May 15, 1998

FROM LEAP FORWARD IN HOPE, TO LEAP IN THE DARK

 

Geneva, 14 May (Chakravarthi Raghavan) -- A draft ministerial text for adoption and issue by next week's 2nd Ministerial meeting of the WTO was being discussed Thursday at an informal heads of delegations meeting chaired by Director-General Renato Ruggiero. 

In the light of comments and amendments proposed to his original draft, Ruggiero has put forward a revised draft, which is currently being discussed and 'negotiated' at the informal meetings, which are expected to go on into the late hours of Thursday. A formal meeting of the General Council is set for Friday for adopting this draft and recommending it to the Ministerial meeting next week. 

The revised draft has some changes, to meet developing country objections, to several of the declaratory statements and assessments in the original draft.  

The two final paras, on the crux of the decisions to be taken, still places on the same pedestal implementation problems and issues, mandated negotiations under built-in agenda or reviews, and the new issues.

Paragraph seven of the revised text, on implementation, now says: 

"Full and faithful implementation of the WTO Agreement and Ministerial Decisions is imperative for the credibility of the multilateral trading system and indispensable for maintaining the momentum for expanding global trade, fostering job creation and raising standards of living in all parts of the world. When we meet at the Third Session we shall have the opportunity to further pursue our evaluation of the implementation of individual agreements and the realization of their objectives. Such evaluation would cover, inter alia, the problems encountered in implementation and the consequent impact on the trade and development prospects of Members."  

While seemingly meeting the criticisms of developing countries to the earlier wording (which among others suggested that unresolved problems are being solved through the dispute settlement mechanism), the issue of implementation and problems, which was left to speeches in plenary in empty halls at Singapore, is now being pushed off to the next Ministerial, with a vague promise that it would be addressed 

The final eighth para of the new text, dealing with the idea of a new round of negotiations (this is not mentioned as such, but the concept is in the wording), says:  

"8. We recall that the Marrakesh Agreement Establishing the World Trade Organization states that the WTO shall provide the forum for negotiations among its Members concerning their multilateral trade relations in matters dealt with under the agreements in the Annexes to the Agreement, and it may also provide a forum for further negotiations among its Members concerning their multilateral trade relations, and a framework for the implementation of the results of such negotiations, as may be decided by the Ministerial Conference. In the light of this we have decided to establish a broad-based process among WTO members under the auspices of the General Council. The process should commence work at the beginning of 1999 and, on the basis of consensus, prepare for our consideration at the Third Session,   (a) recommendations concerning:

(i) issues relating to implementation brought forward by Members;

(ii) the negotiations already mandated that will allow us to begin such negotiations as scheduled;

(b) recommendations on the basis of consensus, concerning the future work:

(i) under existing agreements and decisions taken at Marrakesh;

(ii) under the decisions taken at Singapore;

(iii) relating to the followup of the outcome of the High-Level Meeting on LDCs;

(iv) on other matters proposed by Members concerning their multilateral trade relations, and 

(c) recommendations concerning the organization and management of the work programme arising from the above, including its scope, structure and time-frame, aimed at achieving overall balance among the interests of all Members."

The new draft, lists under separate subparas the issues from existing agreements (presumably implementation and built-in agendas for negotiations and reviews), the Singapore decisions (studies on investment, competition policy, government procurement, trade facilitation or visa-less entry for TNC exports) and new issues that could be proposed now at the Geneva ministerial (or subsequently in the General Council process).  

But it still maintains the basic framework for a trade-off between more benefits under agriculture or services (under the built-in agenda) for some, even more benefits under new issues for the North, particularly the EC, and throwing in both the LDC High-level meet outcomes and any new issues (that the US and others could bring forward).  

Objections, with some nuances, to such a mixing up at this stage had been voiced at previous discussions by a number of countries, with some clearly stating they would have difficulty in agreeing at this time, to the Singapore or other new issues.  

What stand these countries, even though they are a handful, will take on this revised draft is not clear, though it might be difficult for the trade negotiators of some of them to plead that they had to acquiesce because of fear of being isolated.  

Nor is it clear what stand Malaysia and Indonesia (who at the G-15 meetings in Cairo specifically opposed new issues and negotiations on them) would take when it comes to the crunch at the WTO. 

And the burning issue of monetary and currency disorders and the threats this poses to attempts to maintain and advance a world trade order through the WTO is not even mentioned. 

This could still be brought up (for negotiations at the 3rd Ministerial?) under the catch all phrase of sub-indent (iv) of the indented subparaph (b) for the work programme.  

But given the ideological hangups of the WTO secretariat and leading trading nations, and the abject surrender of jurisdiction to the IMF under the agreements between the two secretariats, this seems unlikely.  

And if the WTO still moves ahead to build further the trade order on the Marrakesh foundations, shaky though that be (atleast in retrospect) in neglecting this area, it will be an attempt to disprove Keynes and White and their post-war architecture, of which the multilateral trading system, whose 50th anniversary is to be celebrated on 19 May, is but a part. 

At the time of the Keynes-White negotiations and design of that architecture, John Maynard Keynes wrote to Lord Addison defending himself for the focus on the monetary and financial system, and against Addison's criticisms that the British interest in reducing tariffs and other trade barriers was left separately (for Havana).  

Keynes then said that while other proposals are not essential as prior proposals to the monetary scheme, "a monetary scheme gives a firm foundation on which the others can be built."  

"It is very difficult," Keynes added, "while you have monetary chaos to have order of any kind in other directions. If we are less successful than we hope for in other directions, monetary proposals instead of being less necessary will be all the more necessary."

If Marrakesh was a leap forward, on the basis of hope, that the planned WTO and the IMF will join hands to construct a coherent global framework, with WTO taking care of trade order and the IMF a monetary and financial order, the Mexican crisis of 1994 and the current Asian crisis, still unfolding and far from being overcome, suggests that the WTO's Second Ministerial and its decisions will result in a leap in the dark from the edge of a precipice.