12:35 PM Apr 16, 1996

'HYBRID' SINGAPORE WTO MEET

Geneva 16 Apr (Chakravarthi Raghavan) -- The General Council of the World Trade Organization Tuesday agreed to what was described as a 'hybrid' format for the first Ministerial Meeting of the WTO at Singapore this December -- with a session every day devoted to Ministerial speeches (often intended for back home) and another where Ministers would discuss and try to agree on trade issues.

WTO Director-General Renato Ruggiero who is heading an informal consultation process (at level of heads of delegations) on the Singapore meeting issues, reported to the General Council, the consensus in these consultations on the format.

The second round of the Ruggiero-led consultations, in two sessions, were held Monday -- with one of the meetings having been hurriedly shifted away from the WTO headquarters building on the shores of lake Geneva to the ILO building about a kilometre away up on a hill.

Farmers, many of them from France, were demonstrating outside the WTO for its 'free trade' rules which the farmers said were affecting environment and forcing 'standards' like growth hormones for cattle, and creating diseases like the Mad Cow Disease.

While the farmers were taking advantage of the scare over the disease to assail the WTO, and its rules for reduction of European subsidies.

At the informal heads of delegations meeting, delegates agreed by consensus that the focus at the Singapore meeting, the first since the signing of the Marrakesh agreement and entry into force of the WTO, should be on a review of the implementation of the WTO agreement (with its annexes of agreements in individual areas of trade in goods, services and intellectual property, and an overall dispute settlement mechanism).

In a wide ranging first round of general comments, the Europeans and the North Americans raised their favourite new issues -- among others, investment rights for foreigners, competition law, labour standards, corruption in trade and in particular government procurement, and the 'trade and environment' questions. Canada put forward a 'non-paper' listing a number of items that should be considered under 'investment' and to be the subject of a work programme.

The Canadian delegate noted the ongoing work in UNCTAD on investment, and while welcoming it, thought there could be parallel work in the WTO.

But the range of comments from the others, particularly the developing countries, showed that there was very strong opposition to over-loading the WTO agenda, and bringing up divisive issues at Singapore -- at a time when it was necessary to give an public image of coherence and strength in the trading system.

While a few like India expressed themselves clearly against the EU-pushed idea of a multilateral investment agreement and the WTO taking up this new agenda issue, others were somewhat more equivocal -- expressing their willingness to go along with any consensus to study the issue, but without any commitments.

While the US and EU wanted the Singapore meeting to address the question of labour standards, most of the others who spoke argued that it should be considered at the ILO, and had no place in the trade organization.

The next meeting of the informal Heads of Delegation is set for 15 May when issues about 'implementation' and 'future agenda' are to be discussed.

The EU Commission suggested that the Singapore meeting should wind up with some sort of Declaration or Communique, but this met with some mixed reactions.

In the general views on the Singapore agenda, Pakistan said implementation should be the main focus at Singapore and within this there should be particular attention to such areas as agriculture, textiles and dispute settlement.

"We have problems in the implementation of the Agreement on Textiles and Clothing (ATC) and the dispute settlement," the Pakistan delegate said. "Bilateral arrangements are continuing to undermine the multilateral system. The textiles integration programme and the functioning of the Textiles Monitoring Body (TMB) should be re-viewed at Singapore," he added.

Under 'on-going' negotiations, he said the Rules of Origin should be considered.

The WTO Agreement on Rules of Origin provides for work on harmonising these rules applicable to MFN trade, and not those governed by any preferential arrangements. This work is just at the beginning, but meanwhile the major importing countries are changing and altering their rules to protect their markets. The US has recently changed the rules of origin for textiles and clothing imports, which several of the exporters are finding restrictive.

As for new issues, Pakistan said, the criteria for taking them up at the WTO should be based on consensus, the issue having a direct relationship to trade and within WTO competence. They should not overload the WTO and the trading system.

The United States in proposing the labour-trade link issue, felt the WTO had 'matured' and the earlier GATT sensitivities about new issues was no longer justified and they could have what the US called "a non-threatening"' discussion in the WTO on trade and labour standards. At Marrakesh, the US noted, the Ministers had adopted a decision on coherence, which created no rights and obligations, but was a political commitment of the members. They could have a similar declaration on labour standards at Singapore.

India felt the Singapore meeting should have only two agenda items: implementation of the WTO agreement and ministerial decisions, and new issues.

Under the rubric of implementation, they should consider all questions where actions had to be completed by December 1996.

The new issues being proposed were "controversial and divisive" and addressing them at Singapore, would "take away the focus and attention from implementation which is the primary issue."

"In December when we meet at Singapore we should project an image of strength and coherence in the organization," India said.

India had concerns over the investment questions and the great emphasis being placed on just one factor of production. India was very reluctant at this stage to go into new issues whether investment or labour standards.

India also did not see any reason for parallel work on investment at UNCTAD and the WTO, and said that if on the basis of study and analysis, and discussions at UNCTAD, it was felt that aspects of investment could be the subject of trade rules, it could then be taken up at the WTO.

Mexico felt that the agenda should be balanced reflecting the interests of all parties. Implementation should address all current issues including trade and environment. As for the future, they could consider new issues and further liberalisation. But there should be no priority for new issues.

Colombia was concerned that the first ministerial conference was being projected as one to begin new round of negotiations. But Colombia was not against discussion of issues like investment and labour standards.

Peru felt that implementation must the most important item. The new issues to be taken must be very limited and related directly to trade. Peru was willing to join a consensus to discuss and analyze investment issues provided this would not lead to under undertaking. Further liberalisation was a very delicate question. A ministerial declaration may be useful, but the concerns of Developing Countries must be addressed.

Poland wanted priority to implementation. The agenda should not be overloaded with new issues. But investment and competition were trade related and seemed rational to discuss them.

Korea was open minded on new issues of competition and investment as well as corruption in government procurement. On trade and labour standards there seemed to be a wide gap between the pros and cons.

Philippines, speaking for Asean, wanted focus on implementation and review of the textiles agreement. ILO is the proper forum on labour.

But Philippines also spoke of willingness to take up issues under the built-in agenda of the WTO earlier than stipulated, and referred in this connection to the TRIMs agreement and the Agriculture agreement.

The TRIMs envisages the WTO Council on Trade in Goods taking up before year 2000 a review of the operation of the agreement and proposing amendments, as well as whether TRIMs should be complemented with measures on investment policy and competition.

The Agriculture Agreement which envisages continuation of the agricultural reform process and initiation of negotiations atleast one year before the end of the implementation period, i.e. before end of year 2000.

Some of the Asean, like Indonesia and Malaysia have publicly expressed themselves against the EU-sought Multilateral Investment Agreement, while Thailand has expressed reservations. Statements in Manila suggest that the Philippines government is not opposed to an MIA.

Several of the Asean, who are members of the Cairns group, appear to support the attempt of some of the other Cairns membership (like Australia, New Zealand, Argentina) for acceleration of the 'implementation' and a thrust for further liberalisation by the EU.

For many of the other trade diplomats, it was not clear from the Philippines statement what the position of the ASEAN is on the EU proposed investment agreement and negotiations.

Argentina had some misgivings about the Singapore meeting ending with a Declaration, as suggested by the EU. Argentina suggested that under implementation, the meeting should consider the reports of the WTO bodies, unfinished business and the report of the Committee on Trade and Environment. The meeting should have as separate items the built-in agenda, new issues and finally further liberalisation.

Canada said that by the time of the Singapore meeting, they should be saying something about the accession of new States - China, Russia etc -- on regionalism and multilateralism and on the dispute settlement system. On new issues, Canada put forward a non-paper on investments and wanted a work programme on that initiated at Singapore. Canada also said it supported UNCTAD taking a role in this while at the same time there should be also work on it at WTO.

The EU felt the Singapore meeting should consider TRIPs, Rules of Origin, possibility of accelerated tariff reductions, integration of the least developed countries and the developing countries into the trading system, environment, investment, competition and labour standards.

Norway stressed trade and environment issue and felt Singapore should take steps to make the government procurement code a multilateral accord. The meeting should also address the question of social standards.

Brazil wanted priority for implementation, on-going negotiations in services. The new issues should not have any priority at Singapore. But if there be a consensus, Brazil would be ready to discuss investment, but this must be along with competition questions. Labour standards, Brazil felt, should be dealt with in the ILO. Brazil was not in favour of any acceleration of tariff reductions nor the zero-to-zero options (reduction of tariffs to zero in sectors), which the US and EU are pushing.

Australia felt that under implementation, the agriculture implementation should be the most important issue. The regionalism vs multilateralism issue should also be looked into at Singapore.

Bangladesh wanted priority to measures relating to the LDCs. The new issues should be discussed in the appropriate for e.g. labour standards in the ILO.

Hongkong felt Textiles and Clothing should be on the Singapore agenda and review of the implementation of the ATC must be undertaken. On new issues, Hong Kong agreed with Canada on starting work on investment at Singapore, as also competition questions. The ILO was the appropriate forum for Labour standards.