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WTO BACK TO BUSINESS, BUT DIFFERENCES PERSIST

by Chakravarthi Raghavan


Bangkok, 16 Feb 2000 -- The World Trade Organization is back in business and was engaged in some confidence-building measures.

But while the mood among members were now more cordial, they were not any nearer bridging the differences to enable the ministerial conference to meet again, Director-General Mike Moore told UNCTAD-X and later a press conference for a few invited correspondents.

Moore was speaking at what has been called by UNCTAD, an inter-active session, an initiative of UNCTAD Secretary-General Rubens Ricupero where executive heads of other organizations present their institutional perspective and views under the overall theme of globalization, and then respond to comments and questions.

The interactive session with Moore showed both the strength and weakness of the approach of the interactive session, where many had to be denied the ability to intervene for lack of time, while a few EU ministers, advocating more or less the same view, got enormous time-space and tried to influence the debate over a new round.

The European Union, inside the WTO, speaks and negotiates only through the EU executive commission. At the UNCTAD meeting, four of the member states -- UK, the Netherlands, Germany and Belgium, took the floor to put the same EC view: need for a new comprehensive round; the new issues of investment, competition policy and government procurement are in the best interests of the developing world and development; and their support both for market access to the least developed countries at the WTO and technical cooperation, and a case-by-case approach for extension of transition periods to developing countries facing implementation problems.

On the other side, it was only at UNCTAD that Iran could bring out into the open, as it did, about the way the WTO functions, and how Iran's application to negotiate accession has never been brought to the WTO agenda. Iran's application to accede, and start negotiations through a working party, has not been ever listed on the agenda of the General Council. The decision to set up a working party for Iran to negotiate its terms requires a consensus, and the US, opposed to Iran's accession, could say no. But the US did not want to be put in that position and so the issue never went on to the agenda.

At his press conference, Moore was asked for his response to this complaint that some major powers leaned on the secretariat and ensured it was not brought on the agenda.

It was not a case of anyone leaning on the secretariat, Moore told the limited press conference, when asked about this issue. It was the secretariat's interpretation that the issue would not command consensus (and therefore was not put on the agenda)!

At Geneva, and elsewhere in responding to WTO critics among NGOs and others, Moore often has been pointing to India's ambassador at the WTO, Mr. S. Narayanan, and making the point that Narayanan represented 750 million people who had elected a parliament and government.

Yet, in the interactive session, the cogent and clear critique of the WTO and its intrusive presence in domestic policy making of countries, and the causes for the negative perception of the WTO in public, with such a poor respect and reputation, presented by an elected Member of that same Indian Parliament (Mr. Suresh Pachouri) got no real response. Pachouri was told that India had a good delegation in Geneva at the WTO.

It may have been a good retort in New Zealand or any other country's parliament, but did not help improve the public perception of the WTO.

In his opening remarks and in response to some comments and questions at the interactive plenary session, Moore said that his contacts and meetings with ministers since Seattle showed that the ministers were unanimous that they will not go to another ministerial conference unless a large measure of agreement had been reached before hand.

His own consultations in Geneva and with ministers showed that there has been no fundamental change of positions since Seattle. There had been a marked softening, but there has not been enough progress yet for a conference to meet. On substance, the members were still far too apart, Moore confessed.

"We were far too apart at Seattle on labour, environment, agriculture, anti-dumping, investment, competition policy, tariff peaks and implementation. And until the members move much closer and show more flexibility, we will not be able to reconvene in a ministerial conference."

Moore noted that as a result of the decisions at the 7-8 February General Council, the negotiations in Agriculture, Services and other mandated reviews were to be handled in the respective committees or councils.

Moore had also been asked to hold consultations in four priority areas. One of these was on a package of measures to assist LDCs, and report to the General Council by Easter on duty-free, quota-free market access for exports of the least developed countries and the question of technical assistance programmes for the LDCs and other developing countries.

There had been a set back at Seattle on the LDC initiative, but Moore hoped to have positive results to report to the General Council before Easter. Another priority area was of technical assistance, and need for a regular budget appropriate for it.

The issue of transition period was of the most immediate aspect of the whole complex of implementation-related issues. The WTO membership were committed to find a prompt solution to the transition period problems within a multilateral framework, and the membership as a whole had shown a real willingness to work constructively together to find a solution.

But it had also been made clear to him that the wider implementation issues need to be addressed in a concrete and productive way - and these included a large range of concerns and difficulties of developing countries. It was clear last year during the preparatory process to Seattle that these were key concerns for a large number of developing countries and a decision on these would influence their approach to the future evolution of the trading system. However, there were other members who had expressed opposition to reopening commitments already entered into, at least outside a more comprehensive new negotiating round.

This was a sensitive area, but also an important one.

Lastly, there was the issue of WTO internal procedures for consultations and decision-making. This became a high-profile issue before and at Seattle, and was a problem that had to be resolved. But many members had cautioned against a simplistic or hasty approach and in particular felt that the consensus principle of decision-making, which was at the heart of the WTO system and a fundamental democratic guarantee, must be upheld.

In a lengthy comment from the floor, the UK development minister came back to her pet theme of 'development round', and insisted that including in the negotiations investment and competition policy rules and rules for government procurement where foreign suppliers could compete was in the best interests of the developing world and its development. She also spoke on need for market access for LDCs, but it was not clear whether she wanted action now, or was holding this out to be fully implemented and bound at the end of a comprehensive new round with all the EU demands for new issues.

Three other EU members also spoke - Netherlands, Germany, Sweden and Belgium - more or less making similar points and between them occupied more than 45 minutes of the interactive session.

South Africa wanted to know what the chances were for the reconvening of the ministerial conference, and progress on the issue of decision-making, transparency and inclusiveness.

The Dominican Republic complained that unilateral interpretation of the Uruguay Round agreements were being sought to be foisted on developing countries. There were 'black lists' of countries (a reference to the US practice) against which coercive measures were adopted or threatened. How could poor countries benefit from the WTO when a single interpretation was sought to be imposed. He also complained that the WTO dispute settlement process was not an impartial one. The WTO director-general must also ensure application of the same yardstick for all members.

Moore said that ministers consulted were unanimous that they would not go to another ministerial conference without a large measure of agreement before hand. He had also heard from countries that they could not absorb more obligations when they were still to absorb and implement their existing obligations.

Iran said the WTO could not justify the 'W' in its name, when the membership was not universal. The representative of Iran complained that though Iran had sent an application to negotiate the terms of accession, the request had not been placed before any WTO body nor a working party set up. This had been done to oblige a powerful member for non-trade reasons.

An Indian Member of Parliament, Mr Suresh Pachouri, noted that WTO had a high political visibility in India and many questions had been raised within the country about its functioning. India believed in a rules-based system that protected the interests of all in agreed set of rules irrespective of whether a member was powerful or not, and in trade liberalization, but one done in a calibrated way. Many trade experts and academics, he said, now agreed that the WTO was a highly intrusive organization, with enforceable disciplines in areas hitherto viewed as within the domain of domestic policy making - subsidies, IPRs, and non-discriminatory treatment to foreign service suppliers. "We the elected representatives can feel and experience the sweep, depth and rigour of the WTO disciplines when we discharge our responsibility as law-makers in Parliament," Pachouri said.

The main reason for the negative perception about the WTO was because it was perceived as having been responsible for many developing countries like India accepting commitments in many new areas without first examining whether political, social and economic conditions in these countries could sustain the commitments. The rules of the WTO had been framed mainly keeping in view the interests of industrialized countries and their legal systems. Many policy instruments used by the industrialized countries and the advanced developing countries to achieve development were now being denied to other developing countries.

"In order to gain the confidence of developing countries like India, WTO should be able to address in a meaningful manner implementational concerns and problems.

The second major reason for the negative perception about the WTO was the constant effort to broaden its agenda with proposals for rules in investment, competition policy etc - completely ignoring the difficulties already faced by developing countries. The continuous efforts to overload the WTO agenda showed the insensitivity to problems of countries like India. And the problem got worse when attempts were made to bring on to the WTO agenda non-trade issues like environment and labour standards, creating feelings that the industrialized countries did not want competition from developing countries even in areas where they had comparative advantage.

The third major reason for the negative perception of the WTO was the feeling that the WTO agenda was being driven more by interests of the TNCs than equity considerations. The WTO had to be extremely sensitive to this perception.

And the fourth reason for a negative perception was that an essentially political organization was becoming legalistic in its approach. This dichotomy came into sharp focus when one looked at the highly legalistic dispute settlement system and the political framework in which agreements were negotiated and trade-offs decided.

The Director-General must undertake necessary confidence building measures by encouraging members to find meaningful solutions to the inequities and imbalances existing in various agreements, by discouraging attempts to overload the agenda and ensuring that equity considerations influenced every decision and every activity in the WTO.

Costa Rica spoke in support of a new round and new issues.

Egypt's Amb. Mounir Zahran hoped that Moore did not feel in any way responsible for the failure at Seattle. An organization was only what the members wanted to make it. The WTO should not be selective in respecting rules. One of the reasons for the paralysis of the organization was the attempt of some to impose their will on others. He underlined the importance and high priority to the implementation issues and said unless these were addressed it would be difficult for developing countries to discuss any other issue in the WTO, leave aside new issues.

The industrialized countries should refrain from injecting new issues into the WTO, claiming these were in the interests of the developing countries, Zahran said in a reference to the UK Minister Clare Short's remarks. "Let developing countries decide what is in their interests," said Zahran. "We are adults and we can decide what is in our interests and what is not."

Moore's responses to the second round of comments, several critical of the WTO, were somewhat perfunctory. He merely told the Indian Parliamentarian that India had an able delegation in Geneva. (SUNS4608)

The above article first appeared in the South-North Development Monitor (SUNS) of which Chakravarthi Raghavan is the Chief Editor.

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