Going round in circles about a new round?

by Chakravarthi Raghavan

Lausanne, 26 Oct 99 -- A two-day ministerial meeting of 25 countries,
the so-called "Friends of the Round," ended in Lausanne Tuesday with
key protagonists as far apart as before, and the WTO no nearer a
solution on a draft declaration for Seattle.

The meeting convened by the Swiss Economic Affairs Minister, Mr.
Pascal Couchepin, could only agree that their representatives in
Geneva should focus their efforts over the next few days on "the
identification" of issues for negotiations that are essential to
achieving a consensus in Seattle, and once this has been done,
define "the parameters" of negotiations on each issue."

An official from one of the countries present said that the
discussions had not resolved any issue, and the views remain
sharply apart.

The United States wants the Seattle agenda and negotiations to
focus only on "market access" issues (in agriculture, services
and industrial tariffs), while the EC and Japan want a
comprehensive round of negotiations including investment and

"You can't have investment rules without competition rules, and
the US is not prepared to have negotiations on competition that
includes the anti-dumping and other such instruments," the
official said.

And key developing countries focus on implementation and on the
built-in agenda, but are not prepared for any new issues or a
comprehensive round, nor are they prepared to have labour
standards and environment issues negotiated at the WTO.

The official said: "At the moment there is a deadlock. But the
US and EC may cut a deal, and try to apply pressure jointly on
developing countries. At that stage, how far they would stand up
and stick to their positions is anybody's guess."

Another developing country official said there had been no
progress at Lausanne. But those developing countries working
together had to make a determined effort to stand together, and
not try to cut individual small deals. "And if we do not get
commitments and solutions now to the implementation issues and
the redressal of asymmetries and inequities in the existing
agreements, at Seattle and decide on the remaining ones to be
solved in the first year, nothing would happen once the majors
cut a deal in the substantive negotiations."

Asked at a press conference, whether the Lausanne meeting has
enabled the Geneva process to move forward and the square-
brackets in the chairman's text could be eliminated, Amb. Ali
Mchumo of Tanzania, chairman of the General Council, would only
say: "Ministers have provided us a methodology on how to move
forward in the next few days, and if they will keep to their
commitments here and instruct their ambassadors in Geneva to be
'flexible', we may be able to move forward in our effort to draft
a declaration and knock out square brackets from the text."

Mchumo later said he would be resuming the informal heads of
delegation process from Wednesday. Last week, the HOD process had
discussed agriculture and then had taken up implementation
issues. And in smaller, 'green room' meetings convened by him,
the WTO head, Mike Moore had taken up agriculture, but by the
weekend, these talks broke up in disarray - with the US and the
Cairns group taking a strong stand on the agriculture talks and
the parameters to be set, while the EC and its supporters not
budging an inch beyond agreeing to continuation of the reform
process spelt out in Art. 20 of the Agreement on Agriculture.
Moore's efforts to move on and take up the Singapore issues
failed when the Cairns group made clear they would not discuss
anything until there was agreement on the framework for
agriculture negotiations as part of the built-in agenda.

The press conference was by Couchepin and the ministers from the
24 other countries who were at the meeting.

And the answers showed that the differences between the US and
EC have not narrowed, nor the gap between the developing countries
and the major industrialized countries on the "implementation

And while everyone at the press conference spoke about the next
round being a "Development Round", they did not even seem to have
a common view of what such a development round would involve.

The WTO Director-General, Mike Moore, who twice spoke about the
"development round", listed as subjects for such "development"
all the demands of the US or the EC - investment, transparency
in government procurement, trade facilitation, industrial tariffs,
and about need for "coherence" and issues like debt, for which
the WTO was not responsible he claimed, to be tackled elsewhere.

The Couchepin statement said in its operative paragraphs:

"The Ministers agreed that their representatives in Geneva should
focus their efforts over the next few days on the identification
of issues that are essential to achieving a consensus in Seattle.
Once this has been done, the parameters of the negotiations to
be conducted one each issue will have to be defined.

"The Ministers confirmed their determination to overcome the
remaining divergences and to adopt in Seattle, a balanced
programme of negotiations that would address the interests of all
WTO Members. Drawing on the lessons and analyses of the Lausanne
meeting, the Ministers agreed to show the flexibility needed to
give the preparatory process a new impetus so that they would
have a clear, concise and explicit basis for a final decision."
On the implementation issues and complaints of imbalances, and
proposals advanced by developing countries, the US Trade
Representative, Mrs.Charlene Barshevsky, made clear that full
implementation of existing commitments was vitally important for
developing and industrialized countries.

But the US could not agree to renegotiation of existing
agreements. There were however a range of other issues involving
capacity building and technical assistance that would need to be
looked into.

The EU Trade Commissioner, Mr. Pascal Lamy was more suave and
said the EC understood "implementation" was an important topic
for developing countries. The EC was ready to look at imbalances
in implementation of agreements and rebalance them, but not to
changing any agreements.

Earlier, the Egyptian Minister, Yousouf Boutros Ghali, had said
that the developing world supported an open multilateral trading
system, but wanted to be full partners. Many of the ministers had
said the next round should be called a "development round". But
the Uruguay Round and its agreements had created many inequities
and developing countries faced problems which should be

In answers to other questions, Lamy said that while there was no
convergence between the US and EC views, the meetings in
Lausanne, including bilateral meetings, had been useful. The EC
hoped that the meeting this week (in Washington between EC
President and the US President) could result in more convergence.
At this time they were all concerned on how the agenda for
Seattle was set, and on this the US and EC had differences.

Mrs.Barshevsky said that a range of issues would need to be
accommodated and everyone had agreed to be flexible. There was
a large degree of convergence on launching a new round and for
undertaking liberalisation. Otherwise, there would be severe
consequences in the global economy. "We need trade
liberalisation, not only for our countries, but to sustain a
smooth global economy." But there were gaps and these needed to
be filled.

Comments from Australia for the Cairns Group, the EC, Japan and
the US left little doubt that while all agreed that everyone was
committed to launch a further reform process in agriculture,
their basic differences on the parameters of negotiations
remained. And while all of them agreed that the further process
in agriculture should be based on Art.20 of the Agreement on
Agriculture, there was considerable disagreement on what this
article envisaged or provided for.

Lamy made clear that what is to be negotiated in agriculture in
the next round could not be negotiated and agreed now, but only
in the process of negotiations. It was absurd to say the EC was
not prepared. "We are ready and have our baggage, and we can
board the train, provided others have their baggage too." And for
Lamy, clearly the baggage included willingness of others,
particularly developing countries, to agree to negotiate
investment and other EC priorities.

In a lengthy statement, spelling out the various issues including
investment, competition, anti-dumping etc that Japan wanted to
see included in the negotiations, the Japanese Minister for
International Trade and Industry, Takashi Fukaya, insisted that
the agriculture talks could only be on the basis of Art. 20 -
which provided a clear framework of the next negotiations and
long-term objective. But the idea of bringing agricultural trade
under the same WTO rules and disciplines as trade in other goods
was nowhere mentioned in Article 20, he argued, to reject the
view of the Cairns group and others for agriculture and other
products being treated alike.

While Lamy and Japan insisted on a comprehensive round, including
investment and other issues, Barshevsky suggested there were some
issues ripe for negotiations. Others could be carried forward in
a work programme, and taken up later.

On the issue of labour rights, Alex Erwin of South Africa said
this was not discussed explicitly, but the developing countries
had made unequivocal statements at the meeting that they were not
ready to go beyond what was in the Singapore declaration --
namely for the WTO and ILO secretariats to be in contact, and for
labour issues to be addressed at the ILO.

Lamy said that agreements in any new round of negotiations would
need to be ratified, and public opinion in the North would not
agree unless the labour and environment issues were tackled. The
USTR also said that it was necessary to satisfy their public
opinion and take steps to make clear that the WTO was not against
labour standards or protection of environment. Only this would
remove misconceptions among the public.

In a speech at the Ministerial meeting, distributed to the media
outside, Brazil's Felippe Lampreia had said Brazil believed there
were certain issues in the relation between trade and environment
which deserved closest attention and could be the subject of
rules. They could continue work on these in the WTO Committee on
Trade and Environment, "as long as they do not lead to disguised
restrictions to trade." As for labour standards, Brazil saw no
purpose "in linking labour standards to trade rules, besides
protectionist motivations."

In response to a question, the WTO head, Mike Moore, spoke of a
common view that the next round should be a development round,
and mentioned as the issues of development -- transparency in
government procurement, trade facilitation, e-commerce and
industrial tariffs.

And later to a question that was not even addressed to him but
to the ministers present, as to how the gap between the developing
country view of imbalances in the WTO agreements that needed to
be redressed could be bridged with the views of the US and EC
that agreements could not be re-negotiated, Mr.Moore spoke of
coherence, the debt burden of countries and other issues for
which, he argued, the WTO was not responsible but which needed
to be dealt with in other fora. (SUNS4535)

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