by Bhagirath Lal Das*

New Delhi 10 Jan 2000 -- Rumblings against the negotiating process in the World Trade Organization, which have been growing louder and louder over the last five years, reached a peak in Seattle, and the sound blast reverberated throughout the world.

The shock waves shook the whole GATT/WTO system. Several countries announced publicly that one main reason for the failure of the Seattle Ministerial Meeting was the inadequacy of the negotiating process to cope with the complexities arising out of the enlarged membership of the WTO.

The developing countries have succeeded in bringing home the point that they would insist on their active participation in the deliberations and negotiations. If the system wants to negotiate agreements successfully, the negotiating process has to be completely changed. The old system will not work any more.

In the current system, the various stages of negotiation on a particular subject are: tabling of the proposal by a country in a formal meeting, discussions and negotiations in small group meetings, brief information on the progress given at formal meetings from time to time by the chairman, and finally when an agreement is reached in the small group negotiations, tabling of the results in the formal meeting for approval.

This way, countries in general get involved at the initial stage and the final stage, but are almost totally out of the picture in the actual process of the negotiation in the small groups. The small group of countries for negotiation is selected on ad hoc basis by the chairman of the Council/Committee with the active support of the Secretariat. In actual practice, the chairman generally depends on the Secretariat for the selection and informal invitation.

Most of the time, almost all the developed countries are in this small group. The presence of the EC ensures the representation of the fifteen countries in the EU. Among the developing countries, generally five to ten are selected, mostly those countries that actively participate in the WTO meetings. They prepare and speak.

Sometimes, some others also may be invited if the chairman and the Secretariat fear that they may block the decision in the final meeting if they are not associated in the small group negotiations. Another parallel or supplemental process in the GATT/WTO system is that of negotiations in some Missions or over lunches and dinners arranged and hosted by the countries that have placed the initial proposal or are deeply interested in the subject. The selection of the countries for such events is naturally done by the host Mission.

This system has been going on for a very long time, almost since the beginning of the GATT. Though there was some dissatisfaction among the developing countries, there was rarely any formal protest. But now the protests are vociferous, as was clearly evident during the process of the preparation for the Seattle Ministerial Meeting and more so in course of that meeting.

The situation after the Uruguay Round has changed completely in this regard:

* Earlier, very few among the developing countries had the requisite expertise and resources to participate effectively in detailed negotiations. Several developing countries have now strengthened their capacity in the capitals and in Geneva to participate in the negotiations.

* Then the risks were low, as the developing countries were not called upon to undertake substantial obligations. The character and content of the negotiations have changed in the last 10-15 years.

Earlier, the developing countries were mainly negotiating to get concessions from the developed countries; whereas now the negotiations are focused mainly on developing countries making concessions. The developing countries rightly feel that they have to be actively involved in these negotiations, as otherwise they may suffer major loss. Sitting around with detached aloofness with a sense of helplessness will prove very costly, as the obligations emerging out of the negotiations will be binding on all, whether or not they fully participate in the process. Almost all the developing countries in the WTO are fast becoming conscious of this danger.

The industry and trade in the developing countries are becoming aware of the impact of the Uruguay Round results on them. They are expecting their governments to protect them and expand their opportunities. They are therefore putting pressure on the governments to achieve results to attain these objectives.

* A new feature emerging after the Uruguay Round is the vigil of the NGOs, the media and intellectuals in the developing countries on the role of their governments in the WTO negotiations.

Naturally, the developing countries are now greatly agitated over the WTO negotiating process in which they are not able to participate effectively. They are no more satisfied with seeing the final agreements only in the final open meetings where they are expected to give their nod. It is getting impossible for them to tolerate this situation any longer. Their anger was very much evident in Seattle, as has been widely reported. They are disturbed by the emerging agreements which will be binding on them, though they had no opportunity to shape them.

The obvious answer is to involve all the countries in the negotiations. But there are severe practical problems. The process of a multilateral negotiation is complex. When a subject is selected for negotiation, the countries that are interested, express their points of interest and concern. Generally, these presentations are often at extremes at this stage. After the talks proceed for some time, the main interested parties are able to assess the serious interests and objections of other parties.

Some country then puts up a formal proposal in the form of a text, if it had not done so earlier. There are preliminary comments on the text. Some other countries may feel inclined to put their own texts which may be aligned or opposed to the earlier text. Then all these texts are taken up for consideration. It is at this stage that intense negotiations start on the specific texts.

After a series of negotiating sessions, the duration depending on the seriousness of the subject and the extent of differences, sometimes the chairman conducting the negotiations puts forward his/her text in which he/she tries to absorb the main concerns of all the parties. Points of severe differences and alternatives are put under square brackets. The chairman's text is expected to facilitate the process by focusing the negotiation on one paper. Serious negotiations then follow on the basis of this paper. The objective is to narrow down the differences and to accommodate the main concerns of all the interested parties.

Finally, if possible, an agreed text is formulated, which is the result of the give and take by all parties participating in the negotiation.

One can clearly appreciate the problem in the direct and active participation of all the one hundred or so of the WTO Members present in Geneva at all stages of this negotiating process. Particularly when the texts for negotiations start emerging, it will be difficult to reshape them in large gatherings. Thereby lies the problem of efficiency in the multilateral negotiations. But the WTO has reached a stage, when the major participants can no longer aspire to give weightage only to efficiency, totally ignoring the need of full participation by the entire membership. While seeking efficiency in the process, it is important that full opportunity is given for the active participation of at least the countries that are present in Geneva. Thus the problem reduces to finding an appropriate mix of efficiency and full participation in the negotiating process.

It is unlikely that any agreed text will emerge with all the countries directly considering it in a big conference hall. At the same time it is also necessary that all the countries are fully satisfied that their interests are taken on board and they have full say in the emerging texts. In the present Green Room process, the countries that are not present there naturally feel that they did not have this opportunity. Though some countries present may have similar views and interests as theirs, there is no delegated authority to these people to negotiate on behalf of others.

A possible solution could be to form a representative negotiating group. It should consist of a prescribed and small group of negotiators who would be negotiating on behalf of a set of countries. They should be selected jointly by the countries that they would be representing. Thus, these negotiators will not be negotiating for their own respective countries, but for all the countries that have selected them. Naturally, the negotiator's own country will be in the group selecting a particular negotiator.

A negotiator in this group will be given the brief for the negotiation jointly by the group of countries selecting him/her. He/she will come back to the group for fresh brief if any concession beyond the earlier brief is to be made in the negotiations. This process will involve frequent meetings of these groups; and in special circumstances, like a Ministerial Meeting, groups may have to be continuously on call, so that a negotiator is able to keep his/her group fully informed on the latest developments in the negotiation and the group is able to give further instructions to the negotiator.

One important pre-condition for such a process is that a set of countries will have common or nearly common interest and stand on the issues involved in the negotiation. This, in turn, requires two steps. One, there should be formation of groups in such a manner that countries having similar or nearly similar interests are in one group. Two, there will be initial consultation and negotiation within a group to hammer out a common stand on the issues in the negotiation. The second step will be a dynamic process in the sense that the common stand of the group will undergo changes and will evolve during the process of the negotiation, depending on the stand and responses of the other groups.

The main problem is how the groups should be formed. One general differentiation could be that there are three broad group clusters, viz., the developed countries, the developing countries and the countries in transition. Considering the number of countries in the current membership of the WTO, there could be three developed country representatives, twelve from the developing countries and one from the transition economies. The developed countries may be divided into three groups, each having one negotiator. Similarly the developing countries may divide themselves into a number of groups, depending on their commonness of interest, each being represented by one or more negotiators.

There could be various methods of formation of groups among the developed countries and also among the developing countries. The latter may have more problems because of the large numbers involved. But, once a decision is taken in principle to have the groups, the actual formation may not prove to be an impossible exercise. The simplest, of course, will be to form the groups on a stable basis, even though there may be some divergences in relative interests among the countries of a group in different areas. An alternative may be the formation of the groups for each subject separately. Though appearing more logical, it may involve too cumbersome a process, as each time a subject comes up for negotiation, the groups will have to be formed. The groups initially formed should operate for two years on an experimental basis; and then there may be changes, if necessary. During this period, a country may shift its group, if the new group which it intends to join, accepts it.

It should be noted that this structure is not some thing like the proposal for a Security Council type institution in the WTO which has sometimes been made by some major developed countries. The members of the Security Council speak on behalf of their respective countries, whereas in the proposed structure, the negotiators will be speaking on behalf of the countries that have selected them. Also the negotiators will be acting under the joint instruction of these countries and will be answerable to these countries.

Also, this proposed structure is not like the group system which operated in the UNCTAD negotiations. There the groups among the developing countries were rigidly formed based on the geographical location. In the proposed structure, the formation of the groups is being suggested on the basis of perception of common interests. It is, of course, possible that some countries may decide to have their group on geographical basis, and it should not be ruled out.

There may be three main points against this structure. One, it may be feared that it will politicise the WTO negotiations. But an institution like the WTO, which handles the rights and obligations of countries in some important economic sectors, is bound to have an innate political over-tone, howsoever one may wish to keep it immune from politics. In fact, recognition of this reality and encouraging interaction among countries and groups with full realisation of this inevitable feature, will help the institution to proceed smoothly on its path.

Two, it may be argued that each country has its own interest in the WTO, and thus it will be unrealistic to think that such a group system will work. With all the individual approaches of the countries in the WTO, it has often been noticed that there are converging interests; and thus the possibility of the group approach should not appear impractical.

Three, it may be pointed out that the interests in many areas cut across the divide of developed and developing countries; thus to have separate group clusters of developed and developing countries will not be correct. This argument has a lot of force in it. Some countries that are grouped as developing countries at present, may have their interests more aligned to those of the developed countries on most of the subjects. Similarly there are some areas, like agriculture, where there is an interest group at present which includes both developed and developing countries. Considering these exceptional situations, there may be the need of some adjustment and flexibility in the process of group formation, particularly in the beginning.

But more than these technical points, the real opposition to any such suggestion will come from the major developed countries which have always tried to lead and shape the negotiations according to their own desires. Generally they have found the present system to be serving their interest. Hence they may be totally opposed to any new initiative to change the current negotiating process.

But it will be a short term view. A change is now necessary; otherwise the WTO mill may come to a total halt. As the events in Seattle and even during the preparatory process for Seattle indicated, the developing countries have now come to a limit of their tolerance of the current system. It will not serve the purpose of developing an effective international trading system, if changes for improvement of the system are blocked. The structure that has been suggested above is only one possible way; there could be alterations in the suggested structure or there could be totally different alternatives for improving the system. What is needed is a deliberate exercise for improvement and change. It may be desirable for the WTO to establish an inter-governmental committee, chaired by an independent person (something like the committee on agriculture formed after 1982 Ministerial Meeting of GATT) to examine this problem and come up with an appropriate, workable and acceptable structure for the negotiating process.


(* The writer is a former Indian Ambassador and Permanent Representative to GATT and also former Director of International Trade Programmes in UNCTAD.)

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