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Africa: Doha Deception Round
AfricaFocus Bulletin
Jul 1, 2006 (060701)
(Reposted from sources cited below)
Editor's Note
As negotiators again reported "no progress" at international trade
negotiations in Geneva, 100 developing nations released a statement
saying they were still willing to negotiate but that the chasm
between the views of rich and poor countries was huge. Even if a
face-saving agreement is reached over the next months, critics said
that major powers had already demonstrated that they had no
interest in proposals to address developing country concerns.
One such proposal, presented in early June by the Africa group,
focused on measures to address the long-term crisis in trade in
agricultural commodities on which many developing countries are
still dependent.
This AfricaFocus Bulletin contains excerpts from a media summary of
a new report by ActionAid International (http://www.actionaid.org) on "The Doha Deception Round," and
summary of the June Africa Group proposal on trade in commodities
by the Institute for Agriculture and Trade Policy
(http://www.iatp.org), as well as links to further documentation.
For previous AfricaFocus Bulletins on trade issues, see
http://www.africafocus.org/tradexp.php
Note: AfricaFocus Bulletin will be taking a break for the next two
weeks. Publication will resume in the third week of July.
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The Doha Deception Round: how the US and EU cheated developing
countries at the WTO Hong Kong Ministerial
June 29, 2006
Media Summary
[For full text of the summary and the full report, visit
http://www.actionaid.org]
Threats, deception and manipulation are the underhand negotiating
tactics used by rich countries such as the EU and US in the current
round of global trade talks, warns ActionAid in a new report, 'The
Doha Deception Round: How the US and EU cheated developing
countries at the WTO Hong Kong Ministerial.'
Power politics, exclusive meetings, diplomatic arm-twisting and
'take-it-or-leave-it' ultimatums are leading to a final trade deal
that will not alleviate poverty and that could have a devastating
impact on millions of people worldwide.
Poor countries should not be forced to accept a bad deal at any
price and should make history and reject it.
Hardball tactics by the EU and US are undermining the very goal of
the current trade talks known as the 'Doha development round' which
is supposed to have the interests of poverty and development at its
heart rather than leading simply to more trade liberalisation in
favour of rich countries.
The WTO and its chief Pascal Lamy take much of the blame for
allowing and even encouraging a growing reliance on exclusive and
informal negotiations which have become the norm over the past two
years and which help the big players skew the Doha round, warns the
study. ...
To highlight the unfairness of current practices at the WTO,
ActionAid looks at the lessons of the WTO ministerial conference in
Hong Kong in December 2005. These practices are set to intensify in
Geneva in the final stages of the WTO negotiations.
The Hong Kong ministerial was riddled with pitfalls for developing
countries, it says:
- Invitation-only 'green room' negotiation sessions organised by
the WTO leadership completely undermined the so-called 'democratic'
decision-making process
- Round-the-clock talks ground down overstretched and exhausted
developing country negotiators who were unable to stand up to rich
countries with far bigger delegations.
- Divide-and-rule tactics used by developed countries to drive
wedges among developing nations, ranging from trying to buy them
off with vague promises and spin about development deals to
providing heavy-handed "friendly advice" and pressure on their
political leaders.
- An eleventh hour take-it-or-leave-it 'consensus' deal brokered by
the few which left the majority with no choice between the rubber
stamp or the extreme option of rejecting the whole package. If they
rejected the deal they fear they would be blamed for wrecking the
conference, the Doha Round and even the global trading system.
Hong Kong was billed as a milestone in efforts to complete the Doha
Round this year. Such moves were based on ground rules set in the
July Framework which was hatched by 'key' WTO governments in 2004
and then handed down to the rest of the membership. The process was
compounded by a string of so-called 'mini-ministerials' and other
gatherings of self-selected WTO members. ...
It is now clear the EU and US are pursuing an aggressive trade
liberalisation agenda and are offering very little in exchange. The
report concludes that developing countries do best when they stick
together in coalitions and resist divide-and-rule tactics.
Developing countries should dismiss the argument that any deal is
better than no deal: as things stand, no deal is better than a bad
deal for developing countries. ...
The report is based on 37 in-depth interviews with negotiators,
diplomats and others who were deeply involved in the Hong Kong
conference. For reasons of confidentiality, their names are not
revealed. It looks at a number of examples to show what was wrong
in Hong Kong, providing a snapshot of some of the deep-rooted
problems in the WTO process.
Green rooms and the myth of democracy and transparency
The 'bottom-up' approach was the big buzzword in Hong Kong. The
theory was - and remains - that the negotiation process should be
driven by all WTO members rather than being imposed upon them. At
the end of the conference, Pascal Lamy told journalists that
consensus had been reached after hundreds of meetings and other
consultations among members and between different regional
groupings in the WTO.
...In reality, the decision-making hinged on green room talks
between a few countries deemed to represent the main interests of
members, with Brazil and India and a sprinkling of other called in
to represent the developing world. ...
According to an African trade negotiator: "Ultimately, the real
forum of negotiations was the green room and whatever you said in
the other rooms didn't matter. What mattered was the position of
the big guys and what they felt they could deliver." ...
The green room was a problem even for the developing countries who
were allowed the inside.
"You keep repeating your position over and over again, and rather
than being heard, people get annoyed, they start to demand
concessions from you rather than actually compromising with you,"
said a negotiator from the African-Caribbean-Pacific group (ACP),
which represents 56 WTO members.
The final hours of the conference were just as bad: the heads of
delegations were given only an informal meeting to voice their
final statements on the overall text of a deal that had emerged
from the Green Room process only a few hours before.
"[Pascal] Lamy had picked about 20 countries that were to a large
extent positive about the text," said a delegate from an African
country that was wary of signing up to the manufactured consensus.
"The evolving scenario placed some delegates who wanted to oppose
the text at a disadvantage and instead they began to question
whether or not the problem was their inability to comprehend the
text or the problem was the draft Hong Kong text itself."
To cap it all, the closing plenary session was set up theatre-style
without microphones so that delegates could not speak unless they
were prepared to clamber onto the stage and demand a microphone,
something only Venezuela's vice-minister chose to do.
Double-dealing on the services text
Ahead of Hong Kong, developing countries had expressed increasing
unease over the way negotiations on services were heading. In
essence, what was being drafted was a one-sided wish list for
countries seeking sweeping liberalisation, rather than a balanced
document taking into account the concerns of different members. The
draft that ended up on the table on the table in Hong Kong
disregarded the repeated objections of developing countries:
alternative proposals from around 70 developing countries had
simply been sidelined by Pascal Lamy and WTO brokers.
After facing delaying tactics before Hong Kong, developing
countries at the conference were then told that it was too late,
because the purpose of the ministerial was to sign off and not
negotiate.
"Not only was it was it unethical but also unprocedural," said an
official from the G90, which represents 64 WTO members. ...
Brussels' and Washington's divide-and-rule tactics
Attempts by G90 members to have their voice heard on services
sparked a fight back by the EU and US against the developing
countries steering such efforts.
Rwanda, for example, spearheaded moves in the run up to Hong Kong
to ensure that the conference would address developing countries'
concerns. Although WTO rules mean that the world's Least Developed
Countries (LDCs) - 32 of whom are WTO members - are not required to
commit to services liberalisation, such nations have stood
alongside others in the G90 who would have to. As a result, Rwanda
was among several LDCs that faced heat from the EU and US, through
'reminders' that they should shut up on services if they wanted to
get anything out of separate talks on a package of dutyfree and
quota-free measures for their products.
"With these tactics of bad guy versus good guy, they managed to
break up the G90," said a delegate from the grouping. Malawi, which
picked up the baton on behalf of the developing country majority,
also had to deal with pressure from the proponents of
liberalisation including phone calls to its president from the EU.
"We suspect it was the EU who called given what they were saying to
us in the meetings," said a capital-based Malawi delegate. ...
An empty development package
The so-called 'development package' a deal that would purportedly
help the world's LDCs received huge publicity in Hong Kong. It was
the media-friendly result that the WTO needed to prove that the
goals of the Doha round had not been set aside. But the package
turned out to be the biggest deception of the Hong Kong outcome.
...
The EU first proposed the development package two months before
Hong Kong, a move which enabled it to put the US on the defensive
and set itself up as the noble champion of preference-receiving
countries, while at the same time fending off criticism of its own
agriculture tariffs. The US, which accused the EU of hiding behind
the LDCs, proved little better, dangling the possibility of a deal
in front of the world's poorest nations.
Negotiations on the package took up the bulk of the LDCs' time in
Hong Kong, pulling their delegations away from other areas of
concern to developing countries.
For one ACP trade negotiator, the package was "like a carrot on a
bungee, just when you reach for it, it goes back up again."
Focusing on the mantra of duty-free and quota-free imports of LDC
goods, the final fudge which emerged offered 97 percent access to
rich markets but left the possibility of loopholes so that the
developed world [could] restrict imports of key LDC goods such as
textiles or leather goods.
The LDCs had actually rejected what was put before them in Hong
Kong, saying they would not settle for a half-baked deal and that
they wanted more negotiations at the WTO's Geneva base to ensure
they got substantial results.
"Our demands were simply brushed away," said an LDC official from
Africa. ...
US dodging on cotton
Cotton is a particularly contentious issue at the WTO. Under the
2004 July Framework, it was meant to be dealt with "ambitiously,
specifically and expeditiously," but there was little or no
subsequent movement.
The issue was back in the spotlight in the run up to Hong Kong, as
the so-called C4 countries (Benin, Burkina Faso, Chad and Mali)
plus Senegal pressed for an end to the dumping of cotton on their
markets, mainly by the US, and for compensation for the economic
damage it has caused. The cotton debate has resulted in an absurd
situation where the US has promised the affected countries aid
money to make cotton production more efficient while at the same
time destroying their trade production capacity through dumping.
In Hong Kong, the US only agreed to duty-free and quota-free access
for the C4 by the end of the Doha round and to remove cotton export
subsidies this year. Other parts of the deal are still up for
negotiation.
Far from being a huge sacrifice, the US concessions were
effectively meaningless, because the C4 mainly export to the EU and
the bulk of cotton dumping comes through US domestic support
schemes and not export subsidies, which Washington was in any case
required to eliminate after a WTO dispute settlement decision last
year.
Despite the paltry nature of the deal, C4 delegates gave in simply
to keep the debate alive -- because of veiled threats from the WTO
secretariat that future cotton talks could be derailed if they
didn't -- and to avoid taking the blame for any broader failure in
Hong Kong.
In addition, the cotton countries had to endure almost non-stop
talks during which they were vastly outnumbered and slowly ground
down. "It was deplorable, all happening in the night," said a C4
official. "You have to have extraordinary physical force to do
this. It all contributes to the non-transparency. In a state of
extreme fatigue, you can't think or negotiate well. The US had more
than 200 people. They can change their negotiators in all the
meetings. We had to be everywhere."
...
On the Right Path to Development: African Countries Pave the Way
By Carin Smaller and Sophia Murphy
Commentary June 16, 2006
Institute for Agriculture and Trade Policy
http://www.iatp.org
http://www.tradeobservatory.org
[Excerpts. For full text see http://www.tradeobservatory.org]
The June 7 proposal by the African Group (an alliance of 41 African
countries) to the WTO on managing trade in agricultural commodities
is a refreshing way forward for addressing poverty and improving
living standards in rural areas in the context of the Doha Agenda.
The proposal emphasizes the need to ensure stable, equitable and
remunerative prices for commodity producers and to deal with
structural oversupplies in commodity markets. The proposal lays
down a challenge to WTO members: are they serious about doing
something for development with the Doha Agenda or not? ...
Since the Doha Ministerial Conference in November 2001, a group of
African countries including C�te d'Ivoire, Kenya, Rwanda, Tanzania,
Uganda and Zimbabwe, has called for WTO Members to address the
rural crisis in developing countries that arises from the decline
in prices of commodities. This group of African countries has
emphasized the negative effects of the "colossal power asymmetry"
in commodity markets, which allows a small number of multinational
companies to gain an ever-increasing share of the profits from
commodities trade, leaving producers in developing countries unable
to get a fair price for what they produce. To date, the majority of
WTO members have not given serious consideration to these concerns
although the declining price of agricultural commodities remains a
serious obstacle to reducing poverty levels and to securing
benefits from expanding global trade for many developing countries.
On June 7, the African Group took a stand on these vital issues.
The proposal by the African Group identifies four areas for
inclusion in the Doha negotiations:
(1) The elimination of tariff escalation where it discourages
development. Tariff escalation describes a tariff structure in
which tariffs increase as products are transformed from their raw
state into a processed good. For example, tariffs on raw cotton are
typically lower than tariffs on clothing. Tariff escalation allows
developed countries to import raw materials at low cost from
developing countries for their own industries but protects
developed country industry from value-added imports, which
discourages industrial development in developing countries.
(2) The adoption of international systems to manage the supply of
commodities so as to stabilize prices. For commodities like coffee
or cocoa, world prices are severely distorted by the structural
oversupply of the commodities on inter- national markets.
Oversupply has depressed prices with devastating effects for
small-scale coffee and cocoa producers.
(3) To allow the use of export taxes and export restrictions to
stabilize commodity prices. Major suppliers of commodities to world
markets, or a number of suppliers acting in concert, can thereby
avoid sharp declines in the world price when supplies increase.
This also allows countries to slow exports if they want to retain
commodities for their own food security. And it offers countries
another option for increasing government revenue.
(4) To negotiate more concrete disciplines to eliminate non-tariff
barriers that affect commodity trade. Non-tariff barriers can
include health and safety standards and packaging requirements that
are essential to any country's trade regulation. However, other
non-tariff barriers can be used as a way to keep out imports,
unfairly discriminating against producers and exporters from poorer
countries. A better system at the multilateral level is needed to
ensure that any standards put in place are the result of a
participatory process, ideally one that provides funding to
commodity producers to raise the quality of their goods.
The proposal from the Africa Group is an important initiative. By
calling for systems of supply management, the proposal offers
meaningful alternatives to tackle the root causes of dumping (the
sale of exports at prices below the cost of production). ...
These are proposals that farm organizations the world over support.
Farm organizations in the U.S. as in Kenya know that their biggest
challenge is stopping the steady (and sometimes precipitous)
decline in farm income - they know export expansion, lower
tariffs, disciplines on export subsidies may all have their merits
as trade policy, but in the markets in which farmers (not brokers
or processors or retailers) actually trade, these policies have
done nothing to support employment (on-farm or in the local
economy).
The development agenda promised by developed countries in Doha
never materialized. The African proposal offers a serious chance to
redeem this sad state of affairs. It deserves careful consideration
by the WTO membership.
Resources
African Group Proposal on Modalities for Commodities, June 2006
http://www.tradeobservatory.org/library.cfm?refid=88066
Commodity Proposal by C�te d'Ivoire, Kenya, Rwanda, Tanzania,
Uganda and Zimbabwe, June 2005
http://www.tradeobservatory.org/library.cfm?refid=73146
Submission on Declining Terms of Trade for Primary Commodities by
Tanzania, Uganda and Kenya, May 2004
Available at: http://www.wto.org. Search documents for
wt/comtd/w/130
Submission on the Implications of Declining Terms of Trade for
Primary Commodities by Tanzania, Uganda And Kenya, March 2004
Available at: http://www.wto.org/. Search documents for
wt/comtd/w/124
Submission on the Crisis Created by the Long-Term Decline of Prices
for Primary Commodities by Tanzania, Uganda And Kenya, July 2003
Available at http://www.wto.org. Search documents for
WT/GC/W/508/Corr.1
AfricaFocus Bulletin is an independent electronic publication
providing reposted commentary and analysis on African issues, with
a particular focus on U.S. and international policies. AfricaFocus
Bulletin is edited by William Minter.
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