Member-driven or secretariat-driven process?

GENEVA: The WTO General Council is due to take up, at its 19 December meeting, the follow-up to the 4th Ministerial Conference, with Council Chairman Stuart Harbinson due to make a statement.

This will be the first opportunity for the Members to take stock and assess the outcome, including the way the Ministerial itself was run, and how to move forward in terms of the Ministerial declarations and decisions. (Also on the agenda of the Council meeting is the ‘invitation’ from Mexico to host the 5th Ministerial Conference.)

The Doha Ministerial Conference, which agreed on what it called a “broad and balanced work programme,” has provided that “the negotiations [under the work programme] shall be conducted in a transparent manner among participants” and that the overall conduct of the negotiations shall be supervised by a Trade Negotiations Committee (TNC) under the authority of the General Council. The Ministerial Declaration also provides that the “conduct, conclusions and entry into force of the outcome of negotiations” shall be treated as “parts of a single undertaking”.

There are some reports, based on talk emanating from WTO secretariat sources and some meetings of trade ambassadors with WTO Director-General Mike Moore, about following past precedents of previous trade rounds under GATT (General Agreement on Tariffs and Trade, precursor to the WTO) and of constituting a TNC chaired by a minister.

The WTO head has also floated, in a letter to ambassadors, the idea of appointing “facilitators” who could “travel and consult” as a way of improving “the management and systems” of the WTO and its decision-making processes at Ministerial Conferences. (See next article.)

The work programme mandated by the Doha Ministerial involves in effect negotiations on all the issues covered in the Uruguay Round, the last round of multilateral trade talks under the old provisional GATT, which have cropped up in the programme in one form or another.

In addition, there are negotiations for developing modalities on the four Singapore issues and environment, as well as a range of issues (including implementation questions) and several elements not involving negotiations but are to be dealt with by the various WTO bodies and the General Council as a high priority.

A detailed look at the Doha work programme suggests that the workload involved for trade missions and their Geneva-based negotiators will be at least 50% greater than in the Uruguay Round. It will be a burden that will strain even the resources of delegations of the smaller European countries and of the developing world.

And learning from the process leading to Doha and the actual state of affairs at Doha (as different from the media hype about the outcome), several developing-country diplomats are underscoring the need to ensure a firm Member-driven process, rather than a secretariat-manipulated one.

GATT precedent?

On the other hand, some trade officials appear to be invoking the use of the term Trade Negotiations Committee to suggest that past GATT precedents should be followed in constituting and appointing a chair and in the conduct of the negotiations.

Though the Marrakesh Agreement Establishing the WTO (in Article IX.1) is being cited to suggest that GATT practices should be followed, the provision itself applies only to “decision-making”, and the past practices in fact provide no clear precedent or even guidance.

Though it is popular to talk about the seven past GATT rounds, this is in fact very misleading.

When GATT first came into being as a provisional arrangement, with the commercial-policy sections of the Havana Charter being put into the General Agreement, there was not even a provision like that in Art. 17 of the Havana Charter which provided for the ITO to call tariff conferences. In fact there was not even any provision in GATT for a general approach to tariff reductions; this approach became possible under GATT 1947 only in the Kennedy Round (1964-67) after Article XXVIII bis was added into the text of the agreement and came into force.

Till that time (which encompassed the following rounds: Geneva 1947, Annecy 1949, Torquay 1951, Geneva 1956 and Dillon 1960-62), the only tariff-reduction exercise was through bilateral negotiations and request-offer approaches, with the multilateralization taking place only when the amended schedules were incorporated into country schedules and extended to all under the most-favoured-nation (MFN) principle. The tariff conferences (or rounds) were called mainly to enable acceding countries to negotiate their accession in one place with all the GATT members, though from Torquay on, the GATT Contracting Parties also engaged in bilateral tariff negotiations.

The GATT executive director chairing the negotiations thus had no particular significance.

Even the Kennedy Round, where a general tariff-cutting exercise was first attempted, with each of the principals ‘excluding’ important sectors or selected products from the general tariff cuts, showed the limitations of the exercise.

These and other developments in the world economy (the US repudiation of the Bretton Woods Agreement, the expansion of the EEC to bring in the UK, Ireland and Denmark, and the formation of EFTA in Europe) resulted in other issues being brought up for multilateral trade negotiations.

The Tokyo Round (1973-79) was thus the first and, as the report of the Director-General at the end of that round put it, the “most ambitious” multilateral economic negotiations launched as a political act of ministers of countries which were contracting parties to GATT and thrown open to the participation of non-members. It included on its agenda not only reduction of tariff and non-tariff barriers on both industrial and agricultural products, but also other issues like the safeguard system, developed/developing-country issues and improvements to the international framework for the conduct of world trade.

It was in this context that the Tokyo Ministerial meeting and its declaration set up a Trade Negotiations Committee, with authority conferred on it for elaborating detailed trade negotiation plans and procedures and supervising the progress of negotiations.

GATT itself at that time had no institutional framework, and legally its secretariat was that of the UN Interim Committee for the International Trade Organization.

The Tokyo Round TNC was thus an outside body, functioning directly under the ministers but never intended to be the place where substantial negotiations would be conducted.

The Committee was chaired by the then GATT Director-General Olivier Long. (Though a liberal economist, it must be said to his credit that at the end when the US and the EC had drawn up between themselves an arrangement on “counterfeit” goods trade and wanted him to put it through the negotiating process and convene a meeting of a small number of other countries, Long declined.)

The very nature of the negotiations and the various agreements had to be incorporated into the GATT framework by the GATT Contracting Parties.

Uruguay Round

In the case of the Uruguay Round, even in the run-up to its launch at Punta del Este, the then Director-General Arthur Dunkel and the secretariat took a hand, though this was done in a much more subdued manner than would be the case at the WTO, first by Renato Ruggiero and now by current Director-General Mike Moore.

In the run-up to Punta del Este, the membership was deeply divided over the issue of bringing in services for negotiations. A draft prepared by a group of countries led by Colombia and Switzerland provided for all the issues to be negotiated, while another group led by Brazil and India did not provide for any services negotiations.

A compromise brokered by the EC and accepted by the US resulted in the launch of goods negotiations in Part I of the Ministerial Declaration as a decision of ministers of GATT Contracting Parties, and the services negotiations in Part II as a separate decision of ministers meeting on the occasion of the special session of GATT CPs. Part III had a provision for another meeting of ministers at the end of the negotiations in both the parts to decide on the international implementation of the respective results.

The following bodies were set up: a Group on Negotiations in Goods to run the goods negotiations, a Group on Negotiations in Services, a separate surveillance body to oversee the standstill and rollback commitments under the Declaration, and a Trade Negotiations Committee chaired by the Foreign Minister of Uruguay.

But with the minister rarely visiting Geneva, the secretariat moved to occupy the space, and an official-level TNC came into being that was chaired by Dunkel in his personal capacity. This also enabled the secretariat to run its own agendas through the so-called Negotiating Group on the Functioning of the GATT System (FOGS).

The experience of developing countries in the Uruguay Round was not a very happy one, more so in terms of the procedural mandates given when two Ministerial meetings failed - the mid-term review meeting at Montreal and the Brussels meeting in 1990 - and Dunkel was asked to hold consultations to promote an agreement.

In both cases, he promoted an agreement or understanding between the US and the EC, and then forced the outcome on the developing world through “green room” meetings. After the mid-term review, this forced the developing world to agree to negotiate the norms and standards of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), an accord that in retrospect even several free-trade economists now admit was a mistake.

In terms of the consultation process he led after Brussels, with negotiations held among small groups of countries, at the end in December 1991, while in accord with past GATT practice and the Punta del Este Declaration, where decisions were to be by consensus, Dunkel stood this on its head. He tabled a Draft Final Act text (providing texts in parts of each agreement where the parties could not reach an accord) and announced at the TNC that the text could be opened up and changed in any part only by consensus. (In fact, at the time of the December TNC where he made the announcement, the members themselves did not have the draft text, copies of which were distributed to them only after the meeting.)

However, the US-EC differences on agriculture and a range of questions forced the text to be opened (where the two wanted changes) without a prior consensus decision, while any amendments that the developing countries wanted were thwarted by the need for prior consensus.

The TNC under the Uruguay Round was an outside body that was not part of the GATT machinery nor under the control and authority of the GATT Council. However, the Doha Ministerial Declaration provides specifically for the TNC to function under the authority of the WTO General Council. Under the Marrakesh Agreement, when the Ministerial Conference is not in session, the General Council is the supreme legislative authority and is authorized to take any decision that the Conference can take, except perhaps override a decision of the Conference.

In such a situation and given the workload of negotiations and the mandated work in WTO bodies, there is a growing view that the process should be brought firmly under the control of the Members in order to enable smaller delegations to participate in and cope with the work, and to ensure that the secretariat does not hijack the process or create a situation as in the run-up to Doha or at Doha, where Members found themselves ‘negotiating’ with the secretariat officials. The chair of the TNC, in this view, should be a resident ambassador, who would be working closely with the General Council chair, would be directly accessible to delegations in Geneva and aware of their concerns, and need not be approached or dealt with through the secretariat.

This would ensure that smaller delegations are not overwhelmed by the negotiating process and left with a situation where they would again become mere bystanders. (SUNS5028)

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