Birth defects of WTO accession process

By RATNAKAR ADHIKARI

The knowledge that Nepal’s accession to the World Trade Organisation (WTO) has been considerably delayed is already in public domain. Frequent changes in government, shifting of government priorities and lack of preparedness at home are some of the factors responsible for this delay. However, the major reason for the delay is something else – the protracted negotiation process at accession to the WTO. China, for one, has already fallen victim of this process.

Countries with limited resources and minuscule share in world trade might not have any compulsion to do what China has done. China sacrificed a lot to become a WTO member, but her gains from WTO membership will outweigh the costs. However, that is not the case with small and marginal players in the global economy. Vanuatu, a small island country located at the South Pacific with a population of 130,000 provides a classic example.

Despite minuscule share in world trade, Vanuatu felt that she should become a member of a much-celebrated WTO club and accordingly applied for the membership. After fulfilling numerous formalities a draft "Protocol of Accession" was prepared in September 1999 and it was decided that Vanuatu would be granted membership to the WTO in December 1999 during the Seattle Ministerial Conference. However, much to the dismay of the WTO members Vanuatu refused to join the club. Then she was offered membership during the Doha Conference in November 2001. Vanuatu once again refused to join.

Although Vanuatu’s persistent refusal to join the WTO even after having completed all the formalities appears perplexing, if one goes deeper analysing the facts behind Vanuatu’s refusal, her decision looks completely justified. This also explains in part why no least developed country (LDC) has become a member of the WTO during the past six years of its existence. And this is relevant in the context of Nepal (an LDC) inasmuch as it too is facing similar problems, despite the rhetoric that LDCs should be provided "fast-track" accession.

Accession process of the WTO is governed by Article XII of the Agreement Establishing the WTO (Marrakesh Agreement), which states: "Any State or separate customs territory possessing full autonomy in the conduct of its external commercial relations or for the other matters provided for in this Agreement and the Multilateral Trade Agreement may accede to this Agreement, on terms to be agreed between it and the WTO".

Since the WTO is a unique intergovernmental organization, having no power to negotiate accession agreement with the aspirants, it is the existing member states that dictate the terms and conditions for such entry. The accession process to the WTO is akin to membership to a golf club where the existing members decide the terms and conditions. Those members who agree to comply with the requirements will be admitted to the club and those who cannot do so, will never be admitted. Indeed, the applicants for the WTO membership get not what they deserve but what they negotiate.

Therefore, during the accession negotiations the objectives of the existing members are to extract as much concession as possible from the applicant. This is done for two reasons. Firstly, this will help the existing members set precedence for obtaining increasingly higher amount of concessions from other applicants in the queue. Secondly, it provides them benefits without they having to reciprocate the same.

One can substantiate this point by going back to Vanuatu’s example. During the accession process, she was asked by the US to join the Agreement on Government Procurement and Agreement on Civil Aircraft, both plurilateral agreements (as opposed to multilateral agreement it is only optional for the WTO members to sign plurilateral agreements and bind themselves by their provisions), despite the fact that only developed countries have signed this agreement so far. Vanuatu, being an LDC is not required to comply with the requirements of the Trade Related Aspects of Intellectual Property Rights (TRIPS) Agreement before 2006. However, the US demanded that she should make a commitment to have TRIPS legislation in place from the date of its accession.

Similarly, in the area of agriculture, especially on the use of Special Safeguard (SSG) provisions and export subsidies, Vanuatu was nailed, despite the fact that SSG is commonplace in every country and as an LDC Vanuatu is not bound by the subsidy commitment of the Agreement on agriculture. Likewise, in the services offer, she was asked to make offer in 18 areas, as opposed to her developing neighbouring country, Fiji which has made commitment to open only two areas of her services sector.

The examples provided above reinforce the notion that developed member countries of the WTO, especially the powerful ones, are hell-bent on imposing so-called "WTO-plus" conditions (i.e., conditions higher than what existing WTO Agreements require new members to fulfil) to the new members. Some commentators, therefore, argue: "While it remains one of the enduring convenient cliches of the multilateral trading system that the WTO is a ‘rule-based system’, the actuality is that accession is inherently power based and the very antithesis or the WTO’s credo." Therefore, it is clear that WTO accession process has serious birth defects.

The most depressing aspect, however, is that these birth defects are not likely to be removed in the foreseeable future. The reasons are simple. First, the beneficiaries of the reform, those who are applying for WTO access, have no voice in the WTO as they are by definition outside the multilateral trading system. Once they become members they rarely wish to discuss what is an embarrassing and highly intrusive process. Second, those who would have to pay for the reforms would be the WTO proponents, who gain nothing and have to expend scarce political capital in its reforms.

Having seen the example of Vanuatu, Nepal too should understand that she will be coerced into signing left, right and centre if she cannot provide enough justification on why "WTO-plus" conditions should not be imposed on her. Therefore, authorities responsible for Nepal’s accession to the WTO at the Ministry of Industry, Commerce and Supplies should utilize the time period between now and final accession in continuously sensing as well as internalizing the concerns of as many domestic stakeholders as possible and finding the justifications.

Thankfully the Ministry is no more xenophobic. It does not claim anymore that it has monopoly of wisdom. A couple of years back, the Ministry used to shun the stakeholders from the accession deliberations. This change in attitude of the Ministry could be ascribed in part to the change of guards at the Ministry. However, new guards have daunting challenges ahead – not only to get Nepal into the WTO but also to do so without disturbing the vital nerves of Nepalese economy.

(The author is currently associated with World Trade Institute, Bern)

Was sport, a dirty word?

By JOSEPH VERGHESE

Judging by the elaborately comprehensive coverage that sports of most kinds— both national and international variety alike — gets these days in Nepalese journals, it would be quite impossible for anyone today to imagine the degree of disdain with which some distinguished journalists once viewed the preposterous notion of having newspapers favouring that most popular passion, by allotting even meagre column space for reporting it. But, that indeed was the case in the spring of the year 1972. I should know! For the simple reason, I am the protagonist of this little charade that follows.

I was out on a limb...in terrible straits then. I had arrived in Kathmandu (from India) just about three or four months before. After having taught (tutorial work) English and Linguaphone spoken English for a short while, I found myself in dire need of alternate work. Newspaper work appealed to me as a possible calling, having had worked earlier for some time in the Kuwait Times and a small daily newspaper in Delhi. So I spoke to Barun Shumsher Rana, who was Chief Editor of The Rising Nepal at the time. Directly, I secured the privilege of contributing one article a week in that daily. Evidently no one in Nepal had yet thought of sports and games as a discipline worthy of journalists’ attention. Rana had an open mind in that matter; and I soon started writing on that as yet unbroached theme, besides sundry others. All went well for quite some months. If anyone thought sport did not, or should not effect a breakthrough in the matter, no one thought of airing adverse opinions. But I had reckoned without a formidable antagonist, in the person of no less a worthy man than, senior correspondent, Mana Ranjan Josse, who would soon become chief editor, before moving to New York as the (junior) Permanent Representative of Nepal at the United Nations.

It was sometime during the first quarter of 1973 that Josse, I think, started working for my peremptory ouster from the ranks of regular freelancers. I wouldn’t know what was eating him, in the first place. But I should also grant that few people really liked me a lot! Josse himself seemed to cultivate a sombre and grim image. That could have been one of the reasons, he was mildly roughed up by some Holi revellers on the streets once! Having failed in his attempt, he decided to try another gambit. He had a meeting of some of the senior staffers called. I was asked to be present, too. Tek Bahadur Khatri (soon to become a government under secretary) was General Manager, and B D Koirala (who later became General Manager) and Shyam Bahadur KC , besides Barun Shumsher Rana, were present. Josse came up with the suggestion that I could perhaps prove useful as a market surveyor and reporter. I didn’t think so myself. And since no one else thought so either. Josse eventually let me be. And I continued to write on themes I thought suited me best.

It is quite gratifying that sports journalism has come a long way since, in Nepal. Incidentally, 1972 was an exceedingly good year for sports, in the international field, and that I guess helped, too. Indian cricket had struck a bad patch, and Pataudi was brought back to captain the Test team. With Billie Jean King and Margaret Court taking a break from tennis, the teenaged Chris Evert was on the ascendant. American Fischer conquered Russian Grand Master Spassky at chess. The American race horse Secretariat proved a great champ by winning all three major races in the US. Nepalese sport itself was yet to emerge as a major force, barring tennis, which in any case was the pastime of the very privileged few then.

In 1987, The Rising Nepal celebrated the fifteenth anniversary of the birth of English sports journalism in Nepal. I was here in Kathmandu at the time, and read an excellent report about the gala function the next day, in that newspaper.

Promoting equitable distribution

By DEEPENDRA JOSHI

For centuries, genetic resources were not protected for the benefit of local communities and no sui generis system was recognised by law. Genetic resources were collected and used without any regulation and huge profits were made but never shared with the custodians of biological diversity.

The commitment of international community to ensure an equitable supply of food and nutrition to everyone on Earth has been reiterated time and again. Such equitable distribution based the founding principles of the Convention on Biological Diversity (CBD) which hoped to pave the way from an exploitative sharing of biological diversity to an equitable sharing of such resources. Many agree that CBD is perhaps the only international agreement that explicitly deals with equitable benefit sharing principles. The irony has since been that though everyone spoke on equity, there are few practical examples on how such equity and benefit sharing principles are to be put into practice.

Nepal is predominantly an agricultural country where over 90 percent of its population and 42 percent of its GDP are tied up with agriculture. Many of the unexploited groups of plants can be directly brought to cultivation and/or can be used as genetic resources for particular desirable traits. Some of the wild genotypes have been identified and domesticated for their economic values by the local people through their own experiences and wisdom.

Research potentialities on plants used in traditional medicine are particularly high in Nepal not only due to biological diversity but also due to cultural diversity. Modern health services in villages and remote areas are too weak on the part of the government, and communities depend largely on medicinal herbs and faith healers. Various ethnic groups in the mountains have their own community physicians. Although the mode of treatment may differ slightly, the bulk of medicinal sources come from the same type of plants.

Exploitation of the Himalayan genetic resources has never ensured benefit sharing to its people. The Red Jungle Fowl (Gallus gallus) of this region, for instance, is the progenitor of the world chicken. How much of the income from the world’s chicken market is directed to conserve the Red Jungle Fowl has yet remained an unanswered question.

Currently, the export of plant material requires government permission but there are no specific policies, law or systems in place to regulate the access to genetic resources and to ensure flow of benefit to source countries and the local communities. This lack of policies or law is a common cause of piracy of genetic resources by international biotechnical industries. There are several evidences that those foreign companies for genetic materials from Nepal directly or through governmental and non-governmental sources are looking for biotechnical or other research purposes. Not framing appropriate national legislation to protect and preserve traditional innovations and practices of indigenous and local communities has put the country to the vagaries of bio-piracy: There are 53 patents based on traditional knowledge of the insecticidal and medicinal properties of neem, 11 patents on healing properties of turmeric, 34 patents on tamarind, 16 on Indian mustard and at least 28 on soil micro-organisms. Although some success on revoking these patents such as on basmati and turmeric has been achieved, but at a very high cost and with enormous efforts of India. It is believed that registration of indigenous and local knowledge will safeguard the intellectual property rights of indigenous and local communities.

Nepal became a party to the Convention on Biological Diversity (CBD) in 1992 and ratified it in September 1993. Article 15 of CBD clearly recognizes the sovereign right of states over their natural resources and has also empowered the national authorities to determine the policy, administrative or legal measures for allowing access to their genetic resources. The access and benefit sharing provisions of CBD are very important tools for biodiversity conservation and sustainable use efforts.

The CBD’s idea of fair and equitable sharing of benefits from the commercialization of genetic resources is based on the principle of reciprocity. The CBD has developed compensation and technology transfer models as entitlements for the countries of origin in exchange for providing biological resources. However, the question of fair and equitable distribution of benefits has yet to be addressed in the Nepalese context.

Subsequent to the entering into force of CBD, the World Trade Organisation (WTO) with its provision for trade related intellectual property rights (TRIPS) has also come into force. TRIPS calls for the enactment of regulation for patenting micro-organisms and plant varieties through effective sui generis system of protection. This system provides some protection for traditional knowledge and innovative systems. On the other hand, CBD has left the Intellectual Property Rights (IPR) question unattended leaving rooms for conflicting interpretations.

Hence, in order to address the access to genetic resources and benefit resources issue and fulfil the legal obligations under CBD, the Ministry of Forests and Soil Conservation) in collaboration with IUCN Nepal has prepared a draft Bill on Access to Genetic Resources and Benefit Sharing.

The preamble of the Bill highlights the need for protecting indigenous knowledge and practices of the local communities with respect to the utilisation and conservation of biological and genetic resources from time immemorial. It also aims to assist in fulfilling international obligations under CBD particularly in facilitating access to genetic resources to national legislation to interested party, ensuring rights and equitable sharing of benefit and products.

Nepal is bestowed with outstanding assemblage of plants, animals and ecosystems. The genetic diversity in the agriculture sector is also tremendous. A wealth of indigenous knowledge associated with the utilization of plants and animal parts for medicine, food, and other purposes provides local communities with new opportunities for income generation.

The proposed legislation attempts to systematize access to genetic resources and protect the indigenous knowledge. The legislation will bring the holders of indigenous knowledge associated with genetic resources and potential beneficiaries together for mutual financial gains based on fairness and informed consent.

Whilst the government’s position has been made clear through the sovereign principle, the importance of indigenous and local communities in conservation and sustainable use has been expressly recognised. The draft bill highly recognises that indigenous and local communities should share in the benefits derived from their traditional knowledge as they serve as incentives to conserve biodiversity. Through the recognition and legal empowerment of a broader set of actors, the draft bill aims to establish common ground amongst providers and users through the mechanism of access and benefit sharing principles and agreements.

Although an important step, creation of legislation like this one alone, however, is not going to be sufficient to protect our genetic resources and associated knowledge from piracy. Public awareness in all quarters, including government and judiciary, to raise consciousness is vital. Local communities in particular should see the benefit of biodiversity registration in order for them to protect their indigenous knowledge. Decision makers in the government should see the urgency of putting a ban on the export of genetic resources for purposes other than traditional uses. Campaigns should be launched with the involvement of wide-ranging stakeholders including scientists, tourist guides, travel agents, school teachers and influential villagers, to raise public awareness against bio-piracy and theft of indigenous knowledge.