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November 5, 2001
Volume 79, Number 45
CENEAR 79 45 pp. 33-34
ISSN 0009-2347
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Industrialized countries seek new WTO talks, but future remains hazy in wake of Seattle flop


Two years ago, protesters, police, and tear gas filled the streets of Seattle outside the World Trade Organization's last major gathering. Inside, the WTO meeting broke down.

Now, diplomats from around the globe are preparing to take another crack at starting a new round of negotiations on liberalizing international trade. The Nov. 9–13 meeting most likely won't be as colorful--and thus not as much in the public eye--as the 1999 Seattle confab.




WTO selected the Persian Gulf state of Qatar as the venue for its upcoming high-level conference. Qatar, an oil-rich country with a half million people, is slightly smaller than Connecticut. It has restricted the number of representatives from groups other than national governments who may attend the meeting in its capital city of Doha. Few, if any, protests are expected.

The U.S. bombing of Afghanistan and the current economic downturn are keeping away many who hope to influence the outcome of the WTO meeting, including representatives of the U.S. chemical industry.

"Given the war in the Mideast and cutbacks in travel" by companies, the American Chemistry Council (ACC), which had an entourage at the Seattle meeting, will not send representatives to Doha, says Kathleen Ambrose, ACC vice president for international affairs.

But chemical industry officials have met regularly with the Office of the U.S. Trade Representative to provide input for the upcoming meeting, Ambrose says.

The main outcome sought from Doha by ACC and the chemical industry, the U.S. government, the European Union (EU), some developing nations, and WTO Director General Michael Moore is an agreement to begin a new round of global trade talks.

"If we don't launch a round, we can't negotiate" on issues such as reducing tariffs on chemical imports, Ambrose tells C&EN.

"Launching a new round of trade liberalization negotiations is essential to promoting global recovery, growth, and development. The global economy needs to move forward," says U.S. Trade Representative Robert B. Zoellick.

And Moore notes, "The state of the world economy demands that we use the ministerial conference [in Doha] as an opportunity to boost global confidence." WTO says that growth in global trade in goods is expected to slow in volume to 2% in 2001, compared with 12% in 2000.

Others have a slightly different take. According to the World Wildlife Fund (WWF), "Freer trade alone will not restore confidence in the global economy." It explains, "Unless WTO harnesses the powerful forces of international trade to close the widening gaps between the rich and poor countries and to protect the environment, the credibility of the multilateral trading system will continue to be eroded."

Some factions oppose a new set of trade liberalization talks, saying WTO needs to adjust its current policies to address outstanding issues before plowing new ground. Some of those issues are what led to the breakdown of the Seattle meeting, says Sophia Murphy, director of trade policy at the Minneapolis-based Institute for Agriculture & Trade Policy (IATP).

Moore disagrees, saying that not moving ahead on new issues "will lead many to question the value of [WTO]. It could condemn us to a period of hibernation.

"IN SEATTLE, many developing countries refused to support a draft agreement to launch a new round because they were excluded from critical negotiations in the waning hours of the meeting. Although all countries that are members of WTO could participate at the beginning of the gathering, time ran short at the end. To expedite the process, representatives of only a few governments--mainly from the industrialized world--ended up behind closed doors drafting an agenda for a future round of trade talks.

At previous gatherings, excluded countries accepted the results of this process with the hope of reaping the benefits of trade liberalization. But in Seattle, Latin American, African, and Caribbean nations just said no, tanking the meeting.

Although WTO member nations discussed changing procedures in the months following the Seattle debacle, they never reached any conclusions, according to Murphy. Industrialized nations don't view this as a particularly important problem, so they are set on forging ahead with a new round, she says.

A coalition of activist groups--including WWF, Oxfam International, and IATP--is calling on WTO to change its processes so developing countries can participate more fully. "The systemic inequalities and imbalances, which were so graphically exposed in Seattle, remain to be acted on," these groups say.

The coalition also wants nongovernmental organizations--from environmental to farmer groups--to have greater access and input to WTO meetings and dispute resolution proceedings. This will help address the public mistrust of WTO so vividly demonstrated on the streets of Seattle, they say.

In addition to addressing this procedural issue, many developing countries are seeking adjustments to the results of the previous world trade talks, called the Uruguay Round, Murphy says. These nations have found this trade liberalization regime to be problematic and expensive.

Of particular concern is the Uruguay Round's Agreement on Trade-Related Intellectual Property Rights (TRIPs), Murphy says. Some developing countries want a change in this pact regarding drug patents. To improve public health within their borders, they want their domestic pharmaceutical industry to be able to produce generic, low-cost drugs, she says. Plus, a number of developing countries see the TRIPs deal as restricting the free flow of ideas and technology, seemingly in contradiction to the Uruguay Round's goal of liberalizing trade, Murphy adds.

One of the documents drafted for the Doha meeting would address intellectual property and access to medicines, but it remains to be seen whether government officials will endorse it.

Ambrose of ACC says industry wants WTO to strengthen intellectual property protection for technologies.

Murphy says the nations favoring a new round of trade talks are donning the uniform of the war against terrorism. They are trying to use support of a new round as a demonstration that governments are against terrorism, she says.

Many developing countries are seeking adjustments to the results of the previous world trade talks.

Murphy says Latin American countries likely would support a new round of trade talks, as would some Asian nations with the exception of India, Pakistan, and Malaysia. Most African nations are expected to oppose it, as would the world's poorest nations, wherever they are on the globe, she adds.

As far as specifics for the new trade round go, negotiations should aim at reduction with the goal of eliminating tariffs on chemicals, says Ambrose of ACC and Isi Siddiqui, vice president for trade and biotechnology at the American Crop Protection Association. Another issue, Siddiqui says, is lowering nontariff barriers that act as protectionism for domestically produced goods. These include import licenses, quotas that limit the amount of a material that can be imported from a particular country, and surcharges on top of tariffs, Siddiqui says.

ACC is taking aim at two nations that are major producers of chemicals. "India and Brazil may be considered as developing countries in some sectors, but they are in fact globally competitive producers of many chemical products," the council says in comments on a proposed declaration drafted for the Doha meeting. ACC is "keenly interested in liberalizing the high tariff and on-tariff barriers that persist in these markets as part of the next round of negotiations."

In addition, Ambrose says, the chemical industry wants governments to hammer out trade rules that will protect investments by foreign firms. Chemical firms based in the U.S. and Europe are major investors in other nations, she says.

The EU also supports WTO rules on foreign direct investment. "The rules should provide investors with stability and predictability," notes an EU statement.But some groups strenuously oppose WTO expanding into areas such as investment, services, and government procurement. WWF says, "WTO ... has enmeshed itself in issues and even entire areas of international regulation that overload its capacities and strain the legitimacy of its authority. A balanced WTO will be one that knows how its own jurisdiction and scope should be limited."

As part of a new trade round, the EU wants WTO to clarify its relationship to one of those issues: the environment. In its statement of support for a new round of trade negotiations, the EU is specifying that the talks address the compatibility between environmental and trade policies, environmental labeling, and the role of the precautionary principle.

"The rules in several of these areas are now being determined by dispute settlement panels and not by governments: by litigation and not negotiation," according to the EU. Trade rules should be "compatible with the larger interests of society as a whole," the EU adds.

ACC opposes the part of the EU position dealing with trade and environment, Ambrose says, adding, "I don't think it's necessary to negotiate over this." Adopting the precautionary principle, she says, would neuter governments' abilities to make decisions based on science.

Under the precautionary principle, policymakers are to regulate a substance or activity when preliminary scientific evidence indicates grounds for health or environmental concern but cause-and-effect relationships have not been fully established.

WWF calls the precautionary principle "a fundamental and widely accepted tenet of environmental regulation." But when application of this concept "runs counter to national commercial interests, governments are too often willing to turn toward WTO to limit its operation." WTO needs to affirm the precautionary principle and recognize "the primacy" of environmental, safety, and health agencies in determining how the concept gets implemented, WWF says.

If governments agree in Doha on a new round of trade talks, the negotiations are expected to last three years. The effects of those negotiations would be felt many decades into the future.

But whatever the outcome of the Doha discussions, they are less likely to generate the interest by the news media and the public that the Seattle meeting did, in large part because of the conflict in Afghanistan and homeland security concerns such as anthrax. The concerns hashed out at the WTO meeting may not have the immediacy of these headline-grabbing issues, but they nonetheless have important implications for the future.


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