7:53 AM Dec 10, 1996
DOWN A SLIPPERY SLOPE ON INVESTMENT/COMPETITION?
Singapore 10 Dec (Chakravarthi Raghavan) -- While no consensus has yet been reached on the investment/competition issues for inclusion in the Ministerial Declaration, a number of countries have shifted their positions and are willing to go along with a study process on this at the WTO, spokesman Keith Rockwell announced Tuesday evening. Rockwell was reporting on the informal consultation process -- which he described as the 'Yeo-Ruggiero' process -- under way among a small group of key countries on the areas of contention, lacking a working consensus, for inclusion in the Declaration. [As delegates went into a night session, of the informal HOD plenary, several ambassadors speaking on conditions of anonymity, said that they had seen no real change. "We have not even got into negotiations. The same positions as at Geneva are just being repeated in different languages."] With the textiles and clothing issue, 'conditionally' out of the way (Canada and the US which had blocked consensus at Geneva, have now lifted their objections, provided other parts of the Declaration are agreed to), issues outstanding are formulations on agriculture, on government procurement, competition and investment and labour standards. Apart from the textiles issue, there has also been broad understanding on undertaking some work on trade facilitation. On agriculture, plurilateral discussions among the principal protagonists on either side -- Argentina and a few other Cairns group members and the EU, Japan, South Korea and Switzerland -- was taking place for them to agree on a suitable formulation that will at best reiterate the commitment to take up work on further agricultural reforms in 2000 or so. On government procurement, while many countries are agreeable to consider a possible arrangement for making the process transparent in countries, others are still objecting to throwing open their government procurement (now confined to domestic enterprises) to foreign competitors. On the investment and competition question, Rockwell said, which he related to the TRIMs agreement process to take up the issues in 1999-2000, Rockwell said, a small number of countries are still opposed to negotiating investment rules or study and insist any study should be exclusively in UNCTAD. But some of them had (since coming to Singapore) shifted their stands and "have joined a majority of countries favouring UNCTAD and WTO working in conjunction." Replying to a question, Rockwell agreed his reference to a "majority" did not mean that the WTO was giving up its consensus decision-making, and a consensus was still lacking on the issue. The "several", he clarified, was "three" (out of ten who have opposed in the Geneva Ruggiero process, any WTO process). Malaysia's Trade Minister, Madame Rafidah Aziz, who has been identified in the Singapore media as having shifted and backed down on the original firm rejection of the investment issue, in answering questions at a press conference, explained her position in these terms: Malaysia, she said, is not "against" a study by experts in the WTO, and such a study may go on and provide inputs to ministers, two years from now. Such a study does not mean there will be negotiations, and it could include other things as well, like anti-competitive practices of transnational corporations etc. At the official press briefing, Rockwell said that on competition, while there appeared to be support for a WTO study, consensus was still lacking. There were three different groups: those who believe the issue should focus on competition and trade, those who want focus on trade rules and their impact on competition (such as via anti-dumping, subsidy or safeguard rules) and many developing countries who already feel overstretched and insist that the study now taking place in UNCTAD be continued, and not brought into the WTO also. The WTO spokesman said, the Yeo-Ruggiero process was now looking at the labour standards issue (and this could go well into the night). In other developments, the information technology negotiations among a key group of countries was reported as making progress. But the US and the EU, which had scheduled news briefings this evening on this and other negotiations, cancelled their briefings. Some of the developing countries, like India, said that while they could go along with an IT products liberalisation, they could not commit to achieve it by any targeted date, but only according to their pace, nor could they commit themselves to achieving zero tariff. Other sources said, the IT negotiations seemed to be tied to the extent also to which the US is willing to include consumer electronic products into the accord. But with the agreement (which when concluded, has to be extended on a most-favoured-nation basis to all WTO members) among a few majors involved in this trade, perhaps the only "likely success" here, all parties are putting a "spin" on this. There have also been some "talks" and exchange of information on the fringes of the Conference, as the WTO spokesman said, on the basic telecom negotiations (which are to be concluded by 15 February). But there has been no negotiations or attempts, the trade officials said. The small group of key countries involved in the Yeo-Ruggiero process appear to include the US, EU, Japan, Canada, Australia, South Korea, India, Indonesia, Malaysia, Pakistan, Egypt, South Africa, Tanzania, Morocco, Chile, Brazil, Hong Kong, Mexico and one or two other Latin American countries. In the discussions in this small group of key countries, the WTO head, Renato Ruggiero, appears to have proposed before lunchtime on Tuesday, a formulation to include the issues of investment and competition policy in the Declaration. At first glance, the new formulation appears to contain nothing new that is not already explicit in the WTO agreements. As one participant said, it is only old (vinegary) wine in a new bottle, though some appear to find something new and reassuring to them, that could lead to a compromise. In the 'new' formulation of Ruggiero, according to participants, the Declaration would recognize that the investment and competition policy issues are inter-linked, and that an educational study process should begin in the WTO, but that this process cannot move forward to negotiations unless there is explicit consensus. Also, any eventual investment agreement or rules will not have a top-down approach, but a bottom-up approach -- more like the GATS approach, where countries only committed themselves to what access they would agree to provide and not an agreement in which everything would be open, subject only to country exceptions. The stipulation that decisions in the WTO should follow the consensus decision-making practice of GATT is in the WTO charter, which also defines this consensus in a footnote -- no member present formally objecting to a decision. While the possibility of deciding by vote, and the various majorities needed for it, is spelt out, there has been little doubt that the majors are more afraid of opening up a decision-making process by vote. They might win one or two, but once decisions are by voting in an organization of over 120 countries, majority voting would not favour them. In reiterating this in the Declaration, no big concession is involved on the part of protagonists, nor the explicit stipulation that negotiations can move forward only by explicit consensus. But, many participants seemed to have been shocked when the Malaysian Trade Minister seemed to indicate that her country, which has been in the forefront of opposition to investment negotiations, could agree to a study process, as that proposed. Since the negotiations on investment, originally mooted by the EU Commission, had never really been in the picture as far as the Declaration is concerned, the reason for the Malaysian compromise was not clear. Initial reactions of others who were opposed to the investment issue figuring in the Declaration, suggested they were puzzled but unwilling to change their own stance. The negotiations and consultations within the small group is expected to continue into the night Tuesday.