Stalemate continues at WTO meet in Nairobi

December 18, 2015 11:25 pm | Updated November 28, 2021 11:04 am IST - NAIROBI:

Developing countries — including India — demanded that the Nairobi Ministerial Conference reaffirm the Doha Development Agenda, to improve the trade prospects of developing and poor countries. Photo: Reuters

Developing countries — including India — demanded that the Nairobi Ministerial Conference reaffirm the Doha Development Agenda, to improve the trade prospects of developing and poor countries. Photo: Reuters

The WTO Nairobi meet — which was expected to produce by noon local time (2.30 PM IST) on Friday a Ministerial Declaration to liberalise global trade — stretched into overtime with the developing and the developed world failing to bridge their differences over farm issues as well as on whether to continue with the ongoing 14-year-old Doha Round talks.

Hectic parleys were on between member countries, during the last day of the four-day Nairobi Ministerial Conference, to come to a meaningful consensus on these contentious issues. The Ministerial Conference is the WTO's highest decision-making body.

To ensure the continuation of the Doha Round till all outstanding issues are solved, developing countries — including India — demanded that the Nairobi Ministerial Conference re-affirm the Doha Development Agenda, to improve the trade prospects of developing and poor countries, and remove the distortions in world trade, as well as all Ministerial Declarations and Decisions taken since 2001, when the Doha Round started first.

However, sources said, the developed world, led by the U.S., wanted to — as the US Trade Representative Michael Froman put it — free themselves from the strictures of the Doha framework and bring in new issues, what they call the emerging trade issues, to “revitalise” the WTO and the multilateral trading system.

These new issues include global value chains, e-commerce, labour, environment, competition policies, investment pacts and state-owned enterprises, on all of which the rich nations have much superior standards or rules than the developing and poor countries. Developing and poor countries feel these standards or rules might become non-tariff barriers, hurting their exports.

The developing world had opposed a draft Ministerial Declaration floated on Thursday as it did not have any commitment by Member countries on the re-affirmation of the Doha Development Agenda, while it did mention the possibility of the new issues being introduced.

The WTO director general Roberto Azevedo is learnt to have held several meetings during the day, including with major members such as the US, European Union, India, China and Brazil to find common ground. Meanwhile, Amina Mohamed, the chair of the Nairobi ministerial conference and Cabinet Secretary in Kenya's Ministry of Foreign Affairs & International Trade, said the draft ministerial declaration is close to being finalised, adding that a deal is likely in a few hours. Rejecting claims of a crisis in the talks, she said all members are trying to do the best they can. She refuted rumours that there was a direct conflict between Africa and India on some issues. She said the global trade body will move to the next phase, an enhanced one, soon.

Farm issues

Sources said there is also no convergence on agriculture related issues including an effective Special Safeguard Mechanism (SSM), as well as a deadline of December 2017 for members to arrive at a permanent solution for the issue of public stockholding for food security purposes.

SSM is a trade remedy that will allow developing countries to temporarily hike duties to address import surges and price dips due to heavily subsidised imports of agricultural products from developed countries. SSM is meant to protect the interests of resource-poor and subsistence farmers in the developing nations.

Developing countries, including India, want the final Ministerial Declaration to have an accelerated work programme on the SSM and food security issues, and not let negotiation on these issues slow down by clubbing them with other elements of the Doha Round.

India had on Thursday opposed a draft declaration on agriculture as their demand for SSM would be accepted only on the condition that the developing countries grant greater market access in farm goods through reduced tariffs.

India had earlier submitted a simplified proposal on SSM and had asked the WTO Chair on Agriculture negotiations to speedily work on it. India had said an instrument similar to SSM is already available to a select few countries (especially the developed countries) for over two decades. Therefore, the demand for SSM was reasonable and pragmatic, India said.

There were efforts to link a deal on SSM with that on 'export competition'. 'Export competition', according to the WTO, refers to elimination of agricultural export subsidies, new rules for export credits, international food aid and exporting state trading enterprises. But India has already rejected claims by rich countries that there is a broad consensus for a deal during the Nairobi meet on 'export competition'.

Timothy A Wise, policy research director at Tufts University's Global Development and Environment Institute, said, for instance, the draft declaration on agriculture favoured rich countries. It offers no meaningful cuts in US export credits, which have favoured US exporters to Africa with some $1.25 billion in credits over the last six years, he said. The draft declaration also makes no mention of reductions in rich country agricultural subsidies and supports. With crop prices low and a new Farm Bill authorising rising levels of support to US farmers and exporters. Tthis omission is a direct blow to those developing countries which see their farmers and export prospects harmed by underpriced US exports, he said.

Official sources said not just India, but even developed countries such as Canada has reservations on the language on export credits in the draft declaration.

LDC package

A lot is at stake for African countries as the Ministerial Conference is being held in the continent for the first time. Sources said a deal is likely to help the least developed countries (LDC) -- many of which are in Africa -- increase their share in global exports.

An LDC package, likely to be agreed upon by all the members, would include duty-free, quota-free market access for LDCs, the LDC services waiver (to ensure preferences to LDCs in services trade) and preferential rules of origin.

Gains from Nairobi

Meanwhile, the so-called positives from the Nairobi meet included the WTO members -- representing major exporters of information technology products, but excluding India and many others -- agreeing on the timetable to implement a major deal to get rid off tariffs on 201 IT products valued at over $1.3 trillion per annum, and accounting for around 10% of total global trade.

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