Doha-style democracy for WTO at Cancun?

When the WTO General Council discussed in early July the need for procedural guidelines to govern decision-making at Ministerial Conferences, members were divided over whether the Ministerial process should be run along more predictable lines than the present “flexible” approach. Differences also surfaced regarding how the WTO head is to be elected in future should there be no consensus, as the contentious proposal for trade-weighted voting was once again resurrected.

by Chakravarthi Raghavan

GENEVA: The chairman of the General Council, Ambassador Sergio Marchi of Canada, is to hold consultations on the proposals before the Council to set up some basic principles and guidelines to govern the preparatory processes at Geneva for the Ministerial Conferences of the WTO and the Conferences themselves.

Before the General Council is a set of proposals from the like-minded group (LMG, comprising Cuba, Dominican Republic, Egypt, Honduras, India, Indonesia, Jamaica, Kenya, Malaysia, Mauritius, Pakistan, Sri Lanka, Tanzania, Uganda and Zimbabwe). These proposals, put forward and explained at an earlier meeting of the Council (see TWE #280), are aimed at preventing the kind of procedures adopted at the 4th Ministerial Conference in Doha.

There is a counter-proposal that was introduced at the latest Council session on 8-9 July, from a group of nine countries: Australia, Canada, Chile, Hong Kong China, Korea, Mexico, New Zealand, Singapore and Switzerland. This basically finds nothing wrong with the Doha process and attempts to have it continued.

Also before the Council is an earlier Bulgarian proposal to ensure adequate notice (rather than the current 12-hour notice) for consultations with all stakeholders of new proposals brought forward for consideration and decision by Ministers.

At the end of a discussion and comments on the different proposals, Marchi said he would hold further consultations.

Behind the ‘courtesies’ of each side in welcoming the contribution of others is the attempt of some to repeat the Doha-style decision-making processes in the run-up to and at the 5th WTO Ministerial scheduled for September 2003 in Cancun, Mexico, and the efforts of others not to be sidelined.

Selecting DGs in the absence of consensus

Marchi is also to hold further consultations on the processes and procedures for the election of a Director-General, where there are differences on the selection procedure to be resorted to if the preferred method of seeking consensus reaches a deadlock. The efforts of a few who favoured a “trade-weighted” voting system were shot down by Brazil and India, which made clear that any decision-making has to be within the parameters set by Article IX of the Marrakesh Agreement Establishing the WTO.

Marchi had held informal consultations in June on this subject, where members showed extreme reluctance to have recourse to voting in the WTO but were willing to have recourse to it as a last resort, as provided in Art. IX:1. This article provides for decisions to be taken by consensus, but where a decision cannot be reached by consensus, “the matter at issue shall be decided by voting”, with each member of the WTO having one vote.

At that meeting, the EC and Japan had said they preferred the idea of trade-weighted voting.

Two other issues relating to the DG election process that came up at the informal meeting, without a consensus being reached, pertained to rotation of the post - whether it should alternate between a developing and a developed country, or rotated according to geographical region - and the idea of an “advisory committee” that could help the election process and the search for a consensus.

In reporting on his informal consultations, Marchi told the Council about a number of areas where consensus seemed possible, but that there were differences on what to do when a decision could not be reached by consensus. Marchi then mentioned the idea of trade-weighted voting suggested by one or two members, and the idea of a “double majority”, i.e., a simple majority of the membership and a trade-weighted majority.

Observers noted that before the Marrakesh Agreement emerged in negotiations among key countries in the closing days of 1993, this had been a difficult issue. The United States at that time had made various permutations and calculations to reach the conclusion that the EC, with its web of preferential accords and agreements, would always be able to command the requisite majorities, and hence placed great stress on consensus decision-making as well as on specified and qualified majorities for certain changes.

Most members now agree with the view that on substantive matters of trade policy, decision-making should continue to be by consensus, but there are many who believe that on procedural matters or selection of the DG etc, if consensus was not possible, voting could be envisaged at some stage and should not be ruled out.

The idea of a trade-weighted system of voting and decision-making has surfaced now and then, before and during the Uruguay Round, but excepting for the three or four majors (Canada, the EC, Japan and the US, which together account for nearly 80% of trade shares) and some of their followers, others have not been agreeable to voting and least of all to trade-weighted voting. Every time this idea has been resurrected, others (who have an equal, if not greater, stake in the system) have refused to allow it.

At the Council on 8 July, when Marchi made a report on his consultations, Brazil was the first to take the floor and firmly reject trade-weighted decision-making, and was supported by India. Brazil’s ambassador Luiz Felipe de Seixas Correa said that his country could not accept or support any proposal for trade-weighted voting, and decision-making by recourse to voting must rest within the parameters of Art. IX:1. He categorically rejected, now or for the future, any tampering with the provisions of Art. IX:1. India supported the Brazilian view and rejected both trade-weighted voting or any double-majority voting concept.

Guidelines for Ministerials

On the question of procedures and guidelines for the preparatory process for Ministerial Conferences and the Ministerial itself, Australia introduced its proposal that was co-sponsored by eight other members. Though WTO officials took pains to suggest that it was not a counter-proposal to the LMG paper but a proposal from a “group of nine”, the Australian co-sponsored paper basically projected the view that the processes leading to and at Doha had been transparent and inclusive and were satisfactory, and no strict procedures should be set that would tie the hands of Ministers.

In the discussions, while the EC, Japan and a few others made some noises welcoming the contribution of the LMG paper and several of its ideas, it was clear they wanted a “flexible” non-procedure where the WTO secretariat and the host country of the Ministerial could continue to function as at Doha.

However, Norway’s Ambassador Kare Bryn, who as General Council chair in 2000 (after Seattle) had set in motion procedures at the Council for a “transparent and inclusive decision-making” process, said that Norway for one would not want to see a process under which Ministers would be faced with a 30-40-page heavily square-bracketed (indicating no consensus) text. He supported the view that while strict rules and procedures might not be the solution, this did not mean that there could be no guidelines to govern the processes at Geneva and at the Ministerial Conference. He shared the view of many delegations that the guidelines should enable and impart some “predictability” to the processes at the Ministerial Conference.

Bryn felt that the processes leading to Doha had been transparent. It had been transparent and inclusive even at Doha, he said, excepting that over the last 24 hours, the “old GATT processes” came into play.

Observers said that at Doha, not only was there recourse to the old GATT processes of ‘consultations’ among a few members selected and called in by the Director-General and all-night meetings of the few Ministers who were constantly faced with new proposals and ideas, but the host country also manipulated the process. It extended the meeting without any authority from the Conference, and even delayed calling the final meeting and scheduled it for a time when many Ministers and developing-country officials had to leave Doha (to catch the Qatari plane, by which several ministers from the least developed countries had been brought to the conference at the host country’s expense, or catch other planes since it would have been too costly to change bookings), so that the opposition to the tactics would be more muted (than at the preceding Ministerial in Seattle).

Developing-country diplomats have been saying non-attributively that at Doha, both at the opening session (relating to the adoption of the agenda, tabling of documents and procedures) as well as in the final 24 hours, ‘Qatari democracy’ had prevailed, and their governments and ministers were determined not to allow its repetition in future.

Competent and experienced WTO observers who had been witness to what happened at Doha said that taking advantage of a situation arising from the 11 September attacks, the two big majors (the US and the EC) had acted together and, with the help of the host government and the WTO secretariat, forced through a work programme that is going to be increasingly difficult to complete and implement.

In the light of recent disclosures and debates within the US surrounding the attacks (“What did the President know and when and what did he do?” and various revelations about the CIA and the FBI etc), and the manner in which the two majors, within days of the 11 September events, had used them to create a momentum behind their neo-mercantilist trade agendas, many more questions (and conspiracy theories) are being raised. Any attempts at Cancun or elsewhere afterwards to manipulate and force down new accords would raise new questions about the “democratic deficit” at the WTO and render the trading rules unenforceable in many countries.

The LMG document has sought to lay out in some detail proposed procedures for the Ministerial Conference process, in effect negativing the kind of tactics adopted at Doha. It calls for the establishment of a Committee of the Whole at each Conference for decision-making; for consultations by chairmen or facilitators at open-ended, transparent and inclusive meetings; for the secretariat and the WTO DG to play a “neutral, impartial and objective role”; and for limiting the duration of the Ministerial Conference and not extending it except through a formal process and by consensus.

The Australia co-sponsored paper calls for continuance in vague terms of “the processes and practices” followed since Seattle (which would endorse those followed at Doha too). It says that the preparatory process should “leave space” for the Ministerial Conference to take up those issues calling for resolution at Ministerial level, and that the most critical consensus is the one to conclude negotiations - thus implying that anything in between is legitimate.

In a paper on internal transparency, put forward in November 2000 and which it brought up again on 8 July, Bulgaria called for changes in the rules of procedure for the sessions of the Ministerial Conference. Currently, the rules enable proposals and drafts for Ministerial decision to be circulated just 12 hours in advance of the meeting at which they are to be discussed.

Bulgaria had proposed that proposals for Ministers should be circulated along with the agenda 10 days in advance. In exceptional circumstances, proposals or amendments could be introduced after the circulation of the agenda. In such an event, the proposal would be adopted ad referendum, with members having the right within 21 days of the end of the Ministerial meeting to raise objections or propose additional consultations, or require further clarifications or consultations. In such an event, the decision is not to enter into force.

During the discussions, Brazil referred to practices at other UN ministerial conferences and suggested a 2-3-day meeting of senior officials before the WTO Ministerial Conference. This was welcomed by many delegations.

Ensuring predictability

India’s Amb. Chandrasekhar, who had introduced the LMG paper at the earlier Council meeting, while welcoming the nine-member paper introduced by Australia, underlined the objective of all delegations to ensure success at Cancun. He said this last required creating “a degree of comfort” amongst all delegations and ensuring “a certain predictability” in the process to ensure that Ministers know the agenda of the Conference, the issues on which they would need to take decisions, the format of the deliberations, the manner in which decisions shall be taken and how transparency and inclusiveness are to be ensured. Success at Cancun will increase “if we are able to create confidence among all delegations in the preparatory process and at the Conference itself,” he said.

While everyone recognized the need for flexibility, the issue was not flexibility but how this was exercised and seen to be exercised “in a fair, objective, transparent and inclusive manner.” The parameters of such flexibility and how it is to be exercised had to be defined in order to attain the confidence of all delegations. “No delegation must ever have the feeling that flexibility is being exercised in such a manner as to drive a particular predetermined agenda, known only to a select few delegations.”

The LMG proposals would not detract from flexibility or pragmatism, but would add to the credibility in the system and build confidence in it. “We are engaged in the task of formulating virtually inflexible rules and rigid commitments enforceable through a dispute settlement mechanism, and there has to be a certain degree of predictability in procedures leading to these rules and commitments also,” India said.

In a reference to the views (at the earlier Council meeting) of Hong Kong China’s Stuart Harbinson about the pre-Doha processes led by him (Harbinson was then Council chair), India said that it should not be presumed that the Doha outcome necessarily justified the process preceding the Ministerial or at the Ministerial itself. The Doha meeting took place “in a particular historical context”, and the Cancun one will take place in another. Doha laid out a framework for a work programme, but Cancun is to flesh out this framework. Even the Doha framework had “many holes” in it, and the fact that the mandate is not “clear and explicit in all aspects” is evident from the time and resources being spent in Geneva debating the meaning of certain decisions. At Cancun, India believed, “Ministers will demand a much higher degree of precision in the final draft as serious commercial and developmental interests would be at stake.”

Referring to the views of Hungary, Chandrasekhar said the LMG paper had not been drawn up “by 15 ambassadors living in 15 nice houses, driving 15 nice cars”, but represents “the views of 15 Governments and 15 Trade Ministers” and is an attempt at “constructive discussion of this issue.”

India also supported the Bulgarian suggestions and was “attracted” to the Brazilian idea of a prepcom of senior officials prior to the Ministerial Conference.

In other interventions, Zimbabwe (a co-sponsor of the LMG paper) strongly criticized the Australian proposals and said there was need for a holistic approach to Ministerial Conferences and decision-making. Otherwise, warned Zimbabwe, “anarchy would prevail”. Zimbabwe could not accept negotiations held all night till 5 in the morning.

Somewhat surprisingly, New Zealand, which co-sponsored the Australian proposal, acknowledged that there had been a problem at Doha during the last 24 hours. (SUNS5157)

From Third World Economics No. 284 (1-15 July 2002)