TWN Info Service on WTO Issues (Dec03/2)

5 December 2003

Third World Network

Dear friends and colleagues

DEVELOPING COUNTRIES CALL FOR SINGAPORE ISSUES TO BE DROPPED FROM WTO

On 3 December, an informal consultation (Green Room meeting) on Singapore Issues involving about 30 delegations was held in the WTO, chaired by the General Council chairman.

At that meeting, many developing countries present said they were not prepared to start negotiations on the four Singapore Issues.  They referred to the EU offer on the last day in Cancun to drop three of the issues altogether from the WTO agenda, and asked that this offer be honoured and implemented.  Any further work should be only on one issue (trade facilitation) or at most two, and this should be on the basis of discussion, not negotiations. 

The EC reportedly said it was prepared to unbundle the issues, to deal with them outside the single undertaking, and to discuss them with those members that were prepared to do so (i.e. plurilateral negotiations).   Later, replying to queries, it said it was it was willing to drop two or even all four of the issues from the Doha Development Agenda.

However many delegations were unsure and confused by what the EC actually meant by “dropping for the Doha agenda” or “removing from single undertaking” as it was apparent the EC still wanted to keep at least some of the issues alive, including possibly as issues for plurilateral negotiations and agreements.  Commented a trade diplomat:  “Dropping issues from the single undertaking or from the Doha agenda is not the same as dropping them from the WTO agenda, which is what the EC had offered in Cancun.”

Several developing countries also spoke against the WTO adopting a plurilateral approach to the Singapore Issues, saying that the WTO is a forum for multilateral trade negotiations and accepting the plurilateral approach would set a dangerous precedent.

The Chair of the General Council seems to be still pursuing his “2 plus 2” approach (start negotiations on two issues and continue discussions on two others), and has asked that further consultations be held on trade facilitation and transparency in government procurement.  But given the views expressed at the meeting, there does not appear to be support for this approach from most developing countries.

Below is a report of the meeting.

With best wishes,

Martin Khor

Third World Network

DROP 3 OR AT LEAST 2 SINGAPORE ISSUES ALTOGETHER FROM THE WTO, SAY DEVELOPING COUNTRIES AT WTO MEETING

Report by Martin Khor, Third World Network, 4 December 2003

Several developing countries said at an informal General Council consultation today that they would like three of the Singapore Issues to be dropped completely from the agenda of the World Trade Organisation.  Some others said at least two of the issues should be dropped.

Referring to the offer made  by the EC Trade Commissioner Pascal Lamy, on the last day of the Cancun Ministerial conference, to drop two or three issues off the WTO agenda, the developing countries said the discussions in Geneva should start from that Cancun offer to drop the issues.

At the consultations the EC representative said it was willing to drop two or even all four of the issues from the Doha Development Agenda, according to trade diplomats.

But they added it was not immediately clear what the EC meant by that, as the EC also indicated that it favoured a plurilateral approach to negotiations if there is no consensus for a multilateral approach on some of the issues.

Commented a trade diplomat:  “Dropping issues from the single undertaking or from the Doha agenda is not the same as dropping them from the WTO agenda, which is what the EC had offered in Cancun.”

Several developing countries also spoke against the WTO adopting a plurilateral approach to the Singapore Issues, saying that the WTO is a forum for multilateral trade negotiations.  Some said that if the plurilateral approach was accepted for Singapore Issues, it would set a dangerous precedent which could be followed by many other issues entering the WTO through the plurilateral route.

The informal consultations, a Green Room type meeting, involved about 30 delegations and was chaired by the General Council chairman, Carlos Perez del Castillo.

According to trade diplomats, Perez del Castillo told the meeting that members seemed to agree to unbundle the Singapore issues, but that divergence of views prevailed.  He reminded the meeting that he had put forward a “2 plus 2” approach which he thought was still workable.

(The so-called 2 plus 2 approach, put forward by him at the previous consultation on 12 November, involved launching negotiations for two issues -- trade facilitation (TF) and transparency in government procurement (TGP)

·        whilst on two others (investment and competition) the issues could be further clarified and lead on to some options including plurilateral negotiations).

He also mentioned that there were also other suggestions, such as launching negotiations on one issue and further clarifying three issues, or dropping two issues out of the WTO whilst negotiating or discussing two others.

The EC reportedly said its position had not changed, and that trade liberalisation should be accompanied by rules to facilitate trade.  It acknowledged however that a considerable number of members may not be ready to contemplate multilateral rules on Singapore issues.

It reportedly added that it was prepared to unbundle the issues, and to deal with them outside the single undertaking, and to discuss them with those members that were prepared to do so.  This was taken by diplomats present to mean a plurilateral approach to negotiations.

The EC also said there should be no linkage between the Singapore issues and other subjects being negotiated.

Several countries later asked for further clarification from the EC.  Egypt reportedly said it was not clear what the EC really wanted and said its position needed clarification.  In response, in a later intervention, the EC added that it was willing to drop two or more of the Singapore issues from the Doha Development Agenda.

Canada supported negotiations on all four issues but could go along with the Chair’s proposal to focus on two issues (trade facilitation and TGP).  Switzerland also said the Chair’s proposal was acceptable.

The United States supported the Chair’s proposal, saying there was a fair amount of support for the two issues.  Japan reportedly said it would like all four issues to remain on the table.  Its flexibility on this would depend on how far others would be flexible.

Australia reportedly said that if there is to be a plurilateral approach on an issue, it need not be undertaken at the WTO.  For example, if two issues are dropped completely from the WTO, they can be pursued in a plurilateral manner in some other organisations, for example on how the issue of steel was pursued in the OECD.

Botswana, speaking for the ACP Group, referred to the plurilateral approach and said it was not supportive of any approach that would undermine the multilateral system.  It said that instead of the Chair’s “2 plus 2” approach, the “2 plus zero” approach would be viewed positively, that is that two issues be dropped from the WTO.

Of the remaining two issues, discussions could proceed on the basis and condition that there must be explicit consensus on modalities, that there be progress on the development issues, that there would be no legally binding commitments, and that technical and financial assistance be provided to developing countries to meet the cost of compliance and implementation.

Botswana referred to the EC’s offer to drop two or three issues in Cancun, and to the Cancun Statement that the work in Geneva should be based on the valuable work achieved in Cancun, and urged the Chair to make use of the “2 plus zero” approach as the “2 plus 2” approach was confusing.

In  response, the EC said it could not accept the ACP concept of non-binding rules as the aim of rules was to bind members.

Kenya said that its Minister was in the Green Room in Cancun where the proposal to “shred” three issues had been made by the EC, and Kenya understood this that meant dropping these issues from the WTO work programme completely.  Provided the three issues were dropped, it was prepared to advise its capital to look at the remaining issue (TF).

On the proposed plurilateral approach, Kenya reportedly said the members should avoid changing the functions of the WTO as spelt out in the Marrakesh Agreement, as the core function of the WTO is multilateral negotiations on trade.  Moreover, issues that do not directly involve trade are not appropriate and not permitted.

Referring to an EC comment that weaker members need rules to be protected, Kenya said if the proposed rules cause strain to the weaker members so that they could not even exercise their rights, this would not be desirable.  Developing countries need to expand their capacity first before they could contemplate the introduction of new rules.

South Africa said the trade system should have more equitable and development-friendly rules.  The Singapore issues would place enormous burdens on members. Focus should first be given to development issues, then to Agriculture and NAMA. It questioned the credibility of the EC offer in Cancun to drop two issues, which was a positive development.  But what had happened to this offer?

It added that other organizations also focus on some of the issues and better rules could be provided, for example, by dealing with TF in the World Customs Organisation.  It did not also support plurilateral rule making as this would create a two-tier membership system which should be avoided.

Indonesia said it would like the talks to start from the position of the final hours in Cancun, when the EU had said it could drop three issues, and therefore there was now only one issue on the table.  In that case, Indonesia could discuss the clarification of the trade facilitation issue with a view to establishing modalities.

China reportedly said it was willing to look at clarification of one of the issues (TF), provided the other three issues are dropped completely from the WTO.  The Philippines reportedly also said that three or at least two of the issues should be dropped altogether from the WTO agenda, whilst trade facilitation could be looked at and clarified further.

India said many issues were still unclear and complex and the expansion of the WTO agenda would place strain on weaker members.  Referring to the concessions that the EC claimed it was making when offering to remove some Singapore issues from the single undertaking and to unbundle the issues, India said it had never considered the Singapore Issues part of the single undertaking in the first place and the issues were also not placed in a bundle for any unbundling to take place.  Thus these were not really concessions. India’s understanding was that the EC had offered in Cancun to remove two or three issues altogether from the WTO work programme.  It would now have to consult its capital to respond to the present situation.

India added that the plurilateral approach would be very difficult for the WTO.  If it started with the Singapore Issues, this would be the start of a slippery slope.  In future, other issues such as trade and labour, environment and geographical indications could also be made subjects for plurilateral agreements.

Malaysia stressed that WTO members should concentrate on the development issues first before the Singapore issues.  Malaysia and other countries had submitted documents relating to the areas and issues requiring clarification and to date there had not been a response.

Brazil reportedly said that if there was enough progress in agriculture, this might influence them on Singapore issues.  It stressed however that one point was critical- there must be explicit consensus first on modality before any negotiations could be launched and this should not be lost sight of.  Brazil was also against a plurilateral approach.

Chile reportedly said it could go along with the “2 plus 2” approach if there is progress in other areas.   Discussions on two issues (investment and competition) could be postponed, and what should be done on these two could be discussed at a later date.

At the end of the meeting, Perez del Castillo said the discussion was useful, with some flexibility shown by some members.

He reportedly said that some members had shown interest to focus on TF provided that three other issues be dropped from the WTO. Other members had shown interest to get multilateral rules on two issues (GP and TGP), while some others felt more exploratory work was still needed on TGP.

He added that on the other two issues (investment and competition), some members proposed to drop them from the WTO, others to keep them, and others to explore the plurilateral approach, whilst others were in favour of putting them aside for now and looking at them later.

The GC chair announced that there would be informal consultations on 4 December on trade facilitation and on Transparency in Government Procurement on 5 December.

Trade diplomats said that from the Chair’s conslusions, he was apparently still trying to get his “2 plus 2” approach accepted, i.e. to have negotiations begin on TF and TGP.   Thus, he was directing that further consultations be held on these two subjects.  However, it was also apparent that many developing countries were not prepared to begin negotiations on these two issues.