TWN Statement of 13 December 1996:

Outcome of Ministerial Conference a big let-down, say Third World NGOs

On 13 December, the final day of the WTO Conference, the Third World Network issued a statement articulating the disappointment of the many Third World NGOs present, over how the Conference agenda and process was "hijacked" by the North. The statement is reproduced below.

The Third World Network, an international grouping of NGOs in developing countries (in Asia, Africa, Latin America) is very disappointed with the outcome of the first WTO Ministerial Conference (MC), because:

* The MC was hijacked by the major countries to promote their own interests, e.g. to put liberalization of their information technology products on a super-fastrack via the Information Technology Agreement (ITA). Meanwhile, liberalization of products of export interest to developing countries (eg. textiles and clothing) were neglected and their concerns over continuing protectionism by the North (extension of unilateral trade actions by the US despite the much-lauded WTO multilateral rules-based system, and protectionist use of anti-dumping measures against Third World products) were swept aside;

* The developed countries managed to use the MC to extend the boundaries of the WTO's competence and authority to cover new areas, namely trade and investment, competition policy and government procurement, which are likely to put developing countries at a disadvantage and which they are inadequately prepared to deal with;

* The original priorities and agenda of the MC, i.e. review and stocktaking of the Uruguay Round and problems faced by developing countries in implementation of the WTO Agreements, were relegated to non-issues as the real negotiations were driven by the major rich countries to focus on the new issues and liberalization of information technology;

* The entire process of negotiations was extremely untransparent, secretive and undemocratic (as they involved only a few countries selected by an undisclosed process into so-called "informal groups"). As a result, most developing- country member States of the WTO (including their Ministers and senior officials) were left in the dark most of the time and were expected to merely rubber-stamp the Ministerial Declaration at almost the last hour, when it was already in a near-final state.

As a result, the position of the developing countries has deteriorated further, causing the WTO to become even more imbalanced.

The outcome of the MC has unfortunately confirmed the image of the WTO as a "rich men's club". If the GATT had been heavily weighted in promoting the interests of the developed countries, the two-year-old WTO is even more in danger of being an instrument of domination by the strong over the weaker and smaller countries.

Especially of concern is the acceptance of the new issues of investment, competition and government procurement into the WTO system through the Ministerial Declaration.

Even though the text on investment is carefully worded, and contains some safeguards, the decision to establish a working group to examine the relationship between trade and investment provides an opening for developed countries to apply intense pressures for a multilateral investment agreement (MIA).

The MIA desired by the major countries would enable foreign corporations the right to enter a member country in almost all sectors, be given national treatment, and remove the authority of host governments to regulate important aspects of their behaviour and practices.

Since this would have such serious adverse implications, developing countries have now to prepare for the discussions on this subject, as well as on the other new issues, on top of dealing with their manifold problems of adjusting their domestic policies to meet their Uruguay Round obligations.

Thus, an outcome of the MC is that the WTO system is being more overloaded, making it even more difficult for developing countries to cope.

Marginalization of the South

The MC has revealed how marginalized most developing countries are in the WTO decision-making process. Although decisions are supposed to be made by consensus, most countries are not invited to participate in the informal consultations where the most important decisions are taken.

At the MC, there was abundant rhetoric on the need to address problems of developing countries and LDCs but no real action (perhaps except for the promise of more technical assistance).

The gap between appearances and reality was illustrated by the fact that whilst many developing-country Ministers were recounting problems faced in implementing the Uruguay Round accords in the formal plenary sessions to often sparse audiences, the real action was taking place in the small informal group meetings on introducing new issues into the WTO.

One of the priorities after the Singapore MC is for a reform to the practice of discussion and decision-making in the WTO. There should be much greater transparency and opportunities for meaningful participation for all members (especially the smaller and weaker countries).

Otherwise there would be greater inequities and imbalances in the WTO system. The result would be greater polarization along North-South lines and even more marginalization of the developing countries. This could then result in massive social problems and even upheaval.