Report 6 on UNCTAD meetings: Focus on Round's content, not just its completion, says Indian Minister Kamal Nath

Original Publication Date: 
9 October, 2006

Although there is a lot of talk about the need for completion of the World Trade Organisation's Doha Round, the content of the Round's outcome is just as important and there should be emphasis on this content instead as talk of a Development Round has been rhetorical so far, according to India's Commerce and Industry Minister Kamal Nath.

Speaking at a high-level policy dialogue at UNCTAD on 4 October morning, Nath gave examples of why the WTO rules are imbalanced against developing countries and how these rules as well as the decision-making system had to be changed.

"As someone who has been deeply involved with the current Round of negotiations in the WTO, I cannot assert with any degree of confidence that these changes are being made in the WTO," he said. "Judging from the progress so far, talk of a Development Round remains largely rhetorical."

The strong comments by Nath indicates that there are still wide gaps among WTO members in the G6 and that attempts to resume and conclude the Doha negotiations within a short time span have a far way to go.

Other keynote speakers at the UNCTAD dialogue, which opened the third and final meeting of the Mid-Term Review (MTR) of UNCTAD XI, were Rwandan Prime Minister Bernard Makuza and Finland's Foreign Trade Minister Paula Lehtomaki.

Nath said that to address the prevalent imbalances and asymmetries in the global economic system, it is necessary to revisit the institutional architecture involved in the governance of globalization. This architecture includes the UN system, the Bretton Woods institutions and the WTO, and the structure and objectives of these institutions must reflect the deep-seated changes that took place since they were established.

In this context and referring to the international trade system, Nath said the suspension of the Doha Round negotiations in July has brought into focus not only the substantive issues which are the subject of discord, but also the institutionalized asymmetries which continue to pervade the WTO after its emergence from the GATT.

"While its professed objective is greater openness in all aspects of trade, in practice, this objective is observed in a highly selective manner that reflects the predilections and concerns of developed countries," said Nath. He gave "just a few examples" of this selective openness:

  • National borders should matter less and less for merchandise trade and capital flows. But we are told, "don't talk about technology flows and labour flows."
  • Subsidies are bad for industrial sectors, but on agricultural subsidies, the only thing we hear is that "we'll get back to you."
  • Tariffs should be transparent and ad valorem in the industrial sector. In agriculture, now that's something else!
  • The private interests of IPR holders are sacred; issues of public interest regarding intellectual property are of a second order.

Nath said that "I could go on and on about this. But the basic point is that unless we deliver on the agreed development dimension under the Doha Round, the underpinnings of the WTO will continue to address mainly the mercantilist interests of the developed countries."

Nath said he could not say with confidence that needed changes are being made in the WTO and talk of a Development Round remains largely rhetorical.

"There is a lot of talk on the need for completion of the Round but the content of the Round is equally important. Let's talk about the content.

"Issues of serious concern to developing countries like cotton, ushering in fair and undistorted agricultural world trade, duty-free, quota-free treatment for LDCs, implementation issues, etc remain unresolved.

"The fundamental principle of S&D treatment for developing countries to address their concerns of policy space in the major areas of negotiations remains deadlocked.

"There is as yet no recognition by some developed countries that the basic premise of a Development Round is primacy for the development needs of developing countries, and not market access for developed countries.

"Under these circumstances, much needs to be done to maintain the confidence and optimism of the developing counties in this Development Round."

Nath added that it is important for the WTO to resolve the issue of inequitable integration through both political and institutional measures.

At the political level, said Nath, "we must recognize the current asymmetries and agree to do away with them in the present Round. This would involve, in agriculture, a clear understanding both on the removal of distortions caused by developed countries' measures as well as an understanding on special and differential treatment measures required by developing countries to manage their concerns on subsistence, small and low-income farmers, food security and livelihoods.

"Similarly, in manufactures the concerns of small-scale and labour intensive production as well as of infant industries must be addressed through effective flexibilities. In services, developing countries have acquired skills in the delivery of some services, for example, through cross-border trade (Mode 1) and movement of natural persons (Mode 4) that are critical to their trading partners.

"For globalization to entail win-win scenarios, the comparative advantage of developing countries should not be stifled by protectionism in their developed partners."

Regarding institutional measures, Nath said there is need for greater emphasis on capacity-building and technical assistance to enable smaller countries to participate meaningfully in the negotiations. Supply-side constraints must be tackled by an effective Aid for Trade programme that ensures additionality of resources, predictability and need-based programmes.

For Aid for Trade to be effective, it must be channelled multilaterally and integrated into country development strategies.

"In terms of decision- making, this implies greater emphasis on transparency and openness. Considerations of efficiency alone cannot be allowed to prevail over the need for inclusive decision-making procedures to ensure equity and sustainability of the decisions."

Nath said UNCTAD must continue to make a real contribution to assist developing countries confront today's complex trade and development challenges. It has to remain ahead of the curve in ideas and be a brains trust for development-friendly analyses.

It should examine from the development perspective the inherent asymmetries and inequalities in the international market place. UNCTAD should also address the development dimension of IPRs.

Rwandan Prime Minister Bernard Makuza said there were three categories of developing countries: those that were successful economically; those that are still developing; and those that are still hunting for the right development way.

On the issue of UNCTAD's continuing existence, there is no need to question its future, when there is so much need for it to help the poor countries. It is obvious that UNCTAD's mandate and role is as relevant today as when it was created.

Paula Lehtomaki, Trade Minister of Finland, which presently chairs the European Union, said that the cost if there is a breakdown in the Doha negotiations would be extremely high, and what we will lose is more than just the results of the issues being discussed.

She said the EU wanted more focus and priority-setting in the UN. The aim of reform is to strengthen and not diminish the UN. UNCTAD can be "leaner, meaner and more profitable."

It can be leaner to do its work better, meaner in that it can generate public discussion and in other fora such as in academic circles, and more profitable to all member states, in that the work can have effect especially through technical assistance.