Ban Proposed on Export Restrictions that Undermine Food Security

June 26, 2011 by

Global Geopolitics & Political Economy / IPS

By Isolda Agazzi

GENEVA, Jun 24, 2011 (IPS) – Egypt has initiated a proposal in the World Trade Organisation (WTO) to ban export restrictions on farm products to poor countries that are net food importers. The Group of 20 has also exhorted the upcoming WTO ministerial conference to adopt a specific resolution on export restrictions.

After Egypt’s democratic uprising earlier this year, food security has become a main aim in its quest to achieve social justice. Therefore, Cairo has initiated a proposal at the WTO to ban export restrictions of agricultural products to net food importing developing countries (NFIDC).

Some 77 WTO members are regarded as NFIDCs. They comprise all least developed countries (LDCs) plus another 26 developing countries that rely primarily on the import of agricultural products for food security. The proposal was introduced by the NFIDCs, with the support of the African group and the LDCs group.

A recent meeting on food price volatility, organised by the Geneva-based global think tank the International Centre for Trade and Sustainable Development (ICTSD), discussed the proposal of banning export restrictions on food to countries with vulnerable populations.

Food producers sometimes limit their food exports in favour of serving domestic consumption needs and to keep local prices low.

According to the Food and Agricultural Organization (FAO), global prices of wheat surged by 60 to 80 percent from Jul. to Sep. 2010 following the export ban by Russia, which is not a WTO member but should become one by the end of 2011.

Export restrictions on foodstuffs were one of the key drivers of the food crisis and price spikes during 2007 – 2011. At the beginning of 2011, 21 countries had imposed export control measures. Recently, Ukraine, Macedonia, Moldova and the Kyrgyz Republic, for example, placed export restrictions on different types of grains.

The WTO does not prohibit such measures, but it tries to curb them. "You cannot deprive very vulnerable countries of sustenance by banning exports of food to them," Hisham Badr, ambassador of Egypt to the WTO, argued in an interview with IPS – especially, he said, "given the international food crisis, the energy crisis, the economic and financial crisis and the fact that the Doha Round seems to be in intensive care".

Since Jun. 2010, as a result of price increases, the number of extreme poor people has increased by 44 million in low and middle-income countries.

Concretely, Egypt’s proposal foresees exempting NFIDCs from export restrictions on foodstuffs by both developing and industrialised countries. NFIDCs, however, would still be allowed to use such restrictions for their own food security.

The proposal also foresees the ban of export restrictions on food destined for humanitarian assistance delivered by the World Food Programme (WFP).

Egypt and the African group would like to see this initiative become part and parcel of the proposed "early harvest" of the Doha Round that could be adopted by the WTO ministerial conference in Dec. 2011.

On Jun. 23, the G20 also agreed to remove export restrictions on food destined for non-commercial humanitarian purposes. It also recommended that WTO members adopt a specific resolution on export restrictions at this year’s ministerial conference.

But, given the difficulties of the Doha negotiations, what are the chances of adding export restrictions to the controversial early harvest that some countries contest even for LDCs?

"Many countries sympathise with this initiative from different angles," Badr replied.

However, according to Bridges Weekly, an ICTSD publication, major agricultural exporters like the U.S., Australia and Brazil would like export restrictions to be seen in the context of other trade distortions in agriculture. They don’t see why it should be singled out while there are large aspects of the Doha Round that are meant to redress those imbalances.

Developed countries like Switzerland and Japan, net food importers themselves, expressed support for the proposal. The Philippines, which doesn’t belong to the NFIDC but whose population has been affected by export restrictions, suggested that the proposal should include non-NFIDC too.

"Our endeavour is part of a greater strategy," Badr continued. "The Dominican Republic and Egypt will propose another initiative at the WTO General Assembly in Sep. 2011 on food price speculation. And we work closely with FAO on an agriculture market information system to exchange information and effectively address price volatility."

But he acknowledged that, given the state of the Doha Round, some members are not giving due consideration to the initiative. "We have not had yet countries that are against it. They have rather adopted a position of ‘wait and see’."

Jonathan Hepburn, agriculture programme manager at ICTSD, told IPS that, "it is an interesting initiative, We have to see where it goes, but clearly export restrictions imposed in the last few years have had an impact on markets and price volatility.

"When markets are already tight, such measures risk worsening supply, especially when the country that adopts it is a major exporter."

He indicated that WTO members are trying to address export restrictions in different ways. It could be in an "early harvest" of the Doha Round or, alternatively, be a separate decision outside the Doha package.

All rights reserved, IPS – Inter Press Service, 2011.

This article may not be republished, broadcast, framed, or redistributed without the written permission of IPS – Inter Press Service. Republication of this material without permission from IPS, the copyright holder, constitutes a violation of United States and international copyright laws and may result in legal action.


Filed Under: Agriculture, Diplomacy, Report, Trade Tagged With: , ,

WTO Needs a Shot in the Arm

May 29, 2011 by

Global Geopolitics & Political Economy / IDN

By Jürgen Wiemann*

IDN-InDepth NewsViewpoint     
   
BONN (IDN) – At first sight, it may seem far-fetched to see a link between the icon of Islamist terrorism and the WTO Development Round. But let us not forget that a mere three months after the terrorist attacks on New York and Washington on September 11, 2001, for which Osama bin Laden claimed responsibility, the first multilateral round of negotiations in the WTO, the World Trade Organisation, newly established in 1995, began in Doha, Qatar.

The international community felt the need to express its solidarity with the USA and to demonstrate that the world economic order and its institutions were able to function. At the same time, the fear of global recession was to be countered with a further round of trade liberalisation.

At the previous WTO Ministerial Conference held in Seattle in 1999 the attempt to launch a new round of multilateral trade negotiations had been thwarted by the opposition of the developing countries. They had demanded an adjustment to the outcome of the previous round, the final round in GATT, which had not been to their advantage, before they would agree to participate in negotiations on new rules and agreements.

However, by promising to make those talks a "development round," the USA and the EU were able to overcome the developing countries’ resistance to the launch of a new round, especially in the globally inflamed climate following 9/11. If the attacks had not taken place, the developing countries would presumably have again refused to give their consent in Doha. In this respect, then, Osama bin Laden can be regarded as the involuntary ‘midwife’ of the WTO Doha Development Round.

DEVELOPMENT ROUND OR BUSINESS AS USUAL?

Ten years on, the possibility of this being a miscarriage cannot be ruled out. Even WTO Director-General Pascal Lamy recently recalled the link between 9/11 and the Doha Round and blamed the confusion between the attacks and the Ministerial Conference for the fact that more time and energy were not devoted to drawing up a less controversial mandate for the negotiations between industrialised and developing countries.

And on an earlier occasion Charlene Barshefsky, then the United States’ Trade Representative, had said it had been a mistake to overburden the new round of talks with the label ‘Development Round’. Neither the USA nor the EU had seriously prepared themselves to accommodate the developing countries’ demands without again demanding something in return. The longer the round continues and the more its founding act is forgotten, the more difficult it will be to abandon the usual bargaining modus of trade negotiations.

Trade policy, of course, is negotiated not only between nations, but to an even greater extent on the domestic stage between the likely winners and losers of trade liberalisation and of new rules and agreements on international trade in goods and services.

If the U.S. President wants to open up the American market or reduce agricultural subsidies, he can win the approval of the Congress only by holding out the prospect to the export-oriented branches of the economy of new export opportunities generated by equivalent offers of market liberalisation measures by other industrialised countries and, above all, the emerging economies. But unless and until the emerging economies relent and open their markets to the extent demanded by the USA, the Doha Round will not succeed.

WTO WITHOUT AN INTELLECTUAL COMPASS?

One cause of the stalemate in the WTO Round is the growing weight carried in the global economy by the large emerging economies, Brazil, China and India, which are acting in concert and know they have the backing of most of the smaller and less developed countries. Another is the erosion of economists’ age-old belief in the free-trade doctrine and the trade policy recommendations to industrialised and developing countries derived from it.

A growing number of internationally renowned economists are questioning the compatibility of pure free-trade doctrine with development, citing the experience of Japan and the South East Asian newly industrialising economies from the 1960s to the 1980s, of China since 1978 and of India since 1991.

These countries have driven on their export-oriented industrialisation with, on the one hand, a neo-mercantilist blend of government export promotion through subsidies and undervalued currencies and, on the other, supportive protection against imports for new industries trained to be internationally competitive by industrial policies. (Germany’s economic miracle in the 1950s and 1960s was, incidentally, based on a similar policy mix.)

This policy mix differs fundamentally from the recommendations for liberalisation and privatisation forming part of the Washington Consensus, which even the World Bank’s Chinese chief economist has renounced.

For the WTO’s world trade order the intellectual denunciation of the Washington Consensus is of the utmost importance in that some of the new WTO agreements and rules originating from the Uruguay Round greatly reduce the scope for neo-mercantilist industrial policy and export promotion. Critical economists agree with the critics of globalisation in civil society that the transition from GATT to WTO and the deeper integration associated with it have gone too far and that it is now time to restore the balance between global rules and national sovereignty over economic policy.

Until the fundamental dissension between the industrialised countries and the developing and emerging nations, and also between the orthodox and heterodox schools of economic thought, over the effect on development of trade liberalisation versus protectionist industrial policy has been overcome, there will be no conclusion to the Doha Round that satisfies everyone.

Now that the ‘midwife’ of the Doha Round has been eliminated, the industrialised countries should waste no further time in laying their cards on the table and either offering asymmetric concessions, thus turning the talks into a development round after all, or finding the courage to clarify the misunderstanding that they were really trying to launch a development round in 2001.

This would open the way to a genuinely fresh start in the WTO, whose reputation and effectiveness would be unnecessarily impaired by any further prolongation of the stalemate, not to speak of the associated risk of growing protectionism on a global scale. After the Doha Round has concluded, steps could at last be taken to deal with such new trade policy challenges as trade measures and climate protection or export restrictions on scarce raw materials and foodstuffs, which are leading to excessive price rises in world markets.

*Dr. Jürgen Wiemann is an economist at the German Society for International Cooperation (GIZ). This viewpoint was first published on May 16, 2011 on the website of German Development Institute. (IDN-InDepthNews/27.05.2011)

2011 IDN-InDepthNews | Analysis That Matters

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Filed Under: Opinion, Trade Tagged With:

RUSSIA: Eighteen Years of WTO Negotiations Continue

April 26, 2011 by

Global Geopolitics & Political Economy / IPS

Analysis by Kester Kenn Klomegah

MOSCOW, Apr 25, 2011 (IPS) – After almost 18 years of unsuccessful but persistent struggle to join the World Trade Organisation (WTO), experts say that efforts by Russian authorities have not been enough and have often lacked political will.

"Russia’s struggle to join the WTO has been because Russia has had great difficulty in deciding whether it really wants to accept normal WTO disciplines," Michael Emerson, a visiting lecturer at the Moscow State Institute for Foreign Affairs, told IPS.

Russia, the only major economy outside the global trade body, has been negotiating membership for nearly 18 years, although the average accession period is only five to seven years.

"Russia has come a long way in improving its economy, and by joining the organisation, it will stimulate the economy further for foreign investors," a senior director at Russian Economic Development Ministry told IPS.

Russian business still only sees the WTO as a threat. Russia’s leaders do not really understand the benefits of membership, but have a clear vision of the limitations that the WTO imposes in terms of public procurement and transparency.

"WTO accession is at the same time an old and a new issue. The agenda of Russia accession to the WTO is a long lasting topic which is still prominent under [Russian President Dmitry Anatolyevich] Medvedev," Sandra Fernandes, a former researcher on Russia at the Center for European Policy Studies, a Brussels- based academic think tank, told IPS. "This long process of Russian accession to the WTO has been delaying the Russian participation in a set of open market regulations."

She explained further that the bilateral market access negotiations between the European Union (EU) and Russia for the accession of the Russian Federation to the WTO were concluded in 2004.

Fernandes underlined that the EU is the biggest trading partner of Russia, and that Russia is the third most important partner of the EU.

"The Russian business sector has not been pushing for WTO accession. This sector considers that it does need the trade organisation because it has a zero-sum perspective on WTO accession. Contrarily, the WTO looks for a win-win perspective. Even if recent official declarations point to a will to join until the end of the year, this is not the first time that such calendars are set and not fulfilled," according to she Fernandes.

Anoush DerBoghossian, spokesperson for the World Trade Organisation, explained in an email from Geneva, Switzerland, that Russia – currently a non-WTO member – is not bound by the organisation’s rules, but once it becomes a full-fledged member it will have rights and obligations.

"In order to be a WTO member, the candidate country would need to follow certain procedures. First, it would need to translate all the WTO law into its national law so that its trade regime falls in line with WTO rules," DerBoghossian told IPS. "This requires for the candidate country to implement new legislation or amend its current legislation related to trade… Second, the candidate country would have to enter into bilateral negotiations on market access for goods and services. You can see that this process is quite long and technical and that the candidate country is in the driving seat."

The WTO was established on Jan. 1, 1995, as the successor to the General Agreement on Tariffs and Trade (GATT) that had been operating since 1947. It is the only international body now supervising world trade. The WTO has 153 members, and negotiations on the admission of a new member are held within a working group that unites countries that have unsettled trade problems with the candidate.

As a rule, negotiations focus on four areas: accessibility to the goods market, agriculture, accessibility to the market of services, and systemic matters. The candidate must bring its national laws in compliance with the WTO rules. Two-thirds of votes of WTO members are sufficient for the admission of a new member.

A few more rounds of informal working group consultations are necessary, Russian chief trade negotiator, deputy head of the Economic Development Ministry’s trade negotiations department Maxim Medvedkov said last week.

"We received a dozen of questions from WTO members. There are another seven sections to discuss, including three very difficult concerning technical regulations, veterinary and phytosanitary measures and general legal matters," Medvedkov said. "We would like to finish the settlement of technical issues within the next few months."

The next round of consultations will be held in late May or early June, and some of these issues will be on the agenda.

Georgia, a former Soviet republic that has been in political conflict with Russia, has repeatedly threatened to block Russia’s accession to the WTO citing various bilateral disagreements. Russia, however, accuses Georgia of politicising the issue. Tensions between Russia and Georgia came to a head in August 2008 when the two countries fought a brief war over the breakaway Georgian republic of South Ossetia.

Russian Foreign Minister Sergei Lavrov has also alleged that Western bureaucratic hurdles are delaying Russia’s WTO accession. "Our accession is largely being lobbied now in Washington not by bureaucrats, but by businesses," Lavrov said on Ekho Moskvy radio station.

Another important issue is the long-standing Jackson-Vanik amendment on restricting trade with the Soviet Union, which the U.S. Congress adopted in 1974 to pressure the USSR into allowing emigration. The controversial amendment is still applied to Russia, and has proved a key barrier for the country’s entry to the WTO. The U.S. Congress may terminate the application of Jackson-Vanik to Russia during 2011.

In March, Medvedev voiced hope to U.S. Vice President Joe Biden that the question of Russia’s accession to WTO will be settled this year with energetic support from the U.S.

All rights reserved, IPS – Inter Press Service, 2011.

This article may not be republished, broadcast, framed, or redistributed without the written permission of IPS – Inter Press Service. Republication of this material without permission from IPS, the copyright holder, constitutes a violation of United States and international copyright laws and may result in legal action.


Filed Under: Diplomacy, Europe, Featured, Trade Tagged With: ,

WTO Judicial Activism vs. America

March 14, 2011 by

Global Geopolitics & Political Economy

Ian Fletcher

The WTO’s latest outrage has brought this odious organization to public attention again, but this is hardly the first time it has sided against American interests.

For example, it has for years engaged in judicial activism aimed at systematically rewriting American trade law to our disadvantage. As Robert Lighthizer, a former Deputy U.S. Trade Representative, told a hearing of the House Trade Subcommittee in 2007:

Rogue WTO panel and Appellate Body decisions have consistently undermined U.S. interests by inventing new legal requirements that were never agreed to by the United States….Our trading partners have been able to obtain through litigation what they could never achieve through negotiation. The result has been a loss of sovereignty for the United States in its ability to enact and enforce laws for the benefit of the American people and American businesses. The WTO has increasingly seen fit to sit in judgment of almost every kind of sovereign act, including U.S. tax policy, foreign policy, environmental measures, and public morals, to name a few. [Hearing on “Trade Enforcement for a 21st Century Economy,” Finance Committee, U.S Senate, June 12, 2007.]

To take only one example of this, the WTO ruled in 2007 that the Unlawful Internet Gambling Enforcement Act interfered with free trade in “recreational services.”

More importantly, the WTO has made a string of rulings too technical to inflame public sentiment but nonetheless important for their behind-the-scenes effects. 

For example, it ruled against so-called “zeroing” in antidumping cases (don’t ask, but it’s bad for us); deemed America’s “foreign sales corporation” provision an export subsidy; and repudiated the long-standing understanding that it would generally defer to national authorities in dumping cases. (Dumping is when foreign producers sell products in the U.S. at below production cost, or below their home-market price, in order to destroy American producers and capture the market; China does it all the time.)

Another example: the WTO forced repeal of the Byrd Amendment, a 2000-2006 American law that caused penalty tariffs in dumping cases to be paid to the victimized industries themselves, rather than to the U.S. Treasury.

The WTO’s unelected judges ruled this amendment illegal in 2002 despite the fact that there is nothing in any WTO treaty even mentioning what governments may do with penalty money. Backed by WTO permission, the European Union then imposed a 15 percent retaliatory tariff on American paper, farm goods, textiles, and machinery. In 2006, Congress folded and repealed the amendment.

This is standard procedure: the WTO has no enforcement powers of its own, but works by authorizing retaliation by the injured party against goods chosen to maximize political pressure.

The WTO harbors an inexorable bureaucratic will to power. The desires of the multinational corporations and relentlessly power-accreting bureaucrats that are its driving force are a constant in international relations, even if both are pragmatic enough to draw back occasionally.

The WTO’s tendency is to expand over time on two separate tracks.

Track one, for those powerless to resist its dictates (poor nations) or foolish enough to actually believe in them (Uncle Sam), consists in ever-more-rigid rules, of ever greater scope, designed to usher in a borderless world economy, at least on paper. Its ultimate ambition has been described as “writing the constitution of a single global economy.”

Track two, for nations shrewd enough to practice mercantilism while preaching free trade, is a puppet show designed to square these nations’ policies with the legal framework that props open their foreign markets.

Despite the WTO’s undemocratic and authoritarian implementation of an economic ideal (free trade) that makes no sense even in theory, it actually has failed to deliver where free trade might do some good. Thanks to the many ways in which trade is manipulated, it is, in fact, estimated that only about 15 percent of world trade is genuinely free.

Rational protectionism is the best policy, followed by a genuinely level playing field; the WTO has delivered neither.  The sooner the U.S. withdraws from the organization, the better.

© Copyright 2011 Ian Fletcher. All rights reserved.

This article should not be republished or redistributed without the permission of the original author or copyright holder.

Ian Fletcher is Senior Economist of the Coalition for a Prosperous America, a nationwide grass-roots organization dedicated to fixing America’s trade policies and comprising representatives from business, agriculture, and labor. He was previously Research Fellow at the U.S. Business and Industry Council, a Washington think tank founded in 1933 and before that, an economist in private practice serving mainly hedge funds and private equity firms. Educated at Columbia University and the University of Chicago, he lives in San Francisco. He is the author of Free Trade Doesn’t Work: What Should Replace It and Why.


Filed Under: Commentary, Economic Policy, Trade, United States Tagged With:

TRADE: ”Cotton Dossier” Will Make or Break WTO’s Doha Round

June 9, 2010 by

Global Geopolitics & Political Economy / IPS

Ravi Kanth Devarakonda

GENEVA, Jun 9  (IPS)  – The ”cotton dossier” has become a litmus test for the ”development dimension” of the languishing Doha Round trade negotiations, World Trade Organisation (WTO) director general Pascal Lamy admitted.

This admission came in a fax sent to trade envoys ahead of the consultative mechanism meeting on cotton on Jun 7 at the WTO headquarters in Geneva. His message encouraged envoys to work towards the successful conclusion of the Doha Round.

The ”cotton dossier” refers to the trade-distorting cotton subsidies provided by rich countries, particularly the U.S., that are wreaking havoc in the cotton trade of the West African cotton-producing countries Benin, Burkina Faso, Mali and Chad (the so-called Cotton Four, or C-4).

The dossier also includes development assistance for these countries’ impoverished cotton-growing farmers.

The Jun 7 meeting, held behind closed doors, was apparently convened for some countries to convey the message that cotton development assistance is moving apace but African states still insisted that solutions are required for the problems besetting the cotton trade.

”While we appreciate the provision of technical assistance and capacity building by developed and developing countries, the continued subsidies to cotton farmers and exporters in rich countries are causing irreparable harm to African farmers,” Tanzania’s Matern Yakobo Christian Lumbanga told IPS.

Although the cotton issue, raised by African countries at the WTO ministerial meeting in Cancun in 2003, has been accorded priority status on the Doha agenda, it has nearly disappeared from the Doha radar screen — except for some progress on the cotton development assistance front.

The WTO framework agreement of July 2004 and the Hong Kong ministerial declaration of 2005 mandated WTO members to address cotton trade ”ambitiously, expeditiously and specifically within the agriculture negotiations in relation to all trade-distorting policies in all three pillars of market access, domestic support and export competition”.

The mandate required developed countries to eliminate all forms of export subsidies in 2006; provide duty-free and quota-free access for cotton exports from least developed countries (LDCs); and agree to substantial cuts in their trade-distorting domestic subsidies.

”To this day, we remain far from reaching these fixed objectives. The current pace of the negotiations makes people pessimistic about the imminent conclusion of the Doha Round,” Burkina Faso’s trade minister Léonce Koné said in his address to the other WTO members at the Jun 7 meeting.

”How can we address the worries of the millions of our cotton growers and stop their financial haemorrhage which is happening because of the subsidies (of rich countries)?” he asked.

Despite the C-4′s concerted campaign an impasse has been reached, largely due to the stand adopted by the world’s largest cotton subsidiser, the U.S.. Washington is yet to offer a counter-proposal to what was suggested by the former chair of the Doha agriculture negotiations, New Zealand’s Crawford Falconer.

In the last draft text, Falconer suggested a formula to cut trade-distorting domestic subsidies in cotton. According to this formula, the U.S. would have to shrink its nearly two billion dollar cotton subsidy, given to some 2,500 farmers, by more than 75 percent.

The U.S. promised that it would submit a counter-proposal to indicate what ought to be the magnitude of the subsidy reduction commitment in cotton. Except for the U.S., almost all other members of the WTO have tentatively agreed to Falconer’s proposal.

Subsequently, Falconer held a series of meetings with the U.S., the European Union, Brazil and the C-4 to hammer out a deal.  However, his consultations failed to yield significant results.

David Walker, the current chair of the agriculture negotiations and Falconer’s replacement from New Zealand, started his term last year with cotton as the priority issue. He informed members that he had received a proposal from the C-4 and suggested that it was not acceptable to some countries whose names he did not mention.

”The main stumbling block to resolving the cotton issue is the U.S., which is neither ready to accept compromise proposals nor to table its alternative offer,” said a trade envoy from a developing country who asked not to be identified due to the sensitivity of the issue.

IPS learnt reliably that, during the Jun 7 meeting, Walker candidly admitted that there has been no progress on the cotton issue and that his consultations have brought about no change. He expressed disappointment over the continued impasse.

Privately, trade negotiators familiar with the Doha agriculture negotiations have maintained that the cotton issue has been pushed to the backburner when compared to other issues.

African countries are aware that there will be no solution to the cotton dilemma as long as the U.S. sticks to its inflexible position, backed by its powerful domestic cotton farming lobby.

Despite being a party to the 2004 framework agreement and the 2005 Hong Kong ministerial declaration, the U.S. has maintained that the solution to cotton depends on progress in all areas of the Doha agriculture negotiations. This stand amounts to the U.S. turning its back on the Doha cotton mandate, some trade diplomats say.

But the C-4 has a supporter in Dr Supachai Panitchpakdi, secretary general of the United Nations Conference on Trade and Development (UNCTAD): ”Cotton is the single most important issue for least developed countries in Africa,” he told IPS.

”African countries’ request for an early agreement on cotton in the Doha Round is reasonable because it is a livelihood issue.”

All rights reserved, IPS – Inter Press Service, 2010.

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Filed Under: Diplomacy, Report, Trade Tagged With: ,

WTO Talks Trapped in an Endless Deadlock

May 2, 2010 by

Global Geopolitics Net Sites / IDN

By Martin Khor*

IDN-InDepth NewsAnalysis

GENEVA (IDN) – The World Trade Organisation’s Doha Round appears to be stuck in a strategic deadlock, with no end in sight, and little hope for completion in the foreseeable future.

The latest bout of negotiations, a “stocktaking exercise” held in Geneva in the last week of March, ended with no direction and without plans for a further meetings of senior officials from capitals, or for Trade Ministers. The target of finishing the Round by the end of this year was not even mentioned. It has been given up.

The Doha Round started in November 2001 at the WTO’s Ministerial meeting. At that time the developing countries were strongly against a new Round, arguing that they had not even begun to digest the Uruguay Round and its many problems.

So the new negotiations were officially termed the Doha Work Programme, and even informally called the Doha Development Agenda to make it more palatable.

In the nine years since, the development content of the talks has almost entirely disappeared, and the developed countries’ real intentions – to open up the markets of developing countries while protecting their own turf especially in agriculture and in labour services – have come to the fore.

The latest draft texts on how agricultural and industrial imports are to be liberalized are imbalanced. They call on developing countries (except the LDCs) to undertake more real commitments than developed countries.

In particular, the developed countries can still make use of their huge agricultural subsidies which enable the United States’ and Europe’s otherwise inefficient farms and companies to capture markets, including displacing the small farms of developing countries.

But developing countries are asked to cut tariffs of their manufactured goods drastically (for some countries by up to 60 percent) so that most of their new import duties will be below 15 percent. Many economists worry that this will damage the countries’ industrial development prospects as the local firms cannot withstand the competition.

Despite the advantage given by the drafts, the United States is still asking for more. They want some developing countries (China, India and Brazil in particular) to also agree to cut their tariffs on some industries (chemicals, industrial machinery and electronics) to zero.

A senior Chinese official said that China had already made major concessions in the draft texts, and these extra U.S. demands are simply unacceptable, as they would damage or wipe out the most important industries in the countries concerned.

U.S.-based analysts meanwhile note that the U.S. administration faces a Congress and a public that is hostile to the U.S. agreeing to sticking to its own minimal commitments on reducing its maximum level of agricultural subsidies and industrial tariffs. Thus the U.S. is going beyond the draft texts and making even more demands to selected developing countries to open their markets.

The developing countries are calling “Foul” as this goes far beyond the agreed mandate. The U.S. stubbornly sticks to its unreasonable demands, pointing to what its Congress wants. The developing countries counter-argue that they too have their own public to think about, and they won’t accept the destruction of their farms and industries.

So it is a stalemate. At the “stocktaking” held at the WTO, South Africa’s Ambassador Faisal Ismail was perhaps the most eloquent in diagnosing the stalemate.

“We find it disconcerting that the U.S. remains the most significant major player in the Doha Round that is unwilling to work on the basis of these multilateral texts. Its major constituencies and business lobbies are demanding more market access commitments from its trading partners, particularly from the major emerging markets,” he said. “This is the main reason for the current impasse in the Doha Round.”

Ambassador Faisal quoted Albert Einstein, that doing the same thing over and over again and expecting different results was “madness” and warned that continuing with “business as usual” will risk unraveling over eight years of work. He proposed that the major players stop their mercantilist approach, and adhere to the principles of fairness, sticking to the development mandate of the Round and to agreements already made, and recognise the value of a stable multilateral trade system.

Brazil, on behalf of the G20 of developing countries, said the drafts embody a delicate balance that must be respected, otherwise we will need readjustments of the entire package.“Such readjustments cannot entail additional unilateral concessions from developing countries.”

India said: “There is nothing to suggest that the political constraints that have impeded our progress over the last six months will suddenly disappear.”

It urged members to continue with the talks but warned that their purpose “cannot be to meet the unrealistic demands of one or more Members for new or additional market access, but to come to a balanced outcome in line with the development mandate” and added that “a few developing countries cannot be the bankers of the Round.”

The WTO Director General Pascal Lamy said the negotiations would continue with the Chairs leading the process at the WTO. He would also hold meetings. And countries would also hold their own meetings in small groups or bilaterally.

The stocktaking exercise ended with no more plans for senior officials from capitals to meet in Geneva, as they have been doing, nor for any small Ministerial meetings at the WTO. The target set by the G20 Summits, to conclude the Round this year, is dead.

As has often been the case in the chequered history of the Doha talks, the rest of the world is still “waiting for the United States.” Previously the wait was for the U.S. to agree to make some commitments to liberalise its agriculture. Now the wait is for the U.S. to give up its unreasonable demands on others.

With the U.S. mired in its own domestic problems, it will be a long wait. So long that the Doha Work Programme, renamed the Doha Round, may unravel or diminish in the global agenda.

*Martin Khor is the Executive Director of the South Centre. This article was first published in the South Bulletin Issue No. 46. (IDN-InDepthNews/02.05.2010)

2010 IDN-InDepthNews | Analysis That Matters

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Filed Under: Commentary, Diplomacy, Trade Tagged With:

Q&A: Why Poorest African Countries Should Not Sign the EPAs

April 9, 2010 by

Global Geopolitics Net Sites / IPS

Isolda Agazzi interviews Dr EL HADJI DIOUF, expert on the economic partnership agreements (Part 2)

GENEVA, Apr 9  (IPS)  – It is a ”million dollar question” why African least developed countries (LDCs) would enter into economic partnership agreements (EPAs) with the EU as what remains of especially their agricultural markets will be overrun with subsidised European produce.

Dr El Hadji Diouf made this statement in the second part of IPS’s interview with him on whether the EPA negotiations between West Africa and the EU should be suspended, as proposed by Ablassé Ouedraogo, former minister of foreign affairs of Burkina Faso and former deputy director of the World Trade Organisation (WTO).

Diouf is the manager for the EPAs and regionalism programme at the Geneva-based International Centre for Trade and Sustainable Development (ICTSD). ICTSD is a nongovernmental organisation (NGO) seeking to empower stakeholders in trade policy and influence the international trade system to advance sustainable development.

Q: When will the EPAs enter into force?

A: The implementation period is one of the points of dispute. The EU wants to give Africa a 15 years deadline to implement accompanying measures and adapt to trade liberalisation. The WTO foresees 10 years but studies show that all regional agreements go beyond this date.

The bilateral free-trade agreement between the U.S. and Morocco had an implementation period of 24 years. On this basis, African countries want a 25 year deadline. But the EU stands firm on the 15 years, so the problem is not solved.

Q: What are these ”accompanying measures”?

A: They are key to sustainable development. West Africa already has the EPA programme for development (known by its French acronym PAPED). Governments maintain that, since trade liberalisation entails adjustment costs, the continuation of PAPED is a pre-condition for the signature of any EPA.

But the EU proposes 500 million euros and West Africa asks for nine billion. For the region, if there is no PAPED, there are no EPAs.

It’s understandable to link aid and conditionalities when the relationship is unilateral. This is why the EU has invoked a non-execution clause in the past to suspend its cooperation in case of democratic troubles in the beneficiary country or region.

But when a contract foresees obligations for both parties, it is very difficult to implement extra trade conditionalities. The EU is still advocating for a non-execution clause in the EPAs but that is unacceptable to West African countries.

Q: Ablassé Ouedraogo also says that Africa needs to be given enough time.

A: Dec 31, 2007 was the deadline given by the WTO and it has been missed, except for a couple of interim EPAs. Yet, the timing of negotiations is very important. There can firstly be a minimal agreement on goods but Africa needs more time for services, intellectual property, government procurement, competition policy and investment.

These issues were successfully opposed by developing countries at the WTO but Africa could subsequently not resist the EU and they are on the agenda of the EPAs in a ”rendezvous” clause. Obviously, the EU wants to go very fast but nothing obliges Africa to conclude an agreement by a given time.

From one year to the other, Africans make progress on different issues. One more article or one more conference can change a position. Why hurry up to sign an agreement that is going to commit the lives of future generations?

However, these deadlines don’t mean anything for the LDCs since they already have duty-free and quota-free market access to the EU with the ”Everything but Arms” (preferential trade scheme).

Q: So what interest do LDCs have in signing the EPAs?

A: This is the million dollar question I don’t have any answer to. LDCs don’t have any interest in signing the EPAs. Worse, these agreements jeopardise regional integration.

If Côte d’Ivoire and Ghana (two of the three non-LDCs in West Africa) open up their markets to European products, these will go to other countries too because of the regional free-trade agreement.

Currently, the interim EPAs with Côte d’Ivoire and Ghana are in force but not implemented because of a ”gentleman’s agreement” not to jeopardise regional integration.

Some LDCs, like Burundi and Rwanda, have initialled interim EPAs, with the promise that less strict rules of origins would be applied to them. But promises were not kept and these countries will not get any additional benefit.

If there are no duties on industrial goods, consumers can get cheaper products and may be better off. But pan-Africanists like me believe that a country cannot develop by opening up its markets completely.

The example of tomatoes and onions shows that as soon as imported products start coming in, small and medium enterprises are squeezed out of business because, in addition to not paying duties, Europe keeps subsidising its agriculture.

African countries must decide what they want. I prefer minimal protection that will allow them to have performing industries in the coming years.

All rights reserved, IPS – Inter Press Service, 2010.

This article may not be republished, broadcast, framed, or redistributed without the written permission of IPS – Inter Press Service. Republication of this material without permission from IPS, the copyright holder, constitutes a violation of United States and international copyright laws and may result in legal action.


Filed Under: Africa, Development, Interview, Trade Tagged With:

AFRICA: Stop Rubber Stamping Trade Deals

October 4, 2009 by

Global Geopolitics Net Sites / IPS

By Christi van der Westhuizen

CAPE TOWN, Oct 4 (IPS) – Civil society should call African parliaments to account on international trade negotiations as parliamentarians have in the past not been "robust" enough in ensuring that such talks deliver on developmental priorities.

This candid admission came from Sisa Njikelana, a South African parliamentarian representing the ruling African National Congress, at a discussion organised by the Africa Trade Network and the Trade Strategy Group.

These organisations, which represent civil society groups from South Africa and the rest of the continent, advocate fair trade policies that advance social justice. They organised a two-day seminar on Oct 1-2 on the present state of the Doha Round of talks at the World Trade Organisation (WTO) in Cape Town, South Africa.

Njikelana, who is a member of the parliamentary portfolio committee on trade and development, admitted that South African parliamentarians have been "rumbling and mumbling about always getting the cake already baked when it comes to trade agreements", meaning parliamentarians only become aware of the content of trade agreements when they have been finalised.

At that late stage, parliamentarians can only ratify the agreements and not propose any amendments. "The question that arises is whether parliamentarians have become rubber stamps?"

He argued for a "more vigorous and visible role" for parliaments in the developing world and especially Africa with regards to oversight over the content and progress of trade talks, while still giving governments the space to engage in the actual negotiations.

Njikelana urged the trade activists present at the meeting to ensure that parliaments get involved with the content of trade agreements in the early stages of negotiation. "The trade and development agenda should be driven by the need to improve the quality of life of the poor. If we veer off the path, you should call us to account."

He also suggested that parliamentarians needed civil society’s support in order to drive pro-poor trade and development policies. "Even the WTO has admitted the importance of civil society involvement with the WTO Public Forum held this week."

While there may be questions about the effectiveness of the event, where NGOs meet with governments to discuss the international trading system, it is still a "good thing". Njikelana urged activists to also engage with the Pan-African Parliament (PAP) and with the East African Legislative Authority (EALA).

While PAP is the legislative arm of the African Union, EALA serves as legislative arm for the East African Community.

Njikelana’s statements provoked a heated debate. He was taken on by Moses Shaha, chairperson of the Kenya Small-Scale Farmers Forum, who declared, "government is turning against us and singing a foreign song.

"How can we remove a son of ours who is in parliament and becomes part of the problem? Once he leaves parliament, he’ll be one of us again but while he earns money, he won’t let it go (by making decisions against dominant interests)." The Kenya Small-Scale Farmers Forum is a non-governmental lobby group working to advance the interests of non-commercial farmers in Kenya.

Shaha admonished all present "to come out of the goody-goody feeling" and "provoke the law", as that was the only way to push back "the advancing wall", he said with reference to the agricultural agreement currently being negotiated as part of the Doha Round. "What is to be done?" he asked.

In response to Shaha’s challenge, Angelica Katuruza, director in Zimbabwe’s ministry of regional integration and international cooperation, said farmers "should make a lot of noise. If government officials are making the wrong decisions, make a noise. They have ears; they will hear it."

To which Nathan Irumba, chief executive of the Southern and East Africa Trade, Information and Negotiations Institute (SEATINI) quipped, "But what if they don’t want to hear?"  SEATINI does research and advocacy on trade issues.

Marie-Lou Roux, executive officer of the environmental non-governmental organisation Habitat Council, threw down the gauntlet by asking whether activists "should chain themselves to the gates of parliament" if parliamentarians don’t heed their calls.

In response Njikelana stated that, "I want my organisation (the ANC) to be challenged. You should take your public representatives on but in a positive way. Don’t chain yourself to the gates. There is nothing wrong with contacting the chairpersons of portfolio committees (to put your case). But if we dilly-dally, then you can chain yourself."

Talking to IPS, he said he is upset about how little engagement there is between civil society and parliamentarians, which is why he decided to raise the issue forcefully at the meeting.

In an interview with IPS, Tetteh Hormeku, head of programmes at Third World Network (TWN) Africa, said that the activists at the meeting regard their role, among others, as "to show up, put demands and put pressure but also to support and encourage our governments in Africa to take position" against the current negotiations at the WTO. TWN works for trade justice.

For the past two years, activists mobilised around the issue of the trade deals known as economic partnership agreements (EPAs) as the WTO "was a bit comatose", explained Hormeku. With the new impetus towards concluding the Doha Round, African trade activists are focusing their sights on the different aspects of the WTO negotiations to mobilise people but also to assist African governments.

As Katuruza pointed out, some African countries do not even have permanent representatives in Geneva, where the WTO is based, as they cannot afford it. Njikelana also spoke about the serious "intellectual and administrative" capacity constraints that affect parliamentarians as they frequently do not have the knowledge or the support to get to grips with complicated trade issues.

TWN focuses on demystifying trade and making the issues more understandable. For example, Hormeku pointed out, "African countries never asked for non-agricultural market access (NAMA). Non-agricultural market access is a euphemism for industrial tariff reduction. It is obfuscation.

"Whenever developing countries say ‘we don’t want to cut our tariffs on industrial goods’, the North says ‘but you’ll get market access’," he added. Given African states’ inability to compete, this is untrue in most cases.

All rights reserved, IPS – Inter Press Service, 2009.

This article may not be republished, broadcast, framed, or redistributed without the written permission of IPS – Inter Press Service. Republication of this material without permission from IPS, the copyright holder, constitutes a violation of United States and international copyright laws and may result in legal action.


Filed Under: Africa, Politics, Report, Trade Tagged With:

AFRICA: ”Why Surrender Market to Subsidised European Goods?”

September 14, 2009 by

Global Geopolitics Net Sites / IPS

Nasseem Ackbarally

PORT LOUIS, Sep 14  (IPS)  – ”Why should we surrender ourselves to the invasion of highly subsidised European goods? What will be the impact of capital outflows because of strategic services such as telecommunication, port, energy and water services being liberalised and privatised in the interest of European companies?”

These are the questions that Rezistans ek Alternativ, a Mauritian political movement, wants answers to after their country’s government, along with Madagascar, Seychelles and Zimbabwe, signed an interim economic partnership agreement (EPA) with the European Community (EC) at the end of last month.

They appealed for an urgent session of the parliament to be held to debate the agreement.

”Those who will benefit substantially from this agreement are not those who will shoulder its consequences,” Roody Muneean and Ashok Subron, members of the movement, told IPS.

They argued that technocrats and politicians have not learnt past lessons, referring to World Trade Organisation (WTO) agreements that were signed ”hastily” with detrimental results for many developing countries’ peoples.

They further deplored the exclusion of the trade union movement, small-scale producers and industries, fishers, consumer organisations and other citizen movements from the negotiating process.

”The market access given to ESA (eastern and southern Africa) countries is nothing more than the further locking of African economies into the neo-colonial export-led strategy, based on cheap labour and degrading working conditions for our people,” according to Rezistans ek Alternativ.

Muneean and Subron see the EPA not as a development tool for Africa but as a profit-generating mechanism for EC companies and some local interests.

But those that signed the deal put a different spin on it. Foreign affairs and international trade minister Arvin Boolell of Mauritius, one of the main promoters of the deal, told IPS that the island state wants to use the trade deal to increase trade, promote diversification, attract EC investments and encourage technology transfer.

”We have to constantly wage war against poverty. Improving the lives of our populations expands the circle of opportunities for everybody,” he declared.

Sindiso Ngwenya, secretary general of the Common Market for Eastern and Southern Africa (COMESA), justified the EPA by indicating that the latter collectively represents 27 countries.

”These countries are not only the most important trading partners for the COMESA region, accounting for between 20-40 percent of trade turnover, but they are also very important partners to the region, providing essential development finance in the form of loans and grants through various channels,” he observed.

Zambia’s industry and commerce minister, Felix Mutati, insisted that there should be ”no debate on words, please. The challenge for the sugar farmers in Mauritius, the vegetable growers in Zimbabwe and the honey hunters in Zambia, being bitten by bees but continuing to harvest honey û who all need to put food on the table — is to know how they can connect to the EPA.

”If we can provide some relief to these people in the field whose lives are only about pure survival, the EPA would have achieved something,” he observed. However, his country did not sign the deal despite leading the ESA group of 16 African countries.

Quizzed by IPS, Mutati replied: ”In the African tradition, the father does not eat first.” Later he added that Zambia will sign the full EPA scheduled for October 2009. The Zambian minister is all set to canvass the other ESA states that have remained outside of the process to get inside the tent.

He appealed to EC companies to come to Africa as the continent has ”abandoned” bad governance, including instability in economic management and dysfunctional institutions.

The EPA replaces all previous trade agreements between the EC and the African, Caribbean and Pacific (ACP) countries and was ostensibly meant to support their development, strengthens regional integration, and provide for special and differential protection of vulnerable ACP markets.

Under the deal, signatory states export all goods except sugar and rice to the EC duty and quota free.
For textile and clothing, the EC now offers the single transformation rule of origin, thereby allowing enterprises in ESA signatory states to source fabrics from anywhere in the world, transform them and export to its markets duty-free and quota-free.

This new agreement moves away from the traditional, non-preferential trade relationship between ACP group of 77 developing countries and the EC as it is based on reciprocity. Thus, ESA states will gradually liberalise 80 percent of imports from the EC over a period of 15 years with an initial five year preparatory period.

After this period, 20 percent of trade, mainly agricultural and final products which countries have deemed too sensitive, will remain completely excluded from any liberalisation.

Sunil Boodhoo, deputy director at the non-governmental Trade Policy Unit in Mauritius, told the press that there was ”no compulsion” to sign the EPA. ”Any country is free to sign or not but one should measure the consequences for an island like Mauritius that is not a least developed country (LDC) and does not benefit from the Everything But Arms (EBA) trade initiative (for LDCs),” he said.

He further stressed that, if tomorrow, one of the local industries is detrimentally affected by imports from EC countries, Mauritius can always put safeguards in place. ”This is the case for any African country,” he observed.

The EPAs are being signed with the EC in seven regions of the world. So far, 26 out of the 36 countries have already signed this trade agreement that will change the trade, economic and investment relationship between the European Union and the ACP countries.

All rights reserved, IPS – Inter Press Service, 2009.

This article may not be republished, broadcast, framed, or redistributed without the written permission of IPS – Inter Press Service. Republication of this material without permission from IPS, the copyright holder, constitutes a violation of United States and international copyright laws and may result in legal action.


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