TWN Info Service on WTO Issues  (June03/8)

Third World Network

18 June 2003

Dear friends and colleagues


The WTO Secretariat has organised a three-day public symposium on the theme “Challenges ahead on the road to Cancun.”

Below is a report on the opening session of the symposium.

This report was first published in the South North Development Monitor (SUNS) of 17 June.

Please check our website for previous issues of TWN Info Service.

With best wishes

Martin Khor

Third World Network





TWN Info Service:  Geneva 16 June 2003

The World Trade Organisation’s  untransparent decision-making system and the controversial push by developed countries to begin negotiating new issues at the Cancun Ministerial conference became the main focus of debate as the WTO’s three-day public symposium (organised by the WTO Secretariat) got underway this morning.

Opening the symposium on “Challenges ahead on the road to Cancun,” WTO Director-General Dr Supachai Pantichpakdi although deadlines on many issues had been missed, constructive discussions continue.  However, he warned that if understanding is not reached on these issues, “the Ministers will have an unmanageable task in Cancun.”

In reply to questions at the opening session about the untransparent and non-participatory decision-making process surrounding WTO Ministerial Conferences,  Supachai said he was trying to find ways for all WTO members to be involved.

He said that he and the chairman of the WTO General Council, Ambassador Carlos Perez del Castillo are “highly concerned to learn from the past experience of previous Ministerial conferences and we are willing to engage with our Members to find the best solution to get everyone involved.  It is our full intention to get everyone involved.”

Supachai added that a situation should be avoided in which Members find they have little room to manouvre or little time to respond to drafts, and there should instead be a situation in which everyone can respond properly.

At question time earlier, Aileen Kwa from Focus on the Global South said that rules should not be imposed on developing countries through an unfair process.  She said that the Indian Commerce Minister Mr. Maran had complained that at the Doha Ministerial conference, drafts of texts had been pulled out at the eleventh hour for delegations to consider.  She remarked that any system that imposes drafts at the last minute on its Members cannot be a fair system.

Kwa added that although 15 developing countries had asked the WTO to adopt clear procedures, in fact more Mini Ministerial meetings had been held in the past few months.  There had also been a proliferation of Chairman’s texts being used, instead of texts from members, as the basis for negotiations, and this is not in line with procedures of international organizations.   She said the Chairs should facilitate and not rule over the negotiations, and asked whether we can expect transparency in the WTO that befits the tile of a democractic organization.

Martin Khor of the Third World Network said the main reason why the WTO had failed to reflect development concerns despite the rhetoric in the Doha Declaration was the continuation of the non-participatory decision-making process in which Ministers, officials, Ambassadors and diplomats from developing countries were not given the opportunity to take part in the key decisions, especially during Ministerial conferences and their preparatory process.

He differed from one of the panel speakers, Prof. John Jackson of Georgetown University, who had said that “the Green Room process has broken down”.  Instead, said Khor, the “Green Room” process had operated at the Doha Ministerial where drafts had been produced in an untransparent way, developing countries had complained that their views were not reflected, a late-night meeting for only a few delegations had been arranged on the last night, and a decision was made to extend the Conference without consulting members before hand.

He added that the proposal by many developing countries for the WTO to adopt rules and procedures on how Ministerials should be run was astonishing as it revealed how the WTO did not practice even the most basic principles such as that the positions of different members’ be included in drafts, and that Ministers and delegations be informed if a meeting is called, or that any decision to extend the Conference should be made by all Members.  And even this proposal calling for such widely accepted norms had been rejected by developed countries.

He said such disregard for procedures and rules was ironic in an organization that prided itself to be a “multilateral rules-based organization.”   As long as the WTO did not reform this decision-making system, its legitimacy would be questioned by the public and it would continue to be a lightning rod for criticisms.

After Supachai’s reply, Jackson also responded on the issue of better rules at Ministerials. “I don’t think you can do everything with 146 Ministers,” he said.  “There should be a more efficient process, and the work must be divided.”  He suggested that countries could be divided into groups, and representatives of the groups could meet with the assistance of the Secretariat, and the website could be used better to provide information to delegations.

Earlier, in his opening speech, Supachai said there were only 53 working days to the Cancun Conference.  Although he had earlier warned of “imminent deadlock”, Supachai said, “we have avoided the worst and although key deadlines were not met, constructive discussions continue.”

Stating that “lowering expectations will not make the outcome easier to reach,” Supachai said he was encouraged by engagement of senior officials and Ministers and by tabling of ambitious proposals.

He warned however that basic concerns remain, and the missed datelines in TRIPS and health, agriculture, non-agriculture market access, implementation and S and D were setbacks that had entailed a cost.  Failure to reach agreement on these issues had postponed the preparation of work for Cancun.  “If understanding on these issues is not reached, Ministers will have an unmanageable task in Cancun.”

Several participants debated the desirability and effects of the new issues, negotiations on which the developed countries are working hard to launch at Cancun.

A panelist, Dr Claude Martin, Director General of WWF International, said the WTO cannot take on all issues and “to think of the WTO as a place for negotiating a ragtag of new issues is wrong headed.”   The WTO has no expertise to deal with the proposed new issues.

“Investment is one such new issue that should be dropped from the WTO agenda,” said Martin.  To grant foreign investors the right to enter and establish in countries, or to deny host countries the ability to regulate foreign investment flies in the face of sustainable development goals, he added.

Stating that the proposal for a WTO investment agreement was just a watered down version of the failed OECD multilateral agreement on investment, he said such an agreement would damage the development options for developing countries and would affect their integrity.

The WTO had an opportunity to use trade policy fro sustainable development.  The credibility of the WTO rested on its beig able to solve existing problems, not on its hopping onto new issues before it could deliver on its core issues, he concluded.

A representative from the EC in Brussels said it was a myth that the aim of negotiating the new issues was only to open up markets.  He said there was a deep concern that TNCs have too much power and that states have too little.  Competition rules in the WTO would balance this perceived imbalance.

A representative from German industry disagreed that the proposed WTO investment agreement would be the same as the failed OECD-MAI.  According to him, the EU proposal is aimed at disciplining trade-distorting subsidies and would act against corruption, so it should be supported.

Shelley Chaderton, a diplomat from St Kitts and Nevis, agreed with the WWF analysis on new issues and said the investment issue should be dropped from the Doha agenda.  She proposed that the decision scheduled to be made at Cancun on the starting of negotiations “be postponed indefinitely.”

Criticising the proposals being discussed at the WTO for reducing tariffs in industrial products in developing countries, she said that almost half the revenue from her country was derived from customs duty, and any agreement to reduce import duties will have serious effects such as social disruption.  Moreoevr, liberalization had already led to local companies losing their market share, and to the worsening of the trade balance as the increase in imports are exceeding export increases.

Jaques Berthelot, of the French NGO, Solidarite, criticized the dumping of European and US agricultural products which he said had been permitted by the WTO rules because of a defective definition of dumping.  He said that the system in the agriculture agreement of classifying domestic subsidies in green, blue and amber boxes was a farce that is used by the EU and US to perpetuate their dumping of agricultural products to developing countries.  He added that the EC scheme for reforming agriculture through supposedly de-coupling subsidies from production was a farce and a legal and political untruth that would continue dumping.

Panellist Prof. John Jackson of Georgetown University, US, said there was a tension on what the WTO is and what it should become.  He posed the issue of whether the WTO is a  place for nation states to talk and take actions on issues addressed for the longterm, or is it a regulatory body for new rules for new issues that can balance the need for nation states to meet the goals of its constituents but also have international coordination as nation states cannot cope with problems arising from globalisation.

There was also the question of internal governance or how to administer the WTO since its Green Room process had broken down, said Jackson.  What can replace this process, and have transparency and increase the knowledge base of Missions whose capacity needed to be built.   Although he supported the consensus rule in WTO, Jackson said its use by some countries to “hold an issue hostage” was not wise, and therefore the consensus rule should be amended.

Mr. Aftab from ActionAid Pakistan and the Pakistan WTO Watchgroup, said the WTO practice of reaching consensus was of little use if it did not produce deliverables for developing countries.  For example, the Uruguay Round had created the agriculture agreement by consensus, yet the poor farmers in developing countries were now facing serious problems arising from that agreement.  The success of the Doha programme depended on what is delivered and not on consensus, he added.