Trade and competition, trade and investment, transparency in government procurement and trade facilitation are called the New Issues or Singapore issues. These are called Singapore issues as they were first introduced in the trade talks at the first Ministerial meeting at Singapore in 1996. Various working groups were formed at the Singapore Ministerial who were to discuss various aspects of these issues.

Paragraphs 20, 23, 26 and 27 of the Doha Ministerial Declaration state;

“We agree that negotiations will take place after the Fifth Session of the Ministerial Conference on the basis of a decision to be taken, by explicit consensus, at that session on modalities of negotiations.”

In between the 4th and 5th Ministerial Meetings, various developing country groups voiced their concerns and reservations that they were not convinced to embark upon negotiation on the new issues. All their resistance bore no fruit and the proponents of the new issues did not budge from their stance and kept on trying to start negotiation on the new issues at Cancun.

Points of divergence on the new issues
The developing countries voiced their concerns through letters to the WTO’s General Council but when the Draft Ministerial Text (DMT) was made public in late August 2003, their concerns were not heeded to. Although, the DMT mentioned in two sets of brackets that there were two opinions on the start of negotiations on the new issues, yet the annexes of the DMT were based on the EU-Japan’s points of view on these issues. There were and are reasons as to why the developing countries resisted the start of negotiations on new issues. Since there was no explicit consensus on modalities, which came out very strongly during the Cancun Ministerial, it made a strong case not to start negotiations. Initially, EU and Japan were brushing off the resistance by saying that there were only few countries who were against the start of negotiations but at Cancun, when the developing country groups like Group 21, African Caribbean and Pacific Countries (ACP) and Least Developed Countries (LDCs) posed a joint resistance, it became clear that there was no explicit consensus as these groups consisted of more than 90 countries which was a sizable majority of the members. Cancun exposed this myth when nearly 80-90 countries expressed themselves clearly and decisively against launching negotiations in these areas.

The developing countries feel that the trade agenda of the WTO is already overloaded and they feel negotiation fatigue. Negotiations on issues such as agriculture, agriculture non-agriculture market access (NAMA), SDT, service negotiations, DSU and other issues in itself ask a lot of commitment from the members and it makes a case not to start negotiations on another four issues. If we look at the number of members of developing country negotiators at Geneva, it becomes evident that many of them can’t afford to have a sizable presence, which weakens their negotiating positions. Moreover, they are of the view that the developed world had ditched the developing countries in terms of not fulfilling many commitments that it had promised. The developed countries don’t have a clean slate in terms of commitments. Another apprehension on the part of the developing countries is that these issues have become a bargaining chip and the demandeurs are trading these off in return for reduction of commitments in Agreement on Agriculture (AOA). The fact that the negotiations would have brought in its wake, the very stringent compliance requirements was yet another reason of shying away from negotiations.

Many developing countries are concerned about the effects of a multilateral framework on their industrial, development and other policies. Also developing countries were not convinced of the need of any binding rules for all these four issues and they questioned WTO as an appropriate forum to discuss these issues due to in built power asymmetries among members with special regard to enforcement of obligations.

The major controversies regarding the relationship between trade and investment revolve around definition of investment and investor, transparency, technical assistance, development provisions and a GATS type positive list approach to modalities for pre-establishment commitments. The developing countries wanted policy flexibility, which would allow them to regulate investments in the light of national interest. The EU had advocated a GATS type positive list approach, which according to them would have provided policy space for developing countries. But some developing countries expressed their concern about the progressive liberalization concept and foresaw difficulty in backtracking on commitments once made.

On the relationship between trade and competition policy, there are wide ranging differences not only between the demandeurs (EU, Japan and Korea) and the opponents (developing, ACP and LDCs) but among the demandeurs also. The EU was the only among the other demandeurs to push for an agreement on competition policy banning hardcore cartels. On the other hand, developing countries emphasized the importance of voluntary rules outside WTO regime. Clarification was also sought about a clear definition of hardcore cartels and to what extent some of such cartels could be defended on efficiency grounds. Inclusion of special and differential treatment in core principles of competition policy was also demanded. On compliance mechanisms, India opposed dispute settlement and advocated for a peer review process under the auspices of UNCTAD. Whereas, US, Japan, Australia and Korea propounded also proposed a peer review system, EU preferred a combination of a peer review and dispute settlement.

Resistance to a possible agreement on Transparency in Government Procurement included binding dispute settlement rules in this area, a possible intrusiveness with reference to a policy against corruption. Developing countries are apprehensive of the fact that any such agreement would place limitations on them to use government procurement as a tool for development policy and also burdensome obligations that an agreement on TGP would have in store for them. The proponents of an agreement on TGP, on the other hand, preferred a dispute settlement rules. The EU and other proponents are in favour of coverage up to sub federal level whereas the developing countries felt a loss of sovereignty in terms of sub federal coverage.

In case of trade facilitation, some of the developing countries were apprehensive of the fact that they had limited implementation capacities and any multilateral agreement on trade facilitation and it would be difficult for them to comply with in this regard. Moreover, some of them were of the view that since they didn’t have such capacities, the costs of implementation would outweigh the benefits. Many countries were of the view that there should be a review of existing arrangements and they also suggested national and regional efforts instead of binding and harmonized multilateral rules.

What happened at Cancun?
Developed world wanted to give an impression to the world that the trade talks failed due to stubbornness of developing countries on not agreeing to start negotiations on Singapore issues. If one takes it on the face value, it becomes unfair by putting entire blame on the countries that under immense pressure from their domestic conditions formed a united stand and devoutly resisted infringement on their rights. In fact, the developed world was taken aback by formation and sustenance of Group 21. The developed world was not expecting the degree of resistance posed by this group spearheaded by Brazil, India, South Africa and Malaysia. Rather, the tougher resistance by Group 21 encouraged the other group of countries such as ACP and LDCs also to flex their muscle. A combined resistance by 90 odd countries not to accept peanut reduction commitments on AOA by the EU and US compelled the developed world to strategize and change the sequence of talks by compelling the Conference Chair, Mr. Luis Ernesto Derbez (Mexican Trade Minister) to bring in to the talks the Singapore issues prior to the talks on AOA. This change of sequencing accelerated the collapse. Matter of the fact is that Mr. Derbez announced the collapse prematurely and even some of the developed country delegates were equally perplexed at the premature announcement of collapse.

The Draft Ministerial Text that was brought forward on September 13, had not only deleted the differing option that was provided in the earlier DMT, but it also stated to start negotiation on the linkages between Trade and Transparency in Government Procurement and Trade Facilitation. The reason for this purposeful vagueness was that it gave an impression of magnanimity of the demandeurs by not pushing for to start negotiation on at least two of the contentious issues. But by calling a working Group in Special Session in WTO parlance mean start of negotiations.

Moreover, the September 13 DMT linked negotiations on investment and competition with agriculture non-agriculture market access (NAMA) by stating that:
“…Modalities that will allow negotiations on a multilateral investment (competition) framework to start shall be adopted by the General Council no later that the [date] (that will coincide with the date for agreeing on modalities on agriculture and NAMA)”

Unfortunately, this proposal came from Pakistan and South Africa and it had serious implications for the future of talks. Had it been accepted, there would not have been any progress on reduction commitments by the developed countries unless and until they got modalities for agreement on investment and competition.

Whenever something is mentioned in WTO to explore its relationship with trade, it is our experience that it finally ends up in the form of an agreement. The proactive approach asks for starting homework at national level and formulate policies to combat corruption and having new institutional arrangements or capacity enhancement of existing ones to oversee the related matters so that by the time negotiations are finalized, we have something tangible achieved that would facilitate implementation and ease the burden of compliance.