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Africa: Key Issues at the WTO
Africa: Key Issues at the WTO
Date distributed (ymd): 011107
APIC Document
Africa Policy Electronic Distribution List: an information
service provided by AFRICA ACTION (incorporating the Africa
Policy Information Center, The Africa Fund, and the American
Committee on Africa). Find more information for action for
Africa at http://www.africapolicy.org
+++++++++++++++++++++Document Profile+++++++++++++++++++++
Region: Continent-Wide
Issue Areas: +economy/development+
SUMMARY CONTENTS:
With the World Trade Organization ministerial meeting set to open
in Doha, Qatar on Friday November 9,the gap between the positions
of developing countries and non-governmental critics and the agenda
being pushed by the U.S., Europe and the WTO secretariat looms even
larger than two years ago in Seattle. Whether drug patents or
public health should take priority in international trade rules is
probably the most intensely contested issue. But lines are also
drawn on a range of other topics. In this posting we present a
summary of key issues in as concise and non-technical language as
possible, plus a brief excerpt from the WTO secretariat's
presentation of the contending options being considered on
intellectual property rights and public health.
Much additional material and updates can be found at the websites
cited in the summary.
+++++++++++++++++end profile++++++++++++++++++++++++++++++
Africa and the World Trade Organization:
The Issues in Brief
by William Minter, Senior Research Fellow, Africa Action
November 6, 2001
Note: This summary is also appearing as a Global Affairs Commentary
in the Foreign Policy in Focus program (http://www.fpif.org), which
also has much additional background on international trade issues.
See in particular
WTO Set to Crash and Burn at Doha and
Trade in Focus.
Two years ago in Seattle, demonstrators in the streets brought
previously esoteric negotiations of government ministers at
the World Trade Organization (WTO) to the world's eye as never
before. Less noticed, inside the meetings, African trade ministers
denounced the lack of transparency in the proceedings. "African
countries are being marginalized and generally excluded on issues
of vital importance for our peoples and their future," they
declared in a public statement. The next day the summit adjourned
with no agreement, as developing countries rebelled at being
pushed aside, and Europe and the U.S. also failed to resolve their
own differences.
Demonstrators will be sparse at the tightly controlled site of the
Seattle sequel in Doha, Qatar. The focus on security threats--not
from demonstrations but from international terrorism--is likely to
overshadow the substantive issues at stake. But these issues,
cloaked by the technical language of international trade
negotiations, are vital to the fate of ordinary people around the
world, and particularly in Africa and other developing regions.
Since Seattle, African governments have joined with other
developing nations in sustained efforts to develop common
positions and present them to the WTO. African and international
non-governmental organizations have followed the negotiations
closely, and prepared detailed critiques. Rich country governments
and the WTO have promised greater openness.
Despite all this, final proposals presented at the last minute by
the WTO's inner club as the basis for consensus almost totally
disregard these critiques. Instead of dialogue, the U.S. and other
rich countries have opted for raw political power. African
countries are under enormous bilateral pressure to go along with
the rich countries' agenda for a new round of trade talks on their
terms, and to accept vague promises to deal with African concerns
later.
Whether or not this power play results in imposing a false
"consensus" declaration in Doha, the contentious issues will not go
away. Below are the points of most concern to African and other
developing countries, as concisely and in as non-technical language
as possible.
[Note: Organizations monitoring the WTO have much additional detail
available on their websites. Particularly comprehensive and up-to-
date, with perspectives from developing countries, are: Third World
Network (http://www.twnside.org.sg), International Centre for Trade
and Sustainable Development (http://www.ictsd.org), and South
Centre (http://www.southcentre.org). The official WTO site is
http://www.wto.org]
Democracy and Transparency
In theory the WTO, with 142 members including 47 African countries,
operates by consensus. All countries have the right to participate
in negotiations affecting them. The WTO secretariat is supposed to
represent all members equally. Since Seattle, moreover, the
secretariat has responded to criticism of lack of transparency by
making many more documents available to the public.
In practice, however, key decisions, including formulation of
documents presented as "consensus" positions, take place in smaller
informal meetings that are closed or unannounced. These meetings
include primarily the rich countries and sometimes representatives
of a few key developing countries. Even when meetings are open,
African and other developing countries are often unrepresented
simply because they do not have enough personnel to send to many
simultaneous meetings.
The unspoken rule is that if you are not present or do not speak up
at a meeting, you are considered to support the "consensus" later
presented by WTO staff. Even when there is vocal dissent, the
positions of developing countries are often totally excluded from
the emerging statements.
On October 27, the chairman of the General Council of the WTO
presented final draft texts for the Doha meeting of trade
ministers. In principle, points of disagreement are supposed to be
highlighted within brackets in the text. But the final text simply
omits almost all areas of disagreement. As the Nigeria delegation
commented, "The text generally accommodate in total the interests
of developed countries while disregarding the concerns of the
developing and least developed countries."
Public Health
Patent rights, by granting temporary monopolies to drug
manufacturers, keep drug prices and company profits up. As a
result, the pharmaceutical industry has higher profit rates than
any other major industrial sector. In 1994 the WTO agreement on
"trade-related aspects of intellectual property rights" (TRIPS)
mandated that member countries bring their laws into accord with
restrictive standards that maximize the rights of patent holders.
As Nobel Prize winner Joseph Stiglitz has remarked, the 1994
agreement was "unbalanced" and "driven by commercial interests."
The agreement does include the option for countries to use generic
alternatives to patented drugs in emergencies, as the U.S.
threatened to do recently to bring down the price of the patented
antibiotic Cipro. In practice, however, using this option requires
strong political will, economic clout, and high-powered lawyers to
face up to pressure from drug companies and their home governments.
Even though South Africa forced the drug companies to back down on
a court case on the issue in April 2001, the intimidation factor is
still extremely powerful. While Brazil, India, and Thailand have
aggressively used generic drugs to push down costs, despite U.S.
pressure, only a few African countries have taken hesitant steps
to do so.
African and other countries have proposed a clear declaration from
the WTO meeting that "Nothing in the TRIPS agreement shall prevent
Members from taking measures to protect public health." While not
changing the text of the existing agreement, such an explicit
statement would make it much easier for African countries to take
advantage of the loopholes in TRIPS. The U.S., Switzerland, and
other rich countries are opposing this statement, and are proposing
weaker language that sounds similar but would mean little change in
the status quo.
The rich countries are also offering to change the deadline for
patent-law compliance by "least developed countries" from 2006 to
2016. But by applying only to "least developed countries," this
would exclude precisely those developing countries most able to
produce and export generic drugs, including Brazil, India, and such
African countries such as Cote d'Ivoire, Ghana, Kenya, Nigeria, and
South Africa.
Agriculture
Trade liberalization, its proponents promise, will bring benefits
to all countries. The World Bank, for example, calculates that
"full" trade liberalization could bring between $200 billion and
$500 billion in additional income to developing countries. The
catch-22 is that in practice the rich countries take full advantage
of the openings they press on developing countries, while failing
to open their own markets.
This is particularly clear in agriculture, where agricultural
subsidies to farmers in the U.S., Europe, and Japan have risen to
almost $1 billion a day--more than six times the amount these
countries provide in development assistance. Together with other
measures such as tariffs and quotas, these subsidies make it
difficult for developing countries to compete in rich country
markets. Even more damaging, they allow agricultural exports from
the rich countries to drive small farmers out of business even in
their home countries. This threatens domestic food security as
well as undermining export potential.
The previous Uruguay Round of trade negotiations which ended in
1994 promised greater market access in the rich countries to
developing countries' exports. This has not happened. African and
other developing countries want this failure to be addressed before
they accept another round of negotiations.
New Issues and Old
Agriculture is only one example of the many trade sectors in which
African and other developing countries have not benefitted as
promised from previous agreements. They want a comprehensive
reevaluation of existing agreements before starting up a new series
of complex negotiations on additional sectors. They want the WTO
to consider the empirical evidence on benefits and damages. They
also want to remedy the difficulties they have faced in setting up
legal and administrative systems for implementation of trade rules.
In short, they want to address the systematic imbalance that
ensures that rich countries benefit disproportionately, while the
poor countries' "development deficit" only grows.
Developing countries have identified at least 104 specific
"implementation" issues they want addressed. A few examples
include U.S. use of "anti-dumping" barriers to restrict exports of
steel from developing countries, including South Africa, the impact
of lower industrial tariffs in devastating domestic industries in
many developing countries, and the failure of the rich countries to
provide adequate technical assistance to enable developing
countries to comply with trade regulations and compete effectively.
African countries have also led a fight to oppose the use of
intellectual property rights to patent life forms, a trend which
threatens developing country control over genetic stock vital for
agricultural production.
The bottom line is that while developing countries have been forced
into opening their markets, allowing cheaper imports to undermine
domestic agriculture and industry, rich countries have failed to
lower their own trade barriers, which cost developing countries
some $100 billion in lost opportunities. Instead of addressing
these concerns, the rich countries and the WTO secretariat are
pressing for a new round while offering practically nothing to
address these implementation issues.
The agenda of the proposed new round sought by the rich countries
includes extending WTO negotiations to include matters related to
the policies of countries for regulating investment, competition,
transparency in government purchasing, and trade facilitation (such
as customs procedures). The effect, should negotiations be
completed on these topics, would be to make even larger areas of
economic life in all member countries subject to complex WTO
regulations. As in the agreements already in place, developing
countries are at a particular disadvantage in defending their
interests in negotiating or implementing such agreements.
These issues are already being explored in working groups, but
opening a formal new round is supposed to come only after a
certain level of consensus is achieved. African and other
developing countries have repeatedly voiced their disagreement with
proposed consensus statements. The draft declaration being
presented to delegates in Doha simply ignores these disagreements.
"Special and Differential"
All previous trade agreements, including the Uruguay Round
concluded in 1994, recognize in theory that developing countries
have disadvantages that may warrant "special and differential
treatment." In other words, these countries may and should be
granted better market access, be allowed greater flexibility in
implementing trade rules, and be allowed to sign agreements with
developed countries that do not require full "reciprocity."
The Uruguay Round assumed that such treatment would be very
temporary, and that developing countries could quickly adopt the
general standards after brief transition periods with the aid of
technical assistance from rich countries. The catch was and is that
almost all the "special and differential treatment" provisions were
not mandatory but instead dependent on the political will of the
rich countries to implement them. As a result they have rarely been
implemented. Developing countries have demanded that the non-
application of special and differential treatment provisions should
be reviewed, and that they should be mandatory and binding on
developed countries.
The draft declaration for Doha does include a commitment for a
committee to study existing provisions for special and differential
treatment and consider the option of making some of them mandatory.
This commitment, however, falls far short of the extensive review
developing countries regard as essential.
Crisis Now Worse than Seattle
Speaking off the record, many developing countries representatives
say the levels of tension between rich and poor countries are now
at even higher levels than in Seattle. Instead of taking the
opportunity for dialogue, rich countries have offered little or
nothing to address the concerns of African and other developing
countries. The poor are asked to accept the agenda whether
they like it or not and to swallow their rage as rich countries,
claiming to represent global interests, once again impose their
minority views.
If rich countries do succeed in imposing an artificial consensus in
Doha, it will be a hollow victory. They will store up more fuel for
future conflict by demonstrating once again that the wealthy of the
world are oblivious to the opinion of the world majority.
October 27 draft from the WTO Secretariat
[full text available at:
http://www.ictsd.org/ministerial/doha/docs/IP27oct.pdf]
Note that brackets indicate disagreement. While the difference in
language seems small to the non-specialist, analysts regard Option
2 (agressively pushed by the U.S. and Switzerland) as making little
change to the status quo. In contrast, Option 1 (advocated by
African and other developing countries, as well as non-governmental
groups) clears the way for more effective use of TRIPS safeguards
on public health to make drugs available to those who need them.
The broader title "Public Health" is the one favored by developing
countries.
On November 1, Harvey Bale, director-general of the International
Federation of Pharmaceutical Manufacturers Associations (IFPMA),
denounced Option 1 as "nutty" and said it would destroy the
industry. The same day, however, the European Parliament passed a
resolution affirmed their "clear and unambiguous support for the
position of the developing countries," and in particular the
wording that "nothing in the TRIPS agreement must be used to
prevent WTO members from taking measures to protect public health."
Draft Declaration on Intellectual Property and
[Access to Medicines] [Public Health]
4. Option 1
[Nothing in the TRIPS Agreement shall prevent Members from taking
measures to protect public health. Accordingly, while reiterating
our commitment to the TRIPS Agreement, we affirm that the Agreement
shall be interpreted and implemented in a manner supportive of WTO
Members' right to protect public health and, in particular, to
ensure access to medicines for all. In this connection, we reaffirm
the right of WTO Members to use, to the full, the provisions in the
TRIPS Agreement which provide flexibility for this purpose.]
Option 2
[We affirm a Member's ability to use, to the full, the provisions
in the TRIPS Agreement which provide flexibility to address public
health crises such as HIV/AIDS and other pandemics, and
to that end, that a Member is able to take measures necessary to
address these public health crises, in particular to secure
affordable access to medicines. Further, we agree that this
Declaration does not add to or diminish the rights and obligations
of Members provided in the TRIPS Agreement. With a view to
facilitating the use of this flexibility by providing greater
certainty, we agree on the following clarifications.]
This material is distributed by Africa Action (incorporating the
Africa Policy Information Center, The Africa Fund, and the
American Committee on Africa). Africa Action's information
services provide accessible information and analysis in order to
promote U.S. and international policies toward Africa that advance
economic, political and social justice and the full spectrum of
human rights.
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