IMPLEMENTATION ISSUES AS IMPORTANT AS AGRICULTURE

by Chakravarthi Raghavan

Geneva, 30 Oct 99 -- With just about 30 days away from the Seattle meeting of the World Trade Organization, the major industrialized countries are now beginning to realise that an issue that they hoped to once again side-track is not going away: issues of implementation and correcting the imbalances against the developing world of the Uruguay Round agreements.

At an informal HOD meeting considering the draft declaration, a number of developing countries including Egypt, India, Pakistan, Malaysia, Indonesia, Nigeria, said that the implementation issues that had been before the WTO for 15 months, were as important to them as the built-in agenda issues for Seattle.

These countries spurned a compromise proposal of Singapore (which had the blessings of a new group brought together by the EC and Japan, of  'friends of the round').

In pointed comments, some of the countries including India and Pakistan made clear that if the implementation issues were not going to be negotiated and resolved, it would mean there would be no progress on other issues as well.

Redressing the inequities and imbalances of the Uruguay Round, the failure to achieve expected benefits and the non-operation of the special and differential treatment provisions could not be avoided by characterising them as 'negotiating issues' or issues on which some were not willing to negotiate.

The implementation questions have been coming up even before the 1996 Singapore Ministerial, and at the 1998 Geneva Ministerial which set up a work programme and a mandate for the General Council to prepare for the Seattle Ministerial meeting.

And developing countries, for 15 months now, have formally put forward several proposals under each of the agreements. And, in the preparatory process for the ministerial draft, had clearly formulated texts of a set of proposals for decision at Seattle, and others in the first year of the new round of negotiations after Seattle.

The implementation concerns were initially sought to be dealt with by the majors as either individual country problems needing 'case-by-case' consideration or technical assistance and cooperation.

Later, in terms of the preparations for Seattle and post-Seattle negotiations, these were again sought to be relegated to the various WTO bodies and the General Council for consideration, while new negotiations with new issues could be launched and concluded.

An initial Chairman's text (a secretariat text that was further modified by the US before issuance) did not even mention the detailed proposals on 'implementation', but dealt with them procedurally. But in response to the views of a large number of developing countries, the Chairman put these proposals back into the text through an addendum - much to the discomfort of the United States and the EC who have been forced to deal with them in terms of a draft declaration for Seattle.

When the implementation issues refused to go away, there were arguments that rectifying the imbalances and deficiencies of the UR agreements would involve renegotiations that would upset the existing balance of rights and obligations.

While the US openly said it would not agree to any changes in the Marrakesh texts, the EC was more devious - suggesting that the changes needed in texts should be part of a comprehensive round, thus hoping to get support for its 'comprehensive round' with new issues including investment.

But the developing countries saw through the game and said they would not agree to any negotiations, involving their paying a price on new issues for redressal of the old imbalances.

Some of the developing country negotiators note that if the argument about the existing balance in the UR texts be a ground for not rectifying the imbalances that have come to light, the public in the developing world would not be agreeable either for their governments to take on more obligations, whether for further liberalization under existing agreements or new agreements and rules and disciplines on new issues.

At the HOD discussions, Pakistan said the implementation issues were very important, but were not issues to be negotiated. It was a question of redressing the imbalances that arose in the Uruguay Round. So far they had heard only procedural objections. The reticence on the substantive question was disconcerting. Redressal of the imbalances was not a tactical issue but a very concrete development matter. Without acceleration of textiles integration, there was no clear benefit for Pakistan. The transition periods on TRIMs, TRIPS need to be extended at Seattle. The response to the implementation issues would determine their views on other issues. Without redressal of implementational issues, there would be no progress on anything else.

The Dominican Republic said that the ACP countries at their recent meeting had endorsed addressing the implementation concerns.

Egypt said the issue was a "deal-breaker or a deal-maker" and endorsed the Pakistan statement.

India associated itself with the comments of Pakistan and said it could not accept the notion that the implementation issues were a reopening of the UR agreements. It was a question of addressing the inequities. India did not want to further categorise or prioritise the issues -- beyond what had been put in the LMG paper, namely issues to be resolved at Seattle and those to be addressed and resolved in the first year of negotiations.

All the issues were of great importance. There were just two weeks within which these issues have to be resolved, otherwise there would be problems. These issues were as important to them as agriculture was to other groups.

Uruguay, Cuba, Bolivia, Uganda, Honduras and Haiti were among those who spoke agreeing with the previous speakers.

Implementation, Uruguay said, was of fundamental importance and it was necessary to look at the specific proposals (and not merely find a procedural mechanism to deal with them). Bolivia agreed with India that implementation was as important as agriculture.

Singapore proposed some amendments to the implementation text which was supported by Canada, EC, Hong Kong China, Japan, Australia, Switzerland and one or two other developed countries, but was rejected by India, Malaysia, Pakistan and others who said that Singapore's 'bridge-building' attempt and formulation went in an opposite direction and was not acceptable.

Though presented on its own behalf, several developing countries said that Singapore, which is now an odd-man out in the ASEAN, was part of a  'friends of the round' group comprising among others, the EC, Canada, Japan, Hong Kong China, Korea, New Zealand, Switzerland, Brazil, Singapore, Chile, the Czech republic and one or two others, and some times also the US.

Members of the group are very reticent on their activities or even membership. But meeting at 'technical levels', they have been formulating texts for the draft declaration which one or the other member presents on its own (and is supported by the others) - as in the present case of 'implementation' by Singapore, and trade facilitation by Chile.

The involvement of some of the countries in the 'friends of the round' group appear also to have created some 'tensions' among the more visible regional and sub-regional groups (of which those in the 'friends of the round' are members) and others like the Cairns Group whose main target are the highly agriculture protectionist EC, Japan, Switzerland and Korea.

Singapore proposed a formulation for the chairman's draft about evaluation of the implementation of individual agreements and the serious concerns among developing countries, that Singapore said gave a "more balanced reflection of concerns". It provided a formulation that put a positive gloss in the assessment of the WTO and its agreements. Singapore also wanted deletion from the draft that finding solutions to the implementation concerns was an important part of the Seattle agenda.

Since there were only four weeks to Seattle, in Singapore's view a way out would be to extend the transition periods ending 31 December 1999 and extending the moratorium on non-violation disputes in TRIPS. Also to be addressed at Seattle would be the question of tariff peaks on products of interest to developing countries, completing work on rules of origin, extending the non-actionable subsidies to cover the subsidies of developing countries, and a monitoring mechanism for Art. IV of GATS (about increasing participation of developing countries in the services trade). Other implementation issues, Singapore said, could be addressed in the post-Seattle work programme.

But fellow ASEAN member, Indonesia,  however supported Pakistan and other developing countries.

Canada said that while important, implementation could not be addressed if the UR agreements had to be reopened. A fundamental difference lay in what constituted 'implementation'. Anything requiring changes to the UR agreements was not implementation.

Canada said extension of TRIPS transition period could be considered on a case-by-case basis. It also supported continuation of the harmonisation work on rules of origin, and the extension of the non-violation moratorium of TRIPS disputes. The General Council and the various WTO committees could review the implementation problems. The definition of dumping in the anti-dumping agreement could be reviewed. But Canada would not agree to expansion of the list of countries in Annex VII of the subsidies agreement to whom the prohibition of export subsidies do not apply.

The EU supported Singapore, and suggested a three-track approach: issues needing decisions at Seattle, a working group to decide what could not be decided at Seattle, and technical assistance and technical cooperation for implementation. Nigeria complained that the issue was not being given the seriousness it required and the WTO was not responding to the real concerns and needs.

Venezuela said that the problems of implementation were a reality. There were problems of unfulfilled expectations of developing countries from the UR and the issue needed to be addressed if the negotiations were not to fall into an abyss. Venezuela was ready to accept 'new issues' provided the implementation issues were satisfactorily resolved.

Mexico supported the amendment of Art. 5.3 of the TRIMs agreement to mandate (rather than the present 'may') extension of the transition periods for developing countries. This in no way reopened the existing agreements.

Hong Kong while supporting the Singapore proposal wanted textiles and clothing to be included among the issues to be decided at Seattle.

Mauritius supported the implementation concerns raised by other developing countries and said that 55 WTO members of the ACP group had also reiterated these positions.

Colombia said the 'implementation' issue was not limited to "full and faithful implementation of existing provisions nor to changing existing provisions, but a combination of both."

Australia broadly supported the Singapore amendments, and said that implementation was an important, but complex issue and could best be tackled by categorising them.

The United States said that it had given two detailed responses to the implementation issues. Members had to be 'practical.' The preparatory process was not the forum to assess the effects of texts that had been in force only for five years. The US would not look at anything that upset the existing balance of rights and obligations. It had not heard any country-specific problems. And while it could accept part of the Singapore text (the part giving a positive gloss to the UR agreements), it had to study the others.

Malaysia, an ASEAN member, in effect contradicted the Singapore stance and said the implementation issue was a "deal-breaker or deal-maker". Though it had been before the WTO and the General Council for over 18 months, there had been no substantive discussions. Malaysia referred, as an example, to the harassment of Third World exporters under anti-dumping rules.

Switzerland, Chile and the Czech Republic supported Singapore.

Indonesia, like Malaysia, supported the views of other developing countries, and was for retaining the draft in the revised text which makes a negative assessment of the UR agreements and implementation.

The United States said that it would not accept any proposal that did not provide specific examples of the implementation problems of a country, and repeated its view that the existing balance of rights and obligations could not changed.

However, a number of developing countries said their concerns over "implementation issues" were as great if not greater than the issues of agriculture and services to others.

Venezuela said that only if the implementation issues were addressed and resolved would it be able to address any new issues. (SUNS4542)

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

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