Less developed countries (LDCs) don't have a lot of resources to use in trade negotiations, like those involved in the Doha Round.
Alan Beattie brings this home in his story Dipak and the Goliaths (Financial Times, Dec 9 - access not restricted). He personalizes issues by telling them incidentally to the story of Dipak Patel, the Zambian trade minister.
Physical and human infrastructure is limited:
When I visit Patel’s ministry offices in Lusaka a few days later, it becomes clear just how scant are his resources, a situation against which he constantly chafes...
The ministry has just moved to an impressive new tower block. The building was funded by an aid package from the Chinese government...
But it still is not finished...
The office is so new that the landlines have not yet been installed, so Patel conducts business on his mobile phone, barking instructions at an unseen minion to come and see to his computer, which has been playing up again. Brown cardboard folders sit on the shelf behind his desk, labelled “WTO”, “IMF/World Bank”, “Reading Material: General”, “Privatisation”, “Strategic Plans”.
Patel summons Lillian Bwalya, his chief economist, and starts thinking and planning out loud, having picked up a paper calendar. He has to attend a meeting of ministers in China in a fortnight to discuss the Doha round. “When is the meeting? 12 July? Let’s assume I leave on July 10.” But a more pressing matter this morning is the need to boot out the human resources people who have taken up residence in offices down the corridor, offices his staff are supposed to move into. “Why do I have to sort even this out? I want human resources out of here. Get me Violet.” Violet, from the building’s management, is summoned and bawled out as well. He cuts off her objections. “You follow the plan. Full stop.”
One assumes that newly appointed US trade representative Rob Portman and EU trade commissioner Peter Mandelson do not have to spend their days assigning office space. But the Zambian foreign trade ministry operates at around the level of a small-sized student union. Apart from two secretaries, an office orderly and a driver, it has a total of eight professional staff - plus Philip Osafo-Kwaako, a 26-year-old Ghanaian MIT and Oxford graduate seconded by the Overseas Development Institute, a London-based think-tank...
Effective participation requires analysis:
Patel starts working on a speech for the launch of a new handbook about a special preference scheme for African, Caribbean and Pacific countries,... He cites a computer simulation showing that EU demands for cuts in Zambian tariffs will lose the government $15m in precious tax revenue.
But Zambia’s ability to do such research is limited. It has access to an online computer model developed by the World Bank, which allows it to do simulations. “But I don’t have the bandwidth, so I often get cut off,” Patel says. He wanted to do a simulation of the effect of possible cuts in goods tariffs on the LDCs in time for the Livingstone conference, but had to run round the donors asking them to do it for him. It arrived just a couple of days before the meeting, undermining its usefulness.
Eight years ago, a new “integrated framework” was set up by the UN, World Bank and others to help LDCs develop trade policy. So far it has disbursed just $1m per country. “A million dollars!” Patel says. “This is a nation, not a bloody corner shop.”
Often, he relies on briefing notes prepared by NGOs based in rich countries, such as Oxfam. “We get criticised for allowing NGOs to dictate our policy. But if we don’t have the capacity to do our own research, what can we do?” In May, Patel attended a small meeting of trade ministers in Paris on the Doha round. He says that Rob Portman, the US trade representative, already had an advantage over him, being equipped with a thick briefing binder with colour-coded documents for the different subjects. “I asked him if he could show it to me, and he said perhaps he had better not.” For Hong Kong, he has heard that the rich countries are setting up war-rooms in the hotels, with roaming officials working the developing country delegations and keeping in contact with each other with PDAs. “How do you combat that?”
...and mastery of a complex body of law:
Any country trying to advance or defend its interests needs expertise in statistics, economic modelling, negotiating tactics and, above all, the law. For example, the LDCs’ demands to have their tariff-free access permanently entrenched are mired in arcane legal bickering. The European Commission, which offers one of the most generous programmes, claims that to “bind” the deal in a WTO agreement would violate the equal-treatment principle at the heart of the WTO, as it would have to offer the same access to all other countries. It has instead offered what it says is the strongest form of promise possible, short of a legally binding agreement. For Patel, this is not good enough. But in an area of highly complex jurisprudence, where there are often few precedents, it is hard to prevail...
The complexity can baffle even the best-resourced. Earlier this year, the part of the Doha talks that concentrated on agriculture were held up for two months waiting for the EU to come up with a way to convert its flat-rate farm tariffs, such as E100 per tonne, into an equivalent percentage tax. The import prices registered in the WTO’s own database were at odds with the UN’s commodity statistics, and an arcane but fierce row developed about whether to weight an average of them together before or after they were converted to a percentage. This was not mere nit-picking. At stake, months or years of negotiations down the line, the calculation in tariffs would determine how big the cuts in protection would have to be - and, ultimately, how many European beef and dairy farmers would be put out of business, as lower protection made them vulnerable to competition from abroad.
The WTO offers training assistance:
But the WTO, along with some other institutions that offer help, such as the UN Conference on Trade and Development and the rich donor countries themselves, is making earnest efforts to bring officials from its poorest members up to speed. In October, in a drab, strip-lit room in the WTO’s unglamorous Geneva headquarters, 21 officials from a variety of countries - Yemen, Afghanistan, Uganda, the tiny Pacific nation of Kiribati - sit in rows taking instruction on the agreements that underlie the organisation. Twice a year - once in English, once in French - the WTO offers three-week training courses to officials from LDCs.
The class is taken by Claude Trolliet...
The morning course I attend consists of running through the agreement on trade in services industries such as banking or insurance, part of the 500 pages of basic texts that underlie the world trading system. The overwhelming impression is one of grinding legalistic detail: the judicial principles of the agreement, the exclusions, the obligations, the schedules of services that are, and are not, liable. “For each exception there is an exception,” Trolliet says.
At times the knowledge being acquired appears ludicrously obscure. The LDCs will not be forced to open up their services industries further as part of the Doha round. And in any case few western companies are salivating at the thought of getting into such tiny markets. But nonetheless the class is attentive, even enthusiastic. “Article 6, paragraph 4: how does it define domestic regulation?” Trolliet asks. Several in the class have a word-perfect reply. And they have not lost faith in the WTO, despite acknowledging its complexity. “It seems to me that the scope of the WTO is too large, and the agreements too complicated,” says Azizun Nahar, a Bangladeshi civil servant and economist who has just been moved on to the WTO brief in Bangladesh’s commerce ministry. “But if you follow it carefully you can understand.” Gesturing to the thick book of legal texts, she says: “This is the bible.”
Later, notwithstanding his brief to give them just the facts, Trolliet digresses slightly into the dangers of relying on outside advice when making trade policy. “The US will help you liberalise audiovisual services because it wants to score points against the EU; the EU will do the opposite,” he says. (The US has long argued that France’s desire to protect its domestic cinema is a thinly disguised form of trade protectionism.)
There's a lot more in this worthwhile story.
Comments