by Chakravarthi Raghavan

Geneva, 8 Oct 99 -- A 12-page first draft of a Ministerial text circulated on 7 October, "on his own responsibility", by the Chairman of the General Council Amb. Ali Mchumo of Tanzania, has provoked such hostile reactions among key developing countries that it threatens to be a "dead- on-arrival draft".

By Friday noon, when the WTO press office announced a schedule of next week's meetings, there was no mention of a time set for an informal General Council (GC) for the Seattle process.

On 1 October -- after informal General Council meetings on proposals and contents for his draft outline of a declaration put forward by him on 8 September and on which the General Council has been hearing views since about 20 September -- Mchumo had said that he would prepare a draft declaration text and it would be in the hands of delegations in the week of 4 October. It reached delegations afternoon of  7 October.

The draft text, for a Declaration by Ministers to set a WTO Seattle agenda for a "balanced work programme which includes launch of new negotiations, as well as other actions", appears so lop-sided even for non-technical readers that it may build up considerable steam behind the popular slogan of NGOs against the WTO and Seattle -- "No New Round, But Turn Around" -- and developing country governments will find it hard-put to justify anything they agree to at Seattle.

After an initial study of the new draft text, several developing country delegations said Thursday they were shocked to find a text "so severely imbalanced and unfair" -- both in structure and content of the text, even the square bracketed ones, and the omission from the text of their specific proposals on implementation.

Some of the key developing countries, after a meeting of theirs Thursday evening, reportedly conveyed to the GC Chair that they were not prepared to take the draft even as a basis for further work.

"At a minimum," one generally reticent Third World diplomat said, "all our proposals must first be put into the draft text. Otherwise this text is dead on arrival."

Strong reactions against drafts, and particular portions or contents as a whole, prepared by the secretariat or any chair, is not unusual.

But what is or ought to be more disquieting, even for a secretariat that partisanly espouses the views of the US and Europe, is the feeling among many developing country diplomats about the pedigree of the draft.

A perusal of the content of some parts of the text, one of the delegates said, appeared to confirm the talk in the WTO corridors, that an initial draft prepared after the informal heads of delegations meeting, had been made available to the United States which recast or redrafted several parts, and the text given to them on Thursday was thus of mixed pedigree.

The 'unfair and biased way' the process is being directed, the delegate said, is starkly evident if the contents of the text where the implementation concerns are dealt with, are contrasted with the way the four issues for 'study process' mandated by the Singapore ministerial meeting, and the other priorities of the major developed countries, have been phrased as among 'subjects for negotiations' in a new round, and alternatively, elsewhere, as among subjects for further study.

A Third World trade expert, Mr. Bhagirath Lal Das, said on studying the text, that if developing country diplomats take this paper as a basis for comments or pre-Seattle negotiations, they would be doing their Ministers the greatest disservice. They would be still harming their own cause, even if they maintain all their objections to any of the square-bracketed texts and add on brackets to others and succeed in putting their own proposals into the draft in square brackets, on an equal footing with the new issues of the North.

This would set up the ministers from the South for negotiating a surrender to the North at Seattle, and would face a domestic outcry when they return home from Seattle.

At a minimum, said the former negotiator for India in the GATT and a Director of trade programmes in UNCTAD (during the Uruguay Round), any draft text to be a basis for discussions here should set out all the proposals made by developing countries on implementation - those for actions before Seattle, and those to be addressed and solved in the first year as a priority.

Also, said Das, the formulations on the Singapore study process issues should be taken out of the portions now listed under 'subject for negotiations' and put, in square brackets, in a separate category of Singapore issues - with a formulation in square bracket for taking each of them up for negotiations and an alternative one for continuing the study process as many developing countries have said in the study groups and in the General Council.

Unfortunately, he added, there is no place in the GATT/WTO processes for diplomatic politeness and 'yes, but...' language. Only a blunt and plain NO and repeated NO, counts. Any talk of willingness to be flexible is treated by the secretariat and the major developed countries as a sign of weakness to press the developing world, individually or collectively.

After mentioning the various agreements on which developing countries have voiced their implementation concerns, and mentioning a general point about the inadequate implementation of special and differential treatment, the draft text in a para under implementation concerns has three dots within square brackets!

And without any details either, but merely as another three dots in square brackets, is another formulation, a carrot of sorts held out to developing countries on 'Immediate action' at Seattle.

And sandwiched in-between is a paragraph on the Agreement on Textiles and Clothing that repeats the non-sequiturs of the Singapore and Geneva ministerials -- rephrasing the content of Art.7.1 (a) of the ATC, which the US has been arguing means developing countries should open up their textiles and clothing markets as a further price for the US to abide by its ATC commitments to integrate the trade into normal WTO/GATT rules and end discriminatory quotas against the developing world.

Coupled with the decision to launch new negotiations with a broad-based agenda of liberalization in goods and services and including some new issues and some old ones coming up under new names, and the negotiations to be completed by 2003, the earlier promises of the Uruguay Round  agreement on full integration of the textiles and clothing trade will be completed two years after the new round ends!

No wonder that one of those who negotiated in the Uruguay Round till about 1991, Mr. Rubens Ricupero, the head of UNCTAD, has been repeatedly saying in recent periods that he doubts whether even by end-2004, the textile and clothing restrictions against the Third World will disappear or appear in a new form (restrictions on grounds of environmental or labour standards).

Next in the Chair's draft is a para about 'Implementation Review Mechanism' -- for a decision by Ministers to establish an improved mechanism to examine and address "implementation- related" concerns. Towards this end, the Ministers direct

* that the General Council, meeting at heads of delegations level, "shall conduct a full and comprehensive review of issues and problems identified by Members, relating to the implementation of existing WTO Agreements and Decisions.

* The General Council shall complete its review and shall take or propose appropriate actions within one year from the date of this Declaration."

Considering that developing countries have been raising these questions just before and at Singapore (in December 1996), in the run-up to and at the Geneva Ministerial (in May 1998), and for more than a year now in a more detailed way at the General Council, the outcome promised of a full and comprehensive review by the General Council with proposals for actions (by the Ministers?) sounds like the proverbial mountain in labour producing, at the WTO, a dead mouse.

For, the other issues of implementation, put into a basket of 'other elements of a work programme' to be dealt with in the committees or the General Council, would result in their being safely 'bottled up' in endless discussions, with no conclusions for lack of consensus or made into a bargaining chip for concessions by the North in return for more market access in the South.

There is another para about technical cooperation and assistance by the WTO and other international secretariats and promise of making available resources.

From there on, the text makes a quantum leap into a New Negotiating Round, without any brackets or square brackets.

There is then another paragraph, a kind of chapeau, that refers to the Marrakech decision to renew negotiations in agriculture and services, and again, without any square brackets as if it is a consensus decision, talks of Ministers "wishing to pursue the progressive liberalization of trade in goods and services through a balanced and broad-based negotiating agenda".

The sentence then continues with the words:

"we decide to launch multilateral negotiations as set out below with effect from 1 January 2000. The negotiations shall be concluded within three years, and shall be based on the following principles:...."

The principles list the new round as a 'single undertaking', with a meaning different from what it was when put in the Uruguay Round, and as one now requiring the results to be adopted in their entirety and applied to all WTO Members (in clear contradiction to the Vienna Law of Treaties and the WTO itself about amendments to treaties and new agreements extraneous to the original text).

There are references to transparency in negotiations and of balance and equity in outcome, about the development objectives - of trade liberalization and further rule-making to be pursued in line with promoting development; and of special and differential treatment.

There are no square brackets around these - perhaps because they have no operational content and remain mere exhortations to be tossed aside as having been achieved at the end of the new Round, as was done with the equally high-sounding phrases in the Punta del Este Declaration.

There is a call, in square brackets, for a standstill commitment by every participant in the negotiations -- no new trade restrictive or distortive measure inconsistent with the WTO; no trade restrictive or distortive measure, even within WTO rights, that would go beyond that necessary to remedy specific situations as provided in the WTO agreements; and not to take any trade measures in such a manner as to improve a Member's negotiating position.

If the current generation of trade diplomats delve into records of the Uruguay Round, and proposals (formal and informal) that remained proposals, and the way the standstill functioned and the complaints dealt with -- the records may be found in what former Director-General Arthur Dunkel once called the cemetry of papers at the GATT -- they would find that the majors, and particularly the US disobeyed all these injunctions and negotiated by wielding the stick of S.301 and its threat of unilateral trade sanctions.

Though in the informal heads-of-delegations process, there was at best partial support to the idea of negotiations being run by a Trade Negotiations Committee, while several countries expressed their opposition to this and insisted on the entire process being under the General Council, the new draft text without any square brackets has a formulation for the negotiations to be run by a TNC.

Trade officials and diplomats wanting a TNC headed by the WTO Director-General have been pointing to the precedent of TNCs under GATT MTNs like the Tokyo and Uruguay Round MTNs. But those multilateral trade negotiations were under the provisional GATT, which had no legal basis to launch any new round of negotiations - and everyone of these MTNs were launched by Ministers of GATT countries acting in that capacity and outside the framework, and requiring incorporation into the GATT framework by a special process at the end.

The WTO was supposedly established to put an end to all this and provide a permanent framework for negotiations - with the periodic Ministerial Conferences (meeting once in two years) and the General Council in between deciding everything the Ministers could do.

Plus ca change plus c'est la meme chose (The more things change the more they remain the same).

As subjects for negotiations are listed, in separate paragraphs, the two areas of negotiations mandated at Marrakech:

* Agriculture - with a formulation on what and how to negotiate within square brackets; and

* Services - with a similar approach.

Next on the list is an item, 'Market Access Negotiations on Non- Agricultural Products', with the title, formulation and modalities set out in square brackets.

Then follows in square brackets, and as indents within them, negotiations on 'Other WTO Rules':

* contingent trade measures - examination of existing rules and clarification;

* subsidies - review, taking into account the role of subsidies in economic development of developing countries and effects of subsidization on trade, with fisheries issue thrown in as a further bracketed item;

* state trading; and

* regional trade agreements.

There are four further paragraphs and items under the subjects for negotiations in a new round -- listing the Singapore study issues of investment, competition, transparency in government procurement and trade facilitation - as areas for establishing multilateral framework of rules and disciplines.

There are cross-references to the same issues figuring elsewhere in the text, under 'Other elements of work programme', for continuing the study process initiated at Singapore.

Under this heading of 'Other elements of work programme' are listed, some, but not all of the issues raised by developing countries under TRIPS (with the work programme entrusted to the TRIPS Council), under TRIMs (with the work programme similarly entrusted to the TRIMs Council), and the Singapore study subjects, to the respective study or working groups.

There is a paragraph on Rules of Origin (whose mandate under the Marrakech Agreement for completing work on harmonization of MFN rules running out some time ago) to be continued under the new work programme without any new deadline, but with an "as soon as possible" exhortation.

Another separate para asks for the GATT BOP Committee examining all issues arising from the provisions of Art.XVIII:B and the Uruguay Round Understanding along with Art XV of GATT (which deals with the IMF role) and reporting to the General Council.

There is another item about 'Coherence', with some best endeavour language for enabling developing countries to integrate into the multilateral trade system, participate more effectively in WTO negotiations, and about the WTO Director-General and the World Bank head in collaborating to further the Bank's "Comprehensive Development Framework" to make the trading system a more effective tool for economic and social development.

The Bank's Comprehensive Development Framework itself is nothing more than a Wolfensohn-Stigliz public relations exercise for the Bank to distance itself from the Fund and the bad name that the Washington Consensus and the Fund-Bank Structural Adjustment Programs have created for the two, but pursue the same policies under the guise of a new framework of development and poverty focus.

Under the new Coherence item, the WTO secretariat will provide a helping hand to this process.

There are also listed as separate items, with the formulations to be filled in -- electronic commerce, DSU review, fisheries subsidies, working groups on trade and finance, on transfer of technology and on trade and debt -- all safely remitted for examination.

And under immediate decisions at Seattle are listed:

* Actions in favour of the LDCs -- duty free treatment for their exports, full and effective implementation of the integrated framework of trade-related technical assistance, promise of consideration of extension of transition periods "on the basis of individual requests", establishing a new committee on LDCs (instead of the current subcommittee under the Committee on Trade and Development);

* Technical cooperation;

* electronic commerce - with a square bracket text for extending the Geneva declaration for moratorium on no customs duties on electronic transmissions;

* DSU review with the decision left blank;

* for adoption of a draft agreement on transparency in government procurement - a text yet to be negotiated, with several countries at the last meeting of the group last week, declining to go on to negotiations;

* WTO transparency


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

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