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Against a backdrop of war and global recession, trade ministers at the World Trade Organization (WTO) meeting in Doha, Qatar, concluded what Director-General Mike Moore termed an "extraordinarily successful" conference. They agreed to a new round of negotiations aimed at opening vast new areas of the global economy to international competition. But the 9-14 November meeting also exposed the same kind of bitter divisions -- among the major trading powers and between the industrial North and the developing South -- that led to the failure of the last WTO ministerial meeting in Seattle in 1999 (see Africa Recovery, December 1999).

In addition to continuing talks over liberalization of trade in services and in agricultural products, the organization's member states will begin negotiations on industrial tariffs and trade-related aspects of environmental protection, among other issues. Developing countries had initially opposed inclusion of a number of even more controversial issues, but relented when they won agreement that those talks would be postponed until 2003 -- and then only on the basis of an "explicit consensus" that eluded the ministers in Doha. In addition, upcoming talks will review past trade agreements for inequities that African and other developing countries argue have unfairly denied them the benefits of increased global commerce.

For proponents of greater trade liberalization, the stakes in Doha seemed considerable. A second failure like the one in Seattle, combined with a deepening global recession, they felt, could have spelled a return to widespread protectionism, thereby worsening the world crisis. The costs of failure, said Mr. Moore, "would have been very high."

However, with Africa's share of world trade dropping and its people sliding deeper into poverty, the continent's trade ministers might well have left Doha wondering about the costs of success, and who would pay for them.

Africa's expectations

The Africa Group of negotiators went to Doha opposed to adding new issues to the trade agenda until a better deal is reached on those already covered. With the notable exception of South Africa, which announced beforehand that it would support the launch of a broad new round of negotiations, most African countries wanted Doha to concentrate on resolving outstanding "implementation issues," such as the failure of Northern governments to reduce tariff barriers to African exports. The WTO General Council had, in fact, decided in December 2000 that the differences over these previous agreements, known as the Uruguay Round, should be resolved before or at Doha. Despite a commitment under Uruguay to reduce import duties, some developing country products exported to industrial nations, such as sugar, metals, cereals and textiles, continue to face tariff barriers, in some cases of more than 100 per cent.

After years of trade talks, many African exports still face high tariffs in Northern markets.

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Photo: ©World Bank

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"These are the countries that evangelize in the name of free trade," President Yoweri Museveni of Uganda told the UN General Assembly in New York in November, at the same time as the Doha meeting. "What a paradox," he said. "These double standards must end."

African ministers also went to Doha hoping to obtain binding commitments from rich countries to reduce the agricultural subsidies that enable the North to export cheap food to developing countries, to the detriment of farmers in the South. As well, they wanted binding commitments on food aid, grants and technical assistance from the industrialized countries, as compensation for the negative impact of removing agricultural import barriers. Finally, they sought an explicit affirmation that safeguards on intellectual property rights could be overridden for public health purposes, without fear of triggering trade sanctions or legal challenges

Broad compromise, complex agenda

In the end, Doha resulted in a broad compromise between the rich and poor countries. The industrialized countries got a mention of the contentious new issues they wanted, but in the face of developing country resistance, agreed to postpone any decision to actually begin negotiations until the next WTO ministerial meeting in 2003. While the developing countries' emphasis on "implementation issues" -- such as access for their agricultural and textile goods to industrialized country markets -- was not actually resolved in Doha, they did win agreement that a review of past accords be incorporated into the new round.

This new round of negotiations is quite complex (see box, next page). Some talks will begin in early 2002, including on opening market access for "non-agricultural" (industrial) products and on revising laws against "dumping," by which subsidized goods are sold abroad below their true costs of production.

The controversial new issues include proposals on investment, competition policy, transparency in government procurement and trade facilitation, all of which could further open domestic markets to competition from foreign companies. In general, opponents claim, liberalization in these areas will reduce governments' ability to protect their countries' national interests. It is unclear whether or when talks on these items will begin. Based on the vague language drafted in Doha, opponents such as India believe that WTO members can still vote to block the talks at the 2003 ministerial meeting. However, the European Union (EU) maintains there is a commitment to actually launch negotiations in 2003, with the next ministerial session merely deciding the nature of the talks.

While the separate areas of negotiation could be completed at different times, most agreements, including the implementation issues, are to be signed at the completion of the entire round and will become effective only after that date. Currently, a deadline of 2005 has been set, but realistically negotiations could extend longer.

Towards cheaper AIDS drugs?

A declaration in Doha on Trade Related Aspects of Intellectual Property Rights (TRIPS) addressed some of the developing country concerns about that 1994 agreement. It contained stronger language on the primacy of public health over patents for medicines, declaring that "the TRIPS agreement does not and should not prevent members from taking measures to protect public health."

The declaration did not, however, resolve widespread concerns, especially in Africa, about the need to prohibit the patenting of life forms and biological material. Many Southern governments and activists believe that such patenting could erode poor farmers' rights over seeds and other indigenous innovations and bring the unauthorized exploitation of genetic resources by Northern industrial and pharmaceutical companies.

Despite the declaration's shortcomings, many developing countries welcomed it as a step towards making drugs to fight public health emergencies such as AIDS more available to poor people. A number of international groups lobbying for access to cheaper AIDS drugs, like Médécins sans frontières (MSF), also commended the move, saying it would strengthen the hand of developing countries already producing cheaper generic medicines, such as Brazil and India. The US had used the declaration to gain developing countries' concession on the notion of the new round of trade talks.

For the first time, the WTO gives explicit rights to member countries to unilaterally grant licences that allow domestic producers to override patents. Under TRIPS, such "compulsory licensing" was permitted only under emergency circumstances, a stipulation that was removed in Doha.

However, Doha did not resolve "the most obvious problem with TRIPS -- limitations on exports of medicines manufactured under a compulsory licence," observes Mr. James Love of the Consumer Project on Technology, a non-governmental organization active on the issue. The Doha meeting discussed but rejected proposals to permit the "parallel exporting" of generic drugs to countries with no means to manufacture the medicines themselves.

The issue now goes back to the WTO TRIPS Council, which is required to make a ruling by the end of 2002. Since most African countries are not in a position to manufacture drugs, they are looking for a decision that will permit them to serve the medical needs of their people at affordable cost.

Waiver on EU trade

As Africa had wanted, the WTO agreed to exempt trade between Europe and the African, Caribbean and Pacific (ACP) countries from global trade rules. Such an exemption allows the EU to continue granting preferential market access under the Cotonou Agreement, which covers cooperation in areas like market access, financial aid and technical assistance. For ACP countries, the waiver was a potential deal breaker -- they threatened to oppose the launch of a new round if they did not get it.

A delegate noted that in Doha, "African negotiators remained coherent, coordinated and forceful" in arguing their positions on this issue. During the last two days of the meeting the Africa Group agreed to form a single negotiating bloc with the least developed countries (LDCs) and the ACP. To obtain the waiver, they had to overcome strong objections from banana-producing Latin American countries and tuna exporters such as the Philippines and Thailand, which were concerned about the impact of the ACP's preferential access on their own exports to Europe.

More open consultations

"Unlike in Seattle, Africa has been satisfied with all the stages of consultations and negotiating processes in Doha," Nigerian Commerce Minister Mustafa Bello, who chaired the Africa Group in Doha, declared at the close of the meeting. By making compromises and agreeing to a new round, he hoped that Africa's development partners would keep their commitments to provide technical assistance to help Africa's negotiators "enhance their understanding of the issues."

Kenyan delegation at WTO meeting in Doha: African negotiators presented "coherent, coordinated and forceful" arguments.

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Photo: ©WTO

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One of the major objections of developing country ministers at the Seattle talks was their exclusion from crucial negotiating sessions in so-called "green rooms," where a small group of ministers, mainly from the rich countries, thrashed out final details. In Doha, maintained Mr. Ablassé Ouédraogo, former foreign minister of Burkina Faso and now deputy director general at the WTO, "preference was given to open consultations instead of the method of green rooms."

"The effective presence and even activism of ministers from developing countries at this meeting show that there has been a change in the WTO," he argued, "one that raises hopes that the outcomes of Doha will help bring certain corrections in the multilateral trading system."

But the process in Doha was far from ideal. Before the meeting, Nigeria issued a letter attacking the chair of the negotiations, Mr. Stuart Harbinson, for adopting a "non-inclusive attitude by sidetracking the views of the developing and least developed countries." The first draft declaration, which formed the basis of negotiations in Doha, was "empty of contents on the issues of interest to developing countries," the letter charged.

Uproar over agricultural subsidies

One of the most hotly contested issues at Doha was that of high agricultural subsidies in developed countries. Basing themselves on agreements that had previously been negotiated, Africa and other poor regions had expected the North to apply them both in letter and spirit. However, despite a commitment under the Uruguay Round to reduce certain agricultural subsidies by 20 per cent by 2000, overall subsidy levels in the industrialized countries of the Organization for Economic Cooperation and Development (OECD) have continued to rise. Payments to farmers now reach some $1 bn a day, equivalent to the total daily income of the world's poorest 1 billion people.

Mr. Moore himself notes that reducing subsidies and barriers to imports from developing countries could provide economic benefits equal to three times the level of aid currently provided by Northern countries. A World Bank report released just before the Doha meeting concurred. It noted that the elimination of such farm subsidies -- along with the reduction of high agricultural tariffs and the granting of duty- and quota-free access to OECD markets for exports from the LDCs -- could bring developing countries additional earnings of $15,000 bn over a 10-year period.

France's leaders, facing elections in early 2002, have been desperate to defend subsidies for French farmers, who form an important political constituency. At Doha, France consequently tried to block language in the declaration committing members to eliminate subsidies.

This led to an eleventh-hour drama that nearly scuttled the talks. France held out until the early hours of 14 November when other high-subsidy countries, such as Japan and the Republic of Korea, deserted its camp, and eventually other EU countries abandoned support for the French position. Also pressing France were the US, which is concerned about the effect of EU subsidies on US farmers, the so-called Cairns Group of agriculture-exporting nations, and poor developing countries.

France eventually succumbed after the US proposed face-saving language that countries would go into talks on reducing subsidies, "without prejudging the outcome of the negotiations."

Also on agricultural issues, a group of countries that included Kenya, Nigeria, Senegal, Uganda and Zimbabwe failed in their demand that a package of reforms, known as the "development box," be included in the Doha declaration to amend the Agreement on Agriculture, another of the Uruguay Round accords. The reforms were intended to allow poor countries to raise import tariffs on staple foods, in order to meet their food security needs and support vulnerable rural populations. They also wanted to be able to directly subsidize crops that provide the main source of livelihood for poor farmers, a practice the agreement currently prohibits. "The agreement protects the interests of the developed countries at the expense of developing countries," Kenyan Minister of Planning Paul Adhu Awiti commented.

Gearing up for the challenge

While Doha's outcome presents some potential opportunities for Africa to negotiate its way out of unfair trade rules, it also poses a formidable challenge. Once again African countries are facing an agenda of negotiations that is much too extensive and complex for their meagre resources and limited personnel to adequately handle. As during the Uruguay Round, this may mean that countries unwittingly take on more commitments without fully understanding their implications.

Negotiators from developing countries will have to pit their skills against the armies of officials, lawyers and lobbyists deployed by the EU, Japan and US. Some African countries, such as Mozambique, have as few as three negotiators at the WTO. Others have none. This will make it hard to ensure that their main concerns are incorporated into the final agreements.

The agenda that came out of Doha "is so huge" that Africa faces a major challenge going into the talks, UN Economic Commission for Africa Executive Secretary K.Y. Amoako told Africa Recovery. Therefore, "we need to be very focused." Both the ECA and the UN Conference on Trade and Development are working with African countries to help them prepare for future negotiations.

Whether African nations succeed in pushing their interests at the WTO during the next few years remains to be seen. If they do not, they may ultimately conclude that Doha was more of a sand trap than an oasis.

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***Box 1***

New agenda for trade talks

The WTO meeting in Doha agreed to a broad agenda of negotiations for 2002-05. The areas to be discussed include:

The "built-in" agenda: Negotiations in Geneva on the Agreement on Agriculture and the General Agreement on Trade in Services, which began in 2000, will now be incorporated into the new round. In agriculture, members will negotiate improvement in market access, reductions of subsidies and domestic support measures. The new round will also include negotiations on TRIPS.

Implementation issues: Re-negotiation on a series of issues, including commitments at the Uruguay Round that industrial countries have not met. They also involve developing countries' concerns about the economic impact of existing agreements, as well as the burdens and costs to poor countries of trying to implement some of them.

Industrial tariffs: Immediate negotiations on eliminating tariffs and other barriers to trade in manufactured goods, despite opposition from developing countries. A number of African countries asked for full impact assessments before negotiations start, since their experience so far has been that tariff reductions have contributed to industrial closures and job losses.

Environment: The EU pushed for negotiations in this area, although developing countries have opposed them, fearing that environmental requirements will be used as yet more barriers to their exports. Negotiations, however, will be limited to the reduction or elimination of tariff barriers on environmental goods and services, and on the relationship between WTO rules and multilateral environmental agreements such as the Kyoto Protocol on climate change.

Investment, competition policy, government procurement and trade facilitation: Inclusion of these issues was one of the most contested items between the North and the South at Doha, resulting in a compromise that negotiations would begin only after the 2003 ministerial conference. The EU and the US wanted to begin immediate negotiations, while developing countries opposed them on the grounds that inclusion of these issues was not in their interests. Some of these issues had been the subject of OECD negotiations on a Multilateral Agreement on Investments (MAI) in the late 1990s, an effort that was abandoned after non-governmental critics galvanized opposition and obliged some governments to withdraw their support.

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