Summary, Overview and Development Report 3.3

QATAR: September 2001

By Julio Montes de Oca/ ICDA Secretariat

During the month of September some of the most controversial trade related issues started to surface as the WTO Trade Ministerial started to approach. Most of the themes presented here will no doubt continue making waves long after the delegates and stakeholders head home.


The issue of access to life-saving drugs has already brought about severe disputes between pharmaceutical companies (both patent-holders and generic drug makers) and governments [September 5, 20 - HEALTH BEFORE WEALTH]. Now, as highlighted by their 'Health Before Wealth' initiative, Oxfam wants governments to address the issue squarely in the face by putting it on the table in Doha. The debate has become more complex in light of the problem that emerged later with the need for anthrax drugs in the United States, but this means that there will be no getting around the topic in upcoming trade discussions.


The trade of agricultural products was disciplined in the Uruguay Round of multilateral trade talks in 1994, where the Agreement on Agriculture (AoA) was adopted. The main commitments of the agreement included reduction of domestic support to agriculture, reduction of export subsidies, and improved market access. However, to this day there is still fierce discussions about the implications of its implementation, not to mention about what how the Agreement should be furthered through amendment and expansion.

One of the most important players in these discussions is the Cairns Group (of agricultural exporting countries). Recently, the Group made their position known regarding the future of agricultural negotiations, in light of the Article 20 mandate in the AoA for continuation of fundamental reforms [September 5 - CAIRNS GROUP LIKELY TO…]. While the group is convinced that launch of a new round is the best way to achieve progress in agricultural reform, their demands have been toned down significantly, possibly to prevent the immediate alienation of their traditional trade opponents in this field, the EU and Japan. The Cairns Group has the current challenge of presenting a strong, united voice all the while avoiding utilization of the more abrasive tones of the so-called "Seattle-style language" and downplaying non-trade issues that are more important to the EU, such as the multifunctionality of agriculture and the precautionary principle.

Paradoxically for the United States agricultural sector, its domestic policies seem to be favoring new protection measures [September 5 - TREATIES MAY CURB FARMER'S SUBSIDIES]. A battle will surely ensue since the US must honor its international multilateral commitments while some congressional factions seek to protect the farmers that make up their particular constituencies. Additionally, the Senate has started drafting legislation that also comes in conflict with the House's subsidy-based approach, by enphasizing non-trade distorting measures instead. Intense arm-wrestling will follow over the next few months, as the United States tries to reach a domestic compromise that will abide by its international trade commitments.


There is no doubt that Chinas accession to the WTO will have an enormous impact on global trade flows [September 20 - CHINA'S ADMISSION WILL CHANGE WTO]. There is widespread agreement that having 1/4 of the world's population under the same trade rules (independent of some of their inadequacies) will have a positive effect on the global economy. What is currently the subject of much speculation is the alignment that China will follow within the WTO. But apart from these 'good news', what are short and mid-term domestic effects that will be felt in China? The Financial Times, somewhat biased to the benefits of free trade, does point out some of the challenges to be faced by China [September 20 - WELCOME TO THE FAMILY, CHINA]. After their incorporation into the global trade family the Chinese will undergo growing pains in various sectors, including auto manufacturing and agriculture. The political climate in the government, as well as its commitment to reform will be key in the acquisition of the promised benefits of trade liberalization.


The most contentious issue to be resolved in Doha is certainly the possible launch of a new round of trade talks. At the beginning of September, future WTO boss Supachai Panitchpakdi expressed a somewhat optimistic opinion about the launch of new trade talks in Qatar [September 5- NEW ROUND OF WTO TRADE TALKS…]. Mr. Supachai was also positive about the evolution of other outstanding issues including agriculture and the environment. Additionally, SADC ministers started defining a common position for the Ministerial. In similar fashion to the post-colonial UN, developing countries can now benefit from strength in numbers in multilateral fora. As these countries learned the hard way, the Uruguay Round commitments did not deliever some of the promised benefits, mostly because of developed country limitations on market access; thus they have become more skeptical and realized the advantages of standing together. By the end of September the WTO still wanted to sound optimistic about the chances of a new round being launched [September 26 - PUSH FOR NEW ROUND…]. Quote WTO Spokesman Keith Rockwell, "while all countries have one problem or another with various aspects or issues for launching a round, no one has said they do not want to go forward with a new round". One has to wonder if Mr. Rockwell only has access to information coming from above the Sahara.



Developing country heavyweight India is leading the calls for revisiting implementation isues from the Uruguay round before committing to any new issues in Qatar [September 12 - INDIA: NO CONSENSUS IN MEXICO]. The India position is centered on removal of trade-distorting subsidies (as India does not have a general policy of export subsidization, for example) and on policies that support developing countries dependent on agriculture. On the other hand, India has been one of the staunchest opponents of imposition of higher environmental standards, putting forth the argument of developed country 'green protectionism'. Is a compromise possible in this negotiation climate? Manoj Pant gave another developing country (Indian) perspective [September 20 - WTO AND DOHA: A DEVELOPING…]. He contends that the Uruguay round is still unfinished business, particularly with respect to textiles, agricultural policy, and intellectual property rights, all in dire need of clarification. Placing trade negotiations in a North-South perspective evidences that developing countries are just starting to obtain the negotiation experience that developed countries have accumulated over the past 50 years. However, they must not depend exclusively on technical assistance from the North, but also enhance their own trade policy research capabilities.

Dissent within the ranks of government with respect to common trade policies is not limited to the United States. European Parliament Green MEPs has openly disagreed with EU trade negotiation policies, most prominently with trying to convince developing country governments of the necessity for launch of a new trade round [September 12 - EURO GREENS CRITICISE DOHA…]. On the surface, Trade Comissioner Pascal Lamy exudes satisfaction at the preparations for the Doha Ministerial, heralding the openness and frankness in the debate