by Chakravarthi Raghavan

Geneva, 19 Nov 99 -- Developing countries participating in the "green room" consultations appear to have turned down Thursday night the separate US and EC proposals on trade and labour standards issues.

Meanwhile, there was still no word out of the WTO, about the draft declaration. Informal heads of delegations meeting that had been set for Friday afternoon, then brought up to noon, had been put off, with reports that it may be held on Saturday.

The US introduced on 30 October a proposal for a WTO working group on Trade and Labour to produce a report in two years. The US paper goes beyond the 6 core labour standards of the ILO. The US itself has only signed on to one of them.

The EC paper on addressing the challenges of globalization, has suggested a joint ILO/WTO standing working forum on trade, globalization and labour issues.

Both approaches have been rejected by the developing countries in discussions at the informal heads of delegation meetings.

But they appear to have been brought up Thursday in 'green room' consultations, but were turned down by the developing countries.

The EC's idea apparently got the support, reluctant on the part of some, of other industrialized countries -- Norway, Switzerland, Canada, New Zealand and Australia among others. Japan was said to have been silent.

But all the developing countries reacted very strongly and rejected both approaches. Pakistan reportedly warned again that the move to bring labour issues into the WTO, directly or indirectly, would wreck the Seattle meeting and the WTO itself.

Brazil, which reportedly has been part of the 'friends of the round' group cobbled together by the EC in the drafting of the EC's draft declaration of 11 November, also rejected the US and EC approaches, trade diplomats said Friday.

The 'working papers' issued by the General Council Chair, Amb. Ali Mchumo, in all other areas excepting 'implementation' and 'agriculture', several developing country diplomats said Friday, was perhaps even more prejudicial to the developing countries than the draft of 19 October, they said.

Some of the square brackets in the 19 October draft that have now been eliminated are those more favourable to the developing countries.

Meanwhile, the EC which with some of its 'friends' has prepared the text of a "draft declaration" which it has been trying to "sell" to the other developing countries and win their support.

The paper is seemingly more forthcoming, and even makes some concessions, but areas where the EC does not have to pay any real price. For e.g. the paper seems to concede the demand of developing countries for acceleration of the integration of textiles and clothing, bringing forward to 1 Jan 2000 the products to be integrated by 1 Jan 2002 - something that the US has flatly already rejected.

The EC's own integration scheme has left till the final stage all the textiles and clothing products that are considered by its industry to fall into the "sensitive" or "very sensitive" categories, and thus restricted by quotas.

While seemingly more forthcoming to the concerns of developing countries, on every crucial question, the draft on implementation issues to be acted on at Seattle: has such wonderful promises phrased as to consider, examine, pursue with a view to clarification, make every possible effort to complete, review, provide 'sympathetic consideration' etc.

Perhaps they may be described, in words attributed to Mahatma Gandhi in his description of British promises during the war of independence to India: "they are post-dated cheques on a crashing bank."

And most of these promises for the developing countries in fact relate to some of the concerns of the EC and other industrialized countries vis-a-vis the US, such as the issue of 'non-violation complaints' in dispute settlements on TRIPS, where almost everyone except the US wants the moratorium to be extended.

Though the developing countries have put this as one of the 'implementation issues' for decisions, there are some trade experts who believe that such complaints (about nullification and impairment by another country, not arising out of violation of rules) are so difficult to sustain in TRIPS that developing countries should pay no price whatsoever on this. For, the patent and other rights, are at best what are called 'negative rights', namely protecting the owner from exploitation without his consent. There is no right to be able to benefit from the monopoly, because that monopoly could be nullified by domestic competition laws and, as is the case even in the US, may result in issue of compulsory licence without compensation.

The only benefit to developing of extending the moratorium is avoiding costly litigation to defend themselves before the Appellate Body. On another TRIPS issue, which is also agitating a range of environment and development NGOs, namely the conflicts between TRIPS and the UN Convention on Biodiversity (CBD) about patenting life-forms including genes etc, the EC paper only provides for work shall be initiated "to examine" the relationship between TRIPS and CBD, and for recommendations to be made where appropriate.

The EC's position on this issue, in some of the restricted consultations, has been that the EC could not agree to outside agreements overriding rights under TRIPS and trade rules to the CBD (with the US has said that not being a party to the CBD, it could not allow any derogation from TRIPS).

The promise to examine and make recommendations as appropriate on this question, and the talk of review of Art. 27.3 (life patenting, sui generis protection etc) "shall be pursued" is a joke, some trade diplomats comment.

The Marrakech agreement on rules of origin mandated the completion of the work of harmonising the non-preferential rules of origin within 3 years of the WTO entry into force. This work has been actually frustrated in the committee by the majors.

The EC paper now provides only that the committee "shall make every possible effort" to complete the work in 2000, and any event no later than the 4th Ministerial.

Similar is the approach on almost every point on implementation decisions to be taken at Seattle meeting which is also asked by the EC draft to set up an "improved mechanism" to resolve implementation related concerns, for the General Council conducting a full and comprehensive review of issues and problems identified by members, and for the Council to complete is review and take appropriate actions within one year to resolve them.

But this is much less than even what it sounds. For, the next para in the draft, No 12, goes on to provide that any concern involving a change or modification of the Uruguay Round agreements, in particular to those involving the agreements on subsidies and countervailing measures, anti-dumping, TRIMs, TRIPS, customs valuation and 'certain other' WTO agreements and rules, "shall be added to the negotiating mandates set out in the declaration, and taken up in relevant negotiating bodies under the single undertaking."

And with the single undertaking involving several new demands on behalf of the EC and its TNCs and owners of capital -- investment, competition policy, trade facilitation, transparency in government procurement to provide market access -- developing countries are told to pay a new promise for the promise that their concerns of the imbalances and deficiencies resulting in developing countries not having benefited from the Marrakech agreements would be on the negotiating table of a comprehensive round.

The EC draft, which is being sought to be sold to other countries and gain their backing to enable the EC to present it at Seattle, is more like the Lewis Carrol tales of the spider inviting the fly to walk into its parlour. (SUNS4556)

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

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