Wednesday, 22 August 2012

Plurilateral Agreements vs. Multilateral Agreements

This is with reference to WTO trade negotiations. In Oct-Nov 2011, some developed countries suggested that discussions should aim at achieving plurilateral agreements on selected  issues  in  the WTO  rather than multilateral agreements covering  all issues and all countries. This was roundly criticized by the developing countries (India included) as they saw this as an effort for plurilateral agreements to replace decision making by multilateral consensus. Let us understand this development:
Multilateral agreements/consensus: where all WTO members subscribe to all WTO agreements. 
Plurilateral agreements: A plurilateral agreement implies that WTO member countries would be given the choice to agree to new rules on a voluntary basis. At present there are four plurilateral agreements in WTO: government procurement; trade in civil aircraft; bovine meat; dairy products.
Single Undertaking: is a principle of negotiation wherein virtually every item of the negotiation is part of a whole and indivisible package and cannot be agreed separately. “Nothing is agreed until everything is agreed”. Plurilateral Agreements would violate this principle as select issues can be negotiated upon by interested parties, and the rest would be excluded.
The suggestion moving towards plurilateral agreements came from a group of 16 industrialized countries, led by US and Canada and including some developing countries ( Singapore, Colombia, South Korea, Hong Kong, Mexico, and Chile) who call themselves the '"Real Good Friends of services liberalisation".  This suggestion to replace multilateral agreements with plurilateral agreements has drawn much criticism. 

The Doha Development Agenda was launched almost 11 years ago to correct the historical imbalances and asymmetries in the global trading system and was designed to enable poorer countries to integrate into the system. The Doha Round was launched on the basis of single undertaking in 2001 to enable the WTO members to address all the issues across- agriculture, industrial goods, services, rules, environment, and intellectual property rights – on a fair and balanced framework.

But the negotiations are facing a grave impasse due to untenable demands raised by some industrialised countries seeking market access for industrial goods and services (in developing nations), while not making adequate cuts in domestic agriculture subsidies, and not facilitating movement of short-term services providers as demanded by developing countries

To resolve this impasse new approaches were being tried out, and in this climate the "Real Good Friends of Service Liberalisation" suggested moving towards plurilateral agreements. However trade envoys of India, Brazil, and South Africa have warned industrialised countries not to hijack the Doha multilateral trade negotiations. This, they say, could ultimately undermine “the possibility of resuscitating the Doha Round.”  The trading bloc known as IBSA (India, Brazil, South Africa) stated that while they are willing to explore new approaches to advance the Doha trade negotiations towards an early outcome, they would oppose any attempt to weaken the multilateral negotiations based on inclusiveness and transparency.  

In a nutshell, the WTO is torn asunder by the two conflicting approaches. 


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