by Martin Khor

Geneva, 15 Nov 99 -- An attempt by the United States and the European Communities to get endorsement before the WTO Seattle Conference for their separate proposed agreements on transparency in government procurement met with strong resistance from many developing countries at the WTO on Monday.

The US and EC each presented a proposed text of an agreement at an informal meeting of the Working Group on Transparency in Government Procurement. The US said it wanted to have an Agreement signed at Seattle itself. The EC implied it would like Seattle to extend the current mandate beyond the issue of transparency -- into market access. The US and EU proposals met with a negative response. Several developing countries stressed there was no mandate for the Working Group to negotiate an agreement as its mandate was only to discuss the elements of an appropriate agreement.

They also stressed that there was too little time left for the intensive negotiations that would be needed for an agreement or for detailed elements for one. This was especially so because negotiations were also going on for so many other subjects and it was especially difficult for small delegations to cope.

Several developing countries also said they were concerned that whilst a few developed countries were pushing for this issue, in other areas of interest to developing countries (such as implementation) there was no progress.

The EC proposal dated 5 November is entitled "Elements for an Agreement" but the contents in fact are in the form of an Agreement itself, with a preamble and 18 Articles.

In tabling it, the EC said it had taken account of views of other delegations. It said it wanted a substantial agreement and not just any kind of agreement.

Although it is seeking an ambitious approach in Seattle, it said it was not interested in immediate market opening on government procurement but only for the Working Group to see if further rules are necessary.

In an introductory section of its paper, the EC said introducing rules on transparency in procurement "will not be sufficient to resolve possible distortions in procurement practices. Therefore further work on additional multilateral rules on government procurement is necessary."

This has been taken by other delegations to mean that the EC will press for extending the subject of government procurement from the original transparency issue alone to market access issues, during or after Seattle. This has been opposed by several developing countries.

The US, on behalf of co-sponsors Korea, Hungary and Singapore, tabled a proposal dated 9 November containing "a draft text for an agreement on transparency in government procurement" with a preamble and 14 articles.

It said it continued to hope that an agreement could be signed in Seattle. It had made changes to its proposal and others had helped to draft it. It appealed to Members to accept it as it only addressed transparency.

Pakistan said it valued the concept of transparency but it was a different matter to conclude an agreement in Seattle. There is still a wide divergence of views on the issue and there was no time left to negotiate an agreement. The subject is not ripe yet for Seattle to conclude. Moreover, said Pakistan, its flexibility on agreeing to post-Seattle negotiations is also diminishing because of a lack of progress on issues of interest to developing countries, especially implementation issues.

Malaysia said that although transparency is important, the texts presented by the US and EC were not suitable. It had a particular concern with one of the proposals (the EC) which was a building block to market opening in government procurement.

Malaysia also said this discussion should be taking place at the General Council and not the Working Group. It added we are far from any agreement even on the most basic elements and we cannot see an agreement before or at Seattle.

Its concerns that Malaysia had included the scope of the agreement, and the two proposed texts also contained elements of a prescriptive nature that put into question government policies on procurement. Proposals on judicial review and coverage of DSU also remain as points of contention.

India said the time was not ripe for an agreement in Seattle as the Working Group had not finished its mandated work. For example, there was no agreement yet on the scope of the agreement. Developing countries were also concerned about the linkage of transparency to the DSU and about domestic review.

It said the Working Group should continue its work within its existing mandate and stressed that developing countries do not want to have the additional stress of having more implementation problems as a result of this issue. Whilst India's procurement methods are very transparent, putting them under the WTO's purview is a very different matter and it wanted to be very cautious on this subject.

Egypt said there were serious divergences of views and this would not make an agreement in Seattle possible.

Brazil said it had made it clear it could not accept an agreement on transparency before Seattle as the issue was not ripe, there was a lack of mandate to negotiate. And with only three weeks remaining for Seattle, there was no time left. After Seattle Brazil may consider negotiating on this issue but this would depend on other factors.

Many other countries, including Cuba, Lesotho, El Salvador, Honduras, Barbados, Colombia, Argentina, Uruguay, Turkey and Brunei Darussalam, said it would be premature to have an agreement in Seattle.

Korea was confident a transparency agreement would enhance public confidence and recommended the draft text as the basis for an early agreement. Chile said it could support a Seattle agreement and said it was in favour of transparency as well as market access.

Switzerland believed that momentum is building towards an agreement. But if it could not be achieved yet, negotiations can start immediately after Seattle. Canada, Malta and Hong Kong China also supported an agreement but if this was not possible, then a mandate should be given in Seattle to the Working Group with a time frame to reach agreement.(SUNS4553)

Martin Khor is the Director of Third World Network.

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

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