Liberalisation Perseveres Without Multilateral Talks

By Gustavo Capdevila

GENEVA, 22 Sep 2000 (IPS) - The process of trade liberalisation and opening of
markets forges ahead even though multilateral negotiations on the matter
have been at a standstill since the failed World Trade Organisation (WTO)
ministerial conference in late 1999.

Industrialised countries are now implementing reforms they wanted, but
through regional or bilateral accords, such as those the United States
recently signed with Cambodia and China, or the European Union with its
former colonies of Asia, the Caribbean and the Pacific (ACP).

The rulings handed down by the powerful WTO’s Dispute Settlement Body
constitute other means of reaching these objectives, especially in the
opening of markets.

Given this situation, more attention must be paid to the events in the
regional and bilateral spheres, and we must abandon the belief that the
only thing that matters is what happens in the WTO, charges Rubens
Ricupero, secretary general of the United Nations Conference on Trade and
Development (UNCTAD).

In the agreement signed with Cambodia, the United States was able to
include clauses about several controversial issues - such as labour rights
linked to market access - that have not found consensus in other
multilateral negotiations.

Cambodia accepted the treaty with its explicit links between compliance
with labour standards and the access of its products to the US market.

Another example is the November 1999 accord China signed with the United
States as one of the top requirements for its entry into the WTO fold.

In that agreement, Beijing accepted the possibility that Washington could
impose specific safeguards for 10 to 12 years on those products whose
imports increase on the US market.

Ricupero commented that neither of the concessions - the so-called
”social clause” or the safeguards - is covered by the WTO’s current

China accepted the stipulation because in 1999 it had a favourable trade
balance with the United States - to the tune of 67 billion dollars - and
”has enormous interest in maintaining that presence” in the world’s
leading market.

At a seminar organised in Geneva last week by the Third World Network,
Ricupero concluded that the bilateral and regional accords, and often the
cases heard by the WTO Dispute Settlement Body, “are more efficient
methods than multilateral negotiations” in achieving market

A new mechanisms for trade reforms also stems from the Trade and
Development Act passed last May by the US Congress, which contains a
chapter evaluating the growth and opportunities offered by African nations,
and other trade matters centred on the Caribbean.

To take advantage of what the US law offers, African countries must meet
certain conditions, many of which these and other developing nations have
already rejected in WTO negotiations.

Martin Khor, head of the Third World Network, said “the Act is thus an
instrument to obtain support or agreement of African countries in those
areas which the countries had already objected to or refused agreement in
the WTO.”

Among the US law’s requirements for African countries are “a market-based
economy that protects private property rights and an open trade system.”

The United States’ potential trade partners in Africa must also minimise
government interference in economic matters via measures such as price
controls, subsidies or state enterprises, according to the legislation.

Khor pointed out that these requirements “very much constrain a country’s
ability to set its own balanced policy or strategy in relation to the
government’s role in the economy,” and eliminates government autonomy in
setting policy for the private sector or to implement social safety net

Ricupero, meanwhile, echoed the commentaries frequently heard in
negotiating circles about the expanding authority of the WTO’s dispute
settlement system, which includes special panels and the Appellate Body.

Today, it is often more fruitful to utilise dispute settlement proceedings
to gain access to markets than to rely on multilateral negotiations, said
the Brazilian diplomat.

Carlos Correa, a jurist and expert on intellectual property rights,
criticised the WTO dispute settlement panels and the Appellate Body for the
power they have assumed.

Correa, who serves as trade adviser to several developing nations, called
for the rigorous examination of the resolutions handed down by the WTO
panels, which had not only declared their own jurisdiction over assessing
and interpreting the provisions of trade treaties, but had also proclaimed
their right to interpret the laws of individual nations.

The specific case Correa cited had been initiated by the United States
against India for applying a provision of the Agreement on Trade Related
Intellectual Property Rights (TRIPS). The WTO ruled in favour of the United

The consequences of the bilateral and regional accords are cause for worry,
according to Ricupero. They show that unilateralism still has power and is
on the rise, despite efforts to build a truly international system, he

At the last WTO ministerial conference, held in the US city of Seattle last
December, the world’s finance ministers failed to agree on the convocation
of a new round of international trade negotiations.

Attempts by the WTO and other multilateral forums since then have not had
much success either.

The maximum financial authority of the United States, Alan Greenspan,
chairman of the Federal Reserve, has agreed with WTO director-general Mike
Moore in his scepticism that a new round of trade talks would be launched
in the short term.