8:00 AM Dec 9, 1996

A WTO SPIN OR JUST INCOMPETENCE

Singapore 9 Dec (Chakravarthi Raghavan) -- The World Trade Organization had some 'bad' news for the trade ministers as they began their first Ministerial Conference: world trade growth was decelerating faster than envisaged in the beginning of 1996.

At the beginning of this year, the WTO had said that world trade growth this year would be less than the eight percent last year, but just about a little less, perhaps around seven percent.

In its latest projection,`this has now been scaled down to 'about five percent' in volume compared to an eight percent in 1995 (which itself was below the 10% recorded in 1994).

But this news was buried in the WTO's annual report on page 12 of an overview. A subtitle on page three said of prospects: "after a comparative slowdown in 1996, trade growth is to speed up again in 1997", but it was not easy to discover in the text any backing for the subtitle.

Well, trade data as GDP growth data and estimations and projections are not really that exact, as economists and econometrists would have us believe - from the econometric models, equations and figures churned out by computers, on basis of assumptions of those doing the projections, that the economists try to make us believe and get away with.

And one might even conceivably argue, to laymen, that the difference between a seven percent growth and a five percent growth is not all that big, and that there is still a growth.

But what was interesting about the latest figure was that the bad news was 'buried' inside the annual report which was put on the table for media and (perhaps delegates and observers) to pick up and read on the morning of the opening of the Singapore Ministerial Conference.

At a news briefing the previous day (Sunday evening), the WTO spokesman, Keith Rockwell, among the many announcements about facilities, told the media that near the area where press desks have been set up, at a stall, will be all the WTO publications, 'including the annual report'.

Normally, these reports are released with an embargo and the press office writes a press release too.

This time there was none of this fanfare, and perhaps one might be tempted to think that the preparations for the Conference had overwhelmed the secretariat and the press office.

And many journalists specialising on WTO affairs missed it, and certainly this writer did. Only the query of a journalist, an economic writer from India, who had come to cover the WTO meet and sought some explanations from this writer, about the exchange rate movements this year (and its effects on value of trade) led this writer to the counter where the report was and to read it.

Inquiries showed that while the finalization of the report had been held up, as the economists worked on figures to see if a better projection could be achieved, the fact of the slowdown was becoming known and talked about within the secretariat.

What is not clear is whether this resulted in any conscious decision not to issue a press release or issue the report as usual in advance with an embargo, and whether its being 'published' on a crowded day for WTO news, was in the hope the bad news would not find its way into the news media.

But the failure to draw attention to the report (as is normally the practice) was part of a WTO attempt at 'putting a spin', became clear when the WTO Director-General, Renato Ruggiero, in his speech to the Ministers, spoke of the solid evidence of the scale of liberalization of world trade and benefits already achieved and drew attention to the annual report which he presented to the SMC.

Ruggiero, in 12 lines of his prepared text to the report, highlighting its review of the evolution of trade policies of developed, developing and transition economies in the direction of liberal trade regimes, greater resort on tariff based measures and transparency and that these policies represent the surest means to expand the participation of all countries in today's increasingly dynamic international trade.

"In turn," announced Ruggiero, "the Annual Report also shows how trade continues to be a powerful engine of growth: global trade again grew last year by one of the fastest rates in a decade and now exceeds six trillion dollars for the first time, with the stimulus this represents for job creation worldwide."

Nary a word in the Ruggiero speech, which drew on the Annual Report to talk of trade as a powerful engine of growth and 1995 recording one of the fastest rates, to the Report's news that deceleration this year was faster than last year, or as anticipated early this year, that all this is due to the slowing down of world growth of output and sluggishness etc.

Was the failure to put out a press release, or even draw attention of the media to the 'bad news' in the report being put out (without embargo) next morning, and Ruggiero's failure to mention it in his speech, a spin?

The WTO often paints itself in business terms and as an institution to uphold transparency and promote business and efficient mobilization of resources, advocating privatization everywhere.

And not too long ago, a Swiss national and business executive who was formerly Swiss Ambassador to the old GATT (M. de Pury), even suggested that the WTO itself could be privatized.

Well, if the WTO had been a privatized business corporation, and its Members shareholders, Mr. Renato Ruggiero and his chief economist, US national, Blackhurst, would have found themselves hauled up by the US Securities and Exchanges Commission for failure of full and complete disclosure in the annual report and prospectus.