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One-size-fit-all system needs flexible procedures for itself!

Geneva, 14 May (Chakravarthi Raghavan) - The major trading entities, and a few of their followers who have benefited most from the ‘one-size-fit-all’ set of rules and obligations (but not rights) of the rules-based multilateral trading system and the member-driven World Trade Organization, argued this week at the General Council that there could be no ‘one-size-fit-all’ procedures and rules, and that the procedures in the preparatory process and the ministerial conferences should remain flexible.

The General Council at formal plenary sessions (that are still closed to media and outsiders) discussed Monday and Tuesday, the proposals (communication) from 15 developing countries, members of the like-minded group for agreed procedures so that both the preparatory process and the conduct of Ministerial Conferences are transparent, inclusive and predictable.

The proposals (SUNS #5117) got praise from almost everyone (except perhaps for some nitpicking and acerbic criticism from Singapore, and more polite opposition from Korea, Costa Rica and Chile), but with reservations on need for flexibility, and some self-serving statements justifying what had been done in the preparations for and at Doha itself including a speech by the then chair of the General Council, Mr. Stuart Harbinson of Hong Kong China, that the final outcome of declaration legitimised and justified the means adopted of Harbinson and the WTO head, Mike Moore, formulating and sending documents to ministers, without the authority of the Council, but on their own personal responsibility.

Singapore, which for some time now finds itself at odds with other ASEAN members, and on whose behalf it got representation in the smaller conclaves of the big entities, argued that the proposals would mean that the accredited delegations and ambassadors to the WTO were trying to constrict the flexibility of ministers, with India somewhat politely replying that the proposals represented the views of their ministers and had been decided by Ministers.

Fellow ASEAN member, Indonesia (which along with Malaysia was a cosponsor of the paper), in a response to the calls for ‘flexibility’ in procedures, pointed to the irony of WTO rules being largely rigid and the ministerial conferences are where the rules are made, and if there was too much flexibility in the process leading to rule-making, the results may not benefit the smaller economies, and the flexibility would lead to uncertainty and defeat the larger objectives.

On Monday, the WTO’s spokesman Mr. Keith Rockwell, in a on-record briefing, played down the proposals and discussions, even making it appear (by quoting out of context from a speech of India in introducing the proposal) that India had praised the process for Doha, and implied that the item too was destined like other items (Iran accession, the US Jones Act waiver, or problem of observers at the WTO) that appear on the General Council agenda, but are talked and killed in consultations.

However, on Tuesday, at a press briefing, the Chair of the General Council, Canadian Ambassador Sergio Marchi, said the paper introduced by India had made ‘a very helpful contribution to the whole issue of internal transparency’, that it would be listed in the agenda for the next General Council in July (when others would be able to present their own views and proposals) and that in the light of these he would hold consultations.

In response to questions about the detailed criticism in the LMG paper of both the process leading to and at Doha itself, Marchi argued that the process leading up to and at Doha had been ‘fair,’ and that he judged Doha to be a success (and presumably justifying the process).

Neither Marchi nor those who were justifying the process to and at Doha on the basis of the ‘declaration and work programme for negotiations’ have shown some awareness that apart from the difficulties that even major entities now face (in the light of state of the world economy and the prospects of low-growth scenarios over the medium term, and the protectionism unleashed) the process by which the negotiations have been forced and launched have itself created an environment in many countries where the negotiators and governments are being challenged and the outcomes of negotiations would not be easy of acceptance or implementation, and that opponents in business and civil societies are gearing up to use the very processes to challenge their legitimacy.

On the proposal in the LMG communication that the Director-General and the secretariat should remain impartial and neutral on the specific issues being discussed (which implies that they have not behaved so hitherto), Mr. Marchi made the claim that the Director-General was appointed and paid such high salaries “to promote liberalization.”

However, the Marrakesh Agreement for the Establishment of the WTO, in Article VI, laying out the role of the Secretariat, gave the DG only the role of administering and running the secretariat.

At the time the Agreement was negotiated in November-December 1993, without a single exception, the key countries negotiating the text, declined to agree with the plea of the then Director-General (Mr. Peter Sutherland, who appeared before them twice) for a role for the DG similar to that of heads of other international organizations to put forward proposals etc.

The negotiators made clear that they did not want the DG to have any such role, but that he and the secretariat should only carry out the tasks asked of them by the Members (collectively at formal meetings) and that (Art.VI.4) “they shall not seek or accept instructions from any government or any other authority external to the WTO”. There is no reference to the DG or the secretariat promoting or carrying out the objectives of the Marrakesh Agreement.

However, the WTO and its heads and senior officials, have repeatedly shown that they act for the majors with impunity and that they themselves need follow no rules in the rules-based organization.

It is of course possible that the consultations by Marchi on the LMG paper may lead to the same fate foretold by Rockwell at Monday’s on-the-record briefing.  However, a number of proponents and their supporters, have indicated that the proposals had not come from the top of the hats of envoys here, but had been well-considered in their capitals and by ministers, in the aftermath of Doha, and had been formulated and put forward to ensure that the experiences of Doha are not repeated again.

In other decisions, the Council agreed to the suggestions of the designated host country, Mexico, and set the dates for the 5th ministerial conference for 10-14 September 2002, and to meet at Cancun.

Marchi said that having taken care of the ‘plumbing’ for the conference - the TNC and its structures and the dates and venue for the next conference - they should now address the ‘poetry’, namely the substance of the negotiations.

On Monday, in introducing the proposals/communication, Indian ambassador K.M.  Chandrasekhar, recalled the post-Seattle General Council meeting in February 2000, where internal transparency and effective participation of members was identified as one of the priority issues for consultations among members.  Chandrasekhar referred to the interim report, after the consultations, of the then General Council Chair, Amb. Kare Bryn of Norway, and the views of Mexico that smaller group consultations could never pretend to be reaching a consensus, and the views of Jamaica and Uganda that inclusion of members in such consultations must be a matter of choice for each delegation (and not one for the DG or the chairs of WTO bodies, whether at Geneva or as happened at Doha).

The Indian statement (a text of which was made available to the media after the WTO briefing on Monday) also noted Bryn’s statement to the Council in December 2000 and that a “strong, inclusive and transparent process leading up to and including Ministerial Conferences is fundamental in order to ensure a successful outcome”, and added: “Since the consultation in 2000, we have had the benefit of our experience at Doha and in the run up to it.”

The Indian envoy added that the preparatory process for the Doha Ministerial Conference, was in many ways ‘marked by transparency and inclusiveness’, but “there were aspects of the process with which many developing countries were not comfortable.”

These he pointed out had been articulated in the various meeting before Doha.  The consultation process at Doha, while being transparent, however “fell short on the question of transparency and inclusiveness, at crucial phases.”

“Many developing countries,” he said, “were unhappy at being excluded from crucial meetings; in some cases the exclusion was despite specific request for being involved in such meetings.

“It is necessary for the long-term health of the organization and the multilateral trading system it seeks to promote and preserve, that we collectively address the issue of transparency and inclusiveness in the decision-making process.”

The cosponsors of the proposals had identified certain issues for focussed attention:

·        General issues of procedures at Ministerial Conferences and the Geneva process leading to the ministerial conference - different procedures had been followed at Singapore, Geneva, Seattle and Doha.

·        Preparation of draft Ministerial Declaration - different views not fully and clearly reflected and options for decisions not precisely laid out; no discussions by the General Council or the Committee of the Whole (COW) on procedures to be followed at Ministerial Conferences.

A decision on appointment of facilitators and selection of facilitators appears to have been taken prior to the meeting (at Doha)and then communicated to the COW, and there was no inclusiveness or transparency in the process.

·        Organization of meetings - Ministers had to sit for more than 40 hours at a stretch.

·        Last-minute draft on important issues - no time for consultations with stakeholders, other Government Departments and proper reflection on implications.

The procedures adopted at various Ministerial Conferences had not been uniform and this uncertainty made it difficult for many members to prepare themselves for the conferences. Many developing countries were hence of the view that some basic principles and procedures need to be agreed upon for this member-driven organization so that the processes are “efficient, transparent, inclusive and predictable.”

Explaining the proposals in the paper that Ministers should be left to deliberate and decide only on those issues reflected as options or those where the chairpersons had reflected the different positions of delegations, India added: “This is not with a view to limiting the authority of the Ministers to decide on any issue, but with a view to ensuring they will have sufficient time to focus on issues on which lack of consensus was discernible in the Geneva process.”

On the issue of venue of conferences, India the communication suggested that all future conferences after Mexico should be held in Geneva itself. Apart from convenience, this would also result in savings in cost and efforts. Even in the consultations in 2000 held by the General Council, many members had suggested holding future conferences in Geneva.

Speaking immediately after India, and unusually for itself, the United States appreciated the efforts behind the paper and suggested a codification of best practices. While agreeing with several details, like bringing out minutes on time and the central role of the General Council and need to complete as large a part of the draft ministerial declaration as possible in Geneva, the US said that different ministerial conferences had different objectives and procedural needs, and “one-size-fit-all’ set of procedures would not do. There was need for flexibility, and it was hard “to imagine the success in Doha without this flexibility.”

Amb. Bryn from Norway agreed with many of the points and said that with the experience of Doha there was a need to look at what happened. At the same time, there was a need for flexibility, and ways found for representation of smaller groupings of countries. He suggested that the General Council should hold consultations with the membership on the proposals.

Hong Kong China’s Stuart Harbinson also harped on need for flexibility, and argued that in the absence of a consensus, Moore and he had forwarded a text to Ministers on their own responsibility, and the final outcome and its closeness to their own draft, showed they had been right.

China in providing general support to the LMG paper, laid stress on the need for neutrality and impartiality of the secretariat and the DG.

The EC agreed with the need for transparency and need to build on experience, but argued that the procedures followed at Doha were satisfactory and could be built upon, and with flexibility and room for manouevre.

Brazil also was positive on the paper, but stressed the need to avoid unnecessary rigidity. It supported Norway’s suggestion for consultations.

The Philippines shared the objectives of the paper and said “flexibility should not become a licence for sensitive issues being brought up at midnight in a meeting not attended by all members” - a reference to the shenanigans at the Presidential suite in Doha where the EC and US kept bringing up last minute proposals and formulations.

Korea was critical of the many details of procedures in the proposal, while New Zealand was sceptical of its being agreed in consultations, though it agreed on need for an inclusive process, but ensuring these did not create unnecessary blockages or long-term failures.

Turkey was positive and stressed need for participation of all members in decision-making.

Singapore argued that the permanent representatives at Geneva should not tie the hands of ministers.

Malaysia however said that guidelines were needed, and consultations would produce meaningful results as had happened over the issues relating to the Trade Negotiations Committee. Any drafts should clear bring to the attention of ministers the difficulties of countries on issues. Otherwise the position of individual countries would be prejudiced at the Conference. In any event there was need to avoid “last-minute surprises.”

Colombia agreed on need for guidelines, but felt some points went too far. Both Colombia and Venezuela saw some merit in conferences meeting outside Geneva.  Chile was negative to the proposals, and said having too many rules would paralyse the organization. It could not also agree that the DG should be impartial, arguing that he had to be partial to his mandate.

Japan agreed on the need to develop guidelines and for transparency and inclusiveness. The WTO Ministerial conferences, in its view, should be the last resort for resolving differences.

Pakistan disagreed with those who viewed the process to and at Doha positively and said that many of its own and other delegations concerns had not been taken into account in the process to and at Doha itself. It was also opposed to last minute surprises and use of non-conventional negotiating tactics.

At the end of the discussions, Director-General Mike Moore viewed the discussions as healthy, and said there was need not to forget the lessons from Seattle and Doha. He claimed that no one who wanted to speak had been refused the floor at Doha. He had his own ideas in the light of Doha and would formulate and present them in due course.

Chairman Marchi said the item would be listed on the agenda of the next General Council (in July) for other members to comment or make their own proposals, and he would then hold consultations.

Earlier, the General Council among others agreed to the compromises for derestriction of documents.

The US waiver under the Jones Act came up for discussion, and the US said that nothing had happened over the year to enable it to change its position.

Chile brought up the problems which it said had been created by differences in language used between the English and Spanish texts of the Uruguay Round agreements, as a result of which the Spanish version, unlike the English, had made some rules obligatory. It thought the problems could be resolved by agreed clarifications. Consultations are to be held on this proposal.

Trade officials and some diplomats noted that in the final stages of negotiations, the texts adopted were translated and put before the plenary meetings, and after December 1993, the official draft texts were scrutinised by legal drafting committees. The French and Spanish speaking delegations also went through the texts in their languages. Even over the English texts, some of the internal contradictions and variations were brought up, but at that time, the proponents of the agreement cautioned against changes that would upset the compromise, and felt the problems could be resolved later, as and when they arose.

In the dispute process itself, with all three texts being recognized as official and equally valid, the panels and appellate body (guided by the secretariat) have sometimes used the Spanish or French versions to support their own interpretations, when the ‘ordinary meaning’ of a word or words in the English dictionary seemed to give two or three different meanings. The panels and the AB have provided rulings that have generally increased the obligations on developing countries, using the Spanish or French versions to buttress their case.

So the process of clarification would not be so easy, some trade officials said. In the secretariat the top two or three posts in the legal division are vacant or with officials in the process of leaving the job, and the Rules division head also is absent for health reasons. And Mr. Moore himself is at sixes and sevens with most of the secretariat and senior officials. – SUNS5119

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