issues”. Nor can ANY conditional (non-MFN) plurilaterals (as envisaged by the U.S. and EU) be incorporated into the WTO treaty framework, except when there is a consensus on it at a Ministerial Conference.

True, key developing countries, particularly the major ones of Asia and Africa, have returned from Nairobi empty-handed, insofar as their efforts at rectifying the inequities of the Marrakesh accords, in particular on agriculture, through decisions at Nairobi have not borne fruit.

While WTO Director-General Azevedo and, to some extent, Kenya Cabinet Secretary and MC10 Chair Mohammad, have flaunted the various “decisions” out of Nairobi on the so-called “deliverables”, these are not enforceable at the WTO, until and unless a protocol is adopted incorporating all the results into the WTO framework, and accepted by all Members.

And Brazil, which joined hands, or was a silent supporter of the U.S. and EU in the final days of the Nairobi negotiations, against its G-20 group, would soon realise the wisdom of Raul Prebisch, who, in 1963 and 1964, repeatedly advised Brazil and other members of the Latin American group of nations in 1963 and 1964 at the time of UNCTAD-I, not to view themselves as stronger or superior, and that they need Afro-Asian groups and their support, and not the other way around, since politically Africa and Asia had collectively more clout.

It was this wisdom of Prebisch that Brazil (under President Lula and Foreign Minister Amorim) remembered and understood in 2003, on the eve of WTO’s Cancun MC. At that time, the U.S. and EU joined hands to ditch the entire WTO agriculture reform agenda (a treaty commitment), accommodate each others farm subsidy programs, and join hands to attack developing countries and their agriculture sector from development or future competition.

Lula, Amorim, and Brazil’s then Ambassador to United Nations Office at Geneva and WTO, Luiz Felipe de Seixas Correa, fell back on the Prebisch advice, and approached China, India and South Africa to form the G-20 alliance, and tabled alternative proposals (see Raghavan, ‘Agriculture: Key developing countries formulate modalities approach’ SUNS #5401 21 August 2003; and Martin Khor, ‘G-17′ get broad developing country support, attacked by EC, SUNS #5402 of 22 August 2003).

This alliance, and need to maintain it, prevailed in Brasilia and its Itamarty (Brazilian foreign office), during the tenure there of Foreign Minister Celso Amorim and his successor, Antonio Patriota. However, on the eve of Nairobi, Brazil unilaterally abandoned the G20 alliance to join U.S. and EU, in trying to act against China and India, and in time will find it “a costly error”.

Shorn of verbiage, and self-praise of the WTO’s achievements in its 20 years (virtually miniscular, if not nil, vis-à-vis the developing nations, and the billions of their poor and hungry), the core of the Nairobi Ministerial Declaration is in paras 30, 31 and 34. And the three paras merely reflect the existing deep divisions within the membership, including on the DWP and its Single Undertaking, where negotiations are at an impasse.

No agreed way out of the impasse

There is no roadmap or agreed way forward out of Nairobi on the impasse.

The status of the DWP (the formal name of the agenda of the Doha Ministerial Declaration and the agenda of MTNs that was launched there, though since then it has acquired other names DDA or Doha Development Agenda, and DDR or Doha Development Round), remain the same.

However, its status as a Single Undertaking or SU (legal concept) has been considerably diminished, though not altogether buried for good. There is still some scope to retrieve ground lost and uphold its single undertaking character. The text in para 31 of the NMD, notwithstanding the disagreement on that score in the text of para 30, gives scope to breath some life into the SU.

Undoubtedly, there is a bit of a contradiction between paras 30 and 31.

However, for the fight to uphold the SU of the DWP, it is not material that para 31 mentions ‘Doha issues’ rather than ‘Doha Development Agenda’ or ‘Doha Round issues’.

The real problem for developing countries is that they gave up the single most effective leverage they had in the negotiations by conceding at Bali 2013 the TFA (Trade Facilitation Agreement) as a separate accord, and agreed at Geneva in 2014 to a protocol for its incorporation into WTO Annex I-A, without resolving other issues of concern to them or tying it into the SU.

However, if developing countries don’t band together NOW to enforce the SU nature of the mandate of the Doha Declaration, the developed countries would have managed to change the basic character of the Multilateral Trade System as it has been known since 1948 (when GATT 1947 came into being as a provisional agreement, arising out of the Havana Charter).

It was rather strange, and difficult to explain, why in the 5-nation “green room” at Nairobi on November 18-19, India and China seemed unable to say, “NO” and refuse to make any concessions to the U.S.-EU, aided by Brazil, Kenya Chair and the WTO DG. If China-India-South Africa at least now do not stand together, and mobilise other developing countries, particularly in Asia and Africa, against the neo-mercantilist onslaughts of the U.S. and EU, they would have betrayed their people.

If the WTO and its MTS (multilateral trading system) are allowed to take on the new “shape” that the U.S. and EU, and their media shills are now pushing, the major players will only pick up issues of interest to them one by one from now onwards.

And if and when that happens the legitimacy of the WTO, which it sought to establish at MC2 Geneva in May 1998, by claiming lineage from Havana, will also be at an end (“The Birthday Party that hosts didn’t plan” in Chakravarthi Raghavan, 2014, The Third World in the Third Millennium CE, Vol 2, pp 183-187).

And one more nail would have been hammered into the coffin of the post-War Order, an order whose principal pillars in the UN Charter and System, the U.S. and EU have been so busy dismantling (in their regime change interventions around the world) in the Middle East, Eastern Europe and elsewhere.

Developing countries cannot afford to lower their guard

And the collapse of the MTS will hit the U.S. and EU too, notwithstanding the flamboyance of U.S. Trade Representative Michael Froman. For, in this 21st century, no trade and investment rights can be enforced anywhere through exercise of military power or gunboat diplomacy, unlike in the 18th and 19th centuries, but only through international accords – negotiated, concluded and implemented in good faith. At the WTO, this last has been lacking on the part of the U.S., EU and the secretariat acting to promote their interests, rather than that of the membership as a whole.

Developing countries thus have to ensure that no consensus gets developed at WTO, in Geneva, on new issues, either taking them up for study or on the agenda at the General Council, or negotiations allowed to begin at the WTO (by not giving their “unanimous agreement”, as stipulated in the last sentence of para 34 of the NMD), until the successful conclusion of the DWP agenda. They also have to resist the temptation to get their issues addressed by paying a further price for them through new issues. Developing nations have paid enough since Marrakech to the US, EU and its coat-tail allies, whether in developed or developing nations.

They have to use their leverage in the various processes in Geneva, including budget processes, to call the secretariat to order, and ensure they do not continue with their partiality and advocacy role on behalf of the United States.

As stated earlier, the only conclusion from paras 30, 31 and 34 in the NMD is that the Single Undertaking is diminished, but not dead, though China, India and others have a strong fight on their hand in Geneva.

At Nairobi, Kenya Cabinet Secretary for Foreign Relations and Trade, Ms. Amina Mohamad, hyped up the benefits of the TFA and more trade, and repeatedly appealed to all those nations who have not yet done so, to ratify the TFA protocol and convey their acceptance to bring it into force.

However, Kenya’s leading newspaper, The Daily Nation, in its edit on the Nairobi outcome, said the trade facilitation agreement “… would allow Africa and other developing nations to access markets in Europe and the United States. On paper, this would be a boost to the developing world, but, in reality, it is not. Most exports from Africa are largely agricultural and raw. They hardly fetch good prices on the international market. At any rate, agricultural subsidies in the West mean products from Africa have little chance to compete in those markets. Not surprisingly, the West has resisted attempts to eliminate subsidies because they give their farmers a competitive advantage.”

Catching an elephant by its tail

As noted earlier, the developing nations have given away the leverage of TFA they had, and as China said before Nairobi at Geneva, enabled the U.S. and EU “to pocket the TFA” and walk away.

However, if enough of them withhold depositing instruments of ratification/acceptance of the TFA to prevent its coming into force, until they secure their own other demands and incorporate all the results (including the decisions on Nairobi “deliverables”) into a single protocol incorporating the results of the DWP, and ensure that the two protocols are accepted by a sufficient number of members to bring them both into force.

It is a difficult task, like trying to catch an elephant by its tail, but not impossible.

The NMD, operative paras 30-34 stipulate:

“30. We recognize that many Members reaffirm the Doha Development Agenda, and the Declarations and Decisions adopted at Doha and at the Ministerial Conferences held since then, and reaffirm their 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 this Organization.

“31. Nevertheless, there remains a strong commitment of all Members to advance negotiations on the remaining Doha issues. This includes advancing work in all three pillars of agriculture, namely domestic support, market access and export competition, as well as non-agriculture market access, services, development, TRIPS and rules. Work on all the Ministerial Decisions adopted in Part II of this Declaration will remain an important element of our future agenda.

“32. This work shall maintain development at its centre and we reaffirm that provisions for special and differential treatment shall remain integral. Members shall also continue to give priority to the concerns and interests of least developed countries. Many Members want to carry out the work on the basis of the Doha structure, while some want to explore new architectures.

“33. Mindful of this situation and given our common resolve to have this meeting in Nairobi, our first Ministerial Conference in Africa, play a pivotal role in efforts to preserve and further strengthen the negotiating function of the WTO, we therefore agree that officials should work to find ways to advance negotiations and request the Director-General to report regularly to the General Council on these efforts.

“34. 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.”

Paras 30 and 31 are in effect contradictory. Para 30 merely records the differences of positions and views on Doha Development Agenda (DDA) and its reaffirmation. Para 31 notes despite the differences, Members are committed to “advance negotiations in remaining Doha issues”.

Whether the remaining issues are referred to as DWP (the Doha Work Programme), DDR (Doha Development Round), DDA (Doha Development Agenda), or only as “Doha issues”, remains irrelevant. The SU can end only if and when, the outcome of all the negotiations and decisions since 2001, are incorporated into a protocol for ratification and acceptance by members, the protocol is accepted by all, before any of the decisions become enforceable under the WTO and its DSU (dispute settlement undertaking).

In sum, as a result of the Nairobi Ministerial Declaration, the Multilateral Trade Negotiating agenda of the Doha Work Programme as a Single Undertaking remains somewhat diminished, but not dead. However, China, India, South Africa and other developing nations can still retrieve it, and prevent any new issues being brought on the agenda for study or discussion by withholding consensus in the General Council, and block negotiations which under para 34 needs “agreement of all members.”

*Chakravarthi Raghavan is an expert on WTO and Editor-emeritus of the South-North Development Monitor (SUNS). This article originally appeared in TWN Info Service on WTO and Trade Issues (Dec15/22) and was published in SUNS #8162 dated 23 December 2015. It is being reproduced by arrangement with the writer.