OPINION

The many must resist the some

“For the first time in a Ministerial Declaration adopted by consensus, there is reference to a consensual acknowledgement of divergence of views.” Picture shows the opening of the World Trade Organisation Summit in Nairobi, Kenya.— Photo: Reuters  

The World Trade Organisation’s (WTO) press release after the Nairobi Ministerial Conference in mid-December said, “WTO members secured a historic Nairobi Package for Africa and the world”. Those seemingly optimistic words, however, belie several fundamental challenges that the Nairobi Ministerial Declaration presents for the future of the WTO. Buried in the last few paragraphs of the declaration is a recording of differences between WTO members over how the future negotiations will be conducted. It notes that while many WTO members reaffirm the Doha Development Agenda (DDA), not all members share this view.

A cardinal principle for WTO negotiations is consensus. The WTO works on the principle of one vote for each member country, irrespective of size or economic power. This principle worked well in theory in a world where a few economically strong powers could continue to hold the reins of decision-making, but has been running into increasing complexities in a multipolar WTO with a membership of over 160 countries, and a U.S. and European Union whose economic clout have been diminishing.

The Doha precedent

To add to the complexities of the increasingly complex WTO was the fairly egalitarian mandate that the DDA presented. The Doha Development Round, launched in 2001, set for itself the challenge of a “single undertaking” comprising several elements including agriculture, non-agricultural market access, services, intellectual property, trade facilitation, trade and environment, and trade and development. Virtually every item was envisaged as a whole and indivisible package which could not be agreed upon separately. The underlying principle for this was the need for a balanced outcome in all streams of negotiations.

The slow progress at the WTO has been accompanied by the growth of mega-regional trade agreements — the recently concluded Trans-Pacific Partnership (TPP) formed among 12 countries, and two under negotiation: the Regional Cooperation for Economic Partnership (RCEP) formed among the 10 ASEAN countries and India, China, Japan, South Korea, Australia and New Zealand, and the Transatlantic Trade and Investment Partnership (TTIP) between the U.S. and the E.U. These mega-regionals need to also be seen in the context of increasing bilateral free-trade agreements (which have increased from around 124 such agreements in 1994 to over 600 agreements in 2015). A significant amount of India’s own negotiating capital and focus has been on the mega-regional RCEP agreement, and on bilateral free-trade agreements; but neither approach is a substitute for the WTO and its strong edifice of a multilateral system of rules, backed by an effective dispute-settlement mechanism.

Agreeing to disagree

It is in this context that the Nairobi Ministerial Declaration’s admission of dissonance in the WTO membership on the ‘Doha mandate’ assumes greater significance. This dissonance is presented in the text of the declaration which records what “many Members” versus “some Members” want. While “many” reaffirm the Doha mandate, the others do not. While “many Members want to carry out the work on the basis of the Doha structure”, “some want to explore new architectures”. And finally, while “some wish to identify and discuss other issues for negotiation” (a reference to issues other than those under the Doha mandate), “others do not”.

For the first time in a Ministerial Declaration adopted by consensus, there is reference to a consensual acknowledgement of divergence of views, which underlies the slow progress of the Doha round. While there is no identification in the declaration, the developing countries, including India, clearly belong to the “many” category, while “some” includes the U.S., the E.U., and other developed countries. The use of the word “many” could perhaps be seen as an implicit recording of a majority view in favour of the Doha mandate. A glimmer of hope, however, remains — that the views of the majority could potentially be tapped for driving at a logical and hopeful conclusion of the Doha mandate.

However disappointing the Nairobi outcome may be, it is in essence a recording of a factual reality of the differences between countries, and the strong pressure of the developed world to manoeuvre the WTO in a direction that best suits its interests. The only option for India is to forge ahead with a high degree of preparedness and focus on areas of its interests, coalition-building with like-minded countries, and translating what “many” want into actual results. The Doha round had resulted in several decisions and declarations which continue to remain legally valid decisions of WTO members and need to be honoured in taking forward the negotiations. The Nairobi Declaration in fact refers to the recently concluded United Nation’s 2030 Sustainable Development Goals (SDGs). One of the SDGs is that of promoting an equitable multilateral trading system under the WTO “through the conclusion of negotiations under its Doha Development Agenda”. This can again be seen as an implicit referencing of the DDA and its importance.

Furthermore, the Nairobi Decisions on special safeguard mechanism for developing country members and on public stockholding for food security purposes clearly make reference to post-Doha decisions (the Hong Kong Ministerial Decision and the Bali Decision) as the basis for further negotiations. It is important to build on each of these to reach clear, successful and speedy outcomes.

On other Doha issues, it is important to clearly map what India wants, and how that may be achieved — for example, in services negotiations.

Of equal importance is the need to prepare for the new issues, approaches and architecture that “some” WTO members have expressed their desire for in the Nairobi Declaration. The recently concluded TPP agreement perhaps provides a clear glimpse of what these new issues are likely to be — environment, labour, investment, competition, government procurement, and so on. How to engage on these issues, and identify the red and green lights for negotiations, is the next challenge that India needs to be prepared for.

The WTO remains an institution that is worth preserving. India needs to approach it from a position of strength, with clearly defined agendas, and with preparedness for the new challenges it presents.

(R.V. Anuradha is a Delhi-based lawyer specialising in international trade law and policy matters.)



However disappointing the Nairobi outcome may be, it is a recording of a factual reality of the differences between countries