Hong Kong — A joint press conference of the three main groupings of developing countries created history of sorts at the sixth ministerial meeting of the WTO in Hong Kong on Friday (16 December).
"We are united that the developmental nature of the round should be kept foremost," said Celso Amorin, head of the Brazilian delegation, pointing out that this was not a mere 'market access round'.
"This is a historic moment," he declared.
For any observer, the first thing that strikes one about the WTO negotiations in Hong Kong is the proliferation of pressure groups. There are now seven major country groupings - the G4, G20, G7 plus (or G8), G10, G77, G90, and G33. Some countries are members of more than three groups, and many enjoy the status of a special invitee in the other groups.
The amazing heterogeneity of these groups makes them interesting as well as vulnerable. But there are doubts about their internal cohesion on policy issues and what they expect as the final outcome.
What and who?
Before exploring the working dynamics of these often-contradictory alliances, it is worth looking at what each group stands for and who their constituents are.
The G4 is a very articulate group, albeit the smallest. They are the four cotton cultivation-dependant African countries: Chad, Burkina Faso, Mali and Benin. This group has threatened to walk out of the Hong Kong conference if their major concerns are not addressed seriously and quickly. All four are also part of the G90.
The G20 is made up of large developing countries, including Argentina, Brazil, China, India, Malaysia and Pakistan, which together account for 60 per cent of the world's population. It began life as the G15 before the Cancún ministerial meeting in 2003. With more than 20 members now, some call it the G20 plus. This group has emerged as the main interlocutor between the rich and least developed countries.
The G8 represents the eight leading industrialised countries: Canada, France, Germany, Italy, Japan, Russia, the United Kingdom and the United States. The G10 is another wealthy countries club of those who are net food importers, including Japan, Switzerland and Norway. The G77 was set up in 1964 as a large grouping of developing countries that has now expanded to 130.
The G90 comprises African, Caribbean and Pacific (ACP) nations and the Least Developed Countries (LDCs). The G33 includes Indonesia, Philippines and a number of ACP countries as well as India from the G20.
This group focuses on securing the designation of effective 'Special Products' and 'Special Safeguard Mechanisms' for developing countries in order to protect their small farmers and rural livelihoods.
Variations
There are major economic variations within developing countries, which explains why almost every grouping has the seeds of contradiction in it.
For instance, South Africa's economy alone is bigger than the combined economies of most other southern African countries, including Angola, Botswana, Lesotho, Namibia, Malawi, Mozambique, Swaziland, Zambia and Zimbabwe.
So why are the LDC members of the G90 permitting their richer neighbours in the G20 to represent them? And why aren't they accepting the EU's special preferential offer to the LDCs in the form of the 'Everything But Arms'? (The initiative ostensibly grants duty-free access to imports of all products from LDCs without any quantitative restrictions, except to arms and munitions.)
After all, the LDCs are affected by the export potential of the G20 countries - which in turn affects the domestic market as much as imports and dumping from rich countries.
The G90 countries are neither naïve nor gullible. A delegate from Bangladesh says: "We permitted the G20 to take up some of the key issues because they have more resources to do it. We think the rich countries are trying to create too many sub-classifications. For instance, the EU's 'Everything But Arms' proposal is restricted to just 49 LDCs while there are ninety members in the G90".
Points of convergence
The basic thread that unites the G20 and G90 is the resolve not to permit rich nations to re-enact the old 'divide and rule policy'. The G90 firmly believes that no deal is better than a bad deal, and it feels that the G20 will ensure that no bad deal will be thrust down its throat.
One of the areas where the G90 received substantial help from the G20 was in unravelling the 'Everything But Arms' offer. While on the one hand the EU said it is opening up its market fully, it also introduced stringent 'rules of origin' (a condition that requires substantial value addition in the country of origin).
Unity amidst contradiction is the governing philosophy not just for the developing countries and LDCs, but also for the rich nations.
The G8 and G10, as well as the EU and US, have much in common. But they differ sharply on the question of reducing farm subsidies. Since this is the first time such a significant divide between the rich nations has come to the fore, the media sees a major fissure in the trans-Atlantic economic alliance.
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But some in the G90 are convinced that the present fight between the EU and US over farm subsidies is a planned, well-orchestrated move to scuttle the Doha Development Agenda.
"They wanted to introduce any number of sub-classifications to divide us by promising something for each cluster, which is not of a global nature and which does not reflect fair trade," notes one South African delegate.
"They resisted the Doha ministerial from becoming a development round as their focus was only on trade - trade for trade's sake. But it was the motley groupings of the G20, G33 and G90 that worked tirelessly to put the development agenda firmly into the trade talks. Now that we have proved that our voices cannot be muffled any longer, they have lost the interest in sustaining the negotiations."
The developing and least developed countries know that there will be another round of negotiations - this time among themselves - to sort out their own skewed trade relationships.
