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BUILDING UP ON SEATTLE, AFTER STOPPING THE STEAMROLLER

by Bhagirath Lal Das*


New Delhi ,15 Dec 99 -- The developing countries were able to stop the steamroller at Seattle and thereby saving themselves from yet another set of iniquitous obligations and unfair WTO processes.

The outcome at Seattle has caught every one by surprise. The smooth way that the will of the major developed countries prevailed in Marrakech (April 1994), Singapore (December 1996) and Geneva (May 1998) had led one to believe that developing countries would once again meekly nod to the proposals of the major developed countries. But this did not happen. The majors did not have their way. Not even the biggest among them, the host country in this case, could impose its will. There is clearly a change. It should be noticed and analyzed.

A real break occurred when the developing countries came out of the spell of the Uruguay Round (UR) and started identifying the deficiencies, imbalances and inequities in the UR agreements. Earlier, during 1993, 1994 and 1995, they had been fed with the prospects of billions of dollars of benefits likely to come out of the UR results. The trade officials of the developing countries had persuaded their governments to perceive these gains and support the results. The trade negotiators of these countries were congratulating themselves on having done such a good turn to their countries.

But no such gain actually accrued.

On the other hand, the developing countries found that their own burden in implementing the UR agreements were very heavy. As a result they stood the risk of either being penalised for non- implementation or exposed as a meek seeker of favour in asking for an extension of time. They were often the targets of taunts of  the major developed countries that the obligations once undertaken must be fulfilled.

This insensitive attitude of the major developed countries was matched by their own actions in implementation which were viewed by the developing countries as erroneous at least in spirit if not in the letter of law, and certainly grossly unfair.

Instances of such non-implementation or unfair implementation include: the continuing high domestic and export subsidy as also prohibitive tariffs in agriculture in the major developed countries, practically no liberalisation of trade in textiles and clothing sector in respect of the products under actual or potential restraint, a spate of new restrictions on imports of textiles and clothing products from developing countries, new rules of origin in the textile and clothing sector, a large number of anti-dumping actions against the products of the developing countries, re-introduction of the system of special trade regime (voluntary export restraints and 'grey area' measures), e.g., in the steel sector.

The dispute settlement process, a much publicised benefit of the Uruguay Round, though providing relief to the developing countries in some cases, proved to be less attractive because of the high cost involved.

It also became harmful in some ways as the panels and the Appellate Body went about engaging in substantive interpretations resulting in added obligations and reduced rights of the developing countries. The disputes between the US and the EC on banana and beef also gave developing countries a clear impression that on real sensitive issues they would not be able to enforce the findings of the panels/Appellate Body. The last resort in getting relief would be retaliation which was neither practical nor feasible.

They also noticed that the threat of unilateral action by the US had not been eliminated by the WTO agreements, as the relevant provision continued in the US law.

Simultaneously, they also perceived the dangers of the new issues, viz. Investment, Competition Policy, Transparency in Government Procurement and Trade Facilitation. The subject of labour standards championed by the major developed countries at Singapore was always lurking on the side.

The developing countries saw through the objective behind all these proposals which was to ensure full freedom of action for the transnational firms of the developed countries in the developing countries and expansion of market access of the developed countries in the developing countries. There was naturally a large-scale opposition of the developing countries to all these proposals.

While the developing countries were struggling with all these frustrating experiences in the implementation of the WTO agreements and fighting against the new issues, they gradually started noticing that several important agreements were full of deficiencies, imbalances and inequities. They rightly thought that the priority of action in the WTO should be to remove them and improve the agreements. Identification of these problems led them to work out appropriate solutions. Many of them submitted their own proposals containing some solutions under the general heading of implementation of the agreements.

The twin approach of putting in their own proposals and stiff opposition to the proposals of the major developed countries brought a lot of credibility to the developing countries, as they were no more seen as merely saying "no" to the proposals of others. Also, their insistence that the implementation issues, including improvement of the existing agreements, should have absolute priority over consideration of any new issues in the WTO was logically and morally forceful.

A particularly significant trend was that a group of the developing countries gradually came together on all these issues. The group came to be known later as the Like Minded Group (LMG). They started meeting regularly and had a common approach on almost all the current issues. They prepared together and shared their knowledge and information among themselves. This helped them to prepare well. Their frequent meetings and discussions ensured a good degree of transparency among them. They also kept their windows open to other developing countries, and in that sense they were not an exclusive group. They functioned with technical efficiency and political cohesion on the WTO issues, even though some of them would differ on other political matters.

The main cementing force among the countries in this group was their common perception of the past losses and future dangers. Also, with the experience of the Uruguay Round and the first two Ministerial Meetings, they perceived that they would be losing all the way in future if they did not combine together. Alone, they would not be able to be effective at all, howsoever well prepared they might be.

The LMG and other developing countries were helped widely and effectively in their preparation by some organisations like the UNCTAD and the Third World Network. Some other organisations, like the South Centre, SEATINI and the Commonwealth programme also provided useful inputs. Analytical and comprehensive papers had been prepared on some subjects, specific deficiencies and inequities in the current agreements had been listed and concrete suggestions for improvements had been made, relevant reports of the panels and Appellate Body had been analyzed for their implications and responses to the proposals of the major developed countries had been worked out. Extremely useful assistance was provided particularly by the Third World Network and to some extent also by the South Centre on a day- to-day basis during the course of the preparatory negotiations in Geneva. All this assistance provided invaluable support to the efforts of the developing countries in their efforts in Geneva!

The pace of negotiations was so fast that the developing countries with all the expertise would have found themselves quite deficient in meeting the challenge without this help. Besides, it also boosted their confidence.

Simultaneously, the Third World Network and the SEATINI were active in South East Asia and in Africa with their briefing and coordination meetings where senior government officials and important NGOs had participated. This helped the strengthening of the trade policy machinery in the capitals and also improved the capacity of the NGOs to interact effectively with the governments and influence the policies.

In the meantime, two other moves were afoot. Some governments had embarked on wide consultations in their countries on the WTO issues, which was in contrast to the approach during the Uruguay Round negotiations when a limited number of the trade policy officials kept this subject close to their hearts and would not welcome any outside interference. Then the trade and industry in various countries started their own exercise of education and analysis. They became aware of the consequences of the agreements which the governments were entering into at the WTO, and discovered the necessity and importance of their role in advising their governments in these matters.

Various political bodies, NGOs, intellectuals and the media also got into the exercise and started exerting pressures on the trade policy machinery of the governments. In this process, vigilance on governments increased and the possibility of their succumbing to the pressures of the major developed countries thereby diminished.

It is surprising that all this could happen in about two years. Perhaps the process was accelerated by the unending ambitions (and appetite) of the governments and transnational firms in the major developed countries to expand their opportunities in the markets of developing countries. The aggressive approach of the major developed countries, some times even verging on arrogance, further caused disillusionment and frustration among the negotiators and trade policy officials of the developing countries. They had been almost pushed to the wall and they had no option but to react firmly and build up their defense.

Clearly, the developed countries were not for a cooperative approach, but only for consolidating their gains and ensuring further gains. Various sources indicate that the developing countries were quite prepared even with their fall back positions at Seattle and to help the process of concluding agreements; but the major developed countries were not willing even to engage in negotiations. All they did was to dictate their stands and ask for complete surrender, without even giving a hint of any compromise from their own side.

All this has backfired. Even the very weak can be pushed only to some extent, beyond which they would start resisting stiffly and firmly, as it happened in the negotiations leading to Seattle and more so at Seattle itself.

The road after Seattle is more difficult for the developing countries. Various factors will come into play simultaneously. The major developed countries, as in the past, may patch up their differences and jointly push for their advantages vis-a-vis the developing countries. They would not like to have their own differences stand in the way of their trying to ensure full freedom of action for their transnational investment, manufacturing and trading firms in the developing countries through agreements on investment, competition and government procurement. Attempts also may be made to create differences in the ranks of the developing countries which are now working together in the WTO. There may also be attempts to strengthen the opinions and forces in the developing countries which are arguing for making concessions in these areas.

All this calls for continuing and strengthening the preparation of developing countries in Geneva and in capitals. The following steps appear necessary.

1. The most essential requirement is that the developing countries should remain together in as large a number as possible. Thus, for example, the LMG must remain united. They should also try to enlarge the group, of course, keeping in mind that the group is not so large as to make a common view on the important issues impossible. Both the technical cohesion and political unity should be strengthened. It may be useful to have the meetings of these countries at high official level and at level of Ministers a few times in a year.

2. Special efforts are needed to keep the group united. There must be total transparency within the group. For example, if some member of the group is not present in any formal or informal meeting or discussion, it should be immediately briefed by those present. Also if there are bilateral discussions of any member of this group with some developed countries either in Geneva or in capitals, the gist of the discussion should immediately be given to the members of the group. If there is a compulsion on any member to make any compromise, it should explain the circumstances to the other members. With such transparency, there is a good likelihood that the group may continue to be together.

3. There should also be linkages of the individual members of such groups with some other developing countries which, though not the members of this group, have similar interest on some specific issues. Such linkages should be forged with full transparency within the group itself.

4. The capitals of the developing countries should widen the consultations on the WTO issues within their countries. In countries of larger sizes, efforts should be made to enhance the awareness at the regional levels and even at lower levels. It would require seminars and workshops at these levels and small publications in regional languages on specific issues. The capitals should also keep their Geneva missions fully informed about any bilateral and plurilateral discussions with other countries. Considering the speed and low cost of modern means of communication, the capitals and their Geneva missions must be linked through fax and e-mail, if such linkage is not already there. Communications should flow almost on a daily basis. Such means of communication should also be employed quite frequently among the capitals of the countries.

5. The institutions and organisations assisting the developing countries should continue with their efforts of analysing various issues from the angle of the developing countries. The responses to the proposals of the developed countries should also be prepared. They should hold seminars, workshops and small group discussions with the developing countries on specific issues. They should try to detect the nuances of differences among the developing countries in a specific area, analyze the implications of the differing views and expose the countries to such analysis. They should facilitate the discussions of these implications among them. It will help the developing countries to understand each other's position and also to harmonise their positions. This will need a close contact with the developing countries both in Geneva and in capitals. The latter can be achieved through a series of regional and national meetings.

6. The institutions and organisations should also enhance their efforts at briefing the NGOs, the media and intellectual groups in various developing countries. The regional and national meetings can be utilised also for this purpose.

7. What has been found to be of particular utility is assisting the delegations in preparing their positions, statements and formulations of texts. This may result in a heavy demand on the time and the resources of the institutions and organisations. But any effort in this exercise is worth it, as the negotiators find such contribution extremely useful.

8. The institutions and organisations should have some means of coordination among themselves. There could also be burden sharing among them to some extent, so that duplication is avoided.

Too much is at stake in the WTO. The Geneva missions of the developing countries and their capitals as well as the institutions and organisations assisting them have to work in close harmony all the time. (SUNS4574)

(* The author was formerly Ambassador and Permanent Representative of India to the GATT. Later he was also the Director of International Trade Programmes in UNCTAD.)

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

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