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15 DAYS TO SEATTLE AND DIFFERENCES ON EVERY QUESTION

by Chakravarthi Raghavan


Geneva, 15 Nov 99 -- With just 15 days to go for the 3rd Ministerial Conference of the World Trade Organization at Seattle, there is not one issue or action that Ministers have to decide (one way or another) on which members are agreed.

There are substantial differences on almost every subject proposed for inclusion on the agenda of a new round or future work programme, and even whether there will be a round at all.

And on Friday, a small group of developing countries which met with the WTO head, Mike Moore, bluntly made clear that they could not accept in any way a compromise to bring labour into the WTO, nor to any working group or forum between the WTO and ILO. And in this context, they also refused to agree to any invitation to the ILO head to come to Seattle to speak to the Ministerial Conference.

Having already missed a 5 November deadline to prepare a draft for consideration in capitals, the General Council chairman, Amb. Ali Mchumo of Tanzania has set a new one, "early in the week of 22 November" to transmit the results of the work at Geneva to the Seattle Ministers.

The WTO Director-general Mike Moore appealed Saturday at the informal Heads of Delegation meeting, to all sides to make every possible effort at every level to resolve issues, and move forward in a balanced way and "not hold issues hostage to each other."

But at the end of over 3 hours of what was described as "blunt, plain-speaking and straightforward" comments, it was clear that the preparatory process for Seattle is not only in a state of "hostage of issues to each other" but to resolution of many extraneous ones.

So much so, senior WTO officials and experienced negotiators, began to talk of an outcome at Seattle not dissimilar to that of the GATT Ministerial meeting in 1982 at Geneva. After at least two prolongations (of two days), that meeting ended up with a declaration for a work programme and a "best endeavour" commitment not to increase protectionism.

But one key developing country negotiator expressed an apprehension in private that with some minor concessions to developing country ministers at Seattle on implementation issues (like the non-operational special and differential treatment provisions of the Marrakech agreement), the US and President Clinton would begin to telephone counterparts in key capitals, seeking their help to make Seattle a success, and holding out the possibility of a renewed wave of protectionism in the US Congress as a threat.

"What would our Prime Ministers and Presidents, who with all their best efforts, are not fully aware of the details -- "and the devil in these agreements lies in details" -- do when Clinton appeals for help," the negotiator wondered.

Such interventions from heads of states and governments of developing countries, and even ministers, in the GATT context, have not been useful, and in fact have resulted in going down the slippery slope of surrender to big nations.

But some of the issues where the US wants some movement at Seattle are the very ones that the politically conscious developing country heads of government have fiercely opposed -- labour standards and working parties and groups to "cohere" with the ILO, or "environmental clauses" and exceptions, both to legitimise protection.

And heads of government of developing countries will face considerable domestic opposition - from their parliaments, businesses and public interest groups, if they compromise on these.

And while the EC wants investment and other new issues, presenting them as a 'political necessity' for agreeing to agriculture and other mandated issues, the US is not too keen (lest they become lightning rods for their own domestic opposition). But in some limited consultations, the US has indicated some willingness to agree on a 'minimal approach', but without spelling them out.

At the Lausanne meeting in October, the USTR, Ms. Barshevsky indicated the US would be agreeable to continuing the study of the Singapore issues, but enabling them to be included in negotiations at the next ministerial meeting after Seattle.

But the most thorny questions for Seattle are:

* those relating to the agriculture negotiations and the mandate for such negotiations, and

* the proposals of developing countries, under the rubric of "implementation issues" for actions to correct the imbalances and deficiencies of the Marrakech agreement that is responsible for the developing countries not getting any benefits and their increasing marginalisation.

Reports by the Chairman of the General Council, Amb. Ali Mchumo of Tanzania and WTO Director-General Mr. Mike Moore, to an informal heads of delegation meeting on 13 November, showed that there were "big divergences" (Moore's words) which remain unresolved, that members were not closer to agreement on the scope of a possible negotiating agenda beyond the mandated negotiations. Moore also said there were "significant differences" in approaches to agricultural negotiations and on the range of issues grouped under "implementation."

The HOD meeting had been called to go through a 'transparency' exercise of reports by Moore and Mchumo on their consultations -- and the text of their remarks did not provide any details of outcome in the limited consultations -- and to get "legitimacy" of sorts for the secretariat to produce a revised draft text of a Declaration.

But the meeting saw an outburst of discontent and some blunt and plain-speaking by a range of developing countries on the failure of the majors to address the "implementation" issues.

In varying and nuanced language, but some very bluntly, several of the major developing countries, who have been participating in the "green room" consultations and knew the state of affairs, said that without a solution to the "implementation" issues, they would not agree to either a new round or even a Declaration.

The implementation issues, some for decisions at Seattle and others for commitment to decide in 2000 have been set down in specific proposals by the Like-Minded Group (Cuba, Dominican Republic, Egypt, El Salvador, Honduras, India, Indonesia, Malaysia, Pakistan and Uganda.) These have received support from a wide range of other developing countries, including several in the Cairns Group of agricultural exporters.

These demands were initially fobbed off with words of 'sympathy and understanding' and promises of "technical cooperation" and help to comply, and statements that the "balance" of rights and obligations established at Marrakech could not be upset.

Until the last week or two, no attention to these was paid in any of the restricted consultations which had only focused on agriculture and all the new issues and demands of the North.

And finally, in the consultations over the last few days, they have met with a blunt 'no' on several specifics. Some 'technical' discussions led by former WTO deputy DG, Anwar Hoda, now brought in by Moore as an advisor, have produced some compromise language on minor questions - some of importance even to other developed countries, such as the extension of the moratorium on non-violation complaints in TRIPS.

But at some 'green room' meetings last week, the US made clear it would not change its schedule of integration of textiles and clothing trade. As notified to Congress, the administration has said it would remove restrictions on 51% of the product lines, all products now under restriction, only on 1 Jan 2005, the very last deadline under the Agreement on Textiles and Clothing.

The US representative, Amb. Rita Hayes, made clear Saturday to media that there was no way the textile integration process could be accelerated, even autonomously, by the administration.

The EC has indicated it would be willing to advance integration of textile and clothing products, now set for 1 Jan 2002, to 1 Jan 2000 (provided its new issues in the new round are accepted). But most of the heavily restrained imports into the EC are not due for integration on 1 Jan 2002 either.

And both the US and EC turned down attempts to reconcile TRIPS with the UN Convention on Biological Diversity.

Most of the other substantial implementation issues, whether those for Seattle or in 2000, have been turned down by the US and EC.

Judged by the Saturday meeting, and the reported remarks of delegations at the informal HOD, there has in fact been no movement on substance, at best, only some procedural advance.

A number of developing countries like Egypt spoke up and made clear that if they did not get satisfaction on "implementation" questions, there would be no consensus for a Ministerial Declaration for a new round, and a work programme on other new issues, and further negotiations on the built-in agenda could be launched with a 2-page statement and without any declaration.

Other developing countries, spoke in a more nuanced way, but making clear that their main preoccupation and agenda for Seattle are the implementation questions and satisfaction on them.

Some of them later explained outside that they had not held out the threat of blocking everything else, simply because they did not want their ministers to be caught in a trap at Seattle -- with the US and EC at the last moment making one or two small concessions under 'implementation' in return for including in a new round their new issues and demands, whether on industrial tariffs or investment and other Singapore agenda issues, or even the newer proposals on labour and environment and the so-called "coherence" through the WTO involving the other international organizations.

After the meeting, several old-time officials of the secretariat, and delegates, spoke of the distinct possibility that Seattle may have an outcome not dissimilar to that of the 1982 GATT Ministerial meeting which ended with a large work programme, and some "best endeavour" clause-type declaration, about fighting protectionism and keeping markets open.

At the HOD, Moore appealing to delegations to help clean up the square brackets, told them "we should not go to Seattle with a text which we are ashamed of."

Canada called for goodwill from all sides, and spoke of the need for "chemistry" between the developing and industrialized countries, and need for everyone to show courage.

India said that the common responsibility to agree on a text could not ignore the "differential levels of development (and thus responsibility)." India added: "And we should not go to Seattle with a text with which some are ashamed of and others are delighted."

Mexico thought there was some movement, but asked "is there [was] enough in it for everyone."

Pakistan, speaking on behalf of the LMG countries, said it seemed that it would be extremely difficult to get a balanced agreement for Seattle. There were serious problems in the areas of agriculture and implementation, and the differences on these problems had to be reconciled.

On implementation, there was great disappointment among developing countries to see the "inflexible position" of many developed countries. Their response to the developing countries had been a blunt 'no'. "At this point," Amb. Munir Akram said, "there is very little in the draft text for the developing countries."

As for the trade-labour issue, his delegation would not accept, even for further reflection, this issue and proposals on this. Members had been told at the Singapore meeting, when they agreed to the formulation and the existing level of cooperation between the secretariats of the WTO and ILO, that this trade-labour issue "will not rear its head again". Any discussion of this or inclusion of the item on the Seattle agenda "will wreck the Seattle Ministerial meeting," Akram added bluntly.

Egypt's Amb. Fayza Adoulnaga, said it was important to rectify the shortcomings of the Uruguay Round in respect of developing countries. The developing countries had put forward their detailed proposals in all good faith. But their suggestions on subsidies, anti-dumping, textiles, TRIPS and TRIMs have been rejected out of hand. Egypt would not agree to placing these proposals in a negotiating context (for the next round) either. In this situation, Egypt could only envisage a two-page paper for decisions at Seattle on the built-in agenda and mandated reviews, and no declaration.

Ecuador also complained about important meetings being held among restricted delegations. Bolivia (which is one of 14 countries that has written a joint letter against 'green room' consultations), said that developing countries were being asked to be both "ambitious" (on new issues) and "realistic" (on implementation or agriculture). The industrialized countries should put themselves in the shoes of others. How could small economies take on more commitments when they had difficulties in implementing existing ones?

St Lucia and Jamaica supported Pakistan, while Cuba said the kind of consultations held by Mchumo on LDCs and technical cooperation showed how negotiations could be done in open-ended consultations. Cuba would only accept for Seattle the implementation issues and the built-in agenda.

Mexico referred to the call for comprehensive and broad-based round and said it was torn between lack of progress on some difficult issues. But without progress on implementation it was extremely difficult to see how they could go beyond the built-in agenda at Seattle.

Bangladesh said the market access and technical cooperation were important for the LDCs, and it was important to have "bound" market access commitments and an accelerated track for accession by LDCs.

Nigeria supported Pakistan, while Canada thought discussions were taking place in "vertical silos" and there was need for inter-linkages. Canada called for "more courage" on agriculture, and confessed it had not been helpful on implementation in "green room" consultations. But many of the problems required renegotiation of the Uruguay Round agreements. It was very important to settle quickly what could be decided on these at Seattle and identify those that need negotiations. The labour issue should be tackled urgently.

The US ambassador, Mrs Rita Hayes, said that Mchumo had indicated in July there would be "green room" meetings and they had to find a way between small and large meetings. It was difficult to satisfy everyone. But these meetings, she claimed, had been "transparent".

And while developing countries had problems, many of the implementation issues were "one-off" issues and could not be tackled in a general way. The issues had to be prioritised. On the labour issue, she would report back to the capital, but there was need to establish a dialogue between the WTO and ILO. Uganda's Amb. Nathan Urumba, endorsed the comments of Bangladesh on LDCs, and supported Pakistan's intervention.

India's Amb.S. Narayanan, said that at the moment a large number of developing countries were disappointed with the progress on implementation and "it would not be a good idea to have a large number of countries disappointed before Seattle". There were some issues which could be tackled before and in Seattle and others by 2000. As to the call for "courage", the developing countries and the LDCs had shown "great courage" in signing on to the Marrakech agreement and joining the WTO, thinking it was an organization that held promise for them. He too would like a clean text for Seattle, but it was not a responsibility of the developing countries alone.

Morocco's Amb. Nacer Benjaloun-Toumi said everyone should look at the process in a more realistic way. People should realise that the time was not ripe for some issues. Some delegations would have 'legal problems' on some issues (presumably reference to the implementation proposals). But it was necessary to realise that a modest outcome on implementation had to be reflected with a modest outcome on other issues too.

Switzerland said that the implementation issues had to be understood in terms of the legal problems, insurmountable for many countries including Switzerland, to accept some of the implementation proposals.

Hong Kong China said that while there was difficult issues on implementation, it was possible to make progress on textiles and clothing. Industrialized countries needed to show more flexibility. Nothing more could be done at the WTO on labour standards, and raising the issue now was not very helpful.

Pakistan again intervened to reiterate its strong opposition to any consideration of the labour standards issue, while Egypt said that without implementation, there was no need for a declaration, just two small pages of decisions on the built-in agenda.

Brazil said there had been no substantive progress on agriculture, but some on methodologies. There had not been enough work done in the implementation issues. And while there were legal problems, it was not necessary for everyone to agree to everything at Seattle. But what was needed was a political acknowledgement of difficulties and commitment to sit down and find solutions. Some of the implementation issues and problems -- like those on anti-dumping and trade harassment, or the S&D issue and its application in the subsidies agreement -- had not been intended by the Uruguay Round agreements, and they had arisen because of the way they had been implemented. This was a legitimate question.

Australia thought that it was not surprising to have difficulties. And while they could go to Seattle with square brackets (for Ministers to decide), some delegations had said they could not negotiate here at all (a reference to the Japanese position on agriculture, and a footnote to this effect put into the 'green room' text by Japan).

On labour standards, Australia said it was one of the few industrialized countries which had rejected it in the WTO, and this was the position of both conservative and labour governments. There must however be a way to address these issues.

After the meeting, several delegations said that it was their belief that the secretariat would still spring a new text, in the name of the chair, but after the Saturday meeting they would need to do much more work. (SUNS4552)

The above article first appeared in the South-North Development Monitor (SUNS) of which Chakravarthi Raghavan is the Chief Editor.

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