New Round with an open-ended agenda advocated

by Chakravarthi Raghavan

Geneva, 18 March -- To the many panacea for solving problems of trade and development, one more can be added after this week's WTO-organized symposia on Trade and Environment and Trade and Development - a new round of multilateral trade negotiations, with an open-ended agenda setting process.

The four days of symposia that ended Thursday evening, saw almost every speaker at various sessions, and the chairs of the various sessions, and most of the discussants and floor interventions -- seemed addressed to the developing world and the "civil society", telling them that all their problems could be addressed and resolved in a comprehensive round of trade negotiations. The acting EC Trade Commissioner, Sir Leon Brittan, (the EC president and Commissioners resigned Monday night and announced they are now a caretaker body making no policies or any decisions), who has been pushing for a "millennium round", advocated it both at the environment and development symposia.

Brittan (who had flown back to Brussels on Monday, from the Environment symposium at Geneva, over the report indicting the Commission as a whole, forcing their resignations) came back to Geneva Thursday to deliver a speech at the Trade and Development Symposium.

Referring to the concerns expressed by "some developing countries", as he put it, that the Uruguay Round agreements themselves have produced an unbalanced result, Brittan said: "If that is so, it is clear to me that the only way to address the issue is through a new Round of negotiations. Indeed, I would ask all WTO members, including developing countries, whether they are entirely happy with the present trading system. If the answer is no, it is clear that the only way of improving upon that system is in a new round, the Millennium Round."

Developing countries (already overwhelmed by the commitments and obligations they have undertaken in the Uruguay Round), don't have the capacity to absorb more obligations or negotiate?

There is need to continue to help build capacity in developing countries, and to that end the WTO ministerial in Seattle (which he advocated should launch a comprehensive round and complete it in 2-3 years) should give a strong endorsement in capacity-building, develop a work programme to build on current initiatives, including ways to enhance cooperation between donors, avoid duplication, improve targeting of assistance and strengthen evaluation of it, Brittan said.

Capacity-building, John Toye, Director of UNCTAD's Globalization and Development Strategies Division, ventured to suggest at the symposium session the previous day, can't be achieved between now and end November when the new millennium round is intended to be launched, but one that not only requires money and other resources, but time too.

But Toye's voice, as that of some others, got short shrift at that session (chaired by the director of the Development Research Group of the World Bank, Mr. Paul Collier) where developing countries were told that if they don't agree to a new round and give more concessions to the United States, they might face more protectionism and lose even their existing rights (ending textiles quotas etc).

Brittan also made another offer for capacity-building: the EC proposal for "a new WTO Law Advisory Unit within the WTO to strengthen the secretariat's capacity to provide advice and assistance to developing countries on dispute settlement, without undermining its impartiality."

Brittan added: "These ideas have been presented in Geneva and we are working to encourage support for them from our WTO partners."

That the developing countries (from Asia, Africa and Latin America and Caribbean), who have sponsored setting up a unit independent of the WTO, and some EU member states who had offered to put up the money, had not favoured this, and had interpreted it as an EC move to ensure that the legal advice to developing countries for dispute settlement would not challenge the EC's common agricultural policy or other protectionism, did not figure in Brittan's speech. But there have been reports that the Commission has taken an aggressive stand to discourage EU members individually to fund the independent legal aid centre.

Earlier, Brittan had said "My central message today is that we need to rethink the application of GATT and WTO rules in the context of development and ensure that opportunities provided by the multilateral trading system are available to all members."

Perhaps it was an answer to the renewed demand in the preparatory process from almost every developing country on the question of operationalising the "Special and Differential" treatment for developing countries found in various WTO agreements, a demand that got strong endorsement from UNCTAD Secretary-General Rubens Ricupero in his opening address to the symposium on Wednesday.

The S&D issue once again appears to have developed a growing support from developing countries, and is now being sought to be diluted by the major industrial nations (and the WTO secretariat) by making it one for the least developed countries.

"I need hardly say," Brittan declared, "that I strongly believe myself that such a Round of multilateral trade negotiations is necessary in the current economic climate to stimulate trade and growth and to reduce the risk of protectionism...." The comprehensive round, he said, would have the key feature of its "open-ended nature of the agenda-setting process. Any issue or area of concern to any WTO member can be put forward for inclusion on the agenda, which is itself agreed by consensus..."

And in a jibe at the United States, Brittan also added that the EC will put all its current tariffs on the table for negotiation in the new Round. We will not simply put forward a series of carefully selected tariff sectors where would be prepared to make changes and regard others as no-go areas. Instead we are prepared to negotiate tariffs across the board and look to others to do the same."

But to those developing countries, probably a large majority, who seemed to think that making industrial tariffs an issue for negotiations, and thus address their problems of tariff escalation and tariff peaks, the comments of some other industrial countries should lead to some pondering.

While several of them, under the compulsion of IMF/World Bank conditionalities, have lowered their tariffs unilaterally, binding them at the WTO mostly in terms of the Uruguay Round requirements of an average tariff, the demands already voiced by the US, EC and their firms is for developing countries "to bind" their tariffs at their current applicable rates.

This means that in future, when they want to establish a new industry, and provide it some initial protection by raising tariffs above their applicable rates, but below ceilings, they would be unable to do so.

Brittan also stressed that the outcome of the new round too would need to be accepted by consensus, and gave the example of Singapore where he said a small group of developing countries were able to succeed, by insisting that their concerns be met before an agreement could be reached. The developed world cannot today impose its wishes on the rest of the world. This is not only a constitutional feature of the WTO system, but a political fact of life.

In summary, therefore, said Brittan, a new Round guarantees that developing country concerns can be put on the agenda, and that nothing can be imposed against the will of individual WTO members, including developing ones.

He also tried to rebut the growing feeling that issues such as agriculture, textiles and trade defence instruments are the priority demands of developing countries, while those of investment, competition and environment were developed country agenda.

He argued that in agriculture and textiles they all had both offensive as well as defensive interests, and could not be divided neatly into areas of interest to one or another category.

But investment and competition, he claimed, as of widespread benefit to the whole WTO membership and not to any particular category. The key was to seek rules that establish a more open and predictable regulatory framework for business, in turn providing benefits for growth and employment for developing countries which can attract investments only by providing such a framework.

On the S&D question, Brittan said that he had asked his staff for a list of developing countries and was "surprised" to be told there was no agreed WTO definition, but that there were a number of GATT and WTO provisions relating to developing and least developed, coupled with some existing waivers of WTO rules by individual members.

There is a complex patchwork of rules and exceptions and the new round should seek to rationalise all this into a coherent and defensible approach, combing virtues of non-discriminatory nature of the WTO rule making with special treatment where it is justified on economic and development grounds, Brittan added.

If the siren song from the North at the symposia -- "put everything into the new round and we can negotiate, conclude it in three years" -- was a repetition of past promises, no one referred to it, and probably did not even remember or know about it

GATT's official history does not deal with it. But any one who seriously studies the history of GATT since its inception in 1947 would easily find that ever since the Heberler committee report of 1963, on the eve of every round of negotiations (Kennedy, Tokyo and Uruguay Rounds), this was argument and promise. Developing countries issues were put on the agenda, and the rounds ended with either more restrictions on their exports (Textiles and Clothing accords and protocols) or not dealing with them, but putting them at the end of each round on to a new work programme that never were completed successfully.

Under the old GATT and the new WTO, every country seeking admission has to make an initial payment, one veteran trade observer noted.

"Perhaps, the time has come for developing countries to say that anyone who wants to put a new issue, not covered by existing WTO agreements, should pay an initial price to all the other members to have the issue put on the agenda."

But his may be a voice in the wilderness.

In their anxiety to get the US to abide by its commitments in the WTO or the EC to abide by its commitment to continue the agriculture liberalization process, they have already agreed to put on the agenda the US and EC demands for new areas to be brought into the WTO, and for new obligations placed on other members, and all without any actual commitments from the EC, one of whose officials dealing with agriculture has been reported as saying "we are only committed to begin negotiations on agriculture, but not to complete or conclude it."

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