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Info Service on WTO and Trade Issues (May24/09) Geneva, 9 May (D. Ravi Kanth) — A clash of perspectives on the continuation of “consensus-based decision- making” surfaced at the World Trade Organization, after a group of countries floated a proposal on “responsible consensus” on 7 May, which was earlier echoed by the United States, said people familiar with the development. Two proposals on “consensus-based decision-making” were floated on 7 May for further discussion at the upcoming WTO’s General Council meeting on 22 May. In a communication (WT/GC/W/932) circulated by the ACP (African, Caribbean and Pacific) Group on 7 May, titled “Preserving the Current Practice of Consensus-based Decision-Making in the WTO,” a strong case was made as to why there can be no departure from the existing practice of consensus-based decision-making at the WTO that provides “equity” to all Members. A second proposal (WT/GC/W/933) also circulated on 7 May by Costa Rica, The Gambia, Korea, Norway, Peru, Singapore, Switzerland and Chinese Taipei, titled, “Responsible Consensus”, called on Members to re-commit “to uphold the practice of consensus in a responsible manner in order to ensure that the WTO remains as the cornerstone of the rules-based multilateral trading system, and maintains its relevance by delivering shared prosperity for all its Members.” Although the US did not sign onto the proposal on “responsible consensus”, the US trade envoy to the WTO, Ambassador Maria Pagan, had earlier echoed the need for “responsible consensus” to avoid gridlock on several issues. She had reportedly said that “responsible consensus” would enable countries to avoid gridlock, describing it as “the ability to say something that maybe I don’t care that much about, but it doesn’t hurt me. And I’m not gonna hold it back as a chip … until I get … what I want.” A blog post, titled “Responsible Consensus at the WTO Can Save the Global Trading System”, posted on the website of the New York-based Council on Foreign Relations on 22 January, quoted Ambassador Pagan as saying that important allies like the United Kingdom support “the spirit of collaboration and responsible consensus so as to ensure that MC13 [the WTO’s 13th ministerial conference] builds on the success of MC12 [the WTO’s 12th ministerial conference].” Against this backdrop, it may not be out of place to suggest that the US would not be uncomfortable in supporting the proposal on “responsible consensus” when it comes up for discussion at the General Council meeting on 22 May, said people familiar with the two proposals. Further, developments at MC13 that concluded in Abu Dhabi on 2 March, particularly after India blocked the non-mandated plurilateral Joint Statement Initiative (JSI) on Investment Facilitation for Development, may have contributed to raising the issue of “responsible consensus” all over again, said people who asked not to be quoted. This controversial issue of adopting decisions based on “responsible consensus” failed to garner consensus in the run-up to MC13. It appears that Singapore is planning to host a retreat to advance some of these controversial issues before the summer break, said people familiar with the development. ACP PROPOSAL To start with, the ACP proposal reiterated that “Article IX, paragraph 1 of the Marrakesh Agreement establishing the World Trade Organization (WTO) states that “The WTO shall continue the practice of decision-making by consensus followed under GATT 1947″.” It noted that “except as otherwise provided, where a decision cannot be arrived at by consensus, the matter at issue shall be decided by voting. At meetings of the Ministerial Conference and the General Council, each Member of the WTO shall have one vote.” More importantly, according to the ACP proposal, “the principle of consensus-based decision making represents a tradition that goes back three-quarters of a century in the multilateral trading system and thus can be seen as part of not only treaty law, but also customary international law as verified by constant practice.” The Group said, “among international organizations, the WTO stands out as one of the few that allows each of its Members, irrespective of its size or level of development, the wherewithal to secure certain outcomes in its interests through consensus-based decision-making.” In contrast, it said that “other key international organizations rely on power dynamics or other approaches such as quota-based systems as the basis for decision-making.” It is well-known that at the WTO’s fifth ministerial conference in Cancun, Mexico, in September 2003, it was Botswana that blocked the “Singapore issues” advanced by the European Union and other industrialized countries. The ACP Group argued forcefully that “the Marrakesh Agreement does not qualify consensus with terms such as “responsible”, “constructive” or “flexible”. While Canada had suggested “flexible” consensus during the discussions on the draft Abu Dhabi Ministerial Declaration in early February, China suggested “constructive” consensus, said people familiar with the discussions. Therefore, the ACP Group said in its communication, “it does appear that the letter, spirit and intent of the Marrakesh Agreement provide for an approach to consensus-based decision-making which is unqualified.” Raising the question as to “why should the WTO preserve consensus-based decision-making,” the ACP Group argued that “the current consensus system is a representation [of] equity in the WTO.” Such decision-making based on consensus “sends an important message that all Members are equal and as such, each Member must have a stake in securing outcomes which are favourable. Especially for the smallest, poorest and most vulnerable Members of the WTO, consensus-based decision-making protects them from the vagaries of power dynamics.” The ACP Group expressed “systemic concerns regarding any attempt to alter the status-quo with respect to the consensus system in WTO decision-making.” It strongly objected “to the introduction of any qualification or modification which departs from existing treaty rights under the Marrakesh Agreement.” Significantly, it said “the consensus principle goes to the heart of the WTO system, and it provides a fundamental guarantee which is non-negotiable for the ACP.” “In essence, the current and long-standing practice of decision-making by consensus gives all Members an equal say in the WTO which is not based on political power or level of development,” the ACP Group underlined. In short, the Group said “rather than seeking to alter Members’ existing rights with respect to consensus-based decision-making, it would be more beneficial for the entire membership to focus on trust-building activities.” “Where trust exists and is reciprocated – where there is confidence in institutions and systems – all Members will achieve more,” it added. “To alter the status quo would be to undermine trust and ultimately achieve less.” “RESPONSIBLE CONSENSUS” In comparison to the ACP proposal, the eight proponents of “responsible consensus” issued a draft General Council decision on the alleged pretext of commemorating the WTO’s 30th anniversary. The eight proponents noted that “the World Trade Organization (WTO) stands at a pivotal juncture as it commemorates its 30th Anniversary.” They acknowledged that “since its inception, the practice of making decisions by consensus has been a defining characteristic of the WTO. The practice of consensus is highly valued as it has allowed all Members, regardless of size, to have an equal voice in decision-making.” However, “on its 30th Anniversary, it is opportune for the WTO to redouble efforts to adapt to its growing Membership and their evolving needs, reinforce its relevance, and uphold the principles of inclusivity and cooperation,” the proponents maintained. “Hence, Members must re-commit to uphold the practice of consensus in a responsible manner in order to ensure that the WTO remains as the cornerstone of the rules-based multilateral trading system, and maintains its relevance by delivering shared prosperity for all its Members,” they said. “Bearing in mind these imperatives,” the proponents said that “the following draft decision is proposed as a substantive contribution to Members’ discussions on decision-making by consensus in a responsible manner.” The draft General Council decision states: “We agree to uphold the practice of decision-making by consensus in a responsible manner by: a. Pursuing national interests while supporting the systemic interests of the WTO; b. Adopting a win-win approach in negotiations by exercising flexibility and making compromises in order to reach agreement; and c. Engaging in negotiations based on facts and evidence.” The proposal on “responsible consensus” is most likely to be “dead on arrival”, as it will only further exacerbate the tensions among members, and instead of creating trust, it will enhance the real problem of the alarming levels of trust-deficit built up in the WTO over the past few years, said a trade envoy, who asked not to be quoted. +
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