Two winners, one loser at WTO Conference

At its first Ministerial Conference in Singapore on 9-13 December, developing countries suffered a blow when they were pressurized into making major concessions. The North succeded in getting their new issues (investment, competition and government procurement) into the WTO's work programme, whilst the non-transparent Conference process was criticized (to no effect) by developing countries.

By Chakravarthi Raghavan

SINGAPORE: When the first Ministerial Conference of the World Trade Organization ended in Singapore at a closing session on 13 December, the Ministers and assembled delegates did not even have a final official copy of the Declaration in their hands.

At an informal meeting, just before the official final plenary, some three lines of text were added, asking the General Council to consider how the forthcoming 50th anniversary of the multilateral system is to be observed. And there was not enough time to incorporate these and run a new final text for distribution to all delegates.

Delegates will have a limited number of copies in 15 minutes, it was announced, and many copies after 3 hours.

And those who had any reservations could give them in writing, and to be put into the official records, the Chairman announced. There would, in other words, be no discussion. Nor were delegates afforded the chance to make any concluding remarks.

Two winners and a loser

If the Uruguay Round of multilateral trade negotiations ended at Marrakesh in 1994 with some winners and many losers, the first Ministerial encounter after nearly two years in the life of the WTO, thus ended after five days of intense, and totally non-transparent negotiations, with two winners and a loser.

The entire negotiations were made among some 30 delegations (with a Minister and advisor for each delegation allowed in the room). The other delegations did not know what was going on. At an eve- of-closing informal meeting for all, a number of countries, some small and some medium trading countries, openly complained about the process.

Singapore Trade Minister and Conference Chair, Yeo Cheow Tong and WTO Director-General Renato Ruggiero, made some apologies and said they would try to evolve a process that could be more transparent and efficient.

When Mr. Ruggiero took office in May 1995, he announced as one of his tasks and objectives, the bringing of greater transparency into the WTO. That 19 months later, so many countries were complaining of lack of transparency, and Ruggiero could only promise some new method which his spokesman said was still to be worked out, is an interesting side-story to the problems that the WTO faces.

The first winner as a result of this meeting, is the Industrial world, with the European Union and the United States leading the pack, in establishing a new Imperialism to further their neo-mercantilist interests.

The second winner is the host country, Singapore, which managed to get the Conference end with a consensus Declaration, and achieved its objective of enhancing its position as an international conference centre, as a facilitator and an entry-point, if not a bridgehead, into the emerging markets of Asia and the developing world.

The loser is the developing world, collectively and individually as countries.

Looked at from another perspective, shorn of the cliches of the econocrats and the WTO functionaries, the transnational traders and the Fortune 500 corporations have been assured of greater rights and freedoms to make more money under the rubic of globalization. The majority of the world's populations lost out.

Nothing emerging from this meeting will address the problems of marginalization of the majority of people, nor the dire need for greater equity and justice for the poor under the world trading system.

There may be arguments whether in fact the North and the host country are winners in a long-term perspective - for there can be no enduring prosperity for a few surrounded by growing poverty for the many. Also, the WTO system is inherently asymmetric and hence, unstable in a world of slow or sluggish growth. And after 15 years of ascendency, the tide of neo-liberal economics is showing signs of ebb.

But there can be no denying that the developing world as a whole not only did not gain anything here, but again lost. All its problems have been brushed under the carpet as at the end of earlier GATT rounds of "trade negotiations", where even before their commitments could be implemented, the major trading nations succeeded in making yet more and new demands on the developing world.

South's disunity and lack of coordination

The governments of the developing countries, as guardians of their people's interests, cannot escape their share of individual and collective responsibility for this outcome -- because of their continued disunity and lack of coordination. Their brave words, including at levels of heads of State or government at recent conclaves, their joint positions at Geneva and elsewhere on some of the new issues, all crumbled in Singapore, with one after the other yielding to the pressures of the US, the EC and the WTO chief in the small negotiating groups. At last, the one or two countries still holding out were unwilling to withhold consensus and be publicly blamed for "wrecking" the Singapore Conference. After trying to build in safeguards in the disputed texts, they also agreed.

The damage done to their slow attempts to build a united front, is going to take some time to repair, when time is not on their side.

But a larger share of the responsibility for neglect of the implementation problems and concerns of the developing world, must lie with the WTO head, Mr. Renato Ruggiero, and the host country.

Mr Ruggiero (the former EC functionary, Italian Trade Minister, and, then a FIAT executive), brought his own "agenda" to the office (and proudly proclaimed it in a recent interview with the Wall Street Journal), and has been promoting it while cris-crossing the world in 18 months of travels - from Auckland to Vancouver, from Buenos Aires to Seoul and Tokyo, and more frequently, to Washington and Brussels. The Ruggiero agenda coincided with the agendas of the US and the EC.

The host country, in its efforts to ensure a successful conference, with a 'political message in a Declaration', found itself forced to be more aware of and sensitive to the 'needs' of the US and EC and how to accommodate them for a successful outcome, and used all its 'cards' to get the ASEAN countries and other Asian and African nations to compromise.

The result was that five days and nights of meetings, 'negotiations' and 'plurilateral consultations' (with negotiators getting less than five hours of sleep every day) were devoted to the priority agenda items of the EC and the US - investment, competition policy, government procurement, and labour standards.

None of the several scores of issues troubling developing countries received any attention. Some of these were raised in speeches by Ministers in an open plenary, but there were no discussions and hardly an attention was paid to them.

Almost all the time and energy of the preparatory process, and of the Conference itself, were taken up by the 'new issues' brought up by the US and EC, and how to get developing countries to "compromise" and accommodate to these interests of the majors.

And accommodate them, the Conference did. The Ministers collectively agreed to set up working groups on investment, competition, and government procurement, thus bringing in these new areas into the WTO's territory. The North succeeded fully in their objectives.

In exchange, developing countries won some 'comforting language' that they can use to argue back home that their concerns have been met. In reality, they now have to look quickly at ways to control the damage and push back the floodgates of the new issues opened at Singapore.

The much promoted Ruggiero talk of 'integrating' the least developed countries (LDCs) into the global economy, through an Action Plan for duty-free access to their exports was brought up in the closed consultations at the end, by EC Trade Commissioner Leon Brittan. But the US expressed its inability to accept it because of the legal situation and lack of Congressional authority.

In the end, the LDCs, the poorest of the world's poor, had no more from Singapore than a "plan of action" that only calls for 'best endeavour' by the developed countries, and the more advanced of the developing countries, to provide greater and duty-free access to LDC products as an autonomous (and not a binding) policy.

This, like the old Generalized System of Preferences (GSP) or the Lome Preferences, is unlikely to help the LDCs to achieve the structural changes and improvements in productive capacity needed for them to take part beneficially in the world market.

The plan for LDCs adopted in Singapore promised a 1997 meeting on LDCs, to get UNCTAD, the International Trade Centre, aid agencies and multilateral financial institutions to foster an 'integrated approach' to assist these countries enhance their trading opportunities.

In the code language of the 'aid' agencies, 'integrated' does not encompass additional aid!

Marginalization of the LDCs

This was known from the time the US Congress adopted the Uruguay Round Implementation Act, and the American negotiators have made no secret of it. For the issue to be brought up at the tail end may enable Brittan and Ruggiero to contend that they had done their best for the poor countries.

But despite the spin put out by public relations officials, this gesture will not convince the public that the WTO or its major Members are really interested or able to help the poor countries out of their marginalized condition.

In 1982, the veteran Representative of Brazil to GATT, Ambassador George Maciel, remarked that GATT was too serious a business to be left to Ministers to handle.

He made this statement not to downplay the role of political leaders, but to reflect the technicalities and complexities of multilateral trade negotiations, including the inter-connections of rules in different areas, and the fact that developing country Ministers and even their capital-level bureaucrats are not fully equipped to understand and negotiate with their 'peers' in the North - even if they get a chance to negotiate by being "invited" to the small informal groups.

Maciel' statement was of relevance to the situation at the Singapore Conference, where the developing country Ministers were no match when facing the combined phalanx of the US and European Commission Ministers and the WTO head.

This first Ministerial Conference of the WTO has also brought home that the built-in asymmetry and non-transparency of the old GATT system has, if anything, been accentuated and enhanced in the two- year old WTO system, and that the interests and concerns of the developing world are receiving, and will receive, even less attention than under the old GATT.

This feeling was shared by many delegates and developing country Ministers (who had spent large amounts of money and travelled long distances to be in Singapore- only to be shut out of any meaningful participation in decision-making), by observers and leading representatives of 'civil society'.

Ministers from the developing world, who had meetings here with their NGOs, confessed to a feeling of helplessness and to be in total ignorance as to what was going on. Some of the NGOs, were shocked to find that their Ministers and officials knew even less than some of the NGOs and media personnel.

The unjust, inequitous and asymmetric WTO system and institution was brought home to the NGOs as never before.

And while their Ministers and officials put on a brave front on going home, announcing how their concerns had been met, the NGOs and national media personnel had gained deeper understanding of the reality of the WTO: that it has become an instrument of global governance on behalf of the industrial world, potentially a very destabilizing factor of the international system (as the UNCTAD Secretary-General put it) or a powerful tool of the New Transnational Imperialism, as the NGOs see it.

At a large eve-of-closing NGO forum, developing and developed country NGOs made clear their view that the WTO, with its non- transparency and secrecy, was an undemocratic and illegitimate institution intruding into national policy space and disrupting people's lives.

As such, several of the speakers said, aside from their individual agendas and focus, all of them had to focus their activities on raising public awareness of the WTO as an institution promoting the interests of the North and its corporations and as an "illegitimate" agency for global control.

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