Poverty, Islamist extremism, and the debacle of Doha Round counter-terrorism.

Author:Bhala, Raj
Position:Trade Remedies and Facilitation, part 3

TABLE OF CONTENTS I. Synopsis II. No Remedy for Remedies A. Twelve AD Fights B. Five CVD Fights C. No Remedy for Small Scale Muslim Fisherman, Either III. Not Facilitating Trade A. Progress through April 2009 B. Heavily Bracketed April 2011 Draft Trade Facilitation Text C. What Should Have Happened IV. The Missing Middle "D" in the DDA A. Why Not ...? B. Because ...? C. Trade Deficits and China D. Reciprocity and the Two-Track Approach E. Embarrassing Protecting Self-Interest F. The Mexican Plan Spurned V. Special Trade Dispensations to Win Muslim Hearts and Minds A. Developing Stakeholders B. Grim Statistics C. New Ideas Faithful to the Original Purpose D. The "Islamic" Delineation I. Synopsis

This article is the third and final part of a trilogy, the argument of which is that the Doha Round is a failed instrument of counter-terrorism. The Round, launched in November, 2001, was supposed to make the world safe for free trade, but not simply to realize net economic welfare gains from reductions in barriers to cross-border flows of goods, services, and intellectual property. Rather, the original intent was to connect those gains to the threat posed by violent extremist organizations ("VEOs") in the post-9/11 world. The gains were intended to be channeled, in no small part, to poor, marginalized Muslim communities that otherwise might be recruitment grounds for VEOs acting (falsely, to be sure) in the name of "Islam."

As the Doha Round dragged on through the first and now second decade of the new millennium, the commercial self-interest of World Trade Organization ("WTO") Members dwarfed their shared political economic interest. They lost sight of the common good in fighting poverty, thereby attacking one factor exploited by VEOs. They invented (post hoc, of course) new reasons for the Round, such as fighting the global economic slump (as Part One concludes). Their behavior became a reason in itself as to why implementing the initial vision for the Round proved difficult, such as the negotiating positions of China (as Part Two concludes). Plausible or not, all such reasons spelled a collective failure to follow through on the founding promise of the Round: drawing a clear link between freer trade, poverty alleviation, and threat reduction. (1)

Part One of the trilogy advances this argument in the context of trade liberalization in agricultural products. Part Two does so in the context of trade liberalization in industrial products ("non-agricultural market access," or "NAMA"), and services trade. Part Three makes the argument in the context of trade remedies, so called "rules" covering antidumping ("AD"), countervailing duties ("CVD"), and fishing subsidies. It also does so in the context of trade facilitation, which refers to customs procedures. As with Parts One and Two, the context of Part Three is technical. The devil, in the sense of straying from the initial purpose of the Doha Round, is in the details, in the sense of lengthy, mind-numbing draft modalities texts. The Texts critically analyzed here are the December 2008 Draft Rules Text, (2) April 2011 Rules Document, (3) December 2009 Draft Trade Facilitation Text, (4) and April 2011 Trade Facilitation Document. (5)

This Part completes the trilogy with comments on the missing middle "D" in the Doha Development Agenda ("DDA"). It also charts out, in a preliminary manner, potential special dispensations in international trade law for Islamic countries. Consequently, Part Three concludes where Part One began, and where the Doha Round did, too: with thoughts about how to link trade liberalization to poverty alleviation, and thereby reduce vulnerability to Islamist extremism. These concluding observations, like those of Parts One and Two, support the trilogy's overall argument that the Round is not about trade liberalization, poverty alleviation, or reducing threats from VEOs.


    Formally entitled the Draft Consolidated Chair Texts of the AD and SCM Agreements, this 94-page document includes a so-called "Road Map for Discussion" to help reach agreement on fishing subsidies, as well as trade remedies against dumping and subsidization. (6) The basic goal of Doha Round rules negotiations is to "clarify and improve" disciplines. (7) After all, since the WTO was born on 1 January 1995 (and as of November 2009), Members have launched over 3,500 AD investigations (with developing countries--particularly Argentina, China, India, and South Africa--accounting for the majority of such cases) and 202 CVD investigations. (8) Chairman Valles conceded up front there was essentially nothing novel in his "new" Draft. On all three topics--AD, CVD, and fishing subsidies--the disagreement among WTO Members was serious, with no obvious prospect of convergence, and easily sufficient to scupper a successful outcome to the Round.

    What was new, however, was the activism in the December 2008 Draft Rules Text. There was far less of it than in its predecessor. Rather than proposing specific compromise language, as he had done in the previous iteration, the Chairman took a bottom-up approach, and offered such language only on points where Members had reached a consensus on a solution. Because they had reached so few consensuses, the new Text was more of an essay with questions and issues than a legal document. (9)

    Indeed, as to fishing subsidies, Members essentially forced the Chairman to abandon the proposals he tabled in November 2007 and return to the proverbial "drawing board." In respect of AD and CVD remedies, the December 2008 and November 2007 Draft Texts were nearly identical, except for the unmistakable emphasis in the new Text on points of disagreement in lieu of proposed language to facilitate accord. The Chair inserted these points in bold, and put them in square brackets, at the relevant spots in the WTO Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (Antidumping, or "AD", Agreement) and Agreement on Subsidies and Countervailing Measures ("SCM" Agreement). (10) Because these insertions replaced draft AD and CVD provisions, giving the documents the sense of reverse momentum, it was ineluctable that the later Text was less advanced than its predecessor. Moreover, depending on the perspective of the Member, the reversal was especially troubling. (11)

    By April 2011, WTO Members registered little progress in reaching consensus on rules about AD, CVD, or fishing subsidies. Accordingly, in his cover note to the April 2011 Rules Document, the Chairman of the Negotiating Group on Rules said he chose to prepare a revised legal text on AD, i.e., a new WTO AD Agreement, but not one on CVDs or fishing subsidies. Regarding the April 2011 Draft AD Agreement, the Chairman stated:

    This should not be understood to mean that I perceive significant signs of convergence on the major "political" issues. To the contrary, it is noticeable that the new text contains the same twelve bracketed issues as the 2008 Chair text. The 2008 Chair text on anti-dumping does however contain extensive un-bracketed language on a wide range of technical but nevertheless important issues, and our work over the past two plus years has pointed to a few areas where useful changes to that language might be warranted. In short, therefore, arguably a new text on anti-dumping can usefully reflect some limited progress, and in any event it can serve to give a clear idea of where things stand. (12) As for CVDs, the Chairman elected to prepare a report instead of a revised text:

    I have chosen to prepare a report rather than a text for the following reasons. First, as with anti-dumping, there have been no significant signs of convergence on bracketed issues as reflected in the 2008 Chair text on subsidies and countervailing measures. Furthermore, unlike in the area of anti-dumping the amount of un-bracketed text in the area of subsidies and countervailing measures is limited, and some of that language (such as that relating to regulated pricing and to the role and interpretation of the Illustrative List of Export Subsidies) is controversial. And while on certain more technical issues un-bracketed language has gained some traction, there are very few useful changes to be proposed at this point. In the area of transposition of possible changes in anti-dumping provisions to their counterpart CVD provisions, insufficient discussion has occurred to date to allow the identification of legal language reflecting convergence. Finally, a significant number of substantive new proposals have been submitted during the past few months. Due to time pressure, the Negotiating Group has not yet fully explored the degree to which any elements of convergence can be found in respect of these proposals. Thus, I see no advantage to preparing a new SCM text at this juncture. (13) Likewise, as for fishing subsidies, the Chairman stated gloomily:

    2. After careful consideration of the current state of play ... I have concluded that I am not now in a position to present a revised legal text on fisheries subsidies. Rather, the only option available to me at this juncture for both capturing such progress as has been made, and more significantly, for identifying the numerous remaining gaps in Members' positions, is to present a detailed narrative report.

    3. In reaching this conclusion in these difficult circumstances, I have heard very clearly the main message from Members to Chairs that for now, any Chair-produced documents must be of a bottom-up nature. That is, Members have made plain that they would not welcome compromise proposals from Chairs that would seek artificially to bridge the real gaps in positions that remain. Applying this standard to the fisheries subsidies negotiations, at present there is too little convergence on even the technical issues, and indeed virtually none on the core substantive issues, for there to be anything to put into a bottom-up...

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