WTO Conference: Crumbs for the South

Political article
The WTO Ministerial Conference held in December 2015 in Nairobi has acknowledged the division among Members over the Doha Round as well as "new issues".

"There is no crisis. There is absolutely no crisis and the Nairobi conference will be reminded as the one that has overcome the North-South divide". These were the optimistic words uttered on Friday 18 December by Amina Mohammed, Chairperson of the Tenth WTO Ministerial Conference as she announced a prolongation of "a few hours". In fact it was to take more than 24 hours before exhausted delegates could arrive at a Ministerial Declaration that expressly acknowledged the division among Members over the future of the Doha Round and the "new issues", which are of great interest to the industrialized countries. These are the issues over which the North-South divide is the greatest.

Although this was the first Ministerial Conference organized in Africa, developing countries came away with very little. They did "limit the damage", but they may have hoped for much more. The Final Declaration is a compromise. It states that some Members recognize the development mandate of Doha, while others do not, but that they will continue to discuss Doha issues while preserving special and differential treatment.

The United States may not have realized its original intention to officially bury this famous Round, launched 14 years ago to rebalance the rules of international trade in favour of the countries in the South. But the vague legal language opens the door to all sorts of creative interpretations and developing countries and NGOs will have to keep a close watch to ensure that Doha does not become pure rhetoric. On the other hand, the Doha Round as it is currently structured, whereby nothing is agreed until everything is agreed (“single undertaking”), is probably at an end.

Members have already started agreeing on some elements separately, beginning with the elimination of agricultural export subsidies. Switzerland has until 2020 to abolish the "chocolate law" – under which the Parliament just approved an increase to CHF 94.6 million – enabling Nestlé, Toblerone and others to offset the higher cost of Swiss milk and cereals used in biscuits, chocolate and soups. India obtained a deadline of 2023. The United States and the European Union no longer practise these subsidies, but use other similar measures for which Washington has made small concessions. Yet export subsidies, whatever their form, are the most pernicious trade instrument as they create a dumping effect on the markets of poor countries. The only true gain for the least developed countries is the decision to simplify rules of origin. Switzerland has one year in which to comply.

On the two questions of critical importance to India and most developing countries – the operationalization of the special safeguard mechanism (which should enable them to temporarily raise customs tariffs on sensitive agricultural products in order to protect themselves against import surges) and public stockholding for food security purposes – no final decision has been taken and the discussions have been transferred to the WTO headquarters in Geneva.

Finally, the Declaration acknowledges that some Members wish to begin discussing other issues, but that the start of new negotiations would require the agreement of all. Although they are not spelled out, the issues concerned are those of interest to the industrialized countries – investment and competition law first and foremost. They concern measures designed to facilitate the establishment of multinational corporations by limiting host countries' right to regulate and granting investors the right to comment on proposed laws. Developing countries have rejected such measures since the 2003 Cancun Ministerial. Once again, the ambiguous legal language foreshadows new confrontations.