South Asia Watch on Trade, Economics & Environment (SAWTEE)

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Let development not remain a mere façade
Published: The Kathmandu Post, 4 February 2005
By: Ratnakar Adhikari

As the expiry of the term of the incumbent Director General (DG) draws closer, World Trade Organisation (WTO) members are debating on who should succeed Supachai Panitchpakdi, the outgoing DG. With the formal nomination of four candidates for the top trade job in December 2004 and their meeting with the General Council (GC) on 26 January 2005, the debate has further intensified.

It is interesting to note that out of the four candidates three are from developing countries – Brazil, Mauritius and Uruguay – and one is from developed country – France. This probably reflects the contemporary view that WTO should be headed by someone from the developing countries for two reasons. First, the DGs of the predecessor of the WTO, General Agreement on Tariffs and Trade (GATT), have always been from developed countries. Even within the WTO, the three DGs preceding Supachai were from the developed countries – Germany, Italy and New Zealand. Second, Bretton Woods Institutions (the World Bank and the International Monetary Fund) have always been headed by individuals from developed countries, and in order to attain balance of power in international economic arena, the WTO should be headed by someone from developing countries.

All the four aspirants made ‘development’ the priority agenda during their speech at the GC on 26 January. Sudden focus on development by the DG candidates could be due to three plausible reasons. First, there is the need to woo the developing countries – which represent the 80 percent of the WTO membership; and the consequent imperatives to obtain their support. Second, the current round of multilateral trade negotiations has been christened the Doha Development Agenda (DDA) and development is the major focus of this round. Third, despite the claim made by various trade officials that the WTO is not a development organisation, ‘development’ had entered the WTO lexicon. The DG candidates have no choice but to face this reality.

A number of United Nations agencies and civil society organisations (CSOs), which were advocating against the ‘development blind’ policies of the WTO, are happy to see at least the DG candidates finally coming to grips with development issues. Despite the unchallenged role of the WTO, as a guardian of the rules-based multilateral trading system, some of its rules were (and still are) unfriendly to the development interests. Right from its inception, the WTO has invariability advanced ‘one-size-fits-all’ approach. Even those WTO agreements that recognise particular discomfort with this approach, have provided nothing but additional time period for the developing countries and least developed countries (LDCs) to comply with WTO rules, as done by the developed countries.

For example, it is universally agreed now that the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) is not only highly biased against the developing countries, but it follows the same discredited ‘one-size-fits-all’ approach. Despite the resistance of the developing countries, developed countries managed to impose their will and include TRIPS within the sanction-based system of the WTO. And it provides a transition period of one year to Belgium (a developing country) and 11 year transition period to Benin (an LDC). The underlying assumption is that Benin would become like Belgium in a 10 year period. What else does anti-globalisation lobby need than this living example to ridicule the WTO! Developed countries should now take the blame for this.

TRIPS is only one example (which is picked up by many due to its high visibility) that explains the development deficit in the WTO. There are a number of other agreements that restrict the policy space of members to achieve their development objectives. These range from the requirement of tariff binding to the restriction on providing subsidies to the restriction on the performance requirement with a view to enhancing linkage of investment with domestic economy.

Development deficit is anti-thesis to WTO’s credo, not least because one of its prime objectives is to promote ‘sustainable development’. The new DG would certainly do well to shift his focus to bring development at the centrestage of multilateral trade discourse. For this to happen, commitment to move the DDA in earnest is a necessary condition, but in no way a sufficient one. The major agenda should be to rebalance the rights and obligations of members such that the real stakeholders feel more secure within the system. The issuance of the Declaration on TRIPS and Public Health, as a part of the DDA, is a humble beginning. However, more needs to be done. Otherwise, development would merely remain a façade within the WTO.

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