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TWN
Info Service on WTO and Trade Issues (Oct25/01) Geneva, 29 Sep (D. Ravi Kanth) — The reform of the World Trade Organization appears to exclude the dispute settlement system – the crucial enforcement pillar – while focusing on curtailing special and differential treatment for developing countries and the principle of consensus-based decision-making, according to people familiar with the development. At a plenary meeting held last week, the first of its kind in the WTO reform discussions, members remained divided on several issues. These include curtailing special and differential treatment (S&DT) and the principle of consensus-based decision-making, pursuing plurilateral negotiations over multilateral negotiations, and ensuring the independent and impartial functioning of the WTO Secretariat, among others. While several industrialized countries appear to be pushing to curtail the availability of special and differential treatment on grounds that self-designation by developing countries is not a “principle” but a mere “practice,” the developing countries seem to have suggested that it is a treaty-bound right for them, said people familiar with the discussions. On 23 September, China declared that it will not avail itself of special and differential treatment in current and future WTO negotiations while asserting its developing country status. However, the United States and other industrialized countries reckon that special and differential treatment is only a “practice” and not a “principle”, said people familiar with the negotiations, who preferred not to be quoted. The divide on consensus-based decision-making, which the WTO Director-General reportedly suggested is responsible for the paralysis in the negotiations, appears to be entrenched. A large majority of developing countries are insisting on adhering to Article IX of the Marrakesh Agreement that established the WTO in 1995, said people familiar with the development. Paragraph 1 of Article IX of the Marrakesh Agreement explicitly states that: “The WTO shall continue the practice of decision-making by consensus followed under GATT 1947. 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. Where the European Communities exercise their right to vote, they shall have a number of votes equal to the number of their member States which are Members of the WTO. Decisions of the Ministerial Conference and the General Council shall be taken by a majority of the votes cast, unless otherwise provided in this Agreement or in the relevant Multilateral Trade Agreement.” China had previously suggested that voting is an option that can be considered after some countries – India and South Africa, in particular – blocked the integration of the Investment Facilitation for Development Agreement (IFDA) into Annex 4 of the WTO Agreement dealing with plurilateral agreements on procedural and systemic grounds, said people familiar with the development. However, China did not press for voting despite the repeated blocking of the IFDA. In the past, the US had remained rather evasive on the issue of voting when this issue was raised by a developing country, said people familiar with the development. During the meeting on WTO reform, some members expressed sharp concern over attempts to exclude the reform of the dispute settlement system from the main negotiating agenda, said people familiar with the development. With one pillar of the WTO, namely the binding enforcement function, becoming almost paralyzed due to the dysfunctional Appellate Body, the overall WTO reform negotiations are being selectively conducted due to alleged opposition by the US to restoring the two-tier dispute settlement system, said people familiar with the discussions. DS REFORM The chair of the WTO’s Dispute Settlement Body (DSB), Ambassador Clare Kelly of New Zealand, on 26 September suggested that trade ministers “should be able to provide a political signal or message that DS reform remains important and work on DS reform should continue” at the WTO’s 14th ministerial conference (MC14), scheduled to be held in Yaounde, Cameroon, on 26-29 March next year. In a restricted document (Job/DSB/11) issued on 26 September and seen by the SUNS, the chair wrote: “With regard to MC14, I have heard views that Ministers at MC14 should be able to provide a political signal or message that DS reform remains important and work on DS reform should continue.” Based on her consultations held in July, Ambassador Kelly noted that “all delegations with whom I met recognized that DS reform is one of the most important elements of WTO reform.” She stated, “different views were expressed on the relationship between them. Although it was generally recognized that the WTO reform and DS reform should take place in parallel tracks.” As regards the technical work done until now, the chair suggested that it “would be important to preserve that work and build on moving forward.” The reason that dispute settlement reform is being pushed to the proverbial backburner is largely due to one member, i.e., the US, which has repeatedly stated that any proposal to include the Appellate Body would be dead on arrival, said several trade envoys, who asked not to be quoted. +
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