Next stop, Cancun

The Doha round of trade negotiations, launched in 2001, is in some difficulty. Whether the difficulties prove fatal depends on whether the developed world continues with the unnecessary rigidity it has shown so far on issues crucial to the developing world. Four important deadlines on trade-related aspects of intellectual rights (TRIPs) and access to essential medicine, special and differential treatment (S&D) for developing countries, implementation issues and agriculture, all of great concern to the developing world, have been already missed, and two more deadlines are at the risk of slipping before the Cancun ministerial meeting in September this year. With separate declarations on implementation issues and TRIPs and public health, negotiations at Doha were launched on eight different issues. These negotiations are part of a ?single undertaking?, meaning that the issues constitute a single package. Member countries have arrive at and agree to be bound by consensus in all eight areas of negotiations. A year and a half later, stalemates in crucial areas are stalling the overall negotiations. The pace of negotiations on services, for instance, has slowed since it became clear that the deadline on agricultural modalities would be missed. On the issue of S&D provisions no progress has been made since the Doha meeting as fundamental divisions between member countries persist, and three deadlines have been missed one after the other. There are as many as 155 S&D provisions that provide favourable treatment to the developing and least developed countries; all of them are just best-endeavour promises, not legal obligations. The Doha declaration requires these S&D provisions to be reviewed with a view to strengthen them and making them more precise, effective and operational. Subsequently, Ambassador Ransford Smith, chair of the committee on trade and development (CTD), had identified 22 agreement-specific proposals on which he felt it was possible to make immediate recommendations for a decision. However, he summarised the progress on consultations so far by stating, ?the members were not willing to go the extra yard?. In agricultural negotiations, with the Cairns group and the European Union (EU) being at loggerheads and majority of developing countries playing the role of passive onlookers, efforts to agree on modalities by the end-March deadline have failed. These modalities are to set out the broad aims of the negotiations, the methodology to be followed and the end-results expected in the three main areas of reform ? export competition, market access and domestic support. Stuart Harbinson, chair of the committee on agriculture, issued a first draft of the modalities paper in February this year, seeking to average out the conflicting positions that had been advanced during the preceding negotiations. The draft was rejected outright by the ?friends of multifunctionality?, who claimed that it was biased, in favour of the Cairns group and did not address non-trade concerns such as environment, animal welfare and food safety. The revised paper presented by the chair appears to respond to some of the key points put forward by the developing countries, including the concept of ?special products? with respect to food security and livelihood security concerns. However, this has not been able to persuade the members either. While the majority of developing countries are analysing the second draft with a fair amount of scepticism, the EU and the Cairns group continue to trade charges. The EU has lashed out at loopholes for export credits and bogus food aid, freely used by Australia and the US. But it is clear that the pressure from EU farm lobbies is unlikely to allow it to bring in major reforms in its Common Agricultural Policy (CAP). On the other hand, the discussion on TRIPS and health ? seen by many as the only positive outcome of Doha ? has also fallen into disarray. There is no sign of a deal, despite the US?s heavy-handed efforts to blackmail southern governments to accept its demands that the agreement be limited to three diseases plus a long list of other constraints that would kill local industry in developing countries and force the rest to source from the West. The TRIPs agreement allows all WTO members to issue a compulsory licence on a patented product to a third party, without prior authorisation of the patent holder in the case of health emergencies or other circumstances of extreme urgency. Many poor countries and small economies cannot take advantage of this flexibility due to lack of capacity to manufacture copies of patented medicines. The only potential course available to them is to issue the compulsory licence to a manufacturer in a third country and import. But the current rules rule out this option. TRIPs Article 31(f) requires use of compulsory licence restricted to the ?predominantly domestic market of the member authorised such use?. It was to overcome this limitation that the Doha Declaration mandated to ?find an expeditious solution to this problem? and to report to the general council before the end of 2002. However the discussions broke down just before the deadline. The US rejected the text proposed by the chair of the TRIPs Council, outlining how an ?expeditious solution? would work. The US argued that the scope of diseases that the solution would cover went too far beyond what its pharmaceutical sector was prepared to accept. The dossier of happenings in the Doha round so far indicates that it is almost certain that the negotiations will go beyond 2005. However, much depends on developments before and during the forthcoming Cancun meeting. One last opportunity to sort out the major disagreements before Cancun is the forthcoming mini-ministerial meeting in Cairo. Certainly, too much unfinished business could lead to a heavy burden at Cancun. It is unrealistic to expect trade ministers to resolve contentious issues in a meeting spanning a few days.