The Hindu : Stakes at Sydney ministerial of WTO

Online edition of India's National Newspaper
Thursday, Nov 14, 2002

Business

Business

Stakes at Sydney ministerial of WTO

Ministers from 25 developing and developed countries are meeting in Sydney on November 14 and 15 in an informal "mini-ministerial" meeting to discuss the progress (or rather the lack of it) in the Doha round of trade liberalisation negotiations of the WTO that was launched exactly a year ago. For Arun Shourie, now holding charge of the commerce portfolio, this will be an introduction to the intricate world of WTO negotiations where crossing the `t's and dotting the `i's can be more important than the content of the global agreements.

The two-day meeting has not been convened by the WTO. It has been organised by Australia on its own initiative, hence its `informal nature'. Representatives from the U.S., E.U., Japan, Canada and from India, China, Brazil and Indonesia are among the 25 invited for the "mini-ministerial.'' Similar meetings have been held earlier (in Mexico City and Singapore in 2001) and are meant to provide an opportunity to the political masters to end an impasse that is beyond the capacity of officials to deal with. No new WTO agreements will or can be drawn up at the Sydney conference, but the stakes are still high for the participating governments and the larger membership.

The Doha Round of negotiations of the WTO is scheduled to be completed by January 2005. A mid-term review is to be conducted in September 2003 and a number of important deadlines will come up over the next ten months. However, progress over the past 12 months has been almost nil in a vast range of issues that include trade liberalisation in agriculture and services, tariffs on industrial products, reviews of rules on anti-dumping duties and a limited relaxation of the rules on patents for medicines. This makes it a strong possibility that the deadlines for the next year will not be met. It is also beginning to look likely that the larger negotiations will not be completed by the final target date of January 2005. This is what makes the Sydney informal ministerial an important meeting for the WTO membership.

For the developing and least developed countries, what was sold to them as "a development round'' of WTO negotiations is increasingly looking like a non-development. The WTO members were supposed to reach an agreement on concessions (called "Special and Differential Treatment'') for the world's poor countries in implementation of the international trade agreement by July 2002. That deadline passed without any worry on part of the advanced economies and a new one was drawn up for December 2002. In the light of a general indifference among the world's advanced economies on the need for S and D provisions in the WTO agreements, it is quite likely that the December 2002 deadline too will pass without any progress. This is true as well for some of the "implementation issues'' first raised by the developing countries as far back as 1999 and where substantial progress was expected by end 2002, but where none has taken place.

The issue that will attract the most attention at Sydney will be the Doha Declaration on TRIPS and Public Health. That declaration, hailed as a template of new WTO sensitivity to the concerns of the developing countries, was meant to provide these countries with greater flexibility in accessing generic medicines produced at low cost. But for small or extremely poor countries which, unlike Brazil and India, do not have the capacity to manufacture generics, the Doha Declaration was of no value unless this "manufacturing problem'' could be sorted out. WTO members were mandated to find a solution by end 2002 on how these countries could buy medicines from generic producers in other countries without being accused of violating the provisions of TRIPS.

Intense negotiations have not provided a solution, with some advanced countries trying to restrict the scope of the Declaration by describing in more narrow terms the countries which would be eligible for the exemptions as well as the kind of diseases in treatment of which TRIPS provisions could be waived.

But the need to demonstrate that there is "a development round'' in progress may persuade the U.S. and E.U. to show signs of greater flexibility on this issue at Sydney, much like they did in November 2001 to get developing country approval for the Doha Round of negotiations. The need for such an approach has been implied by the remarks of the Australian Trade Minister, Mark Vaile, on the eve of the Sydney conference.

There are many other issues which will be the subject of heated discussion at Sydney. Most important is agriculture, where the excruciatingly slow progress makes it likely that a March 2003 deadline on the modalities for liberalisation will be missed. The new farm legislation in the U.S. increasing hand-outs to domestic farmers and the recent decision of the E.U. to effectively postpone reform of agricultural policies until 2006 together mean that agriculture is on the verge of becoming a dead issue in the WTO talks. This is unacceptable to major exporters (like Australia) and also to a number of developing countries.

CRR

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