Negotiations on Declaration in great flux

SINGAPORE 11 DECEMBER: Developing countries opposing inclusion of new issues into the WTO were facing intense pressures - from the host country, the WTO Director-General, and the majors - trying to force them to back down.

At lunch time, there were indications that several delegations were finding it difficult to match the `brave words' of their leaders outside, with strong stands in private talks.

The major issues on which intense consultations are under way on the third day of the five-day, first Ministerial Conference of the World Trade Organization here are: investment and competition policy (originally proposed as two separate issues by the EC, but now dealt with as one), the labour standards question, and the issue of transparency in government procurement in WTO member countries.

At two informal plenary meetings of the Heads of Delegations (HOD) on 10 December, interventions and speeches by a number of countries, suggested that the two sides were still far apart on these questions, with the divisions, perhaps, sharper on labour standards.

The informal HOD plenary is due to meet again 11 December evening, to take up these and other issues intended to be included in the Ministerial Declaration here.

Meanwhile, the key group of about 15 delegations, who are negotiating these issues in limited consultations chaired by Singapore Trade Minister, Yeo Cheow Tong and WTO Director- General, Renato Ruggiero, had a long session this morning, devoted to the investment and labour standards questions.

Under intense pressures and arm-twisting by the WTO head, the EC, Japan, and other industrial nations, some of the opponents seemed to be backing down somewhat, and negotiating "language" to tie up a study on investment and competition policies with the TRIMs accord, and the WTO process to compliment the UNCTAD-IX mandated study of a multilateral investment framework and development dimension.

Some of the African countries who have been strongly opposed, and had insisted on a study only at UNCTAD, were also being persuaded by South Africa to accept the parallel process at the WTO, since otherwise, the major industrial nations would stymie work at UNCTAD also.

As of 11 December lunch-time, in the private consultations, most of the opponents appeared reconciled to some sort of parallel process at the WTO. But, India seemed to be holding out.

But a clear picture is likely to emerge only at the full plenary of the HOD process in the evening.

These talks among the limited group (what in old days, used to be called `green room' consultations, after the green wall- decor of the Director-General's conference room, which now has a grey-beige decor), are addressing the divisive new issues being pushed at this first Ministerial Conference -investment and competition policies, labour standards, and government procurement.

While in the plenary meetings, every developing country has been complaining about implementation problems, the fears of developing countries in the preparatory process, that their problems would be ignored have been more than proved true.

The focus on new issues

The focus on the new issues in the business sessions, and the informal heads of delegations consultations run by Yeo and Ruggiero, has put these on a lower priority, to be taken up, perhaps on 12 December.

On 10 December, besides meetings among a small group of countries in restricted consultations, there were two HOD meetings, one in the evening, on the investment and competition issues, and the other at night, on labour standards. The government procurement issue was addressed in the morning.

The WTO spokesman, Keith Rockwell, said at a press briefing, that the processes were moving towards a consensus, and that there was a "shift" in the stands of the core group of countries who had been opposing the investment issue being taken up at the WTO, and that they were now ready to envisage a study process at the WTO, of investment and competition policies.

On the labour standards issue too, he announced that there was a movement towards consensus.

In the consultations, and at a plenary speech on 11 December, Malaysia (which at highest levels, had originally taken up a strong and vocal stand) signalled a change of its position, and was willing to accept a study, but no negotiations at the WTO.

While this shocked the other countries, who with Malaysia, had signed a joint position paper opposing any consideration of the investment issue at the WTO, whether for negotiations or study, it did not materially alter the position of the other opponents at the 10 December evening HOD process.

Some of them privately noted that anyhow, the proponents of the investment issue are not seeking any negotiations, and the Yeo-Ruggiero compromise that there would be explicit mention in the Declaration, that no negotiations can be taken up except by consensus, was no great concession.

And while Malaysia was now drawing a distinction between study and negotiations, past experience had shown that any "study" in the trading body, inevitably leads to negotiations and rules.

In the corridors outside, some of the supporters of a WTO study process were also talking of a joint UNCTAD-WTO study, but seemed to be confusing any possible roles of the two secretariats, with the UNCTAD-IX mandated intergovernmental study of a possible multilateral framework and its development implications.

But it was not clear what would happen at the full informal plenary HOD, which has developed a dynamics of its own here.

A new (Ruggiero) formulation that came out of the morning's limited consultation process (but not fully cleared), tried to relate the work programme on investment to the existing WTO provisions on matters related to investment and competition policy. The WTO secretariat, in promoting the investment rules issue (in its annual report), has been contending that almost every agreement of the WTO involves the investment issue.

But some delegations were insisting too, that this should be specifically linked to the review work programme of TRIMs.

But there is some resistance to this, from the proponents of the investment study leading to negotiations, particularly, like the TRIMs. For, if a TRIMs agreement review to be taken up in 2000 could be brought up now, how could the references to the more specific agricultural review and reform programme negotiations in 2000, be refused any special mention? And how will the Latin Americans supporting the investment process, justify themselves to their public?

The new formulation would appear to involve establishment of a working group to examine the relationship between trade and investment, and another working group of government- nominated experts to study the interaction between trade and competition policy.

While the latest Ruggiero draft talks of these groups drawing upon complementary work in UNCTAD, some like Egypt, seem to want to change this into the WTO work complimenting the UNCTAD work.

But, one outside trade specialist and observer said, notwithstanding all such formulations, and notwithstanding the declaimers by those who have now yielded for whatever reason, the investment issue is now like the camel that has put its tail into the Arab's tent in the desert.

On labour standards too, the divisions have been sharp, and so far, no common ground appears to have emerged. Some of those opposing inclusion of any reference to the Labour Standards question in the Declaration, seem at best, to be willing to have some mention of it made in the Chairman's concluding remarks, on his own responsibility, on the lines of that made at Marrakesh and before that, at Punta Del Este. But others are opposed even to that.

While Pakistan put forward a formulation as a draft para for a Chairman's statement, it is not clear whether the Northern countries would accept it, given its references to movement of natural persons, and against unilateral trade measures.

The Pakistani formulation on labour standards

The Pakistani formulation said:

"We reiterate the commitment of our countries to the promotion of trade as well as to higher levels of employment. We are convinced that liberalization of trade on an equitable and universal basis, specially in labour-intensive sectors of interest to developing countries, is indispensable to promote higher employment and improve labour standards. In this context, the liberalization in the movement of natural persons can also contribute considerably to ensuring higher labour standards. We reject trade restrictive and protectionist measures as means to enforce labour standards. The invocation of unilateral trade measures are contrary to the WTO objectives of liberalization of trade, hinders the economic and social development of developing countries, in particular and should be rescinded. Labour standards should not be an excuse to challenge the competitiveness of developing countries and the comparative advantage of low wage countries should not be called into question. We are convinced that the ILO, because of its mandate, experience and participatory tripartite structure, is the sole international organization to elaborate and promote core labour standards, as contained in ILO Conventions, primarily by universal adherence to these Conventions."

Participants in the HOD process said that the WTO head, Mr. Ruggiero, had been extremely reluctant to circulate this to the other delegations, but this was ultimately made available only after several delegations asked for it. But the Pakistani formulation was immediately shot down by some of the Northern delegations pushing for a para on labour in the Declaration.

It was clear that they were not ready to accept, along with the references to labour standards, calls against unilateral trade sanctions, liberalization of movement of natural persons (under the GATS accord) and the call for `universal adherence' to these Conventions.

The US is not a party to very few ILO Conventions, not even those relating to freedom of association and collective bargaining, nor to that on forced labour. In a reply to an ILO questionnaire, the US administration had mentioned its difficulties in adhering to the ILO Conventions, mentioning in this connection, the policy of various States (like California and many States in the South), in the USA to privatize their prisons and use of such prison labour (on minimum wage) by private corporations for producing goods and services.

A new draft by the secretariat, removed the references in the original Ruggiero draft to the Universal Declaration on Human Rights, substituting it with references to the Copenhagen Social Summit Declaration and Plan of Action. (CR/SUNS3890)

 The above first appeared in the SUNS of which Chakravarthi Raghavan is the Chief Editor.