A skeleton inside an untransparent process

The Chairman of the WTO General Council has issued the first draft of the “operational text” which will constitute the basis of decisions to be taken by the forthcoming Ministerial Conference in Cancun, Mexico. Tetteh Hormeku points out the deficiencies in the draft’s deceptively open-ended structure and cautions that the process of fleshing out its “skeletal” framework could end up undermining developing-country interests.

GENEVA: The first draft of the so-called “operational text” which will form the basis of decisions to be taken by trade ministers when they meet at the 5th WTO Ministerial Conference in Cancun (10-14 September) was released on 18 July, in line with the announcement by Dr. Supachai Panitchpakdi, the WTO Director-General and Chair of the Trade Negotiations Committee (TNC), at a two-day meeting of the TNC on 14-15 July. Just as Supachai described it at that meeting, the draft Ministerial text which is now circulating is “skeletal” in nature, with critical gaps yet to be filled in all the key areas of contention.

However, it is not only the structure of the text that seems to weigh the filling of the gaps against the interest of developing countries.  More importantly, judging from the developments at the TNC meeting, these gaps are set to be filled through an untransparent, imbalanced and non-participatory process, which will make it possible to secure an outcome in Cancun suited to the major powers of the WTO. 

How will the text be revised and approved?

From statements made during the TNC meeting by Dr Supachai and from positions expressed by some of the major powers, the text may not be formally approved or even properly discussed by the WTO member countries’ representatives at Geneva.       

It is not known how or if the divergent views of members will be reflected in the draft and whether this draft will be revised after comments by members.  But it is now likely that the draft will not be subject to approval by the members but will be sent to Cancun under the “personal responsibility” of the chairs of the General Council and the TNC.

The draft Ministerial text was released by Ambassador Carlos Perez del Castillo of Uruguay, the Chairman of the General Council, “on his own responsibility, in close cooperation with the Director-General”. 

The gaps in the text are explained as reflecting the reality of how far WTO members “still have to go in a number of key areas to fulfil the Doha mandates.  The task ahead of us in the short time remaining before Cancun is to fill in the gaps in this draft so that it becomes a workable framework for action by Ministers.”  Filing these gaps will be the focus of intense consultations  “centred on the informal Heads of Delegation process and the General Council.”         

The text expects that in “some areas the discussions at [the 24-25 July meeting of the] General Council on reports from WTO bodies may contribute to the evolution of this draft. In others, further dedicated consultations will clearly be necessary”.  The aim is “to produce a text for transmission to Ministers by the latter part of August.” (Please see the following article for a report on developments at the General Council meeting on 24-25 July.)

Deceptively open text

On the face of it, the draft Ministerial text of 25 relatively short paragraphs appears straightforward.  In the opening paragraph, Ministers would reaffirm the declarations  made and the decisions taken at the previous Ministerial Conference held in Doha, take note of the “progress that has been made towards carrying out the Work Programme agreed at Doha, and recommit ourselves to completing it fully”, and renew their “determination to conclude the negotiations launched at Doha successfully by the agreed date of 1 January 2005.”

To this end, the Ministers would, in the second paragraph, agree to adopt a number of decisions in the various areas of the Doha work programme, listed in the subsequent paragraphs. Each area of work is listed and next to it, a formulation to the effect that Ministers agree to proceed in the manner outlined in some other document. Those documents are not attached, but represented by a space in a square bracket. Thus, for example, in the area of TRIPS and public health, the draft Ministerial text says:  “We welcome the decision on implementation of paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health set out in document [...].”  In relation to agriculture:  “We adopt the modalities for further commitments in agriculture set out in document [...] and agree that participants will submit their comprehensive draft Schedules based on these modalities no later than [...]”.

However, the formula is different on the “Singapore issues”, i.e., investment, competition, government procurement and trade facilitation. Here, on each of the issues,  the corresponding statement  refers to the work done in the working group concerned as well as the work on the issue of modalities at the General Council, and offers two options, both placed in square brackets.  These are: either an adoption “by explicit consensus” by Ministers of “the decision on modalities of negotiations set out in document...”  or another decision denoted by the words “decide that.” For example, in relation to investment, it says: “Taking note of the work done by the Working Group on the Relationship between Trade and Investment under the mandate we gave at Doha, and the work on the issue of modalities carried out at the level of the General Council, we [adopt by explicit consensus the decision on modalities of negotiations set out in document ...] [decide that ...].”

The formula of the main Declaration transferring the substantive text to an annexed document appears in varied forms in relation particularly to all the areas under contention.  In some areas, like trade and transfer of technology, and trade and finance, where there is apparently not much contention, the indication of the text is that Ministers would recommend further work to continue.

The “flesh” will be in the annexes

Thus, on the face of it, the draft Ministerial text appears open, with nothing decided and with the crucial issues still subject to further discussions and negotiations. This is deceptive on a number of grounds.  It also dangerously weighs against the developing countries’ issues and their ability to influence the text.

One of these grounds for worry relates to some of the documents that will be used to fill in the gaps. At the meeting of the TNC on 14 July, Supachai stated that the reports produced by the chairs of the various negotiating groups “will support and complement this brief operational text with analyses of key issues and priorities”. 

Officials of the WTO who briefed journalists during the TNC meeting cited the respective chairmen’s draft modalities for agriculture (of March) and for market access in non-agricultural products (of May) as texts to be “annexed” to the intended operational text. As is known, however, controversy still continues in the cases of both the agriculture and non-agriculture market access negotiations.  Here developing countries have registered grave objections to the proposed modalities.  In non-agriculture market access, African countries have objected to the modalities proposed by the chair, and have suggested alternatives which have yet to find their way into the text.

At the TNC, many developing countries objected to the suggestion that reports produced by the chairmen of the negotiating groups would be annexed to the operational text to be submitted to Ministers.  Kenya said that the agriculture text has not been agreed to and therefore should not be annexed. 

Some WTO officials suggested that while it may be true that the agriculture text has not been agreed upon, it was the only text available and as such would form part of the operational text as the basis for Ministers to frame their discussions. If this logic is followed, then texts with which developing countries are in disagreement will find their way to Cancun as an integral part of the text.  And yet the fact that there is no agreement on the chairman’s proposals was reinforced again at a two-day informal and formal meeting on agriculture held on 17 -18 July.  Here countries remained as far apart as they were before the meeting.

Imbalances against developing countries

Apart from leaving the way for texts on which developing countries disagree to be sent to Cancun as the negotiating text, in areas where no such texts exist, the draft Ministerial text formulates an orientation of the particular issues in  a manner that would prejudice the viewpoints of developing countries.  This is the case in relation to the Singapore issues.  In each of these areas, the text refers not only to work which has been done in the working group, but also to some work in the General Council on the issue of modalities for the negotiations.  So far however, there has been little or no discussion on the question of modalities in relation to the Singapore issues in the General Council.

As far as many developing countries are concerned, the focus of the work so far carried out in the respective working groups on the Singapore issues has been on the clarification of issues, and the question of modalities for negotiations has not been discussed.  Even on the clarification of issues, there has been no common understanding of the issues among the members, but rather a wide divergence in almost all the topics.  Similarly, there is conflict among the WTO members, mainly on North-South lines, on the very definition of modalities.

It may be that the Ministerial text foresees further work in the General Council on modalities on these issues.  Indeed, some documents have been circulated privately purporting to lay out the basis for discussion of modalities.  Japan has formulated its own view of the elements of modalities, around which it is apparently carrying out consultations.  The chairman of the working group on competition has also circulated a note representing the results of his consultations with members on modalities in the area of trade and competition policy.

But with only one or two more meetings of the General Council remaining, it is most unlikely it can achieve common understanding on the modalities. Thus, before Cancun, the major powers in the WTO are planning for most discussions to be taken in the informal process and in bilateral discussions, where the preferences of developing countries are likely to be sidelined. In this connection, it may be indicative of the way the drafters of the Ministerial text want to go that, although the text puts forward two options, it does not actually state, as the counter to the possible decision adopting the modalities by explicit consensus, the opposite option declared by most developing countries to the effect that the process of clarification in relation to the Singapore issues must continue.

Since the Geneva process is so unlikely to resolve the stark differences on the Singapore issues, it is certain that this set of issues will have to be decided at Cancun.  And the very pressurized and untransparent process of Ministerial Conferences will again act against the developing countries that are opposing these issues.

Finally, there is a double standard in the treatment of issues.  On issues like agriculture and non-agricultural market access where existing texts are biased against the developing countries, as well as on the Singapore issues, the draft Ministerial text envisages that concrete decisions will be taken at Cancun.  On the other issues of interest to developing countries, it envisages only continuation of further work and for report at a subsequent, 6th WTO Ministerial.  Thus, on the issue of implementation, the text would commit Ministers to note that while progress has been made under the Doha mandate, a number of outstanding issues and concerns remain. “We instruct the WTO bodies concerned to redouble their efforts to resolve these issues, and instruct the General Council to report on progress at our next [i.e. the 6th Ministerial] Session”.

On special and differential (S&D) treatment, the formula is split.  On some S&D issues that are relatively minor, some decisions are to be taken as set out in a document to be attached.  Even on this set of issues, an informal meeting on 21 July of heads of delegation showed dissatisfaction by developing countries.  Indeed, the least developed countries (LDCs) and the African group expressed concern that they have been given little time even to study the proposals being put to them.  Apart from these issues on the table, the major contentious cases related to S&D will not be decided before or at Cancun.  Instead, they are to be referred back for further work and be reported at the next WTO Ministerial Conference.

Who decides and how?

The key question now is this: What processes will be adopted on further work on the draft Ministerial text in preparation for Cancun? One aspect of this is the  pressure to “consult” on so many documents simultaneously, in order for them to fill in the skeleton of the Ministerial text, and in so little time.  The developing countries and their small, sometimes one-member delegations are once again being put at a disadvantage.  For example, the LDCs and African countries have already found themselves short of time to consider the chairman’s suggestions on how to treat their own original proposals on S&D.

Then there is the problem of informality of the process and how conclusions under the informal consultations are to be arrived at. What is the state, say, of the  text on  agriculture, and how should it be treated in the Ministerial Declaration?  How about non-agricultural market access?  And implementation?  Whose word counts in deciding how much  progress  has  been made in all these areas:  the entirety of the membership of the relevant negotiating group, or the chairman of the group who can then proceed on his own responsibility?  And after all these  individual questions have been decided, who  decides  on  their  ultimate  shape  in the draft declaration - the membership, meeting formally to examine and approve the draft, or the Chairman of the TNC, closely co-operating with the Chair of the General Council and supported by the army of “friends of the Chair(s)”, all supposedly acting on their own responsibility?

At the TNC  meeting, Supachai’s insistence on the  informal  approach, in the case of the particular issue of implementation, led to one of the most awkward moments (diplomatically put) in the meeting, and provides an indication of the extent to which he would go. As reported in the South-North Development Monitor (SUNS, No. 5386), near the end of the meeting, Supachai, in  summing up discussions on  the issue of implementation, indicated  that  he  would hold further consultations, including with negotiating bodies which had been dealing with these issues.  When India, following similar statements earlier made by Kenya and China,  objected to this approach and asked for the issue to be sent to a special session of the TNC to be convened later, Supachai tried to isolate India, suggesting it was only the latter who had difficulties. India then noted that their concerns were shared by China and Kenya among others, whereupon Supachai turned to the Kenya seat.  But the Kenya delegate, who had made the statement, was not in his seat, having gone to attend another meeting being held simultaneously. When the India delegate insisted that it had instructions from its capital on the importance of dealing with the  implementation issues at the level of the TNC, Supachai asked the India delegation to consider going back to the capital,  presumably to get a fresh mandate more in tune with Supachai’s views.

All these came at the end of two days of a TNC meeting in which many developing countries returned again and again to the question of “process”.  It is clear that for the developing countries, the process of decision-making is most unsatisfactory.  They are still seeking a process in which they can effectively participate in drafting, revising and approving the draft texts that form the key decisions before and at Cancun.

Thus, resolving the issue of process will be the key aspect to the outcomes in Cancun.                                                 

Tetteh Hormeku coordinates trade issues at the Third World Network Africa secretariat and the Africa Trade Network.