May 19, 1998
 
WTO PROCESS FOR "SUFFICIENTLY BROAD-BASED" LIBERALIZATION
Geneva, 18 May (Chakravarthi Raghavan) -- The 2nd Ministerial Conference of the WTO will mandate the start of a process that would lead to decisions in 1999 for negotiations for "sufficiently broad-based" trade liberalisation to "respond to the range of interests and concerns" of all Members, within the WTO framework.
The draft text for adoption by Ministers, negotiated informally at level of heads of delegations, and formally adopted by the General Council Sunday night is such that negotiations on what issues would figure on the agenda of further trade liberalization, is formally pushed into the preparatory process under the WTO General Council.
But in fact it is clear that the European Commission which has been pushing for a new round of negotiations to be kicked off by another ministerial session in 1999 -- with all the so-called built-in agenda of the WTO plus the new issues (investment, competition, government procurement identified at Singapore) and others that could be raised in the preparatory process -- has won the first skirmish.
The 'compromise outcome' hammered out in three days of informal Heads of Delegations meeting (behind heavy barricades, more like a citadel drawing up the draw-bridges and lowering the portcullis, just to keep at bay some 5000-odd demonstrators, with perhaps a score or so of hooligans), can be interpreted as shutting out nothing or admitting nothing.
Trade diplomats could perhaps argue that trade and WTO are too serious a business to be left to Ministers (or heads of government) to negotiate, and it is better to keep it in the WTO General Council process of trade negotiations, that there is no agreement for a new round, or a millennium round of old and new issues (with the old of interest to the developing world shunted into a work programme as in the past).
In the battle over 'language', Malaysia, Pakistan and Egypt negotiated hard to reject some of these earlier EC formulations, and the final compromise language emerged.
It perhaps underlines what UNCTAD Secretary-General Rubens Ricupero has been saying to developing countries for quite some time, that all negotiations are based on power, and it is easier to achieve something on the basis of a 'positive agenda' of what one wants, rather than a negative agenda of what one does not want.
But despite the efforts to be cohesive, developing countries at the WTO are each still groping for some small benefits, and unable at least a number of key ones to formulate and unite behind a broad-agenda for themselves.
Whatever the explanation, the EC (and other industrial countries) have managed not only to put the study issues (agreed at Singapore without any commitment to negotiate, except by a specific consensus decision after the completion of studies in December) -- investment, competition policy and government procurement -- into the pre-negotiations process to be started at a Special Session of the General Council in September.
And while what particular issue to include or not may still be argued about, the work programme of the Council is cast in a mandatory 'shall encompass'.
The operative paragraphs (paras 9, 10 and 11) of the draft text recommended to the Ministers has a chapeau sentence in para 9, citing the functions of the WTO (set out in Art.III.2 of the WTO treaty), and the earlier eight paras of the text (assessments, declaratory views and promises) and says:
"9. ... we decide that a process will be established under the direction of the General Council to ensure full and faithful implementation of existing agreements, and to prepare for the Third Session of the Ministerial Conference. This process shall enable the General Council to submit recommendations regarding the WTO's work programme, including further liberalization sufficiently broad-based to respond to the range of interests and concerns of all Members, within the WTO framework, that will enable us to take decisions at the Third Session of the Ministerial Conference. In this regard the General Council will meet in special session in September 1998 and periodically thereafter to ensure full and timely completion of its work, fully respecting the principle of decision-making by consensus.
The General Council's work programme shall encompass the following:
(i) the issues, including those brought forward by Members, relating to implementation of existing agreements and decisions;
(ii) the negotiations already mandated at Marrakesh to ensure that such negotiations begin on schedule;
(iii) future work already provided for under other existing agreements and decisions taken at Marrakesh;
The sub-indent (i) of para 9.a is one that several developing countries have been seeking to get the WTO to focus on. Under it they have been trying to get some decisions on the difficulties in implementing agreements that developing countries have accepted (and do not resile from) but which nevertheless are creating major legal, political, administrative and economic and social problems no one had anticipated.
They have also been wanting to use this to focus on the fact that most of the alleged benefits to them, touted before, at and immediately after Marrakesh, have not come, but only the marginalisation and economic setbacks.
But unless they clearly formulate what they have in mind, and the reliefs needed, whether in the implementation process or some changes, this will get them nowhere.
The sub-indent (ii) of 9.a. refers in particular to the further process (of the initial 5-year reform process) in agriculture and the second round of liberalisation in Services.
A number of other agreements have built-in provisions calling for 'review' of the agreements, or specific parts, with the possibility of negotiations arising out of them. The sub-indent of 9 (a).iii. is to cover all these questions and issues.
The sub-para (b) covers the issues of investment, competition policy, and government procurement on which studies and work programmes were initiated at Singapore, and are all set to conclude with reports to the General Council end of December, and a specific mention that there would be no negotiations without a consensus decision to that effect.
While this, even normally, would enable any one (the EC, US etc) to move at that time to go further to negotiations, by getting mention of it in the 2nd Ministerial text, and under the rubric of the General Council's work programme (including further liberalization sufficiently-broad based), has in effect increased the pressure on the developing countries opposing it to yield.
Also on the work programme, and possible negotiating agenda are the followup recommendations to the High-Level meeting on LDCs, which though has so far meant nothing more than 'round-tables' for individual countries, as LDC representatives have been complaining at various intergovernmental and non-official fora.
There is also the catch-all 9. (d) that would enable any new matter to be raised as part of negotiations for multilateral trade relations -- that could bring in other issues. If it suits their domestic agendas, labour and environment and any 'trade and... ' they can think of could be brought up, flagged and/or set for new studies and new negotiations.
And developing countries who might feel satisfied that they too can raise their problems, need to know they need institutional memory and continuity for negotiators to pursue things, by blocking others. But if they could not block now, could they do so in the future?
In the past too, under the old GATT (whose 50th anniversary celebrations Tuesday, but to be kicked off Monday with a President Clinton appearance), all the issues raised by developing countries would be put in such ministerial documents, figure on work programmes, and at the end of a round of negotiations, remained largely unaddressed, but pushed on to another work programme (and soon forgotten even by those who proposed it).
The Ministerial text has two other paras, one to set a time-limit to the liberalization negotiations to be started, and the other to achieve an overall balance of interests.
"10. The General Council will also submit to the Third Session of the Ministerial Conference, on the basis of consensus, recommendations for decision concerning the further organization and management of the work programme arising from the above, including the scope, structure and time-frames, that will ensure that the work programme is begun and concluded expeditiously.
"11. The above work programme shall be aimed at achieving overall balance of interests of all Members."
The WTO juggernaut, in a nut-cracker move with the IMF and the World Bank (both of whom have jurisdiction only over developing countries), seems determined to grind down anything coming in the way of its view of 'globalization'.
But often, others have the last laugh.