May 20, 1998
CLINTON FOR NEW TRADE ROUND IN SECTORS OF US DOMINANCE
Geneva 19 May (Chakravarthi Raghavan) -- US President Bill Clinton came to the WTO Monday with proposals for a "new type of trade negotiations" which, shorn of rhetoric and slogans for the democratic party lobbies, was a neo-mercantalist agenda of 'free trade' in areas where the US is dominant. Clinton specifically pushed for WTO members agreeing not to levy tariffs on trans-border "electronic transmissions."
The US attempt to get a separate ministerial text for standstill on "tariffs" on electronic commerce, has not so far got consensus - with several nations opposing the US draft for a "standstill" that is ambiguously worded and could be interpreted as one that needs a "consensus" at the WTO before any nation could decide to levy tariffs.
Clinton also called for "fair and open" bidding on government procurement contracts and supplies - putting it as part of need to end "bureaucratic caprice, cronyism or corruption", and asked all nations to adopt the OECD negotiated anti-bribery convention (which conveniently excludes parliamentarians and party funding).
Both these would provide "investor" confidence Clinton argued.
Earlier, while he had spoken of the Birmingham G-8 summit ideas for strengthening international financial architecture so that private capital markets could promote rapid growth, he had not mentioned 'investment rules' -- perhaps a signal that the US prefers to achieve these via the IMF 'capital account convertibility' moves.
But for an administration enveloped in charges over party fund-raising in return for favours to donors -- with every day's newspapers bringing some fresh details or instances (from the 1996 elections) -- to raise issues of corruption, cronyism or bureaucratic caprice required some straight face.
These examples have ranged from renting out (for a night) the Lincoln Bed-room at the White House for large party contributors, White House internship for children of rich donors, to rewarding corporations for donations, by sponsoring their trade disputes at the WTO (as in the banana dispute with the EU) and bending rules and giving waivers for export of sensitive technology (the day's newspapers carried the latest of these on guidance systems for satellite space launching from China).
And an even straighter face is needed for the head of a country, where 'pork-barrel' politics is a way of public life, to call for end to similar practices in other countries, by merely calling them cronyism.
The Clinton speech to the 2nd Ministerial Conference of the WTO here, was officially one for the 50th anniversary celebrations of the multilateral trading system (MTS), originally planned for 20 May, brought forward to 19 to suit the G-7, and then again a special meeting on 18 May evening for a solo Clinton performance.
But if Clinton came for a solo performance, to avoid sharing a forum with Cuban President Fidel Castro, the latter was present to hear Clinton - and the TV cameras made sure to pan him, including when he joined others in politely clapping hands at end of the Clinton speech.
And if 'popularity' and 'acceptance' by others are to be judged by the extent of the applause, one of the ministers from the developing world observed Tuesday, Castro outpointed Clinton.
The US President, who flew in from London (after the US-EC summit) for a visit to Geneva of couple of hours, before flying back to Washington, kept the ministers, delegates (who for security reasons had to be inside the hall for an hour before the scheduled time), waiting while for 45 minutes while he received the Swiss ministers in the US Embassy near by.
Though previewed (by accompanying White House media from Birmingham G-8 meeting) as a speech where he would propose a new round, to be kicked off at a 1999 ministerial which he was inviting to hold in the US, the Clinton speech proposed much less -- partly, perhaps, with an eye on this November's US Congressional elections.
Clinton invited the WTO to hold its next ministerial in 1999 in the United States, and asked other nations to start negotiations next year to further reduce tariffs and tear down barriers to trade, and the "new type of trade negotiations" so that the practice hitherto in all trade rounds of 'nothing is settled until everything is settled' no longer prevails.
Such negotiations would enable the US to agree to negotiate only in areas or sectors of advantage to it, and even when there is a basket of issues, enable the US can walk away from negotiations, with the concessions it is able extract sectorally, without having to yield in other sectors.
Even more 'interesting', was his mentioning the areas for new negotiations: Clinton asked that the (already mandated) agriculture negotiations should start next year, and even before it concludes, for countries to begin annually cutting tariffs and subsidies further.
He also called for rules, based on science, to encourage full fruits of bio-technology.
On the other sectoral negotiations mandated to begin in 2000, the second round of liberalisation of trade in services, Clinton merely proposed "when services negotiations are launched," it is essential to engage in wide-ranging discussions to ensure openness "for dynamic service sectors, such as express delivery, environmental, energy, audio-visual and professional services".
Clinton also asked for continuing the strong momentum to further dismantle industrial tariffs (again on a sectoral basis) beginning with chemicals and environmental technology.
In a populist move to win his domestic environment and consumer lobbies, Clinton asked the WTO to take steps to bring "openness and accountability" to its operations - but was careful to limit it in terms of actual proposals:
* provide a "consultation" forum where business, labour, environmental and consumer groups can speak out;
* convene a high-level meeting of trade and environment ministers to provide strong direction and new energy to the WTO's "environmental efforts";
* to open the dispute settlement process to the public, for publishing promptly 'briefs' filed by disputants before panels, and for 'stake-holders' to be able to file 'amicus briefs'.
While the US has been demanding, and using the dispute settlement system to force its trade partners give up environmental or consumer-driven standards (beef hormone, genetically-engineered agri-products like soya etc), Clinton used his WTO 'pulpit' to demand that international trade rules must enable sovereign nations to exercise their right to set protective standards for health, safety and environment and bio-diversity!
This may appeal to some of the "environmental NGOs" of the North, and create a new professional class of NGO trade law specialists in Geneva, preparing and filing briefs, and powerful TNCs setting up and funding their own 'civil society' organizations to do the same, in cases where their governments have not sponsored their case before the WTO.
But the Clinton proposal (in effect repeating what the US delegations has been attempting) has been opposed not merely by developing country governments and trade delegations, who are afraid that the already costly (for them) dispute settlement system would become costlier with powerful Northern lobbies ranged against them in litigation (a la US legal system and percentage lawyers in civil damage litigation).
But Third World "civil society" and "stake-holders" organizations, particularly after their Singapore experience, have also been demanding that transparency in the WTO should start at the rule-making and decision-making processes, for an end to the cabal-like "consultations" among the handpicked few whose accords are thrust down on the majority through a socalled 'transparency exercise'. Southern NGOs (and even some of their governments privately), have been demanding full transparency and participation in rule-making and decision-making by their own governments, -- and by the public, as a start, by publishing in advance proposals in these areas to enable the public what their governments are being asked to do and influence their governments.
Clinton also played to the US labour lobby, by calling on the WTO and the ILO to work together more closely, respecting 'core labour standards' and for the two secretariats to convene at high level to discuss these issues.
At Singapore, where this was brought up, many developing countries rejected a secretariat-level cooperation, underlining the different nature of the two secretariats, and the limited role for the WTO secretariat under the WTO charter.
In calling for a "new type of trade negotiations", Clinton argued "we can no longer afford to take seven years to finish a trade round, as happened in the Uruguay Round, or let decades pass between identifying and acting on a trade barrier."
"We should explore," Clinton said, "whether there is a way to tear down barriers without waiting for every issue in every sector to be resolved before any issue in any sector is resolved," adding the fine sentiments on the need to do this in a fair and balanced way and taking into account needs of nations, large and small, rich and poor.
Given the experience of developing countries, whose identified problems and issues have been put into 'the basket' of issues at every successive trade round, but without any solution and merely pushed off to a work programme and the next round, the Clinton proposal would result in developing issues not even figuring on the agendas or for any negotiations even if they figure.
US officials in briefing journalists said that everything was on the table and nothing was blocked or agreed.
But the nuances in their interpretations suggested that while the US was for a new round or negotiations on a range of issues to be taken up, in fact it wants to clinch accords and have them approved and implemented.
After a meeting of the Quad countries (Canada, EC, Japan and the US) in April, it was reported that the Quad have more or less agreed that while a range of issues would be included in the negotiations, if an agreement was reached in two or more sectors, it would be accepted and implemented, without waiting for agreement on an entire package.
And while Clinton has proposed taking up and further dismantling industrial tariffs for negotiations, but specified only chemicals and environmental technology, US officials in briefings sought to give the impression that the entire range of industrial tariffs could be negotiated.
But they seemed to hedge their bets when it was suggested that this should mean negotiating on tariffs on textiles and clothing and other export products of interest to developing world where the average tariffs are high, and tariff escalation is higher.