by Chakravarthi Raghavan

Geneva, 5 Nov 99 -- The agriculture issue and what should be the mandate for further negotiations in a new round is holding up even consideration of other parts of a draft ministerial declaration for Seattle, trade officials and diplomats said Friday.

The European Community's 113 Committee (representatives of member states to the EU) were due to meet in Brussels Friday and until its outcome is known and gets reflected in the talks here, very little progress can be expected, trade diplomats said. The other issue also holding up discussions on various items proposed for the new round and a work programme beyond, is the implementation issue where a group of developing countries have put forward some detailed proposals on actions that need to be taken at Seattle and others they want to see resolved in 2000.

A letter of the WTO Director-General dated 4 Nov, and circulated to the members at the informal Heads of Delegations meeting on 5 Nov, acknowledged that there was a deadlock in agriculture and implementation, and without progress on these, it would be difficult to formulate a clean text for Ministers.

The WTO's original deadline for a near complete draft for the consideration of capitals was November 5, and this deadline has been missed.

There have been attempts to resolve the deadlock on these issues in 'green room' consultations and at the informal HOD, but these have not been successful.

Some of the Cairns group members, particularly those from Latin America have linked progress on any other issue to a solution to the agriculture issue.

Some of the developing countries, the like-mined group of countries, who have formulated detailed proposals under 'implementation' for correcting the imbalances and inequities of the Uruguay Round and Marrakech agreement, and have received support from most other developing countries, while not formally blocking progress on any other issue, even among the mandated negotiations (in agriculture, services and a few others), have nevertheless done so, by not agreeing to any compromises in other areas.

Formally, the US, EC and Japan have said they could not agree to blanket extension, but were willing to have the various councils and WTO bodies dealing with these agreements to consider extensions on a 'case-by-case' basis.

Among the agreements involved are TRIMs, TRIPS, and on Customs Valuation.

But such an approach has been rejected by most of the developing countries, who say that their package of decisions sought at Seattle include the transition periods, but also proposals to redress the imbalance in other equally urgent areas of the UR agreements.

Efforts by Singapore (from the 'friends of the round' shadow group) to make a positive assessment of the outcome of the Uruguay Round, and put forward a more limited compromise on decisions at Seattle, confined to extending the transition periods for some agreements that otherwise end on 31 December did not fly.

Even the other ASEAN countries like Malaysia and Indonesia, who are in the like-minded group (LMG) that have made fairly detailed proposals have rejected the Singapore formulae.

The attempts in the so-called 'green room' consultations by WTO Director-General Mike Moore to deal with questions like 'market access in non-agricultural products', and some of the Singapore agenda items have been blocked by some of the Cairns Group of agricultural exporters who have said that their position on other items would be governed by the way the agricultural issue is resolved.

Meanwhile, at the formal meeting of the General Council Thursday, five countries -- Bolivia, Panama, Mauritius, Cuba and Uganda -- complained of the 'green room' process and lack of transparency and information on these negotiations.

The WTO press office in a media briefing on the formal General Council meeting said that neither the Chairman, Amb. Ali Mchumo of Tanzania nor the WTO Director-General gave any response.

They also confirmed that there has been no formal decision, either by the General Council or at the informal heads of delegation (HOD) meetings of the General Council asking Moore to hold such 'green room' consultations over the heavily-square bracketed draft text, nor could they identify delegations attending these consultations or the basis on which they were being invited.

Trade officials who did not want to be identified or named argued that the DG could invite anyone he wants for the consultations and on any basis he decides.

Whatever the merits or basis for this under the old GATT, and the Uruguay Round, the non-transparent processes involved both in the runup to the Singapore, and the resentment among a large number of members and ministers at that meeting resulted in the then WTO Director-General Renato Ruggiero announcing that he would no longer hold such consultations, and all his consultations would be 'open-ended'.

The Marrakech agreement and the WTO also has introduced a change that the majors and the secretariat do not seem willing to accept.

There are ad nauseam references to the WTO and the trading system being rule-based, but the rules, unlike those of international organizations, have given no role (beyond running the secretariat) to the WTO head.

Despite the efforts of the then GATT Director-General Peter Sutherland (in the final stages of the Uruguay Round) to provide a role for the secretariat, all the participating countries disagreed. As a result, the Secretariat has no independent authority or role beyond what the Council may ask them to do from time to time.

But without any authorization, Moore has been muscling into the remit of the General Council and WTO bodies -- as now in starting a 'green room' process without any authorization.

Also on Wednesday in initiating the annual discussions on the overview of the trading system, while the official report provided to members dealt with the past, Mr. Moore outlined his agenda and views on what members should do at Seattle and beyond.

In all these he advocated the position of the US and the EC - for agreements on transparency in government procurement, trade facilitation, and for "social policy" to go hand in hand with trade liberalization.

Moore's statement at the Council on Wednesday was available to members only as he was speaking (and the membership which uses English is still to get accustomed to his accents and pronunciation).

Nevertheless some of the countries made clear that the rule-based WTO is a member-driven organization and the agenda was to be set by members.

On Thursday, when the five countries voiced their complaints about the "green room" consultations, there was no official response.

But the WTO press office released on 5 November a letter from Moore dated 4 November giving a progress report of sorts on the consultations, and disclosing that he had been holding the consultations at the instance of General Council chairman Ali Mchumo.

Some of the developing country delegations participating in the 'green room' consultations said they were in a dilemma, though they would have preferred if the Council Chair Ali Mchumo had asserted himself and taken charge of the process or had brought the question before the Council, formally or at the informal HOD, to ask Moore to hold the consultations.

But few countries want to go to Seattle with such a heavily-bracketed text, on which ministers would be asked to negotiate.

Such an exercise at the time of the 1982 GATT Ministerial proved quite a disaster - with that meeting ultimately being able only to agree on a work programme of sorts.

At that time, with every thing in a deadlock, some of the ministers were called to some consultations held outside the GATT, in a hotel room, by the Canadian Chairman of that meeting.

And some ministers tentatively agreed to some of the decisions of those meetings. But when they found later the full implications, they left Geneva (taking advantage of the GATT ministerial being extended), and asked their officials to block the outcome of the private consultations at the full meetings.

This led the then Brazilian representative to GATT to say "GATT is too serious a business to be left to Ministers."

Interestingly, the kind of problems faced on agriculture and other issues, including the "single-undertaking" concept, the idea of a "mid-term review" at which time the US wants to launch the investment and competition negotiations, appear to be a replay of what took place before Punta del Este.

If the current disputes over the agricultural mandate now seem to be whether the talks should spell out more details than that in Art. 20 of the Agreement on Agriculture (AoA) and whether it should contain references to 'multi-functionality', there were similar problems in 1986 with different semantics.

The US and the Cairns group at that time wanted specific references in relation to agriculture in the 1984 decision of the GATT CPs on the reform of agriculture (that focused on export subsidies).

The EC refused it and argued for 'specificity', nor was it agreeable to any standstill that would have meant it could not increase its variable levies. The US wanted a standstill, but not as a decision of Contracting Parties (as pressed by Brazil and India) or a GATT surveillance mechanism.

And after agreeing to a standstill and rollback and surveillance, the US came to Geneva (after Punta del Este) to tell the GATT members that it was going to breach it (the fast-track authority that was being devised came with a more virulent array of '301 family' of laws to improve the US negotiating position by threatening unilateral actions).

The "compromise" language used on agriculture for Punta del Este resulted in two or three years of disputes on what to negotiate which were not fully resolved in the 1989 mid-term review decisions, and created further deadlocks in Brussels in 1990.

And it was also the EC, months before Punta del Este, that spoke of the 'globality' of negotiations and the entire negotiations, including that in goods, intellectual property and services being "one undertaking".

But the compromise it struck with India and Brazil, and then with the US resulted in a formal 'single undertaking' only for the negotiations in goods, and the services being in a second-track outside of GATT, and India and Brazil agreeing only to a political commitment that both sets of negotiations should begin and end at the same time.

And so long as the original Indian and Brazilian representatives (Ambassadors Sriranga P Shukla and Nogueira Batista respectively) who negotiated the compromise, the so-called 'common platform approach' with the EC, were representing their countries in the GATT, this view prevailed.

Every time the EC's Amb. Tran Van-Thinh attempted to make goods and services into a "single undertaking", Tran was contradicted in the formal meetings by Batista and Shukla.

After 1989, when the two had left, the EC once again took the 'global approach' to hold up agriculture. And though the Cairns group claimed credit for forcing the EC's hands through linking everything to agriculture, when the push came to the shove, first in the 1989 mid-term review and then in December 1993, and the US and EC reached their own compromises, the Cairns group fell in line.

There is talk even now of the US and EC trying to strike some compromises on agriculture, and agreeing to negotiations on investment at the time of the mid-term review in 2001.

May be history would repeat itself ala Hegel or Santayana, because the trade diplomats of today don't even remember or have records of what happened in the past. Or the US-EC efforts to repeat history could prove that Marx may have been right - history as a tragedy in the first instance and a farce in the second. (SUNS4546)

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

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