SUNS 4350 Tuesday 22 December 1998



Trade: WTO site for 3rd ministerial in US courts!



Geneva, 21 Dec (Chakravarthi Raghavan) -- When the members of the World Trade Organization adjourn for the year end holidays, the inability to choose and name the next Director-General was not the only decision involving the US that eluded them.

They were unable to settle the dates or venue of the 3rd Ministerial meeting of the World Trade Organization which, they have agreed to hold in 1999 in the United States at the invitation of President Bill Clinton delivered at the 2nd ministerial.

The choice of a venue is now caught up in litigation in the United States, tying the hands of the US government in conveying to the WTO its recommendation on the site of the next meeting.

In the United States, the choice is made by "auction" -- with cities and convention centres wanting a meeting to be held at their place to make "bids" on the facilities and the funds they would provide, so that the Federal government budget is not hit.

The two US parties, every four years, decide on the site for their party conventions, on the basis of offers from various groups that will benefit - TV networks, hotels and other that can make money on
visitors.

The International Olympic Committee selects the venue of its various olympic events on a similar basis, but is now caught up with allegations of kickbacks for the committee members.

No one has so far suggested that the WTO should do this; unlike the Olympics or other events, a WTO meeting may bring little monetary benefits, but much costs these days.

In the "auction" over the site for the 3rd WTO Ministerial that was conducted in the US, Honolulu in Hawai appears to have made the best "bid". But it was not chosen as the venue, and was over-looked by Washington which chose San Diego (on the Mexican-California border).

According to trade diplomats, Honolulu has now taken the Federal authorities to court, and probably the case, and its appeal, can't be decided before April next or so.

San Diego was apparently chosen over Honolulu, because of the "image" problem - of the WTO and its big corporate support inside the US getting a beating for the ministerial being held at such a holiday beach resort!

But San Diego near the Mexican border of California is not without its attractions either -- but has a more powerful appeal, given the importance of California and its votes for the Democratic candidate in the next presidential elections in November 2000.

Punta del Este where the Uruguay Round was launched was also at a resort centre - where at the height of the holiday season wealthy Italians and Argentineans and others come for holiday in homes and flats owned by them, but during off season has little else. And Uruguay offered Punta del Este, and the off-season period, and the meeting itself was held in the casino of that holiday centre.

But nobody in Uruguay or elsewhere made a big noise about it.

But in today's fractious United States, anything could prove controversial and land up in courts, other countries are discovering.

The US administration is confident of resolving the conflict.

But the kind of problem that Washington is facing over "transparency" in government procurement will not help too much in pushing this issue at the WTO.

And if things proceed in the US as now, no trading partner can expect to do serious business of trade negotiations with the US, until after the US Presidential Elections of November 2000, and a new administration being sworn in January 2001.

Some trade observers in the US have been saying that any new round can be launched only in 2002 or 2003, after a new administration and congress have set their priorities and agreed on a programme and that no new round of trade negotiations, with all the issues the US wants, and throwing in some that developing countries wants, but which could end up in a future work programme.

The US has been careful, only insisting that the agriculture and services negotiations already set under the Marrakesh accord start as scheduled.