by Chakravarthi Raghavan

Geneva, 3 Nov 99 -- The WTO Director-General Mike Moore suggested Wednesday that the Seattle agenda should go beyond trade liberalization, and that liberalization needs to be accompanied by "appropriate social policies".

Moore also advocated decisions at Seattle to move to agreements on transparency in government procurement and trade facilitation - two of the Singapore agenda issues where there is no consensus, and with some opposition to anything beyond continuing with the "study process".

Moore was promptly assailed by Malaysia which said the WTO was a "member-driven organization" and it was for members to set the agenda and work of the organization.

Rejecting the Moore advocacy of 'social policies', the Malaysian representative, Mr.Mohd Zain, said is a trade organization and not a social organization and "we reject efforts to turn it into a social organization".

A WTO official in briefing the media at first made no mention of the criticisms of Moore, but later tried to gloss over the Malaysian criticism and said that Moore had not advocated any social agenda.

The WTO head's oral statement came in introducing the annual report, "Overview of the Developments in the International Trading Environment."

The report, dated 15 October had not reached many members till late Tuesday, but a WTO official claimed it had been in the boxes of members on 15 October, including the French version which, the press office however had said was not available.

Moore's speech both on the social clause as well as on the Seattle agenda took partisan positions, siding and advocating the viewpoints of the US and Europe on the social clause as part of the Seattle agenda, and advocating their position on two demands on the developing world: agreements on transparency in government procurement and trade facilitation.

In the current discussions on the Seattle ministerial draft and on how to deal with the Singapore issues (investment, competition policy, procurement and trade facilitation), a number of developing countries have insisted that these should continue to be under study and cannot figure as subjects for negotiations.

This is the first time that the head of the trading system has sided with one of the members (the US) seeking to push a controversial and divisive issue on to the trading system and the Seattle agenda.

Mr.Moore's "remarks" to the General Council mostly focused on the Seattle Ministerial and the new round of negotiations. The state of the world trading environment, he said, was generally sound, economic growth was strengthening and the outlook for the next few years was promising. The value and strength of the multilateral trading system (MTS) had been proved during the recent financial crisis when, the good sense of governments and WTO rules had kept the markets open.

Moore said "my ambition" for Seattle was to establish a balanced work programme and the launch of negotiations that would result in a balanced and fair outcome for all Members.

Yet, he said, not all shared the confidence in the benefits of the MTS, and there was "unease about globalization". There were those who felt less secure, worried and uncertain, and saw globalization as a threat.

But, claimed Moore, "globalization is a fact and we cannot retreat from it nor should we want to - it holds benefits for all and we need to take steps to ensure that the prosperity that flows from globalization is accessible to all."

"In Seattle we must continue to deal with the unease - for some of the criticisms are valid."

While economists agreed on very little, they were all agreed about "the gains from trade..."

After speaking about the problems of the LDCs, and advocating duty free access in all markets for their exports and technical cooperation, Moore said the Seattle agenda should go beyond this.

He spoke on need for sound domestic policy and transparency, for working with the Fund and the Bank on "coherence of international policy-making" and ensure that "trade, financial and development policies are fully supportive of each other."

The views on coherence also went beyond the Marrakech agreement and the decision there on "coherence", and pushed the US and EC line on these.

Moore also spoke of need to ensure that the WTO was understood and of the need for decision at Seattle to continue efforts to improve transparency of the WTO and to implement more regular "outreach initiatives" to help build understanding and support for WTO's efforts.

That trade and environmental policies could be mutually supportive was an obvious example, but far from the only one.

"Trade is good for the consumer and like the tide, it can raise all boats," Moore argued. But there were adjustment costs and there were those who perceived inequities in globalization.

"Clearly, appropriate social policies need to accompany liberalization", said Moore who also took the side of those who wanted to go beyond the built-in agenda and wanted it put into the Seattle agenda, extending market access negotiations to "other products" -- non-agricultural products -- and for bringing security and predictability to the trading environment, by strengthening and extending the rules to new areas.

"These are matters on which we do not yet agree, and the time for engagement is now. In Seattle we need to set the path for trade relations for the future."

Several developing country representatives were more critical outside, and said they were "negotiating" with other members and had no intention of "entering into negotiations with the Director-General."

But it was unfair of him to take a partisan position and prejudge the stands of other countries.

The report of the DG, in references to the Asian financial crisis and effects had blamed the outcome on perceived financial weaknesses of countries, lack of experience, inadequate regulation and supervision by authorities. It also spoke of the countries coming out of the crisis as a result of undertaking stabilization and structural reforms - an euphemism for the IMF/World Bank policies.

In joining issue with these, Malaysia said it was "disappointed" with the analysis in the report on the causes of the crisis, and for having failed to refer to the role of currency speculators. And Malaysia, which had not adopted the Fund/Bank prescriptions had done well.

Malaysia also objected to the comments about good governance in several parts of the report, giving the impression that it was lack of governance that had caused the crisis. There had been no mention of the activities of currency speculators that had been responsible for the crisis and set back to their economies.

As for Moore's advocacy of agreements at Seattle on transparency and trade facilitation, Malaysia said they respected Moore right to his views, but the WTO was a member-driven organization that set their agenda. Malaysia had made its position known on the two issues, and "we will stand by it."  (SUNS4544)

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

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