by Chakravarthi Raghavan

Geneva, 3 May 2000 -- A 'mechanism' in the shape of Special Sessions of the General Council was set up at the World Trade Organization Wednesday "to address" issues on implementation raised by developing countries in the run-up to the 3rd Ministerial Conference (Seattle, December 1999).

The Council also heard the proposals and plans of the Quad countries, and a few others, to take autonomous actions for enhanced market access to products from the least developed countries which Bangladesh, on behalf of the LDCs described as a "huge disappointment".

The General Council is to meet again Monday to discuss questions relating to expired transition periods under various WTO agreements, including on the Trade-Related Investment Measures Agreement (TRIMS).

Through the Special Sessions, the General Council has been asked in relation to the implementation issues and concerns to assess existing difficulties, identify ways to resolve them and take decisions for appropriate action.

The first such meeting is to be held no later than June and the process is to be completed no later than the 4th Ministerial Session (yet to be set or convened) of the WTO.

In carrying out this work, the General Council is mandated to direct other WTO bodies to provide any appropriate inputs and take any appropriate action, and take account of any implementation-related issues under consideration in other WTO bodies.

But the decision has a reference to possible multilateral trade negotiations and proved contentious.

The "implementation" issue and the extension of transition periods, and market access for LDCs, as also the launching of the mandated negotiations in agriculture and services have been identified as areas for priority action for 'confidence building' at the WTO after the debacle of the failure at Seattle.

Developing countries, have been pressing the 'implementation' issues from 1996, and tabled a number of proposals, with a view to correct the asymmetries and imbalances in the system and ensure that developing countries do get the benefits they had expected out of the WTO.

After initially ignoring these issues, the major developed countries tried to head them off with talk about technical assistance, and only very reluctantly, in the weeks before Seattle, realising that the issue won't go away, the major developed countries began to talk of their serious willingness to deal with them.

Even then, they have tried to do as little as possible, with the US and a few others insisting that they could not agree to anything that would involve changes to existing rules and agreements, whether by amendments or through interpretations and understanding. The EC was more diplomatic, talking about willingness to consider these questions, as part of a new round.

After Seattle, many of the major developing countries in informal talks made clear that unless these issues were taken up and favourable actions taken, it would be difficult to persuade their capitals to undertake more commitments in existing or new areas.

In the informal consultation process, some developing countries have proved to be more vehement than even the majors in questioning the concept of 'confidence-building' or that the implementation issue was one affecting all developing countries and across all agreements. Costa Rica was one such. Along with Argentina, it argued in the informal meetings that at best it was a case of "enhancing confidence" in the system, and implementation was an issue creating difficulties and problems for some in some, but not all agreements.

And on Wednesday, Costa Rica and Singapore joined the EC, Canada and Japan in talking about the need for a new round of trade negotiations and further trade liberalisation.

A chairman's statement before adoption took note of the statements (for and against any direct or indirect linkage to new multilateral negotiations) said that it was on the understanding that it was "without prejudice to Members positions on any possible further multilateral trade negotiations."

The compromise, by use of "possible" before multilateral negotiations, and a chairman's statement, was reached after what proved to be some very difficult negotiations over language in the informal meetings (going to the core of the WTO problems of a new round or no new round without correcting past asymmetries).

The compromise, in a final para of the decision on implementation says: "this process is to be without prejudice to any future decisions that might be taken by the General Council to further advance its work in this area, including in the context of possible further multilateral trade negotiations."

It remains to be seen whether there would be 'good faith' negotiations on the issue and decisions would be taken to 'address' the implementation concerns, or whether the special sessions would merely be a process for marking time and/or linking solutions to the launching of a new round with new issues (being pushed by the EC, Japan, Canada and some of their supporters in the developing world like Costa Rica and Singapore) where some minor concessions and longer time periods would be given on implementation in return for developing countries taking on more obligations in other areas.

In the post-Seattle situation at the WTO, addressing these issues and resolving them emerged as an important element in the "confidence-building" process, and the decision Wednesday to set up the special mechanism was viewed by many developing countries as just a first step, and said they had a long and difficult process ahead.

This is a first step in the right direction, Pakistan's Amb. Munir Akram said after the meeting, while Amb. Federico Alberto Cuello Camilo of the Dominican Republic said that while a process has been set up, 'confidence' can be built only on the basis of substantive decisions taken within the process to deal with the substantive issues raised by the developing countries over 'implementation'.

But the EC's Roderick Abbot said the decision was 'to address' the implementation issues, and thus different from 'negotiations' on agriculture and services.

In the aftermath of the Seattle failure, and the consultations that were held by the WTO Director-General, the launching of the scheduled negotiations under the Marrakesh Agreement -- in agriculture and services -- and addressing and resolving the implementation issues have figured prominently in the thinking of developing countries.

Without directly linking 'implementation' issues, several developing countries, particularly the members of the "like-minded group" who had put forward detailed proposals before Seattle and got them reflected in the draft Ministerial Declaration, have been insisting on the need for solutions to their implementation concerns before they could consider taking on new obligations in the agriculture and services negotiations or in any other area.

On the LDC market access package where, the Quad (Canada, EC, Japan and the US) have said they would be taking autonomous actions to provide duty-free and quota-free access to their markets on "essentially all" products originating in the least developed countries, but "consistent with their domestic requirements and international obligations". Chile, Czechoslovakia, Hungary, Iceland, Korea, Norway, New Zealand, Slovenia and Switzerland said they were also taking similar actions.

The WTO Director-General Mike Moore said the results were encouraging, and they were autonomous and voluntary, and that collectively they were adding up to tangible and meaningful market access improvements in favour of LDCs. While a positive sign, there were understandable concerns about issues such as potential trade diversion, and hence at appropriate intervals, the General Council should keep under review the evolution of the market access provisions, not only to ensure a positive impact for LDCs, but also avoid unforeseen negative effects on others.

In a statement on behalf of the LDC group, Bangladesh said the outcome was a "huge disappointment". For years, the LDCs had been advised to move away from dependency on aid and to use trade as an instrument for development. The LDCs had accepted this and had participated actively in the WTO and, in the run-up to Seattle, had formulated and presented the Comprehensive New Plan of Action - a combination of market access, technical assistance and capacity-building.

The Quad proposals (annexed to their paper of 31 March), as a response to the LDCs' aspirations, was "a huge disappointment". Citing various public pronouncements of leaders of developed countries about providing duty free market access to all goods to the LDCs, Bangladesh said 'bound quota free, duty free access' was not just an LDC demand, but had found echoes in voices of many political masters of the developed world. "Sadly, though, it has not found expression in translation into action at bureaucratic or negotiating levels."

Before the Quad paper hopes were raised, but after it was presented what came to mind was the Chinese proverb "If you are not going to lay an egg, then please don't make a noise like a chicken".

While the paper had some positive elements, including the call to all countries to notify their actions and for the establishment of a mechanism for regular review and evaluation, nevertheless there were aspects of the document that belied LDC hopes.

Firstly, the package provided nothing new in terms of market access and technical assistance "beyond the promises at Singapore (1996) or at the High Level Meeting on LDCs, and even retracts from what was being, albeit very informally circulated in Seattle".

LDCs, Bangladesh added, already enjoyed these benefits and there appeared to be little new on offer.

Secondly, the use of restrictive terms like 'domestic requirements' and 'international agreements' narrowed the possibilities further.

Thirdly, the use of "essentially all" to qualify products, heightened the threat of restraint upon those very items over which LDCs over a long period of time, after assiduous efforts, had developed some comparative and competitive advantage.

Fourthly, the concept of expanding the Integrated Framework to other economies diluted the LDC-focus and clearly negated the commitments made at Singapore and the High Level meeting.

"There has always been a litany of sympathy for LDCs. What we need to see is a greater initiative to translate this into genuine action. The Quad paper has initiated a focus that we appreciate and take note of. But it is inadequate and much remains to be done."

The LDCs, Bangladesh added, were placing great store to the forthcoming UN Conference on LDCs at Brussels next year.

"However, at the WTO, we need our hopes to be restored, our shattered confidence to be repaired." (SUNS4661)

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

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