the Doha Development Round - International environmental law-making and diplomacy review 2012

The World Trade Organization (WTO), along with its multilateral trade agreements, was established in 1995 at the end of the Uruguay Round of negotiations, but its predecessor, the General Agreement on Tariffs and Trade (GATT) began much ear-lier in 1947. The idea of the WTO (then conceived of as the International Trade Organization) was established at the Bretton Woods Conference in New Hampshire, United States, in 1944, with the aim of pursuing free trade through the reduction of tariffs on the import of goods through successive trade rounds.¹¹⁸ The GATT was based on the philosophies of Adam Smith and David Ricardo, being neo-liberal ideologies of economic capitalism and comparative advantage. As Afilalo and Pat-terson argue, Smith and Ricardo ‘posited that states would maximize their wealth by unilaterally eliminating import restrictions’.¹¹⁹

As a result, GATT was established primarily to correct the market failures of the inter-war period,¹²⁰ and was based on the principles of non-discrimination, national treatment, most-favoured nation,¹²¹ market access and the elimination of non-tariff barriers. Although originally GATT members were primarily developed countries, many developing countries participated in the Uruguay Round negotiations, where the WTO was agreed. The Uruguay Round was based on the ‘Grand Bargain’ that industrialized countries would move more manufacturing to lower wage countries, thereby assisting in their development.¹²²

Many developing countries, including many SIDS, joined the WTO in 1995, but some became dissatisfied with the regime as it failed to assist their developmental agendas directly. Wiener criticizes the regime as follows:

118 Some of the major GATT trade negotiation rounds include the Dillon Round from 1960–1961, the Kennedy Round from 1965–1967, the Tokyo Round from 1973–1979, and the Uruguay Round from 1986–1994. For more information on the trade rounds, see WTO, ‘GATT trade rounds’, <http://www.

wto.org/english/thewto_e/whatis_e/tif_e/fact4_e.htm#rounds> (visited 5 March 2013).

119 Ari Afilalo and Dennis Patterson, ‘Statecraft, Trade and the Order of States’, 6 Chicago Journal of Interna-tional Law (2005–2006) 725–759 at 737.

120Ibid. at 739.

121 Which principle means that no nation may be discriminated against in trade – in other words, that all nations are given ‘most favoured’ status.

122 William A. Lovett, ‘Bargaining Challenges and Conflicting Interests: Implementing the Doha Round’, 17 American University of International Law Review 951 (2001–2002) 951–1002 at 952–953.

[t]he result of institutionalized global trade rules and semi-regular ministerial summits has been a bifurcated agenda whereby developed countries and well-established trade blocs negotiate highly self-satisfying trade policies while the developing world scrambles to interject a development agenda that presently appears incompatible with existing policies.¹²³

Lewis explains the disconnect: that the WTO originally focused only on market ac-cess and not on development directly. She comments that this approach ‘reflects an underlying assumption that the rising tide will raise all boats – that liberalizing mar-kets alone will make all WTO members better off’.¹²⁴ While this strategy inevitably worked for many countries,¹²⁵ it did not for others, particularly LDCs. In preparation for the 1999 Seattle Ministerial Conference, CARICOM SIDS joined the developing country strategy of ‘review, repair and reform’ of the Uruguay Round agreements.

This new strategy by developing states contributed to the collapse of the Seattle Ministerial Conference, and to a proposal for a new development round. This ulti-mately led to the creation of the Doha Development Round which began in Novem-ber 2001, and negotiations under the Doha Round continue in 2013. Lewis com-ments that this round was initiated in part to provide ‘a form of payback to the LDCs and poorer developing countries for their concessions made in the Uruguay Round negotiations’.¹²⁶ The Doha Ministerial Declaration of 14 November 2001 explains its impetus as follows:

[i]nternational trade can play a major role in the promotion of economic devel-opment and the alleviation of poverty. We recognize the need for all of our peoples to benefit from the increased opportunities and welfare gains that the multilateral trading system generates. The majority of WTO members are devel-oping countries. We seek to place their needs and interests at the heart of the Work Programme adopted in this Declaration.¹²⁷

The Doha negotiation round is one of the largest and longest trade rounds in WTO history. The trade round has faced a number of hurdles for a variety of reasons, and the talks collapsed in 2003, were suspended in 2006, and collapsed again in 2008.¹²⁸ Many developing countries see the Doha Round as an opportunity to remove the

123 Jason Wiener, ‘World Trade Organization’s Identity Crisis: Institutional Legitimacy and Growth Potential in the Developing World’, 2 Manchester Journal of International Economic Law (2005) 54–71 at 55.

124 Meredith Kolsky Lewis, ‘WTO Winners and Losers: The Trade and Development Disconnect’, 39 Geor-gia Journal of International Law (2007–2008) 165–198 at 165.

125 The US gross national product (GNP) expanded by more than 50 per cent between 1993–2000. See Lovett, ‘Bargaining Challenges and Conflicting Interests’, supra note 122, at 954. Global poverty rates have declined, with an estimated 200–500 million fewer poor in 2000 than in 1970 – see Christina R.

Sevilla, ‘The WTO Doha Development Agenda: What is at Stake’, 25 Berkeley Journal of International Law (2007) 425–433 at 430.

126 Lewis, ‘WTO Winners and Losers’, supra note 124, at 168.

127 Doha Ministerial Declaration, UN Doc. WT/MIN(01)/DEC/1 (2001), available at <http://www.wto.

org/english/thewto_e/minist_e/min01_e/mindecl_e.htm> para 2 (visited 5 February 2013).

128 Sungjoon Cho, ‘The Demise of Development in the Doha Round Negotiations’ 45 Texas International Law Journal (2009–2010) 573–602 at 579.

old, unfair protectionism enjoyed by the developed countries (particularly in the area of agricultural subsidies) that has led to issues that were not resolved in the Uruguay Round.¹²⁹ Developed countries, particularly the EU member states and the United States, are reluctant to remove these historic subsidies without obtaining new conces-sions from developing countries, and this has erected significant hurdles in the ne-gotiations.

Developing countries account for 73 per cent of the membership of the WTO, and negotiate primarily through the G-77 and China negotiating bloc.¹³⁰ The WTO negotiating forum is based on consensus, with one country having one vote. How-ever, in reality, this voting ‘consensus’ is subject to the economic power of the coun-tries involved, and SIDS have the potential to be marginalized in the negotiations as they represent less than one per cent of world trade.¹³¹ SIDS have joined the negoti-ating bloc of small vulnerable economies, or SVEs, but still struggle to have their voices heard.¹³² Fiji’s Trade Minister, Isimeli Bose, summarized his frustrations as follows:

[w]e are told in a forum such as this that we are all equal and we have a level playing field. However, when I consider my inability to influence opinion, to mobilize razor-sharp executives who lobby convincingly on our behalf, to stage-manage the debate, then I realize that there is no level playing field in trade, and some are indeed more equal than others.¹³³

The SVE negotiating bloc was created in preparation for the Singapore Ministerial Meeting in 1996, and consistently advocates for preferential treatment for African, Caribbean, and Pacific (or ACP) countries. The GATT established the Generalized System of Preferences (or GSP) in 1971, which allowed developed countries the discretion to grant preferences to developing countries. However, Gunewardene ar-gues that this was mainly used by developed countries, particularly the United States, to reward their allies and punish their political opponents.¹³⁴ The GSP was established

129Ibid. at 582; and Susan C. Schwab, ‘After Doha: Why the Negotiations are Doomed and What We Should Do About It’, 90 Foreign Affairs (2011) 104–117 at 106.

130 Sonia E. Rolland, ‘Developing Country Coalitions at the WTO: In Search of Legal Support’, 48 Harvard International Law Journal (2007) 483–552 at 487.

131 Barbara von Tigerstrom, ‘Small Island Developing States and International Trade: Special Challenges in the Global Partnership for Development’, 6 Melbourne Journal of International Law (2005) 402–436 at

132 SVEs are economies which account for only a small fraction of world trade. See WTO, ‘Briefing note: 413.

Small, Vulnerable Economies’, available at <http://www.wto.org/english/thewto_e/minist_e/min11_e/

brief_svc_e.htm> (visited 5 March 2013). See also the WTO work programme on SVEs, Doc. WT/L/447 (2002).

133 See WTO, Ministerial Conference, Singapore, 9–13 December 1996, Fiji, Statement by the Honourable Mr. Isimeli Bose Minister for Commerce, Industry, Trade and Public Enterprises, Doc. WT/MIN(96)/

ST/54 (1996), available at <http://www.wto.org/english/thewto_e/minist_e/min96_e/st54.htm> (visited 28 December 2012).

134 Roshani M. Gunewardene, ‘GATT and the Developing World: Is a New Principle of Trade Liberalization Needed?’ 15 MD Journal of International Law and Trade (1991) 45–68 at 50.

more formally after the Tokyo Round of negotiations in 1979 through the decision on ‘Differential and More Favourable Treatment, Reciprocity and Fuller Participa-tion of Developing Countries’ (the Enabling Clause).¹³⁵

In 2001, the Decision on Implementation-Related Issues and Concerns¹³⁶ helped extend special and differential treatment (S&DT) through the Enabling Clause to SVEs, although the S&DT regime is generally regarded as weak. LDCs have man-aged to be recognized institutionally through the formation of the WTO Subcom-mittee on LDCs in the ComSubcom-mittee on Trade and Development,¹³⁷ and Rolland argues that SIDS should also be given a similar institutional home.¹³⁸ A WTO work pro-gramme on SVEs¹³⁹ was established on 5 March 2002, largely as a result of efforts by SIDS. SIDS had called for a review of existing S&DT mechanisms to determine their efficacy in light of the special needs and concerns of small economies. CARICOM SIDS in particular had highlighted the specific characteristics of small, vulnerable economies, and advocated for a programme that would lower levels of obligations, provide exemptions from commitments in certain areas, apply flexibility in certain disciplines, and provide access to mediation, technical assistance and training.¹⁴⁰ These requests contributed to the establishment of a work programme on small economies, designed to specifically address the special needs and concerns of SIDS.¹⁴¹ Structural inequalities and capacity constraints make it difficult for SIDS to imple-ment their WTO obligations or benefit from the WTO dispute resolution system, and limit their ability to participate in the WTO negotiations. Many SIDS do not have a mission at the WTO headquarters in Geneva, or if they do it is very small.¹⁴² Despite some efforts to combat structure capacity constraints, the WTO has re-sulted in an erosion of historic preferential trading arrangements which benefited SIDS, particularly trading preferences instituted by EU countries to assist their former colonies. The removal of these trading preferences has further compounded SIDS’ financial constraints. A 2010 UNDP Discussion Paper states that in 2009 14

135 Decision L/4903 of 28 November 1979, available at <http://www.wto.org/english/docs_e/legal_e/

enabling1979_e.htm> (visited 17 February 2013).

136 Decision of 14 November 2001, Doc. WT/MIN(01)/17.

137 For more information, see WTO, ‘The Sub-Committee on Least-Developed Countries’, available at

<http://www.wto.org/english/tratop_e/devel_e/dev_sub_committee_ldc_e.htm> (visited 17 February 2013).

138 Rolland, ‘Developing Country Coalitions’, supra note 130, at 513.

139 Doc. WT/L/447 (2002).

140 Arnold McIntyre, ‘CARICOM and the WTO’, 49 Social and Economic Studies (2000) 83–112, at 101.

141 See also SIDS communications to the Committee on Trade and Development on the Work Programme for Small Economies, such as Docs WT/COMTD/SE/W/13/Rev.1 (2005), WT/COMTD/SE/W/14 (2005), WT/COMTD/SE/W/16/Rev.2 (2005), WT/COMTD/SE/W/12 (2005), WT/COMTD/

SE/W/20 (2006), WT/COMTD/SE/W/15/Rev.2 (2006) and WT/COMTD/SE/W/18/Rev.2 (2006).

142 von Tigerstrom, ‘Small Island Developing States’, supra note 131, at 425. In an attempt to combat these constraints, the WTO helped to establish the Pacific Island Forum Representative Office in Geneva which provides assistance to Pacific Island trade officials through technical advice and assistance, training, sup-porting attendance by officials at WTO meetings, and assistance with access to aid for trade capacity building programmes. The office is shared by representatives from the Organization of Eastern Caribbean States.

SIDS had debt-to-GDP ratios in excess of 60 per cent, and eight SIDS registered debt-to-GDP ratios in excess of 100 per cent.¹⁴³ Many of the heavily indebted SIDS are in the Caribbean. These high levels of debt can be explained by trade preference erosion and declines in traditional exports, as well as lax fiscal policies.¹⁴⁴ The degrad-ing fiscal situation of SIDS makes their efforts in the WTO negotiations even more pressing. In an effort to create a cohesive voice across a variety of trade negotiations, the Caribbean region established the Caribbean Regional Negotiating Machinery (CRNM), now known as the Office of Trade Negotiations (OTN).¹⁴⁵ The OTN’s goal is to ensure that Caribbean countries are not impeded by changes in global trad-ing regimes, and it pursues a central negotiattrad-ing platform of securtrad-ing special and differential treatment for smaller economies.¹⁴⁶

Although historically not a multilateral environmental regime, the WTO trading rules have had significant environmental effects on ocean resources. It is estimated that three-quarters of fish resources are under threat, and over the past few decades trade has accounted for over 50 per cent of the value of fisheries production.¹⁴⁷ In 1996, 90 per cent of fisheries subsidies were provided by six developed countries and a regional entity,¹⁴⁸ including Canada, Chinese Taipei (Taiwan), the EU, Japan, South Korea and the US. The Committee on Trade and the Environment took up the issue of fisheries subsidies with the US formally introducing the issue in the Seattle Min-isterial Conference. The informal coalition ‘Friends of Fish’, formed in 1998, has continued to push for a separate Annex to the Agreement on Subsidies and Coun-tervailing Duties (ASCM) specifically to deal with fisheries subsidies.¹⁴⁹ This group argues that fisheries subsidies lead to both overcapacity, considered a trade distorting effect, and overexploitation, which is largely considered an environmental issue. The Doha Round negotiations include efforts to discipline existing fishing subsidies through the Negotiating Group on Rules. The Friends of Fish group was successful in including in the 2001 Doha Ministerial Decision a statement that parties would clarify and improve WTO disciplines on fisheries subsidies.¹⁵⁰ The Hong Kong Min-isterial Declaration in 2005 also noted broad agreement that disciplines on subsidies in the fisheries sector should be strengthened, with special attention being paid to the importance of the sector to developing countries and LDCs.¹⁵¹ Some authors have

143 ‘Achieving Debt Sustainability and the MDGs in SIDS’, UNDP Discussion Paper (2010), available at

<http://www.undp.org/content/undp/en/home/librarypage/mdg/achieving-debt-sustainability/> (visited 5 August 2013) at 4.

144Ibid, at 4. The report notes that many Caribbean SIDS have also turned to international and domestic capital markets to finance development, whereas Pacific countries owe a high proportion of their public debt burdens to multilateral and bilateral creditors.

145 See <http://www.crnm.org/>.

146Ibid.

147 ICTSD Project on Fisheries and Trade and Sustainable Development ‘Fisheries, International Trade and Sustainable Development’ (2006) at ix and 1.

148Ibid. at 62

149 This negotiation group is fluid, but its members usually include Iceland, New Zealand, Australia, Chile, Peru, the Philippines, Norway and the US.

150 Doha Ministerial Declaration, UN Doc. WT/MIN(01)/DEC/1 (2001), supra note 127.

151 WT/MIN(05)/DEC (2005), Annex D, para. 9.

argued that this negotiating issue is an attempt to reform the WTO’s negative repu-tation on environmental issues.¹⁵²

Fishing subsidies can have a tremendous impact on global fisheries, leading to de-structive fishing practices and overcapacity of fishing fleets. O’Shea notes that

[b]ecause destructive fishing practices and fleet overcapacity are enabled by gov-ernment subsidies, the World Trade Organization (WTO) Agreement on Subsi-dies and Countervailing Measures (SCM) may be one of the best tools available for stopping overfishing. Though it may seem strange to tackle conservation is-sues through a trade agreement, the WTO offers something that most interna-tional forums can only dream of – an effective enforcement mechanism.¹⁵³ Most WTO members have agreed to discipline fishing subsidies, and are negotiating on the basis of a ‘traffic light’ approach.¹⁵⁴ This suggested approach, which is a com-bination of a number of member state proposals, would prohibit ‘red light’ subsidies which contribute to overcapacity, remove ‘dark amber’ subsidies which are presumed to have detrimental environmental effects unless governments can prove otherwise, and allow ‘green light’ subsidies which would be used to scrap old fishing vessels or modernize them to make them more environmentally friendly, and retrain fisher-men.¹⁵⁵ The negotiations on fisheries subsidies, however, have been heated, with some WTO members arguing that fisheries subsidies are not subsidies at all,¹⁵⁶ and that including a separate fisheries annex to the ASCM, which includes non-trade concerns such as overexploitation, is not appropriate for the WTO and may lead to fragmen-tation of the subsidies regime, and possibly the WTO itself.¹⁵⁷

SIDS have been active in these negotiations, and have made a number of submissions both as the SVE and in collaboration with other, larger, states such as India. SIDS have argued that fisheries generate a tremendous amount of revenue for SVEs, and argue for three areas to be exempted from any subsidy disciplines:

152 Eric A Bilsky, ‘Conserving Marine Wildlife Through World Trade’ 30 Michigan Journal of International Law (2008–2009) 599–641 at 628.

153 Brook Glass O’Shea, ‘Watery Grave: Why International and Domestic Lawmakers Need to do More to Protect Oceanic Species from Extinction’, 17 Hastings NW Journal of Environmental Law and Policy (2011) 191–232 at 205.

154 Derek J. Dostel, ‘Global Fisheries Subsidies Will the WTO Reel in Effective Regulations?’, 26 University of Pennsylvania Journal of International Economic Law (2005) 815–840 at 828.

155 The definitions vary between proposals of the United States, the EU and several other nations. See ibid.

at 829–830.

156 Some member states and authors have argued that government to government access fee payments do not provide a subsidy to the fishing industry, and that it may be difficult to prove the production distorting effects of a subsidy, thereby making it difficult to prove injury to a member state. See WTO, ‘Access Fees in Fisheries Subsidies Negotiations – Communication from the ACP Group’, Doc. TN/RL/W/209 (2007) at para’s 2 and 9. See also ICTSD Project on Fisheries and Trade and Sustainable Development, supra note 150, at 75.

157 Seung Wha Chang, ‘WTO Disciplines on Fisheries Subsidies: A Historic Step Towards Sustainability?’ 6 Journal of International Economic Law (2003) 879–921 at 918.

• revenue generation from access fees from DWFN;

• domestic and foreign fisheries export-related operations in EEZs to support do-mestic processing facilities; and

• artisanal fishing within the territorial sea and EEZ to supply both domestic and international markets.¹⁵⁸

Fisheries subsidies present a development bind for SIDS. They provide a significant amount of revenue through fees from access agreements, particularly for Pacific SIDS. SIDS have based their argument to retain fees from access agreements on, in particular, Articles 56, 61 and 62 of UNCLOS, which require states to allow access to any surplus of marine resources to other states. SIDS also want to reserve policy space to develop their own domestic fisheries industries in the future. In addition, artisanal fisheries provide food security, reduce poverty, and form part of the culture and way of life of these states. However, fisheries subsidies also make it difficult for domestic fleets to compete with highly subsidized DWFN fleets, and have meant that SIDS have not been able to fully exploit their own fisheries through domestic industries. Fisheries subsidies also contribute to overexploitation, and may lead to the depletion of fisheries stocks in the EEZs of these nations, which will have dra-matic long term consequences for development. In addition, artisanal fisheries, while not as destructive as highly industrialized fishing, can also lead to discarded

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