TWN Info Service on WTO Issues (August03/11)

21 August 2003

Third World Network

Dear friends and colleagues


Attached is a TWN Report by Goh Chien Yen on the situation relating to the Singapore Issues.  From recent discussions in the WTO it is cloear that a large number developing countries do not want to begin negotiations, and their Ministers have proclaimed themselves, as well as their Ambassadors in Geneva.

Yet the proponents, especially the EU and Japan, are still insisting that negotiations must start.

The Report examines the claims of both sides and concludes that since an explicit consensus is needed to start negotiations, and there is no consensus, it should be clear that negotiations should not begin.

With best wishes

Martin Khor




TWN Report by Goh Chien Yen,  Geneva 19 August 2003


Members of the WTO at an informal meeting of heads of delegation discussed the Singapore Issues at a meeting on 15 August 2003.   A major topic was the “modalities” for negotiations on these issues.  There has been contesting but separate interpretations of what this means in relation to what is to be done with the Singapore Issues in current preparation for the 5th Ministerial meeting, at the ministerial itself in Cancun and thereafter.

The Doha Declaration states that negotiations will take place on the Singapore Issues (investment, competition, transparency in government procurement and trade facilitation) on the basis of a decision to be taken by explicit consensus on the ‘modalities’ of negotiations. This has been conscientiously clarified by the Chairman at the end of the Doha ministerial conference in his final statement to mean that the explicit consensus referred to would be a pre-condition for negotiations to begin and that this gives each Member the right to prevent negotiations from proceeding after the fifth Ministerial.

Indeed, this is the understanding expressed by the Chairman of the General Council, Amb. Carlos Perez del Castillo of Uruguay during the Heads of Delegation meeting on Friday morning. And according to trade officials this is indeed the understanding of the bulk of the membership of the WTO.

Since explicit consensus on the modalities is a necessary condition for starting negotiations, it is therefore important to clarify the meaning and issue of modalities. Unfortunately, the Doha Ministerial Declaration itself does not define or throw light on the term “modalities.” 

The proponents of the Singapore Issues, in particular the EC has offered a superficial consideration of modalities. It has framed the question of modalities in terms of listing the “elements of modalities” while studiously avoiding the substantive aspects and content of the modalities. In its formal communication to the WTO, the EC simply provides three subject matters, namely procedural issues such as number of meetings, scope and coverage of the negotiating agenda, and special and differentiated treatment.

Several developing countries have challenged and rejected this interpretation. They have responded to this in their formal communication to the WTO on modalities last month. They have pointed out since the term ‘modalities’ is not defined, it would therefore be rational to understand it from current WTO practice, for instance in the current negotiations on agriculture or non-agriculture market access. It is clear that from these negotiations that modalities contains the aspects of the issues that are agreed on such as tariffs, domestic and export subsidies in the area of agriculture and the nature and direction of obligations to be undertaken, which is to have them reduced and the mechanisms for doing so.

In defining the meaning of “modalities”, it is clear that a mere classification of issues and a mere listing of some of the elements is not enough.  According to these developing country members, the substance of those subjects and the nature and direction of obligations form a fundamental and intrinsic part of the modalities.  “The EC’s paper seeks to divert the decision needed on modalities, to a decision on “elements of modalities” or on the classification of issues rather than on agreement on the listing and substance of the issues.  On the substance and content of these subjects, it is silent. The EC’s ‘elements of modalities’ therefore do not constitute ‘modalities’.” These members quite rightly pointed out that “explicit consensus on the modalities is required for negotiations to commence not consensus on how to classify and group the different procedural and structural aspects of the Singapore issues.”

A crucial question therefore at this stage is whether there is sufficient consensus among the members on the modalities that will provide the rational basis for their ministers to decide whether to launch negotiations at Cancun.

As noted by several developing countries in their formal communication to the WTO, since Doha and until the Fifth Ministerial, the respective Working Groups (on investment, competition and transparency in government procurement) and the Goods Council (in relation to trade facilitation) have been focused on the clarification of the issues arising out of these topics, including those issues mentioned in the Doha Declaration. By July this year, the working groups and the Goods Council had completed their meetings and discussions. What is evidently clear from the General and periodic reports of the respective Working Groups on the Singapore Issues, is that there are wide divergences of views on many of the issues. The discussions in the working groups/CTG, for example in the WGTI, have clearly shown that there is no clarity even amongst proponents regarding the structure of any possible multilateral framework or its components.  In fact this difference of opinion extends even to the basic issues such as scope and definition of investment. In addition even among the proponents there are disagreements.

Trade ministers from the ACP (African, Caribbean and the Pacific) and the LDC groupings and Africa have met at regional ministerial meetings in preparation for Cancun over the last few months and have been apprised of the discussions that have taken place in Geneva and the resulting lack of consensus on the modalities. Consequently, the ministers have made it explicitly clear in their declarations that further clarification of the Singapore issues be continued in the respective Working Groups and the Council for Goods.

Reflecting this decision taken by their ministers, several African country delegations in Geneva including Mauritius which is the current chair of the African Group in the WTO and Bostwana, the current Chair of the ACP group in the WTO, formally submitted a text reflecting the decisions taken by their ministers and requested that it be placed in the Draft Ministerial Declaration.

This text, which was presented by Kenyan WTO Ambassador Amina Chawahir Mohamed at the informal HOD meeting on the Singapore issues on Friday morning, reads as follows:

“We...note that each of the issues has its own peculiar aspects and complexities and that WTO members have not reached a common multilateral context. We reocgnise the concerns of many developing country members about the potential serious implications of these issues on their economies and that the benefits of negotiating a multilateral framework for each of these issues is not evident to them.

Moreover, many developing countries have scare resources and limited capacity to meaningfully negotiate these issues, especially as they grapple with implementation of existing WTO rules and expanded work programme after the Doha Ministerial Conference.”

This situation does not provide a basis for the commencement of negotiations in these areas. We deicide that further clarification of the issues be continued in the respective Working groups (on the relationship between trade and investment, interaction between trade and competition policy, and transparency in government procurement) and in the Council for Goods (for trade facilitation)”

This was supported by several other members including, Malaysia, Philippines, Venezuela and India. They also pointed out that given the lack of progress in key existing  areas such as agriculture, non-agriculture market access, implementation issues and operationalising special and differential treatment for developing country members, makes the consideration of starting negotiations in the Singapore Issues pre-mature and inappropriate.

Unsurprisingly, the European Union, which is pushing to start negotiations on the new subjects, objected stating that only ministers in Cancun can make the decision to drop them, and until then diplomats must continue trying to come up with a framework for future negotiations.

“It isn’t our job to decide that we don’t want to negotiate,” said EU Ambassador Carlo Trojan.

However, the converse is also true, that it is not the job of the delegates to decide that negotiations will begin either. Failing to recognize its own double standards, the EC has been baldly stating that negotiations will start as a matter of fact after the Fifth Ministerial. It is clear from the Doha Declaration and the Qatari Chairman’s final statement, that explicit consensus on the modalities forms the basis of the decision to be taken by the ministers. 

Whether there is consensus on the modalities is a factual matter, and the reports of the respective working groups unequivocally shows that there is none. Since this necessary condition has not been fulfilled, it is hard, if not impossible to see how an informed and sound decision can be taken. The EC imploration (supported by Japan) to come up with a common framework on modalities, in spite of the substantive differences, for future negotiations is therefore misguided at best. More worryingly this suggested course of action could be culpable of misleading the trade ministers when they meet in Cancun and guilty of manufacturing a false consensus when it is patently absent. 

In addition the EC objection also overlooks the simple fact that what the African country members have put forward in the WTO is indeed the considered decision of their respective Trade Ministers.

Indeed, the Trade Ministers of the Africa, Carribean and Pacific Countries (in the ACP Group) and the LDCs have also proclaimed themselves.

A count made by two UK development organizations, World Development Movement and CAFOD, have shown that 66 to 68 developing countries have explicitly proclaimed themselves to be not willing to begin negotiations on the Singapore issues. 

Given this, and the submission of the African country members, as well as the vocal statements made by other countries (such as India, Malaysia, Philippines, Jamaica, Barbados, Cuba), it is hard to see how the Chair of the General Council responsible for drafting the Ministerial declaration could possibly ignore this and not include the proposed text of these countries in all four Singapore issues.