Editorial»
How Nepal can strike WTO deals
NOV 11 - During the Fifth WTO Ministerial conference held in Cancun from 10-14th of Sepetember 2003, Nepal got formal acceptance to join it. The protocol acceptance and the signing ceremony were quite exciting. It was a great victory for the nation, which was struggling for the membership since 1998.
Power dynamics
While looking at the WTO structure and decision-making process, developing countries hold 80 per cent of its membership. However, the real power and decision-making role remains with a few members, particularly the EC and the US. The short history of WTO has revealed that the opinion and concerns of developing countries are repeatedly ignored, and the power giants dominate the process and decision within the organisation. In normal decision-making process, the biannual ministerial meeting is the higher-level decision making forum. But the reality is quite different from what we see in paper. Before every ministerial meeting, mini ministerial meeting with the involvement of few nominated countries takes most of the major decisions. This meeting decides on how to run the ministerial meeting and draft the ministerial text. In case of fourth ministerial meeting at Doha (2001), the mini ministerial process was begun six months before, from the lessons learned at Seattle. If we take an example of the presence of WTO members in mini ministerial meetings held at Mexico and Singapore before the fourth ministerial meeting at Doha, the QUAD (USA, EU, Japan and Canada) group were 100 per cent present where only 3-8 per cent of the developing countries took part. If we look at the power dynamics of WTO, the USA is the central player followed by the EC, QUAD, developed countries, middle income and other low income group countries. Least developed countries exist at the outer circle of power dynamics.
During the ministerial meetings, small mini discussion forums popularly known as “Green Rooms” are created for the decisions to be taken in favour of powerful countries, which is called consensus-based decision by the ministerial meeting. Delegates of some developing countries say plenary of the ministerial meeting is just a platform to keep the delegates engaged while the green room meetings are the ones that takes crucial decisions. Within the normal process of WTO, there are different committee-specific meetings at Geneva in between the ministerial meetings. In 2001, 400 formal and 500 informal meetings were held. In such large number of meetings, how can developing countries participate and submit their concerns? If we compare the human resource present at Geneva, the USA has deputed 14 persons and India has 7 to deal only on WTO issues. But Nepal has only two persons responsible for dealing with all issues related to the UN and the WTO.
In addition to the formal process, developed countries exert bilateral pressure and exercise arm-twisting practices. Developing countries like Nepal cannot deny the arguments and conditionalities posed by developed countries. In such situation, bargaining power and tactics of developing countries are crucial in gaining the benefits of the WTO. Part IV of GATT mentions non-reciprocity and special and differential treatment provisions to develop trading capacity of developing countries. The reaction of the EC Trade Commissioner Pascal Lamy to delegates of developing countries in the fifth ministerial, demonstrates the attitude of the developed countries. He said, “If you are not giving me anything, why are you in WTO ?”. He reiterated that trade is based on reciprocal relations. His reactions are contradictory to part IV of GATT and indicative of the attitude of powerful countries. In this situation, simply relying on expectation of enjoying benefits mentioned in the WTO is not appropriate for Nepal. Therefore, Nepal should make efforts to develop conducive plans and policies to gain the benefits of multilateral trading system.
In Nepal, the accession process has been led by the Ministry of Industry, Commerce and Supplies. During the period of 1998 to 2003, there were frequent changes of leadership in the ministry. The members of the delegation team also changed while participating in bilateral and ministerial meetings. This weakens the understanding and consistency of the issues to be dealt by Nepal. During the whole process of accession, though business sector was consulted, the vast majority of the stakeholders were left out. NGOs made rigorous efforts to make the consultation process more inclusive and to address the concerns of farmers. It is important to understand that the WTO is not simply a trade deal and involves complicated procedures and issues such as environment, IPR, trade in goods and services, etc. that have direct impact on life of every Nepali citizen.
Changing scenario
In the global scenario, critical forces are emerging from developing countries to challenge and alter the power games of the WTO. If we look at the reasons of the collapse of Cancun meeting, a very strong and positive force played a crucial role vis a vis the in-depth analysis of developing countries, their willingness and ability to challenge the USA and EC domination, solidarity among developing countries and dedication of African MPs towards their citizens, among others. In addition, civil society played an important role in feeding correct information to the delegates and their physical presence also created pressure to opt for pro-poor decisions. All these consolidated efforts caused the collapse of Cancun meeting. However, keeping the consolidated voices continued is a challenge for developing countries.
A positive achievement is that the developed countries are now acknowledging the emerging power of developing countries. This has been proven from the expression of the EC President, who highlighted the importance of the concerns raised by developing countries.
Learning attitude is very crucial as Nepal is the second LDC joining the WTO through a formal accession process. Nepal could learn from other LDCs who have experiences on impact of multilateral trade deal and mitigation measures. Nepal should also learn from her own experience of privatisation and liberalisation. Nepal should also rethink how beneficial policies are (e.g., APP) formulated with foreign assistance. Nepal should also develop a practice of accepting it’s own experts wherever possible.
Joining the WTO and having discussion on trade deal is far beyond simple trade concerns. Therefore, consultation and recognition of multi-stakeholder opinion is important and essential.
The commitment made by Nepal to formulate and reform around 42 laws and regulations within 2005 is a real challenge. It requires huge engagement of experts and analysis of pros and cons of each agreement. Therefore, Nepal should be very cautious and proactive in making policies and regulations in compliance to the WTO.
Joining the WTO is not going to bring miracles in the economic development of Nepal. The achievements depend on preparation, effective implementation, joining and mobilising global alliances and bargaining capacity.
Since the WTO is very complex and has long-term implications on the economy of the nation and livelihood of its citizen, understanding of those complexities and dealing with them appropriately needs capable and competent human resources.Posted on: 2003-11-11 12:11
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