by Chakravarthi Raghavan

Geneva, 1 Feb 2000 -- The post-Seattle situation and the issues confronting the World Trade Organization, after the collapse of the 3rd Ministerial meeting at Seattle, are expected to be discussed at an informal meeting of the WTO General Council Wednesday morning, but could continue through the week.

The informal meetings are said to be a prelude to the formal session of the Council set for 7 February. That meeting has on its agenda an item "Follow-up to the Seattle Ministerial Conference", and two other items, one relating to the mandated negotiations on Agriculture and Services, and another on 'other aspects of the WTO work programme.'

The 'Follow-up to the Seattle Ministerial Conference', had been put on the agenda of the General Council meeting of 17 December, but when that meeting was adjourned, the Chairman of the General Council Amb. Ali Mchumo had said that the meeting would be resumed as early as possible in the New Year when the item "Follow-up to the Seattle Ministerial Conference" would be taken up.

The notice for the 7 February meeting and the draft agenda circulated by the Director-General does not say that it is a "resumed" meeting.

At the 17 December meeting, Mchumo had also said that before the General Council met in 2000, there would be prior informal consultations on the item about follow-up and this would include "questions raised by several members at the Council on WTO provisions that lapse and the deadlines that expire on 31 December 1999."

While this would imply that the Chair would hold the informal consultations, Mr. Mchumo had been away from Geneva since the beginning of the New Year and returned only on 26 January.

On the basis of a purported authority given to him by the 3rd Ministerial Conference, set out in a statement of the chairperson of the Seattle meeting, Mrs. Charlene Barshefsky, Moore began his own consultations. On his way back from New Zealand (where he had been holidaying over Xmas and New Year) to Geneva, Moore stopped in India where he talked with the Indian Commerce Minister and other officials, as also some of the trade ministers (South Africa, Norway, Netherlands and the UK) who were there (with Moore) to attend the meetings of the Confederation of Indian Industry (CII).

From Geneva, Moore went off to Brussels for consultations with EC Commissioner Pascal Lamy and the secretariat of the ACP (the Africa-Caribbean-Pacific countries in the Lome convention with the EC). He then went to Washington for consultations with USTR Charlene Barshefsky, the US Agriculture Secretary Dan Glickman and the Deputy Treasury Secretary Stuart Eizenstat.

On return to Geneva he held some bilateral meetings with Geneva trade ambassadors, and then went off to Davos, for the World Economic Forum meetings, to consult the rich and powerful who gather there annually.

In a press release dated 26 January, the WTO secretariat had said that Moore had held these series of consultations with Ministers and Ambassadors from member governments "in an effort to build confidence and prepare the organization for future action". The press release had quoted Moore as saying that having talked to several dozen Ministers since Seattle, he could "clearly see how we can get momentum in Geneva."

According to the press release, Moore added: "The WTO will in a business-like way, make constructive efforts to produce realistic steps aimed at building confidence among Member governments and the public at large. We are committed to negotiations in agriculture and services, sectors which cover half the world's economy. We should address the market access problems of the poorest nations and seek to build their capacity to engage and contribute". Moore said it was imperative to address in an expeditious and realistic way, the very real problems some countries have faced with implementing existing WTO agreements, and also examine the structure and system of WTO procedures, and see what improvements could be made.

Perhaps inspired by the Geneva lake (which has swans) which the WTO headquarters overlooks, Moore declared: "For the first few months of this year the WTO will adopt the posture of the swan - serene on the top of the water and paddling furiously under the water."

Coming back from Davos, Moore has again been holding some individual and plurilateral consultations to prepare the ground for the formal General Council meeting.

But with many legal questions raised by the entire Seattle meeting - ranging from Moore usurping the Chair on 30 November to start off the meeting, and the Barshefsky statements at the final plenary on 3 December (which was not formally adopted) - there have been some murmurs among developing country delegations about the way Moore and the secretariat were again hi-jacking the post-Seattle process, just as in the preparatory process before Seattle.

Perhaps as a response, in the consultations (according to several trade diplomats who did not want to be identified) Moore has been talking of the consultations that were being held by "We/Team", as one diplomat put it, giving the impression to some that the "we/team" covered Moore and the Council Chair, and to some others the "team" covered the deputy Directors-General.

From remarks of Mchumo after his return to Geneva, trade diplomats have had the impression that he was more concerned with finding a consensus candidate to succeed him as Chair, and handing over the General Council responsibilities to his successor.

But the "We/Team" consultations by Moore since Monday have reportedly been on four subjects: (a) the mandated negotiations in agriculture and services; (b) the transition periods; (c) transparency of WTO decision-making; and (d) the Programme of Action for Least Developed Countries and WTO technical assistance programmes. As one trade diplomat recently commented privately, in the days of the old GATT, "consultations" to find a consensus, whether by the chair of various bodies or by the director-general meant "multilateral" and "plurilateral" consultations.

But since the WTO, most of the consultations are held "bilaterally", and those holding consultations announce at the end the decision that would command "consensus". But such a process made it difficult for trade delegates involved to know the views of others being consulted or to interact with them. They have to contact informally their colleagues to find out what happened in such bilateral consultations.

On mandated negotiations in terms of Art.20 of the Agreement on Agriculture (AoA), and in terms of Art XIX of the GATS, Moore appears to be canvassing a consensus to announce the start as of 1 January 2000 of the negotiations (as provided in the Marrakesh Agreement for the WTO), and how and who would conduct it.

The consultations have mostly focused on agriculture, and very little on services, since there is a general feeling that whatever compromise is reached on agriculture would apply to the services talks too.

For the agriculture talks, the countries of the Cairns Group want the negotiations to be in a separate negotiating group.

But a large number of other countries do not want to get into this question of which body should conduct and who would chair that body. This argument, they say, would not lead to any easy solutions or consensus. From this view, they believe that the talks should be held within the Committee on Agriculture, and the Services talks within the Council on Trade in Services. A General Council decision to this effect would mandate and enable the two bodies to begin the process.

On the second issue, according to trade diplomats, with some delegations he has been meeting Moore has been talking of the "transition period" for the agreements to kick in - and whether there should be a blanket extension or on a case-by-case basis as the US, EC, Japan and other industrialized nations want.

Many developing countries are opposed to the case-by-case extensions since this places the countries concerned in a situation where the powerful countries make other demands on them as a quid pro quo.

But with some other delegations, Moore has also been reportedly talking of "implementation and transition periods."

Before Seattle, developing countries had raised a large number of questions and issues under the title of "implementation", and had formulated specific proposals - some involving actions and decisions by the 3rd Ministerial Conference, and others to be taken up and addressed and resolved in year 2000 by the General Council.

The major industrialized countries did not like the 'implementation' issues that had been coming up before and since the Singapore Ministerial Conference of 1996. They tried to ignore it -- with strident statements from the US at Singapore and at Geneva Ministerial to the effect that the obligations undertaken at Marrakesh had to be carried out, and at best some technical assistance and cooperation for implementation could be envisaged, and more diplomatic ones by the EC.

Even during the preparatory process for Seattle, the issues were sought to be ignored in the beginning, and just before Seattle (when it became clear that the implementation issues raised by the developing countries won't just fade away), the US and EC adopted the view that extension of transition periods could be envisaged on a case-by-case basis, and that on other questions raised there could be no changes or interpretations of the WTO multilateral agreements since that would involve upsetting the balance of rights and obligations set at Marrakesh.

But there has never been any convincing answer why developing countries should undertake new obligations - whether in terms of new issues sought to be brought in (like investment and competition policy, or government procurement or trade facilitation), which under new names involved new obligations in areas proposed under some other title for the Uruguay Round, but did not find their way into the concluded agreements, or even in terms of further 'liberalization' within existing agreements involving more obligations for developing countries.

Only the dogma of benefits of liberalization are repeated, and more recently, about the "inevitability" of globalization which, when examined closely, seems to mean a preference for the status quo -- those benefiting from the present processes do not want to give it up. There was also the EC view in the run-up to Seattle that the implementation issues should form part of the new comprehensive round so that there could be 'trade off': developing countries seeking changes should compensate by taking on other obligations and market access through investments, or accepting new non-trade issues like labour and environment.

With the collapse of the Seattle and no early prospect of a new round with new issues, the attitude of the industrialized countries seems to be that they do not want to talk about "implementation" any more, and the most they could consider would be individual case-by-case approach for extending transition periods.

But several developing countries have said that unless the questions raised by them under implementation, and the existing imbalances and perceived inequities are addressed and resolved, public opinion in their countries as also the views of their domestic constituencies and enterprises would not allow them to negotiate or take on any more obligations and commitments - whether on new issues, or even in the mandated negotiations like agriculture and services.

As for the programme of action for LDCs, namely tariff- and quota-free access to their exports, a number of developing countries have reportedly said that it was for the industrialized countries to take action in this field and provide such access, and bind them in the WTO.

Before Seattle, the EC and US and other industrialized countries insisted that the other developing countries should also make a "contribution", and that the duty- and quota-free access to LDC exports should be undertaken by all countries, and not merely the developed countries.

But most of the developing countries rejected it. They noted that when they agree to such treatment by the industrialized countries favouring the LDCs, without requiring MFN treatment for their own exports, the developing countries would be making a 'contribution' in that they or their exporters would lose: by agreeing to the LDCs getting benefits, they would be agreeing to a situation where their own exports to industrialized country markets (where they face duties or quotas as for textiles and clothing) would be facing competition.

For e.g. the Lome benefits extended to Bangladesh in the EU market has resulted in Bangladesh overtaking Pakistan in terms of exports of textiles and clothing.

To ask the developing countries to do more in their own domestic markets, by giving duty- and quota-free treatment to LDCs, would be asking or expecting too much.

This view has been reportedly reiterated by several of the countries who have been consulted 'bilaterally' or more recently in 'groups'.

Other industrialized countries also have taken the position that it was for the Quad (Canada, EC, Japan and the US) to first show the lead and accept such obligations for LDCs, and then they would follow suit.

At a green room meeting on 3 September, when it was clear that Seattle meeting would get nowhere and would have to be ended without agreements, Bangladesh tried to get agreement on the Programme of Action for LDCs and for the technical assistance programme.

But Mrs. Barshefsky, who chaired that meeting, told Bangladesh in no uncertain terms that there was no agreement on the issue of LDCs even among the Quad. Within the Quad the US has been opposed, arguing that Congress would not agree. The EC already provides such concessions to the LDCs.

On the transparency and decision-making issue, the US, EC, Canada and Japan have been using the considerable dissatisfaction among the developing countries over the process at Seattle, and the complaints of the non-governmental groups, to argue that the failure of Seattle was due to these questions.

This enables them to escape their own responsibilities, namely, the deep divisions among themselves on questions of substance, as also between them and the developing countries that was responsible for the Seattle failure. For e.g., Japan had refused during the preparatory process to discuss agriculture mandate for the Seattle declaration, and the EC made it conditional on a new round with investment issues and the massive market access to developing countries through investments and drastic reductions in their industrial tariffs.

After Seattle, particularly in the edited version of the final meeting on 3 December, Barshefsky has linked the internal transparency questions with the external and called for solutions. Canada and the UK have also flagged this question - with talk from all of them turning to the establishment of some form of a steering committee (like the old Consultative Group of 18 in the old GATT, which had a consultative but no negotiating or decision-making role).

Some of the Northern NGOs have taken up this issue, with Oxfam for e.g. holding a "work-shop" this week in Geneva in association with the South Centre to discuss this issue, and with two Oxfam persons planning to present papers, and the South Centre moderating the meeting.

Trade and WTO has now become so "sexy" that many Northern NGOs whose earlier focus in international economic arena had been limited to 'aid' and 'humanitarian' issues like famine relief etc, have now taken up the trade issues, recruiting staff to deal with trade, and jumping into areas like transparency and decision-making, and finding Southern perspectives that they can use in their dialogues with the government.

But the more long-standing 'development' NGOs who have been involved in trade and development issues (including the MAI negotiations at the OECD, UNCTAD issues, and the WTO) have taken a more balanced and holistic view of the problems.

All the ideas being canvassed appear to be no more than an effort by the WTO head and the major industrialized countries to find a way by which the current 'green room' processes could be legitimized.

Several developing country diplomats, both those whose countries are called in for 'green room consultations' and those not brought in, have been noting that the frustrations of delegations, before Seattle and after, of not knowing who was holding these limited "consultations", which really was "negotiations", who were involved or participating and where, and what was being negotiated, had exploded into the open on the final day at Seattle.

While this was an important issue, the process and procedures should not be mixed up with the substantive causes of failure at Seattle. And while there is a case for the WTO system and its structure needing to be looked at and addressed, the system should not be blamed too much. The majors and others who have hijacked the system and processes for their narrow mercantalist aims have to face their own responsibilities.

Also, in the days of the old GATT, when the industrialized countries were not making any demands on the developing countries, and the latter were merely enabled to benefit from the MFN benefits of concessions exchanged, the developing countries did not bother too much about the 'green room' consultations or negotiations, though they were concerned about what went on. But those developing countries who were called in informed their colleagues and, even more, the GATT chiefs of those days took the trouble, immediately after, to advise the membership.

But with the Uruguay Round, the situation changed, with the developed countries making demands on the developing world - in terms of market access or assuming more obligations etc. And with this, the developing countries began to insist on their being involved.

During the Round, many developing countries had limited trade agendas and did not pay much attention to other issues, but only a few major countries were concerned. The idea of a steering committee for the GATT came up in the Uruguay Round, under the item about 'Functioning of the GATT system', but this was rejected by the developing countries, at the Montreal mid-term review and in the final stretch of negotiations in 1993.

But with the conclusion of the Uruguay Round and the application of the 'single undertaking' political concept and the creation of the WTO, as an institutional arrangement under Part III of the Punta del Este Declaration there has been a further qualitative change.

If every issue negotiated in the WTO involves obligations that everyone has to accept, then this logically means every member of the WTO has a right to be involved in the negotiations leading to commitments on the country.

This could not be relegated to a formalistic situation of the right of a country to oppose anything brought before the General Council or any other subordinate body, but involvement at every stage.

This would mean that any negotiations or consultations has to be 'open-ended' in the sense that while a drafting or negotiating exercise, after a full and substantive discussions, could be delegated to a small group, it should be open to any country which feels it has an interest. Whether or not they have a right or need to participate could not be decided either by the chair of the WTO body or by the secretariat or its head, the Director-General.

To argue that this would not help 'efficiency' or for the Director-general or others to say that they could not negotiate with 135 members is a non-starter in an organization where there are contractual rights and obligations on individual members.

But neither Moore, nor the majors, seem ready to face up to the consequences of the system.

But without that, the increasing perception among governments, and various sections within them, and not merely trade ministries, and domestic enterprises, that the WTO system is non-transparent and undemocratic and run for the benefit of the majors and the big TNCs, would not go away, but would increase, and reduce every day, the legitimacy and acceptability of the WTO and its obligations. (SUNS4597)

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

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