Towards a more proactive agenda for G-20

Trade ministers of major developing countries will be coming to India this week for the Ministerial Meeting of G-20. This coalition of over 20 developing countries is an important player in multilateral trade negotiations. In context of the upcoming WTO Ministerial Conference in December 2005, this meeting is an important event.

The General Agreement on Tariffs and Trade (Gatt) has provided a rule-based framework for international trade since it came into force on January 1, 1948. The rule making in Gatt and its successor, WTO is conducted in the so-called rounds, like the on-going Doha Development Round launched at the Fourth WTO Ministerial Conference held in Doha in 2001. Multilateral trade negotiations are highly asymmetric processes and essentially represent power games, where the will of a handful of rich countries, viz. Quad countries comprising the US, the EU, Japan, and Canada, is generally imposed on the entire membership in the name of ?consensus.?

Therefore, for developing countries like India, attempting to protect their interests, mere articulation is not enough. They need to build effective coalitions of like-minded countries. When effectively made, such coalitions have produced desired results. At WTO?s Singapore Ministerial, for instance, this helped in resisting a negotiating mandate on the six new issues sought by developed countries. Two of the issues, namely core labour standards and environmental standards, were completely taken off the agenda, while only a mandate for a study process was given on the other four.

At the Fifth Ministerial Conference at Cancun and in the preparatory process leading to it, developing countries had considerable success in building effective coalitions. For instance, the Group of 16 countries led by Malaysia, with the support of the group of least developed and the ACP (African, Caribbean and Pacific) countries (in all nearly 80), resisted a negotiating mandate on the Singapore issues. With such strong resistance, the main demandeur of negotiations, viz. EU, was isolated at the Cancun Ministerial and offered to drop two of the four issues from the agenda. Eventually three of these were dropped.

G-20 is another highly effective coalition on the key issue of agriculture. It was initially formed to prepare a counter-proposal to the US-EU proposal, submitted in August 2003, on agriculture in the run-up to the Cancun Ministerial. Expectedly, the US and EU were seeking to extract major concessions in terms of market access, while agreeing to very little in respect of removal of their export subsidies and phasing out domestic support to their agriculture sectors. Led by Brazil, India, South Africa, and China, a group of 17 countries submitted a counter proposal in Geneva. By the end of the Ministerial, 10 more countries were supporting this coalition.

It is to the credit of the leadership of the G-20 that it has held together despite the attempts by developed countries to break their ranks. It played an important role in Geneva when the July Package was negotiated. Brazil and India represented the G-20 in the group of Five Interested Parties (FIPs) that arrived at the agreed text.

Therefore, the importance of coalitions like

G-20 for protecting interests of developing countries in the negotiations and, in general, building a development-friendly world trading system, cannot be over-emphasised. Given the high stakes of developing countries in agriculture, and wide-ranging provisions of the Agreement on Agriculture (AoA) covering domestic support, export subsidies, and market access, besides other issues concerning intellectual property rights and sanitary and phyto-sanitary measures, the G-20?s agenda is a heavy one. But for longer-term sustainability, the coalition will need a more constructive and proactive agenda.

The grouping should be increasingly setting the agenda for negotiations with its own innovative proposals. G-20 might also consider formulating proposals on the broader reform of the world trading system, to counter those that seek to further consolidate the existing asymmetries. It could establish its own consultative group for this purpose. It could, thereby, help bring greater equity and transparency in the process of decision-making. These proposals can then be taken up proactively by the grouping in the WTO negotiations on behalf of its members. Formation of such a consultative group would also foster linkages between the trade policy think-tanks of the member countries. The group could also extend its coordination in international financial issues now that WTO has a working group on trade, debt and finance.

G-20 could play an important role in seeking strengthened provisions for special and differential treatment and technical assistance for developing countries that will make the current round truly a development round. It could also consider setting-up a watchdog of developing countries on the implementation of WTO commitments by developed countries and bringing complaints against any cases of under-compliance. Finally, it could also become a forum for promoting South-South cooperation in other areas such as mutual cooperation in implementation of commitments, technical assistance for compliance of emerging standards etc. besides promoting South-South trade and exploiting their synergy for mutual benefit. A broader agenda will make G-20 a more effective, credible, and sustainable alliance of developing countries in multilateral negotiations.

The writer is director-general, Research and Information System for Developing Countries (RIS). These are his personal views