Declaration talks end with consensus of sorts

The following article gives an account of the final day of negotiations at the WTO Conference. The three articles that follow provide a day-by-day report of the events and negoiations at the Conference and before it. We are reproducing them as a "diary" of the Conference. All reports are by Chakravarthi Raghavan.

SINGAPORE 12 DECEMBER: Day-long informal consultations amongst a small group of countries appears to have produced a consensus of sorts on some of the new issues. The "consensus" texts on investment and labour standards, along with other parts, are due to be presented to a full informal plenary of the Heads of Delegations (HOD), on night of 12 December.

When okayed by them, it will be formally presented to the final plenary session of the Ministerial Conference on13 December morning for formal adoption. While actual texts of the draft, now agreed, is not available officially, it is clear that the first Ministerial Conference of the WTO, as such past meetings of the GATT, have provided the industrial nations with new "gains", while the developing countries can take back home a piece of paper - a new Ministerial Declaration þ that actually gives them nothing.

Even what is in the Uruguay Round agreements, and in the reports of the various WTO bodies to this Conference, are fudged over, wherever these involve commitments of the industrial world.

"Damage control"

Nevertheless, most of the developing countries attempted to put on a brave face to say that their concerns have been met on the new issues and that no new commitments and obligations are involved.

Privately, several of them say that their job here had been `damage control' and that the disunity and lack of coordination in their ranks has meant that once again the majors have won trade gains, and the developing countries have lost.

The tentative consensus in the informal consultations seem still to be dependent on Egypt and Pakistan consulting their capitals to clear the language on labour standards, and Argentina and the US were still talking on Argentine insistence on some mention of the future agricultural reform programme.

While an appreciation and judgement on the outcome, by delegations and observers, would have to await the final text being available (probably 13 December morning here), it was clear that almost everyone of the delegations were putting a spin on the final outcome, to show that they had won their points or blocked things they were opposed to.

There was also an all round sense of dissatisfaction, particularly on the part of the developing countries - all of whom on arrival at Singapore, discovered the Conference and its main agenda of implementation has been hijacked by the US, the EC and the WTO secretariat.

On the positive side, the compromise languages in the Declaration, which by itself has no legal value until it is translated into decisions by the WTO General Council, is such that it is capable of different interpretations. There will be no doubt, endless arguments at the General Council in 1997 as to what this means, and how the terms of reference have to be framed in decision.

However, the WTO head, who has set his own agenda, and no one has challenged him in the General Council (despite murmurs outside) can be expected to continue to push the agendas in these new areas set by the US and the EU.

While the WTO process even generally, is non-transparent for most of its members þ and such non-transparency of the trading system has never been higher than now under the WTO - it has been more so here.

While ministers have been speaking at the plenary, to virtually empty halls, about their problems on implementation, the four days of negotiations and talks chaired by the Singapore Trade Minister, Yeo and WTO head, Renato Ruggiero, in the four days of the consultations, did not address these (taking the working given consensus at Geneva on elements of language as final).

On investment and competition, the new formulation involves setting up two working groups to study the issues and report to the General Council, but without any commitment to negotiate and affirming that such negotiations had to be based on explicit consensus.

India, which had been holding out on this all of 11 December and 12 December morning, appears to have agreed to the text evolved in consultations early morning, after getting clearance from New Delhi.

Studies on investment and competition policy

The new text has a chapeau which places the studies on investment and competition in the context of the WTO's built- in agenda, including that in the TRIMs agreement. This says:

"Having regard to the existing WTO provisions on matters related to investment and competition policy and the built-in agenda, and on the understanding that the work undertaken shall not prejudge whether negotiations will be initiated in the future."

It then goes on to:

* establish a working group to examine the relationship between trade and investment.

This language, in the context of the chapeau, could be interpreted as requiring such a study in the context of the TRIMs agreement and particularly its Art. 9, which calls for a review of the TRIMs provisions by 2000, and along with it, the question of investment and competition policy.

The EU, Japan and so on, will no doubt argue that whatever the chapeau says, the study involves examination of the relationship between trade and investment (and not in terms of the TRIMs).

These two viewpoints will certainly reopen the debate at the General Council, except now it is on the WTO agenda.

* establish a working group to study issues raised by Members relating to the interaction between trade and competition policy, including anti-competitive practices, in order to identify any areas that may merit further consideration in the WTO framework.

This formulation about issues raised by Members would mean not only the competition policy issue raised by the EU, but also issues about WTO rules and their application (anti-dumping, subsidies and countervailing measures, rules of origin and so on) that restrict competition.

The formulation further stipulates that these groups shall draw upon and be without prejudice to the work in UNCTAD and other appropriate intergovernmental fora. As regards UNCTAD, the SMC Declaration welcomes the work under way as provided for, in the Midrand Declaration and the contribution it can make to the understanding of issues.

"In the conduct of the work of the working groups, we encourage cooperation with the above organizations to make the best use of available resources and to ensure that the development dimension is taken fully into account."

The General Council is to keep the work of each body under review, and will determine after two years how the work of each body should proceed. The para adds: "It is clearly understood that future negotiations, if any, regarding multilateral disciplines in these areas, will take place only after an explicit consensus decision is taken among WTO Members regarding such negotiations."

There is also a general stipulation, applicable to these and other studies and work programme on government procurement and trade facilitation, that in the organization of this work, careful attention will be given to minimizing the burdens on delegations, especially those with more limited resources, and to coordinate meetings with those of relevant UNCTAD bodies.

Labour standards

On Labour Standards, the formulation would have ministers renew the commitments to the observance of internationally recognized core labour standards. The ILO is affirmed as the competent body to set and monitor their observance and in promoting them. Economic growth and development fostered by increased trade and further trade liberalization contribute to the promotion of these standards.

The Ministers are also to reject use of labour standards for protectionist purposes and agree that the comparative advantage of developing countries, particularly the low-wage developing countries, must in no way be put into question.

The para also calls for the collaboration of the WTO and ILO secretariats, in terms of their current relationship based on observer status in attending meetings of either body. The US undoubtedly is going to try to use this, to push at a future occasion for a work programme at the WTO, but with many developing countries and several developed countries opposed, this may not be as easy as the work on investment and trade. (SUNS3891)

 The above first appeared in the SUNS of which Chakravarthi Raghavan is the Chief Editor.