Moore campaigns for New WTO Round in Africa

By Tetteh Hormeku*

Algiers, 28 Sep 99 (ISODEC/TWN) -- Even by the principles and priorities ag ainst which he wants the world to judge his work as Director-General of the World Trade Organisation, Mr Mike Moore's speech last Thursday before the Conference of African Ministers of Trade in Algiers was quite a travesty.

Moore totally defied the often-stated concern of African countries to focus the coming WTO negotiations on implementation issues.

Instead, his speech was a full-swing campaign for a new round of WTO negotiations to be launched at the Seattle Ministerial Conference, complete with elaborate arguments in favour of the very new issues that African countries have always said they did not want.

Not only did this highlight contradictions in Moore's own stated priorities, but it was also in sharp contrast to the general view of other participants, including representatives of other international institutions, African trade officials, and above all the Ministers of trade themselves.

Indeed, the Ministers seemed rather unimpressed; for, no sooner had the applause died down and Moore been ushered out of the conference hall, did they sit down to quickly adopt a declaration which firmly (even if too quietly) re-emphasised their concern with implementation issues and the imbalances.

Moore told the African ministers: "I want to be your Ambassador in Geneva, your champion in the capitals and your advocate with the other international institutions".

However, instead of finding out what message to take from the Ministers whose ambassador and champion he wanted to be, he gave them his own message, ready-made, which he delivered in apocalyptic tones.

He urged the Ministers "to give their strong support for a new Round of Trade Negotiations," so as to "maintain the momentum for trade liberalisation and hence growth, development and higher living standards for our families". A new round, he said, was necessary to hold protectionism at bay.

"Imagine if the North had kept their markets shut during the Asian crisis," what would have happened, he postured.

Changing tone slightly, he added, "I know you will send a strong message to Geneva and Seattle... Seattle is our best hope to advance."

Moore's campaigning posture was in sharp contrast to that of other speakers.

One such speaker, Mr Carlos Fortin, the Deputy-Secretary General of UNCTAD reminded the African ministers that the proponents of the new round would require the agreement of African countries to launch such a round in Seattle. He therefore urged them to insist on addressing ALL the issues of concern to ALL their countries. Fortin, also urged them to approach Seattle informed by the impact of globalisation on developing countries and, in particular, the recent global economic crises and the inter- relationship between financial and trade liberalisation and their effects on the economies and balance of payments of developing countries.

Indeed, Fortin's focus was on the need for African countries to identify and pursue their own interests, formulate technically sound proposals and form alliances with other developing countries, as the only way to get benefits from the multilateral trade system.

For his part, the Assistant Secretary-General of the Organisation of African Unity, Ambassador Vijay Markham, welcomed Moore's commitment to vulnerable economies. But Markham preferred to talk about this in the more cautious context of future multilateral trade negotiations.

The phrase "future negotiations" which the ambassador had underlined in his text, echoed one adopted just the night before by African trade officials in the draft ministerial declaration.

That draft was a way to signal their unwillingness to engage in negotiations on the so-called new issues, but rather focus on repairing the imbalances of the existing WTO rules and system.

The officials purged all references to the so-called new round in their statement, preferring instead to talk of future negotiations. They further reaffirmed the Marrakech declaration by the G77 ministers as one of the negotiating positions for these future negotiations.

In addition, they produced a list of the changes required to make the WTO rules and system more equitable to African countries. All these were later adopted by the Ministers.

In Moore's campaign speech, however, all the specific and concrete needs expressed by the African officials were either effectively sidelined, or re-interpreted and turned into arguments for free trade and for a new WTO round!

Thus, Moore admitted that the uneven distribution of the benefits in the international trading system require action. However, Moore saw this action as basically being the need for individual nations to intensify domestic efforts for adjustment and reform. This intensified reform must include sound macro-economic policies and a favourable regulatory environment including -- competition law. So in went one "new issue".

On the demand by African countries for the strengthening and expanding of the scope of special and differential treatment provisions of the WTO, Moore conceded it was a 'legitimate' concern.

But, remember, "the benefits of a rules-based system cannot be fully realised if Members seek too many exemptions from the rules," said Moore.

What members should avoid, he added, in a non-discriminatory rules-based system are exemptions "which, from the available evidence, produce the unintended consequence of slowing down the pace of integration into the multilateral trading system".

But he did not give any example of such evidence of exemptions having slowed down the pace of integration, leave aside the question whether developing countries who have been integrated have gained?

Moore spoke of the 'false separation' of trade and development, and of UNCTAD-WTO relations as one of "brother and sister, wings of the same bird," and of the UNCTAD head as a "great man and a great friend", and the two working together to assist our people.

But with such effusive praise to UNCTAD, one wonders whether he had not gone through UNCTAD's Trade and Development Report 1999, which has some clear analysis of the Uruguay Round and its effects on developing world, on trade and development and the backlash against globalization, and on market access, not of developing countries opening their markets more, but industrialized countries doing so, and enabling developing countries to earn to pay for imports, or....

Africa's supply side constraints? Moore replied: "Addressing these problems require a combination of policies - which include improvements by developing Members in their market access and national treatment offers in their domestic markets", particularly in areas like communications, roads, financial services, health.

These improvements include secure commitment to send strong signals to foreign and domestic investors alike, and by these he refers to "sound and complementary regulatory policies and transparency in government, including in procurement policies. A transparent procurement policy is one area where everyone wins immediately".

So market access and national treatment for investors, as well as government procurement. Two more "new issues".

Perhaps for Moore, these too are self-evident truths.

However, the Secretary-General of UNCTAD, in a press conference in Geneva on 27 Sep (#SUNS 4517), took am agnostic view on investment issues, and said there was need for empirical research and evidence on the effects of foreign investment liberalisation, on TNC on technology transfer and technological development in the host countries, on whether TNCs increase host-country exports and export earnings, offsetting the outgo, and the effects of all these on balance-of-payments of the host.

And regional integration? Certainly, said Moore. Then he added: "it is vital to re-affirm the primacy of the multilateral trading system, and ensure that the regional trading integration process is complementary and not harmful to the rules-based trading system".

And this was being told to African countries, who had just watched the WTO rules devour banana producers from the ACP countries, and the GATT/WTO's over 30-year support to the European integration.

Mr Moore capped all this with a ringing lecture to the African Ministers on free trade.

"Allow me, he said, "to raise with you a problem that most nations face which frequently escapes public scrutiny, namely the costs that arise from protection. Trade protection, either through tariffs or non-tariff barriers, imposes significant and damaging costs on national economies," he claimed.

Again this was being addressed to African countries, whose local enterprises were being daily run out of business as a result of decades of dismantling many forms of trade protection!

In short, Mr Moore took on all the demands which African governments and trade officials had repeatedly made as a means of redressing the pervasive imbalances and inequities in the multilateral trade system.

And then he simply turned them into justifications for introducing the very new issues that the African governments and their officials had said they did not want.

Moore put his advocacy for a new round in the context of three priorities on the basis of which he wanted to be judged, both personally and as Director-General of the WTO.

These were: to facilitate and assist all participants to get the most balanced outcome from the new negotiations, an outcome which benefits the most vulnerable economies; to be an advocate for the benefits to both great and modest nations of a more open trading system; and to strengthen the WTO and its rules, maintain its reputation for fairness, and reshape it to reflect the reality of its membership and their needs.

Moore did not explain how vulnerable economies would participate beneficially in the new negotiations, when these same vulnerable economies have said repeatedly that they are so overwhelmed with the implementation problems that they can not meaningfully undertake any new obligations.

Nor did he say how he could strengthen the WTO's reputation for fairness, when most members feel they are unfairly treated as it is. Nor how he could shape the WTO to reflect the reality of its membership, when he defined the desires of the majority of its members in the light of the needs of the WTO (and the 'majors' in it).

May be Moore did not think any such contradictions existed between his priorities and his campaign for a new round. His intention to be an advocate of the benefits of the WTO system, however, was clear in the context of his desire to be made Africa ambassador at large: to promote, on behalf of the African ministers, the new round which they had suggested they were not keen on.

To be sure, Moore also offered other commitments to the African Ministers. One of these was in relation to the fact that even though African countries form a substantial proportion of the membership of the WTO, there had never been an African deputy Director-General.

"There should be", he said, and "I hope to fix that over the next few weeks". As another initiative, Mr Moore said he had appointed a friend who was a retired ambassador from a small country (presumably a reference to Jamaica's former ambassador Anthony Hill) to assist in developing a scheme for small countries who cannot afford to be represented in Geneva.

He said he was also working with members of the WTO to include funding of WTO technical co-operation in the regular budget of the WTO. This would improve the WTO technical assistance to African and other developing country members.

Most important, he would be asking developed country members to grant duty-free access to all products from least-developed countries, 33 of which are located in Africa.

Undoubtedly, most of these must have been welcome news to the African ministers.

But they listened to the total package presented to them by Moore. And then they adopted the statement prepared for them by their officials without a single amendment.(SUNS4519)

(* Tetteh Hormeku is an African economist and researcher working on the Africa Trade Programme of technical assistance and policy research by the Ghana-based Africa secretariat of the Third World Network)