Global Trends by Martin Khor
Monday 7 June 2004
G90 POOR COUNTRIES MAKE ADVANCES
The poorest and smallest countries have recently emerged as a Group of 90 which operates in the World Trade Organisation. Last week their representatives held a Ministerial meeting in Georgetown, Guyana. It started with an impromptu clash between the Guyana President and the European Union, and ended with a consensus on the common stand the group should take in the WTO.
A ministerial meeting of the Group of 90 developing countries saw an interesting and impromptu clash of views between the President of Guyana and the European Union representative on whether the poorer countries take trade seriously enough.
The clash took place at the opening ceremony of the meeting held in Georgetown, Guyana, of Trade Ministers and senior officials from about 20 countries from among the Group of 90. The G90 is an umbrella body of the African Group, the least developed countries and the African, Caribbean and Pacific (ACP) Group. It is the largest grouping of members in the World Trade Organisation.
Per Eklund, head of the EU delegation to Guyana and Suriname, told the meeting that what is missing is “real political commitment to mainstream trade” by developing countries themselves.
“We welcome calls for better mainstreaming of trade in national development agendas, which is a key way to fight poverty.”
The President of Guyana, Bharrat Jagdeo, took on this point in his speech. “I want to convey to the EU, it is not because of the absence of political will that developing countries are reluctant to mainstream trade in their development agenda. It’s the fear of the type of trading arrangements that they will mainstream, which does not benefit small developing economies.
“For example, how can you tell the Prime Minister of the Dominican Republic, who because of the banana regime at the WTO has lost a significant part of his economy, lost thousands of jobs and one third of their foreign exchange earnings, to mainstream this kind of trade into his national development agenda?
“It is the fear of the type of trade to mainstream that we have, not the lack of political will.”
The two-day meeting was held to plan a joint position that the G90 countries can have at key WTO talks scheduled for July. The G90 emerged as a strong grouping at the WTO’s Ministerial conference at Cancun last September, taking common positions representing the largest number of countries.
President Jagdeo said the people of Guyana are worried about the uncertainties of the WTO negotiations, as they live in a small economy heavily dependent on a few basic commodities.
They have seen how the WTO decision on bananas severely impacted on the Caribbean region, and they wonder what would emerge from the present legal assault on sugar in the WTO, the impending sugar reform in the EU and the general threat from other sources to commodity arrangements.
“We tried over the years to convince our trading partners of our plight as commodity producers, yet our cries keep falling on deaf ears.
“Yet vulnerable economies as ours are called to make further commitments in the WTO, when we are already overstretched with our present obligations.”
Jagdeo hoped the meeting would help build a more development-friendly multilateralism in which rules are flexible and “we are permitted to enjoy the policy space necessary to advance our development.”
He added: “We cannot afford to meet the many obligations for tariff reduction that are being requested of us. As developing countries we do not have an array of instruments to defend our agriculture and industry.
“We cannot afford to use contingency measures such as anti-dumping and countervailing duties which are costly, and emergency trade remedies are also not available as they require administrative work and put us in the firing line of retaliation.
“We cannot afford the subsidies of rich nations. We are thus left with our bound tariffs as the only practical means of defending our agriculture and industry. To demand further concessions from us on this is to leave us defenceless in a world characterized by large agricultural and industrial producers whose scale can quickly swamp our production and wipe out our producers overnight.”
He said the countries’ efforts to have the WTO deal with the developing countries’ vulnerabilities and their need for preferences have so far not succeeded.
The G90 would thus try to set up a common platform, with solidarity and unity to give hope to millions and add strength to our cause, he said.
Celso Amorim, Foreign Minister of Brazil, which coordinates the Group of 20 developing countries (which include the big countries Brazil, India, China, South Africa, Nigeria and Indonesia), also addressed the meeting.
He stressed the importance of dialogue between the G90 and the G20 which together constitute the bulk of WTO membership and share common interests, and whose access to benefits in trade is yet to be ensured.
He called for the G20 and G90 to join forces, as this would provide leverage to achieve the aim of an equitable trading system.
In agriculture, which the G20 focuses on, there is “reverse special and differential treatment” for developed countries, which allows them to distort markets.
“Small groups of producers in rich nations benefit from enormous financial support from their treasuries, depressing prices, unduly inc raising their market share and compromising the food security and livelihood of farmers in many developing countries.”
Amorim also spoke of the importance of expanding South-South trade, within the context of the General System of Trade Preferences (GSTP), a scheme in which developing countries give preferences to one another, without extending these to developed countries.
He also warned of risks posed by attempts to distract the developing countries and to split them up. He was indirectly referring to recent initiatives by the European Commission to offer the G90 countries special exemptions from obligations in the WTO, in exchange for accepting some of the EU’s proposals on various issues.
“Developing countries have a rare window of opportunity,” he said. “There is so much that unites us. Let’s work out our small differences in perception. Let’s continue to build up a common front.”
Guyana’s Foreign Trade Minister, Clement Rohee, said the G90 had a historic responsibility as it now had a profile as a force to be reckoned with.
“The G90 is in fact a movement. As we gather momentum, others will no doubt seek to strike common cause with us especially if they conclude that history is on our side.
“There is already reference to a wider G90 that may include LDCs, small economies, landlocked developing countries and commodity dependent countries that are particularly weak and vulnerable.”
He stressed that the G90 meeting should produce a consensus statement, and a Declaration to be communicated to the WTO to indicate positions towards its July General Council meeting.
Stuart Harbinson, chief of cabinet at the WTO’s director general’s office, said the 27 July meeting of the General Council was a real deadline. If it does not get the WTO talks back on track, “we will not be able to make any significant progress for the remainder of the year” and 2004 would be a “wasted year.”
Worse than that, he said, “we do not know if and when we could get the negotiations going again in 2005...If at that time there is an impression that the Doha Development Agenda is floundering, without any real sense of direction or purpose, it is difficult to forsee which Members would take the intiative to get things going again, and even on what basis.”
He stressed that the July meeting was only aiming at agreeing to frameworks for modalities, and it was not necessary to specify all the details or figures for reducing tariffs.
He appealed to the G90 meeting to build on the sense of momentum And convert political commitment into real progress.
The meeting is expected to end with a declaration and a document containing the consensus position of the G90 representatives on various issues being negotiated in the WTO.
Many challenges face the G90 as the umbrella grouping of so many countries tries to reach a common understanding on complex WTO topics. What binds them is a common perception of that they are the smaller and poorer of the developing countries, and that they need to group together and take a common stand, if their voice is to be heard.
As the Guyana President made plain, the small economies of the Carribean have long been suffering from being over-dependent on a few commodities, and their status has deteriorated under certain WTO rulings.
The hopeful development for these countries is their increasing collaboration, which for the first time has made them a force be reckoned with. The Georgetown meeting was a sign of this emerging strength.