The Telegraph
Since 1st March, 1999
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Club of 16 frustrates big brothers

Cancun, Sept. 12: Developing nations have set their face against any move to initiate discussions on the Singapore issues — investment, competition policy, trade facilitation and transparency in government procurement — at Cancun.

“There is no explicit consensus on the launch of the process to determine the modalities for negotiations on the new issues,” said Malaysia’s trade minister Rafidah Aziz, who briefed reporters on the decision taken today by a ginger group of 16 nations that included India.

Besides India, the 16 nations that decided to forestall all discussion on the new issues included China, Bangladesh, Malaysia, Indonesia, the Philippines, Egypt, Botswana, Kenya, Nigeria, Tanzania, Zambia, Zimbabwe, Cuba, Venezuela and Jamaica.

“We have two stark options before us — to discuss or not to discuss. And we have chosen the second,” she said.

The Singapore issues — which got their name from the ministerial meeting in the island nation back in December 1996 when the rich nations tried to widen the ambit of the trade discussions by trying to smuggle the four issues into the agenda — have raised the hackles of the developing nations.

The most controversial of the four issues has been investment which the developing nations see as a sinister move to force them to open up the markets to overseas investments, especially in the area of banking and insurance.

Both the US and the European Union have been battling to force a discussion on the four issues. The US has been a little flexible by suggesting that they could “decouple” the four issues and initiate talks on only one or two of them.

Initially, the European Union had taken a hardline stand and refused to even consider the possibility of decoupling the issues. “It is a very balanced edifice. If we take even one of the issues out of the ambit of the debate, the whole structure will be weakened,” EU trade commissioner Pascal Lamy had said on Tuesday.

When it became clear that the developing nations would not back down on their intransigent stand, the EU seemed to be agreeable to a decoupling. “There is no intellectual thread that binds the four issues,” said Robert Madelin, who coordinates the European Commission's trade dialogue. This indicates a softening of the EU stand on one of the more contentious items in the global trade talks.

But even this cut no ice with the developing countries who have decided to transmit their views to the facilitator of the group on new issues — Canada’s international trade minister Pierre Pettigrew.

“Many of us have yet to understand how the change in the WTO rules with respect to these four issues will impact us. There is no case for universal application of the rules on investment as yet,” Aziz said.

Asked if the developing nations would consider discussions on investment if the rich nations were willing to concede their demands for steep cuts in agriculture subsidies, Aziz said, “This is not about tradeoffs or concessions. We cannot link discussion on the four issues to other subjects.”

Aziz said the rich nations were trying to raise a bogey on the issue of investment by suggesting that unless there were universal rules in this area, funds would not flow from the rich nations to the developing countries.

“This is nonsense. The US has been happy to invest in China which had not adopted universal rules on investment and became a member of the WTO just two years ago,” Aziz added.

She said the developing countries had agreed to a number of issues at Punta del Este in 1986 at the Uruguay Round. “Today we can stand up for ourselves. We have honed our skills in trade negotiations and we refuse to be browbeaten into submission,” one Indian official said.

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