WTO endorses TNC principles and practices and negotiating structures

The WTO’s Trade Negotiations Committee, which is to oversee the trade talks mandated by the Doha Ministerial Conference, has endorsed a set of procedural guidelines that could go some way towards ensuring greater transparency and inclusiveness in the negotiating process. The supervisory body also named the WTO Director-General as ex officio chair in what many Members held to be an exceptional arrangement that sets no precedent for the future.

GENEVA: After more than two weeks of intense consultations and negotiations, the Trade Negotiations Committee (TNC) on 1 February agreed on the principles and practices that should govern its work and that of the negotiating bodies and structures for the new round of trade negotiations mandated by the 4th WTO Ministerial Conference at Doha in November 2001.

The TNC also decided on the parameters for meetings and for the choice of chairs of negotiating bodies (an intergovernmental process, and hence to be chaired by a government representative), and then named the WTO Director-General as ex officio chair until 1 January 2005 (the deadline set at Doha for concluding the negotiations), after taking note of the views of many delegations that the naming of the DG was an “exceptional arrangement” and not a precedent.

Several delegations, including China and India, made clear their view that in the absence of the DG, the General Council Chair or that of one of the negotiating bodies (and not the WTO secretariat) could chair a TNC meeting.

Some of the statements, like that of Tanzania, were quite specific in decrying the continuance of the old GATT practices or of handing over the chairs of negotiating bodies or of small groups to the Deputy Directors-General of the WTO.

The Philippines insisted that the TNC “shall not” interfere in the substantive discussions, nor shall it resort to “the so-called ‘Friends of the Chair’, ostensibly to facilitate or promote a consensus.” This was a clear reference to the process at Doha, where there were ministers (chosen by the Quad: the US, the EC, Japan and Canada) who were named “Friends of the Chair” to promote a consensus and other ministers who were not named but in fact acted behind the scenes in drafting the final document.

The principles and practices endorsed by the TNC can to some degree help ensure that the TNC and the negotiations are an intergovernmental process and can rein in non-transparent and free-wheeling tactics and manipulations such as characterized the final weeks in the run-up to Doha and at Doha itself. However, said trade observers, developing countries and their representatives need to be vigilant and not agree, by connivance or otherwise, to ‘departures’, under the plea or excuse of ‘flexibility’, from these principles and practices.

Chinese participation

The principles and practices to govern the negotiations had been revised (at least twice) from the original draft by General Council Chairman Stuart Harbinson of Hong Kong China. The revisions, in two or three respects, were made at the insistence of developing countries, whose voice has been strengthened by the entry of China into the WTO in January 2002.

In the many consultations leading to the 1 February decision, China had taken a clear stand which was supportive of the need to take into account the systemic concerns of developing countries over the DG’s assuming the chairmanship and the secretariat’s playing a role in the negotiations. China also came out firmly behind the Africa Group and members of the Like-Minded Group (LMG) of developing countries, as also others who were willing to accept the DG as ex officio chair but wanted clear guidelines and rules.

In the run-up to the 1 February meeting, when the chair of the General Council formulated language that still gave much leeway to the chair of the TNC and that of negotiating bodies in reporting to superior bodies when there is no consensus, China insisted, “on instructions from the capital”, that it could not agree to this and wanted changes to the earlier formulation (which stated that in the absence of consensus, “substantive differences” should be reflected).

Though China’s initial oral formulation would not have changed things much, the final language under the principles and practices evolved in further talks now requires that in regard to reporting to the overseeing bodies, “Chairpersons should reflect consensus, or where this is not possible, different positions on issues.”

During the long years of negotiating its entry into the WTO (and before that at the GATT), China had adopted a careful posture. Both its position as a leading trading nation with considerable political and trade clout, and the somewhat larger ‘concessions’ it had made to gain entry, had led some to believe that China would behave like the Quad countries on joining the WTO and may or may not be supportive of other developing countries in its positions.

While China (as other nations) may still follow what is in its own interest on substantive matters, it has now made clear in which corner it would be on questions of process and procedure. The talks on the organization of the work of the post-Doha negotiations were in a sense the first test, and China has left little doubt on its stands, at least on such procedures and processes.

The Chinese negotiators, though, are still feeling their way in the WTO and its processes. In one respect they are handicapped: at the WTO, as in its predecessor GATT, the only official working languages are English, French and Spanish; and in all the ‘green rooms’ and ‘private consultations’ where business is conducted or clinched, the language of negotiations is English. At Doha in the Ministerial ‘green room’, proceedings and negotiations in the night-long meeting were all conducted only in English. As insistent as they are in plenary meetings and at other international organizations about their right to have documentations and interpretations etc in their own languages, at the WTO the French- and Spanish-speaking delegations negotiate in the small conclaves only in English (which makes a mockery of decisions by the WTO’s dispute settlement panels and Appellate Body to cite the French or Spanish authoritative versions to support a particular view in the English texts).

Like others for whom English is not a working language, the Chinese tend to think in their own language and translate into English (or any other foreign tongue). And while they consult friends (as in the lead-up to the 1 February TNC meeting), often in such small meetings, negotiators have to think on their feet, so to say.

So it was that in the many talks in small groups held before the TNC meeting and led by Harbinson, where his original text only required the chairs of negotiating bodies to, in the absence of consensus, report “substantive differences” to overseeing bodies, China reportedly objected in no uncertain terms, citing instructions from government. It is then reported to have orally formulated some language that Harbinson (who is more familiar with the nuances of English usage) seemed quickly willing to accept, since it would still have left leeway for the chairs.

Later, in further consultations on 31 January and 1 February, a number of developing countries and China had this changed to provide, in the final formulation adopted, that not merely “substantive differences” but “different positions on issues” should be reflected. This did not fully meet the original LMG stand but was still an advance.

Trade diplomats from the developing world said they were more confident that China’s entry would provide additional strength to the views of developing countries inside the WTO, and that the Chinese diplomacy is picking up and quickly adjusting itself to the byzantine ways of the processes of the WTO system.

Reining in ruleless conduct

Capping a week of very intense consultations and negotiations after a formal meeting of the TNC on 28 January, the formal meeting of the TNC on 1 February evening heard a statement from Harbinson. In his (revised) introductory comments circulated in advance to Members, Harbinson still argued that it was not a negotiated text but one in which he had carefully considered and attempted to reflect the views of delegates, and hoped it would provide “some assurance” to delegations concerned about following “the WTO best practices”, and for the process to be in a transparent, inclusive and accountable manner. His original proposal was that delegations “take note” of his statement, and no more. However, at the insistence of several developing countries, the principles and practices have now been “endorsed” by the TNC and thus have its imprimatur.

In any treaty-based international system, members do not cede implicit authority to anyone. As such, in the WTO, which is repeatedly claimed to be “rules-based”, the secretariat or the chair cannot do anything which is not specifically backed by rules or agreed procedures. Nevertheless, both in the run-up to Doha and at Doha, such authority had been claimed on the basis of past GATT practice (even though no such specific precedent could be cited).

The principles and practices endorsed by the TNC should now help to rein in such “ruleless” conduct, Third World trade diplomats said.

An interesting aspect of the document, evolved in consultations but declared to be a non-negotiated text, was that in talking about the TNC building on “the best practices established over the past two years” on internal transparency and participation, it cited only “the practices articulated by Harbinson’s predecessor GC Chair, Amb. Bryn of Norway, on 17 July 2000 (WT/GC/M/57) as a reflection of the mainstream of the extensive discussions on internal transparency.” Indirectly, this distanced the WTO and the TNC from the practices and processes witnessed in the final weeks before Doha (followed by Harbinson himself to evolve a consensus text on his own authority) and at Doha itself.

(At the informal meeting preceding the formal on 1 February, Bulgaria, which had held up consensus the previous day because of the way the issue of geographical indications and negotiations on its extension to other products had been formulated, asked for the chair’s confirmation that the TRIPS Council in its regular sessions would engage in substantive debate on this matter. Harbinson responded with a “yes”. At the formal meeting after adoption (where Bulgaria repeated this), Argentina took the floor later to say that it was its understanding that the chair’s clarification was not legally binding.)

Besides the change on the reporting procedures and need to reflect “different positions”, the agreed principles and practices said that “as an overall guideline, as far as possible, only one negotiating body should meet at the same time.” The original formulation had envisaged two meetings at the same time and would have been less conducive to the participation of smaller delegations.

Members’ interventions

After adoption of the package of principles and practices, structures and processes, the EC said that it was time to get down to business and start negotiations. It said that the discussions on the Singapore issues (investment, competition, government procurement and trade facilitation) “will take place in negotiating groups, and negotiations will start on modalities after the 5th Ministerial”, and that the working groups will report to the TNC.

The US for its part said that the chairs of the various bodies should be given “adequate flexibility” and that Members had not altered any of the Ministerial documents adopted at Doha.

Pakistan’s Munir Akram said the position of Pakistan and others related to their systemic concerns and not to personalities. In the absence of the ex officio chair of the TNC, its meetings should be chaired by the General Council chair or the chair of one of the negotiating bodies.

India said the principles and practices endorsed only constituted the first step. Everyone was going to face a difficult task in interpreting some of the paragraphs of the Doha Ministerial Declaration, India said, referring in this connection to the interpretations being put on implementation issues. As for the working groups, said the Indian ambassador Mr. Chandrasekhar (in a clear response to the EC), they will continue their processes and India did not consider that the negotiations are to commence (after the 5th Ministerial). India also noted that WTO DG Mike Moore himself was not at the TNC to take the chair as named. In his absence from any particular meeting of the TNC, the General Council chair or one of the chairs of the negotiating bodies should assume the chairmanship.

Bulgaria said there were aspects of “past practices” that were never established, and it could not agree to the institutionalizing of such practices. The principles endorsed were not a solution, and it was necessary to take concrete steps to improve internal transparency, by explicit rules. Proposals in the negotiations should be made only by Members or groups of Members; and no meeting thereon should take place until everyone had received copies and proposals circulated at least 10 days before a meeting. Bulgaria also said it was time the institution established a selection procedure for the choice of a DG.

China’s Mr. Li said it was its firm belief that the WTO was “a rules-based organization” and there must be rules and guidelines for the negotiations. Chairs of negotiating bodies should be from the membership. Though they had adopted a more flexible approach for the TNC, this was not to be a precedent for the future.

Jamaica’s Ambassador Ransford Smith, in his intervention, said that while ministers at Doha (in paragraphs 45-52 of the Ministerial Declaration) had laid the foundations, it was the task of the Members to further elaborate the scaffolding. The Doha mandate had also unmistakably given political directions on the nature of the process, namely it should be conducted in a transparent manner among participants to facilitate effective participation of all, and with a view to ensuring benefits for all participants. A linkage had thus been set between the process and the substantive outcome. Time spent in developing guidelines and procedures was thus time well-spent and was not “procedural quibbling”. While Jamaica understood the concerns of some that procedures should not become a dead weight on the “Doha Development Agenda”, such a risk should not be exaggerated. Too much flexibility and vagueness could in fact be counter-productive.

While accepting the guidelines, Jamaica believed that the TNC chair should be drawn from the ranks of Members, and there were sound institutional reasons. It did not mean that the DG and the secretariat would not have a vital role to play. The DG was expected to play a meaningful role but not necessarily from the chair.

Jamaica was not fully happy with the compromise on the reports of chairs to higher bodies. Not only formal reports, but the drafts of negotiating texts, should reflect the differing positions precluding a consensus. There should be an overall balance in the selection of chairs, encompassing both regular bodies and negotiating bodies, and the responsibility of developing a slate should lie with the General Council chair. As for the records of meetings, Jamaica asked the secretariat to be “as creative as possible” to ensure prompt dissemination of information on the negotiations to non-resident and smaller missions.

For the Association of South-East Asian Nations (ASEAN), Brunei Darussalam said the document had met the concerns of the ASEAN delegations. The stakes in the negotiations were high for everyone, and now that compromise had been achieved, ASEAN hoped they could proceed to more substantive work.

The Philippines (an ASEAN member), speaking on its own behalf, said the Members had now achieved a higher level of comfort to be fully engaged in the process. As for transparency and neutral management of the negotiations, all negotiations, formal or informal, should be conducted and occur only in negotiating fora. Recommended decisions or consensus can only be made in plenary meetings. The chair or, in its absence, the vice-chairs should be fully responsible for the negotiating process, and the TNC “shall not interfere in substantive discussions ... nor shall it resort to so-called ‘Friends of the Chair’ ostensibly to facilitate or promote a consensus.” Chairs are the facilitators. At the start of the negotiating process, each negotiating body shall draw up its terms of reference, clarifying the scope, objectives and the elements covered by the negotiations. The General Council shall  approve  these and only the Council or the Ministers can amend them.

Tanzania’s Amb. Ali Mchumo, speaking for the least developed countries (LDCs), said at the very beginning they had outlined their position, reiterated in consultations, why it would be institutionally wrong for the DG to chair the TNC, an intergovernmental body. It went against the accepted norms of such bodies and it was harmful to burden the DG’s office and would create other institutional oddities. The DG as the head of the secretariat was to service the membership and the negotiations, and it was “improper” for that office to lead the intergovernmental negotiating process. The Uruguay Round precedent was in the GATT days, when the GATT was not an organization, while the WTO was, and with clear demarcation lines between legislative and negotiating functions, and executive or secretariat functions. It was hence wrong for the DG to chair the TNC, just as if he were to chair the Committee on Agriculture or the Dispute Settlement Body. The argument that this would ensure impartiality of the chair was to say that the best guarantee for objective decision-making would be to surrender the chairmanships to the DG and his deputies or other secretariat members.

The LDCs therefore still believed as a matter of principle that the chair of the TNC should be a representative of a Member, a Geneva-based ambassador, and it was wrong for the DG as head of the secretariat to be given that role, just as it would be wrong to ask the UN Secretary-General to chair the General Assembly. There was nothing personal in this matter. Almost all LDC delegates shared the view that the TNC chair should be a representative of a Member state enjoying the confidence of all the Members.

Nevertheless, Tanzania was committed to ensuring the post-Doha negotiations start without undue delay, and did not want to stand in the way of a consensus. In Tanzania’s view, the guidelines endorsed must have a “binding nature” and should not be a “best-endeavour” exercise. The guidelines should ensure that the negotiating process is guided by the need for transparency, consensus in decision-making, inclusiveness and accountability to all.

Amb. Boniface Chidyausiku of Zimbabwe said that the Africa Group’s opposition to the DG being the chair was on the basis that the WTO was an intergovernmental body and should continue to be Member-driven. Their decision was based on a systemic concern and not on personalities. Chidyausiku added: “Our security is in institutions, rather than individuals. Against our better judgement we have agreed that the DG chair the TNC. This is a one-off decision and does not set a precedent for the future.”

The Africa Group, with other delegations, had made the establishment of ground rules a condition to agreeing on the chairmanship, and could not understand why their partners were averse to such a procedure in a rules-based organization. The rules set out in the statement, however, were still short of what would have given them “the right level of comfort”. The Africa Group was convinced that no chairperson on his own authority should submit to a higher body a negotiating text. If there was no consensus, any divergent positions of delegations must be clearly reflected. The Africans hoped the principle of equitable developed/developing-country representation will be reflected in the selection of chairs, and it would have been more balanced to have vice-chairs. “Some of us have been shortchanged in the past, and we are determined this time around to keep our fingers on the pulse of the negotiations. (SUNS5053)