Implementation issues in the WTO

By Muchkund Dubey

MOST OF the agreements and understandings reached during the Uruguay Round trade negotiations are unequal and unbalanced from the point of view of developing countries. This was mainly because of the weak bargaining position of these countries, their general state of unpreparedness for the negotiations, their dearth of skilled manpower and financial resources to participate effectively, and the lack of transparency in the negotiating process.

Some of the agreements are inherently unequal and unbalanced. The Agreement on TRIPS is in contradiction with the objective of liberalising international trade, as it is designed essentially to protect the monopoly rights of patent holders. It has also been apparent that the implementation of this agreement will result in manifold increases in the prices of life-saving drugs in developing countries. The agreements on TRIPS, TRIMS, agriculture and subsidies have the effect of irretrievably closing for the developing countries macro-economic policy options which developed countries enjoyed till recently. These include granting process patent only and adopting investment policies to promote the use of local resources and skills. Subsidies normally maintained by developed countries have been made non-actionable, while several of those given by developing countries in pursuit of an export-led development strategy have either been prohibited or put in the actionable category. Subsidies to farmers maintained by major developed countries have, instead of coming down, gone up primarily because these countries were able to switch over to subsidies permissible under the Agreement on Agriculture, before the commencement of its implementation. In the case of export subsidies on agricultural products, the countries which had not used them before the Uruguay Round are not allowed to resort to them while those using such subsidies are expected to decrease it by a small margin. Because of the back-loading provision of the Agreement on Textiles and Clothing (ATC), most of the textile exports from developing countries will remain under restriction until 2005.

Several of these instances of inherent asymmetries were brought out in the evaluations of the agreements carried out soon after the Uruguay Round. Others came to the surface during the implementation of the agreements. Some of the agreements are not being implemented in their true spirit. For example, developed importing countries have sought to comply with the targets of liberalisation set out in the ATC by taking credit for the items already outside restriction. Fresh obstacles are being raised to the implementation of the highly limited and conditional commitments taken by developed countries during the negotiations on the movement of natural persons.

Due to the TRIPS Agreement, several developing countries are finding it extremely difficult to provide drugs to HIV/AIDS- affected population at affordable prices. Besides, this Agreement has no provision for identifying the source of knowledge or bio- resources while applying for the grant of patents based thereon. Consequently, several patents based on the bio-resources and traditional knowledge in developing countries have been granted, thus resulting in the piracy of these resources. Patenting of neem and basmati are some of the striking examples.

These and similar other actions by developed countries have made the unequal Uruguay Round agreements even more inequitable. These have tilted the balance further away from developing countries and severely compromised their position under the WTO.

Provisions in the WTO Agreements on special and differential treatment for developing countries are of a non-binding nature and couched in best endeavour terms. In the implementation process, developed countries have totally ignored these provisions. To cite one example, Articles 7 and 8 (Objectives & Principles) of the TRIPS Agreement provide for taking into account the development needs of developing countries, transferring technologies to them, preventing monopolistic trends and safeguarding public interest and public health. As of now, there is no understanding on how these provisions can be implemented.

A group of like-minded developing countries identified various instances of inequalities and imbalances in the Uruguay Round agreements and submitted some 93 formal proposals for rectifying them. These proposals, known as the implementation issues, were pursued during the preparatory process of and at the Third WTO Ministerial Conference held in Seattle in November-December, 1999. However, since the Conference ended in a fiasco, no decision could be taken.

After Seattle, developing countries have pursued the implementation issues in five special sessions of the WTO General Council. But the results so far have been only of a procedural nature. Even the European Union, which has a relatively more liberal position on the subject, thinks implementation issues calling for a renegotiation of the existing agreements could be considered only as a part of a new round of negotiations to be launched at the next WTO Ministerial Meeting in Doha. Developing countries are not prepared to enter into any fresh commitments in future trade negotiations until the implementation issues are resolved. They are opposed to establishing a link between these issues and a new round of trade negotiations. For, if such a link is established, they will be required to offer quid pro quo for something which needs to be rectified on its own merits and for which they have already paid a price.

Inspite of the meagre results achieved so far, the pursuit by developing countries of the implementation issues for more than a year and a half now has been worthwhile. These issues have been put at the very centre of post-Seattle deliberations in WTO. Developed countries have recognised the concern of the developing countries regarding these issues as a serious matter. The debate has created an awareness among developing countries that they have to be better prepared, more conscious of their rights and more united in future trade negotiations. In fact, in the very process of pursuing these issues, they have become more united than before.

The implementation issues are not a spanner thrown by a group of developing countries to escape a new round of trade negotiations. Their attempt to resolve them is designed to safeguard their most vital trading interests and to restore a modicum of balance in WTO agreements after an unfortunately belated realisation that developing countries were short- changed in the Uruguay Round negotiations. What is at stake is the very credibility of the international trading system in the eyes of the developing countries. Resolution of the implementation issues is the only way to restore credibility.

It is essential for the developing countries to adopt a selective approach in pursuing these issues. They should put lesser emphasis on measures of a discretionary nature, those seeking unilateral concessions and gestures of a non-trading nature, and once-for-all extensions of datelines providing interim reliefs. Instead, the stress should be on revising the existing rules, on their equitable application and on reaching agreements on the new rules of the game. Much higher priority should be attached to seeking greater access to the markets of the developed countries in the areas of interests to developing countries.

They should not accept solutions of a procedural nature except those designed to open up for review and negotiation, agreements which are inherently unfair and inequitable. These countries should keep on vigorously pursuing the implementation issues between now and the Doha Meeting. At Doha, serious negotiations should be carried out to resolve as many of these issues as possible. The outcome to be sought at the end of the meeting should be: (a) Insistence on the resolution of issues arising out of non-implementation per se; (b) An understanding that implementation issues of a structural nature will be addressed seriously during the course of the on-going reviews of the relevant agreements; (c) The continuance of the arrangement of pursuing these issues in special sessions of the WTO General Council.

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