The WTO - an 'unruly' rules-based organisation?

The WTO Ministerial in Seattle came to an abrupt end on 3 December, amidst great confusion over whether the Ministerial had been terminated or suspended. The confusion was compounded when, subsequent to this, the WTO Director-General convened a special session of the WTO General Council as a followup to the Seattle meeting. Although the Council, when it met on 17 December, implicitly agreed that the Ministerial had ended, the failure of a rules-based organisation to strictly observe legal processes is bound to affect its credibility.

by Chakravarthi Raghavan

THE Third WTO Ministerial meeting ended in 'confusion' at the Seattle Conference Centre on 3 December. And soon after the press conferences that followed ended, the WTO and US media officials, as also other WTO officials, disappeared from the scene - unavailable for any clarifications.

Clarification on what exactly happened or did not happen, and what documents, formal and informal, have been issued, has been eluding everyone since then.

As one trade diplomat put it caustically after returning to Geneva, 'a meeting that never formally began at Seattle on 30 November was over on the midnight of 3-4 December without any formal decision... The Conference of the 'rules-based' organisation began in a 'rule-less' way and ended in a 'rule-less' way around midnight of 3-4 December.'

Some trade ambassadors said that their inquiries suggested that even at the 17 December General Council special session (see box), WTO Director-General Mike Moore and the secretariat were unlikely to offer any clarification or provide clarity on 'the great deal' achieved, the gaps 'narrowed considerably' and 'the remaining areas' where creative ways to bridge the gap have to be found.

Moore arrived back in Geneva and was at the WTO secretariat on 6 December and an aerogram dated 7 December went forth to WTO missions, convening a special session of the General Council for 17 December with a 3-item draft agenda.

The third item listed said: 'Followup to the Seattle Ministerial Conference.'

A press statement was also issued by Moore, dated 7 December but which appeared as a press release in the media room at the Palais des Nations UN complex on 8 December, announcing that a 'great deal' was achieved by Ministers at Seattle; that 'gaps were narrowed considerably' in a number of important areas; and that US Trade Representative Charlene Barshefsky as Chairperson of the Ministerial had announced 'the meeting has been suspended', and had directed Moore to 'consult' with delegations, discuss 'creative ways' to bridge the remaining areas in which consensus did not yet exist, develop an 'improved process, both efficient and fully inclusive', and prepare the way for 'successful conclusion' of the Ministerial Conference.

Back in business

Within four calendar days of the end of the 'Seattle process', the WTO and its manipulative processes appeared to be back in business.

As one trade diplomat put it, the 3rd Ministerial Conference that was never formally constituted at Seattle on 30 November, nor ended or suspended formally, is now to have a 'follow-up', if Moore has his way.

Trade diplomats, who have been consulting among themselves on what happened or did not happen at Seattle, are agreed on a few things:

1. The Seattle Ministerial was never gavelled to order and never began formally. The formal opening ceremonies set for the morning (local Seattle time) of 30 November had to be abandoned in disarray, when protestors managed to take over the Paramount Theatre hall (where the ceremonies were to have been held) and delegates (ministers and high officials) could not get to the place.

2. The formal opening and the official plenary to follow, it was announced, would be combined, and the meeting would take place on the afternoon of 30 November at the Conference Centre.

3. But the Ministerial Conference never formally met even then, was never called to order and convened; no draft agenda was approved as required in Rule 5 of the Rules of Procedure of the Ministerial Conference, and no Chairperson (and three Vice-Chairpersons) was officially elected as per Rule 12.

4. Barshefsky took the chair and began running the proceedings as she wished, but there were no formal, orderly meetings where she could be challenged and this put on record. And she almost got away with it until she had to acknowledge failure and suspended the conference without any consultations with anyone except Clinton at the White House.

The messy WTO becomes messier

by Chakravarthi Raghavan

THE General Council of the World Trade Organisation implicitly agreed on 17 December that the Seattle Ministerial Conference had ended, when the Council acted on the report of the working party on Jordan and accepted the protocol of accession and the schedule of commitments in goods and services.

Decisions on accession are vested under Art. XII.2 of the WTO Agreement in the Ministerial Conference, and the General Council can act on accession only in terms of its powers under Art. IV.2, which enables it to discharge all the functions of the Ministerial Conference in the intervals between meetings of the latter.

Whether or not anyone raised or challenged it, by acting on the issue of Jordan's accession, the General Council has in effect acted on the basis that the Seattle Ministerial has ended and that until the next Ministerial Conference meets the General Council can discharge all the functions of the Ministerial Conference.

Earlier, the special session of the Council adopted a SwF 127.7 million budget, and put off till a meeting in January any discussion of the agenda item 'Followup to the Seattle Ministerial Conference'.

Neither the secretariat nor the chairman, Amb. Ali Mchumo of Tanzania, offered any clarification about the status of the Seattle Ministerial Conference, and most members appear to have tacitly agreed to put off the discussion to another meeting, in January or even early February, by when further consultations could help to clarify the situation and actions to be taken.

However, legal experts, including some within the secretariat, agreed privately that by the mere fact of taking up for consideration the report of the working party on the accession of Jordan and acting on it, the General Council has in effect decided the status of the Seattle Ministerial Conference, namely that it has adjourned and is not 'suspended', and that the chair of the Seattle conference has now no locus standi.

It would also mean that a special session of the Ministerial Conference (constituted of representatives of member countries, not necessarily ministers) may be held to complete the business of the 3rd Ministerial, namely, setting the date and venue of the 4th Ministerial and naming the chair and three vice-chairs of that meeting.

At the General Council, after a lengthy discussion, at an informal and formal session, on the situation that would arise as a result of various provisions of the multilateral WTO agreements that may lapse or kick in on 1 January 2000, the chairman made a statement to the effect that these too would form part of the 'consultations' on the followup to Seattle, and that meanwhile members would show restraint and not take any steps that might prejudice the consultations.

This was seen as a political rather than a legal commitment, though at the insistence of the US, the EC, Norway and Switzerland wording was included in the chairman's text to the effect that this was without prejudice to legal rights and obligations.

It was also agreed that the record would show the views of several leading countries that a reference to the legal rights and obligations was out of place in the context of a political commitment.

If issues (of transition periods etc) of interest to the developing countries were in a state of limbo, so were others of interest to the industrialised world Ð whether it be the moratorium on tariffs on electronic commerce, or the Singapore study issues and working parties or other such elements of the WTO work programme.

And while any dispute raised on any of the agreements whose provisions (like the TRIPS non-violation issue) end on 31 December 1999, or other agreements whose transition periods end at that time, cannot in any event come before the dispute settlement process (given the 60-day period for holding consultations), even moving in that direction would be an act of bad faith.

The entire exercise of the way the Seattle meeting was run and ended, and the way the post-Seattle mess was sought to be handled, clearly shows that as a result of the WTO and its annexed multilateral agreements, the developing countries are being brought under the grip of economic colonialism of the US and Europe, a participant said.

Many WTO officials and some former officials tried to shrug off questions about the legality of the actions and violations of rules and procedures, with the argument that the issues were not legal but political.

However, illegal actions of a rules-based organisation on the ground of politics and political expediency inevitably erode further claims of legitimacy. - SUNS4576

As one participant put it later, it was not clear at the beginning, nor at any time during the week at Seattle, whether Barshefsky spoke and acted as USTR or as Chair of the Conference.

But she announced at the outset that she (presumably as host country) needed a declaration and was determined to get one, and that she would make the rules and run the meeting towards that outcome.

As 'Focus on Trade', an NGO electronic mail newsletter published from Bangkok, put it in its 'chronology of events' in Seattle, in an address to members Barshefsky had said that 'I need a declaration and you can bet your bottom dollar that I will get it, even if it means changing the rules of this house'.

Rule-changing every hour

No one at the meeting placed a bet, be it 'first' nor 'bottom dollar'. But Barshefsky and Moore did plenty of rule-changing every hour during the Seattle meeting, and yet they both lost and the meeting ended without a declaration and in confusion.

5. The chairs or co-chairs (the WTO media office listed only chairs, while Barshefsky announced co-chairs at a press conference) were announced for five working groups, which met while other unannounced 'informal green rooms' went on at the same time.

The approach to the constitution of working groups and rules was illustrated by the sudden announcement on 2 December of an ad hoc working group chaired by the Costa Rican Trade Minister, and Moore's response on the night of 2-3 December to a number of delegates of small economies who complained of the non-transparent procedures and asked which group was looking at the portions of the draft declaration on principles and objectives.

As one of the ambassadors involved told this writer, 'Moore immediately offered to constitute another working group to be chaired by one of the ambassadors who met him.... Perhaps he hoped to keep us and our ministers busy on this.'

Ministers, senior trade officials and ambassadors of member countries accredited to the WTO, and observers, gathered at very short notice (sometimes as little as 10-15 minutes) every day and night at the Conference Centre and met in 'formal' working groups, 'informal green rooms' and other 'informal consultations' over the next three days.

But there was never a formal meeting of the Ministerial Conference that was gavelled to order; Barshefsky was never formally elected to chair the meeting and did not take over the gavel from the General Council Chair, Amb. Ali Mchumo, nor did the meeting 'end' around midnight of 3-4 December, either at the Committee of the Whole or at the open plenary thereafter.

That would have required a formal decision to 'suspend' put from the chair to the meeting and adopted by the meeting by consensus and gavelled into a decision. This never happened.

In terms of the decision of the General Council on 23 November, the only document that the Ministerial Conference had was an informal 32-page square-bracketed text, a draft declaration put forward by the Chairman of the General Council on 19 October.

In the course of the very large number of confused 'consultations', there were texts of 'evolving' compromises in some key areas that were being 'floated' by the secretariat and the 'chairs' of the working groups and 'informal green rooms'. These texts, reports or summings-up of the state of play by the working group chairs were challenged sometimes in the committees of the whole as lacking in objectivity or authenticity. Various versions of revised draft declaration texts (without even the job numbers that informal WTO documents carry for identification) were circulating among delegates and journalists, some having only a time and a date.

Barshefsky announced at a press conference after the 'suspension' of the meeting - in as unilateral a way as the US exercise of unilateralism (whether at the UN and the use of military power over Iraq or Kosovo, or under S.301 of its trade laws) - that 'everything' on the table was frozen, and this, she announced, included a version of a draft on labour and trade.

Validity challenge

When the Costa Rican Trade Minister held the ad hoc working group on trade and labour, the members present challenged the validity of the constitution of the working group, refused to address her as the chair, and only addressed her as Minister. Her consultations quickly came to an end, and so did some plurilateral consultations convened by the EC. Neverthless, two texts 'evolved' and were 'reported' on by the Costa Rican chair at the final COW, and this too was converted by Barshefsky into the papers on the table that have been frozen and on which 'Mike' will hold consultations.

The Marrakesh Agreement establishing the WTO, and its rules on the Director-General and the secretariat do not provide for any power or initiative of the DG or the secretariat beyond what the membership asks them to do.

The statements of Barshefsky as the chair, and her direction to the WTO head (in whatever capacity she gave it at the press conference), provide no authority to Moore or anyone else to proceed in a -follow-up-. Only the General Council may, but that too only when it gets back to the rules. A repeated charge and challenge to the WTO at Seattle, and in many countries, has been over its -lack of legitimacy- and its functioning as an instrument of transnational corporations.

The rule-less way the Seattle conference was run, and the way forward sought now by the WTO head and the secretariat, would make the WTO, in the public eye, including in the eye of parliaments and legislatures everywhere, even more illegitimate, unless the General Council asserts itself now and takes back the power and authority to itself.

The above article first appeared in the South-North Development Monitor (SUNS- issue no. 4573).