30. Memorandum submitted by Quaker Peace
and Social Witness (QPSW)
1. MARKET ACCESS
Developing countries see market access as being
at the core of WTO functions. However, many developing countries
have already undergone dramatic unilateral liberalisation as part
of IMF structural adjustment programmes, and would like to receive
recognition for this at the WTO. Some have also suggested that
studies on the development impact of trade liberalisation should
be conducted before being expected to make further commitments.
The need for such studies is further emphasised by work already
done by UNCTAD who point out that the level of trade integration
for the least developed countries is already high, and higher
than many OECD countries. UNCTAD's work (Least Developed Countries
Report 2002), also indicates that trade liberalisation is not
an automatic route to poverty reduction, and that certainly in
the short term trade liberalisation has been associated with an
increase in poverty. Empirical evidence is therefore mixed, and
a greater degree of caution on the part of the OECD countries
in simply promoting more liberalisation of trade should be tempered
by this knowledge. Accordingly as specified in the Doha Ministerial
Declaration, developing countries should not be expected to offer
full reciprocity in reduction commitments. Tariff peaks, tariff
escalation and non-tariff measures remain matters of particular
concern to developing countries.
2. AGRICULTURAL
REFORM, INCLUDING
SUBSIDIES
Agriculture is of paramount importance to developing
countries. Arguably, the Doha Agenda effectively depends on the
agriculture negotiations. Developed countries have sought to include
a range of other issues in the work programme: however, unless
there is real progress on agriculture, the negotiations launched
at Doha have little hope of succeeding.
Modalities for commitments have to be established
by March 2003 (including numerical targets). A chairperson's overview
paper was circulated on 18 December 2002, based on proposals to
date, and in preparation for the next negotiating session (22-24
January 2003). The EU has not yet submitted a detailed proposal
specifying average and minimum reduction rates for developed and
developing countries, or on the length of implementation periods.
The EU should also indicate how tariff structures might be harmonised,
and how tariff peaks and escalation might be addressed.
There is a need for effective implementation
of mechanisms to assure food security in poor countries, especially
in those that are net food-importers. In particular, these countries
have called for the implementation of the Decision on Measures
Concerning the Possible Negative Effects of the Reform Programme
on Least-Developed and Net Food-Importing Developing Countries.
Another proposal has been to establish a "development box",
which would permit subsidies for developing country food security
needs in a similar way to subsidies permitted under the current
"blue" and "green" boxes. Small island developing
states and countries in transition have also made proposals calling
for their special circumstances to be taken into consideration.
Meaningful and substantial reform of the EU
Common Agricultural Policy (CAP) is essential. The EU should undertake
the elimination of export subsidies, substantial reduction and
structural reform of domestic support, and substantial improvements
in market access: this would have a direct beneficial impact on
developing country economies, and could transform the livelihoods
of millions of farmers, consumers and poor communities. CAP reform
could furthermore also benefit taxpayers, consumers and rural
communities in the EU.
In May 2002, the US Farm Bill committed $190
billion in farm support over ten years. This has been perceived
by developing countries as an act of extreme bad faith, while
of dubious legitimacy under WTO rules. Developing countries have
consequently questioned the sincerity of developed countries commitment
to agricultural reform.
3. SPECIAL AND
DIFFERENTIAL TREATMENT
The Doha Ministerial Declaration contains a
strong mandate for work on special and differential treatment.
This is spelt out in detail in paragraph 12 of the Decision on
Implementation-Related Issues and Concerns. However, the Committee
on Trade and Development (CTD) missed the July 2002 deadline for
making special and differential treatment more precise, effective
and operational. The deadline was extended until December 2002;
however, this second deadline has now also been missed. It appears
that the Committee is still no closer to agreement on these provisions
than it was in the summer. Once again, failure to meet this deadline
has been seen as an act of bad faith by developing countries.
The issue also has a considerable symbolic importance for developing
countries, as do the negotiations on the export of generic medicines
(see below): the significance of this should not be under-estimated.
4. DEVELOPING
COUNTRIES' NEGOTIATING
CAPACITIES
A mandate for work to improve developing countries'
negotiating capacities can be found in paragraphs 38-41 of the
Doha Declaration, which address technical co-operation and capacity
building. Amongst other things, these specify that WTO technical
assistance should help developing countries and countries in transition
to "adjust to WTO rules and disciplines, implement obligations
and exercise the rights of membership, including drawing on the
benefits of an open, rules-based multilateral trading system."
These paragraphs set out clear instructions for technical assistance,
and envisage a level of funding.
However, criticism has been made of WTO technical
assistance work to date. Developing countries have tried to point
out to the Secretariat that their needs cannot be fulfilled simply
by organising series of seminars. WTO technical assistance activities
have also been criticised for tending to instruct countries how
to implement agreements, rather than focusing on the legal options
and flexibilities that developing countries may be able to choose
from whilst implementing their obligations.
Developing country negotiating capacities are
also affected by the number of meetings held in Geneva, and the
degree of transparency associated with them. Many developing countries
maintain only small delegations in Geneva, often covering not
only the WTO but also other international organisations as well.
They therefore face difficulties if too many meetings are scheduled
for the same time, or if meetings are not announced to all delegations
in a transparent and inclusive way.
The WTO has undertaken initiatives to improve
the participation of Members who are not resident in Geneva. These
have included "Geneva weeks", during which non-resident
Members can take advantage of training and assistance on particular
issues. The WTO has also sought to improve communication with
these Members, including on issues such as circulating details
of meetings to them. However, non-resident Members continue to
face real problems. The WTO could consider doing more to support
them, eg by providing them with office space, or taking other
measures to help improve their participation in Geneva.
The Advisory Centre for WTO Law is a relatively
new intergovernmental organisation, which provides real practical
legal advice to developing countries. It directly helps developing
countries improve their capacity to negotiate effectively, by
providing high-quality legal advice to them at greatly reduced
fees, helping them to prepare for and defend themselves in any
trade disputes, etc.
Developing country negotiating capacities are
diminished by "Mini-Ministerials", such as that held
in Sydney in November 2002. These work against open and inclusive
decision-making in the WTO by excluding the majority of the organisation's
membership.
5. TRIPS: HEALTH,
BIODIVERSITY AND
GENETIC RESOURCES
Negotiations on the export of generic medicines
for public health needs broke down on 20 December 2002, when the
US announced it could not join the consensus on the draft text.
The US was only willing to accept an agreement if the scope of
the text was limited to three diseases, plus infectious epidemics.
Developing countries had refused the limited wording proposed
by the US: not only did they consider that there was no basis
for such a restriction in the Doha Declaration on Public Health,
but furthermore felt they should retain the right to determine
for themselves which diseases might constitute a public health
problem.
At Doha, trade Ministers instructed WTO members
to find a solution to the problems faced by countries with insufficient
or no manufacturing capacity in the pharmaceutical sector. (This
instruction can be found in paragraph 6 of the Doha Declaration
on Public Health). Not only can these countries not produce medicines
for themselves, but other countries may also be limited in their
ability to export to them under certain clauses in the WTO TRIPS
agreement.
Governments normally retain the right to over-ride
patent rules if needed, which in the case of medicines can bring
prices down to accessible levels by introducing competition from
"generic" versions. However, article 31(f) of the TRIPS
agreement requires that anything produced in this way should be
"predominantly for the supply of the domestic market".
At Doha, WTO members were given one year to resolve this anomaly
in a way that would "promote access to medicines for all".
A wealth of possible solutions has been presented.
Developed countries have put forward various temporary approaches,
such as a moratorium on WTO disputes, or a waiver of countries'
legal obligations. Developing countries have tried to insist on
a permanent and legally-sound resolution of the problem, for example
by amending article 31(f), or—perhaps simplest of all—an
agreed interpretation recognizing that article 30 of TRIPS already
permits legitimate export of generic medicine on an exceptional
basis, where this is a reasonable solution to public health problems.
Many developing countries were disappointed that the draft text
produced by the WTO Secretariat only proposed a temporary waiver
as the solution.
There are several reasons why countries have
been unable to reach an agreement. The African Group statement
of 29 November provides some of the answers. Developed countries
have loaded the proposed "solution" with a heavy burden
of new obligations, requirements and conditions—going far
beyond any of those already stipulated in TRIPS. Indeed, patent
experts agree that the restrictions are so cumbersome and bureaucratic
that it is unlikely any government would ever use the mechanism
in practice.
There is a need for greater challenge to the
decision-making processes in their national trade ministries.
Particular commercial interests often enjoy a disproportionate
access to decision-makers. In the recent negotiations on the export
of medicines, trade negotiators from developed countries arguably
represented effectively their research-based drug companies, but
not their generic pharmaceutical industries, consumers, parliaments,
or citizens concerned about development issues.
The situation is made more complex by regional
and bilateral treaties such as CAFTA and FTAA which have TRIPS
clauses which are considerably more tightly drawn in favour of
corporations than the multilateral negotiations under the auspices
of the WTO. These regional and bilateral treaties have the potential
to undermine the multilateral negotiations and place developing
countries in a very weak position.
In following this question throughout the year,
we have also come across several examples of developed countries
abusing their influence and power in ways that undermine national
policy-making. This directly affects fair processes in the WTO
and needs to be recognized and challenged. We have learnt that
some rich countries have contacted particular developing countries
at ministerial level to insist that they accept developed country
demands, and have made other preferential trade arrangements conditional
on acquiescence on the patents and health issue. In general, developed
countries have pursued this "aggressive unilateralism"
or have co-operated amongst themselves to bring tremendous pressure
to bear on developing countries. Developing countries have drawn
the line where the proposed text undermines their existing rights
as recognised in the Doha Declaration on TRIPS and Public Health
and in the TRIPS Agreement itself.
The on-going pre-occupation in the TRIPS Council
on health has regrettably delayed other important issues in the
Doha Development Agenda. In paragraph 19 of the Doha Ministerial
Declaration, the TRIPS Council is to examine the relationships
between TRIPS Article 27.3(b) that defines exemptions to patents
on plants and animals and traditional knowledge and genetic resources.
These relationships are of crucial interest to developing countries,
as clearly analysed in the report from the Commission on Intellectual
Property Rights on "Integrating Intellectual Property Rights
and Development Policy. The Commission's recommendations should
serve to form UK positions and policies regarding the important
work mandated in paragraph 19 in the run-up to the next WTO Ministerial
Conference in Cancun, Mexico in September 2003. In this regard,
the TRIPS Council should consider the legal relationships between
the TRIPS Agreement itself and the new FAO International Treaty
on Plant Genetic Resources for Food and Agriculture and the UN
Convention on Biological Diversity. Representatives of both agreements
should be invited to participate as observers in TRIPS Council
Meetings.
Quaker Peace and Social Witness
January 2003
| 
