US and allies ‘strike work on post-Bali, Doha Round

Original Publication Date: 
24 September, 2014

Geneva, 23 Sep (Chakravarthi Raghavan*) - The United States and its close ‘allies' in industrialised countries, appear to be bent on continuing their campaign to paralyse all negotiations and talks at the WTO - on the other parts of the Bali package, a post-Bali work programme, and the Doha Round - by refusing ‘to work' on other issues, until the US-EU cherished protocol on the Trade Facilitation Agreement (TFA) is agreed to and delivered.

Work on the protocol for incorporating the TFA into the WTO Agreement's Annex 1A has been blocked by India and a few others, in the absence of equivalent progress on implementing the other parts of the Bali package including on food security and the LDC package, which at Bali were adopted on a ‘best endeavour' basis.

At the General Council in July, India had refused any consensus on taking up and adopting the TFA without comparable progress on the food security issue, the LDC package and other parts of the Bali package (see SUNS #7856 dated 4 August 2014).

Since then, at various meetings - BRICS, the G20 trade ministers and other such fora, as also at the WTO since meetings began after the summer recess - India has stuck to its position, undeterred by the vehement campaign against it in the ‘mainstream media', echoed by several leading sections of the Indian media too.

Since the WTO resumed in Geneva after Bali, while work on TF moved ahead, with the WTO DG and secretariat pushing at full breathless speed, both in putting into legal language the Bali decision on TF and on a draft protocol on the TFA, on all other parts of the Bali package of decisions, there has been no negotiations to move them forward.

And various statements of the US, both in Geneva and elsewhere, leave little doubt that as far as the US and EU are concerned they wanted from the WTO and the Doha talks only the TFA, and when that is delivered they have no further interest in the Doha Round, the Bali package or the post-Bali work programme, but would talk them out or use them to end the Doha agenda and bring on new issues.

The US stance on services talks at the CTS last week has also to be seen from its drive for a separate plurilateral negotiations on ‘Trade in Services Agreement' or TISA, with its chapter on financial services aiming for full liberalisation of trade in financial services with very few exceptions and restricting ability of countries to adopt any regulations, prudential or otherwise, that would come in the way of US financial service providers repeating on a global scale their activities on the US market that created the 2008 crisis, from which everyone has suffered, while US financial firms and traders, rescued by the state, are continuing in their merry way, garnering more and higher benefits for themselves.

This latest tactic of the US, and the moribund ‘quad' (US, EU, Canada and Japan) was made clear last week at the Council for Trade in Services (CTS).

Once upon a time these four dictated things in the old GATT and then the WTO. However, after the failure of the WTO's Ministerial meet at Cancun in 2003, and the partial resurrection of the Doha Round via the July 2004 package agreement at the General Council, evolved by Brazil, India and a few others, it became clear that the old decision-makers could no longer decide and force the trading system to agree. The ‘Quad' then gave way to the new grouping of US, EU, Brazil, India, China and a few others on an ad hoc basis.

At last week's CTS, the old quad met and came to the meeting to act in an orchestrated and coordinated way, with some other industrialised nations and a few developing countries joining them and hanging on to the US coat tails.

The CTS is negotiating on mandated (to begin from 1995) work under CTS (including on drawing up disciplines on Emergency Safeguards under Art X and on Subsidies under Art XV), and further liberalization of services in all four modes of delivery, negotiations that were actually launched in 2000 and, in November 2001, was rolled into the Doha Work Programme and its Single Undertaking.

On Friday last, at the special session of the CTS where the Doha negotiations on services are held, the US and its friends announced that there will be no further discussions or negotiations by them on these until the TFA and its protocol are signed, sealed and delivered to them.

The US blamed the deadlock on this and other post-Bali work programme, as well as work on delivering on the rest of the Bali package, on what it called "the intransigence" of one member, India with some of its friends, in blocking adoption of the TFA protocol.

China, India, South Africa and a few others insisted they saw no justification, and viewed the services negotiations as on a separate track from the TF issue, and part of the Doha Single Undertaking.

Interestingly, until this post-Bali development on TF, it has been the US that has been consistently intransigent: it has repeatedly said NO, as the sole nation holding up the agri-modalities text of 2008 (which has a provision to meet the issues of food security, and the market support price of developing countries, procuring from farmers to use on subsidised food to consumers, as of now pegged at the 1986-88 commodity prices).

The US has blocked the 2008 modalities text, since it will curb US support programmes to its farming sector.

The US has also blocked and not agreed to ending its Cotton subsidies, or agreed to the benefits promised to least developed countries - duty-free-quota-free market access for LDC products. Most other nations, developed and developing, with some product exceptions, have already provided such access in a unilateral way.

The US, the richest nation still in the world economy, alone has been refusing to agree to this trade benefit to the poorest nations of the world.

Perhaps the major developing nations and their leaders have to blame themselves for this state of affairs.

As early as 2010, at the Toronto summit meeting of the G20 nations, it would appear that President Barack Obama in his remarks to the meeting of the G20 heads of government/state made clear that he had no interest in concluding the Doha Round, as US calculations had shown that if the Round was concluded, the additional benefit to the US would be no more than a day's worth of exports.

At the time of that Toronto summit, Obama's economic honcho who was the sherpa was Mr. Froman, now the USTR, who is carrying on with that policy perspective even now.

The heads of developing nations at that Toronto summit, who presumably had heard Obama, however chose to ignore it, perhaps thinking that after the 2012 Presidential elections, Mr. Obama would change.

And they have continued to negotiate with the US in the belief things would change, or some of them share a reported view of the WTO DG, Mr. Azevedo, that the US has to be kept engaged at the WTO, and if this involves giving in to the US, and making repeated concessions without any benefit, it should be done, so that the US will remain engaged, and may be will change its views in future.

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