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CONFUSION WORSE CONFOUNDED

by Chakravarthi Raghavan


Geneva, 20 Dec 99 -- The situation of confusion and extra-legality, if not illegality, in which the Seattle Ministerial Conference ended on 3 December night, appears to have been compounded by the decisions, and non-decisions, of the Special Session of the General Council on Friday.

The Special Session (which met formally, informally and formally again) left the post-Seattle situation in not only some confusion, but with legal uncertainties and some illegalities, about the rights and obligations of members. As provided in the various agreements, some provisions (such as the TRIPS non-violation clause, and the 'non-actionable' subsidies and actions under Art. 8 and 9 of the Subsidies Agreement) end on 31 December 1999, and many new obligations for developing countries kick in from 1 January 2000 (such as TRIMs, TRIPS and many others) at end of their 'transition periods'.

In a statement from the Chair, incorporating various changes and phraseology proposed by delegations, and read out (but whose text was actually made available to delegations and the media only later), Chairman Amb. Ali Mchumo of Tanzania, announced that the Council meeting would be "adjourned and resumed" as early as possible next year, to take up item 3 of its agenda, "Follow-up to the Seattle Ministerial Conference."

Throughout this year, both in respect of the General Council meetings to elect a Director-General and during Seattle preparatory processes, meetings have been held, and announced as 'suspended' or 'adjourned' to be resumed etc. No one appears to have paid serious attention to the way these terms have been used.

But in the aftermath of the Seattle debacle, as members pore into rules, it was being 'discovered' that the rules provide for the Chair to open and close each meeting, for any representative to move for 'adjournment' of the debate, but not specifically for the "suspension" of a meeting or "adjournment" of the meeting (and the consequences).

Perhaps, the "consultations" to take place early next year, would result in some "clarification" among members, but this may or may not command credibility among the public.

Mchumo also announced Friday, in announcing the meeting to be adjourned and to be resumed, that informal consultations to be held (before resuming the General Council in the new year) would cover a wide variety of issues, including the issues of deadlines (for various provisions and agreements).

The industrialized countries refused to agree to any blanket legal commitment until the General Council resumes, takes stock, and decides on the murky legal situations, but only to a political commitment of sorts "to exercise restraint".

Despite their repeated 'consultations' among themselves, key developing countries failed to act in a coordinated way, and enabled the secretariat and the Chair to go forward with the approval of the budget, and the accession of Jordan, without a clear statement from the secretariat or the Chair about the status of the Seattle meeting.

But by putting the Jordan-accession question (that was before the Ministerial Conference as an item needing action by Ministers) on the Council agenda, and by acting on it, which the General Council could do only in the performance of the functions of the WTO that it could discharge in between Ministerial conferences, implicitly the secretariat, the Chair of the General Council and the Council itself has 'decided' that the Seattle meeting is over.

Some trade diplomats and observers noted on Friday, that a full two-weeks after the end of the Seattle meeting, the secretariat has been unable to furnish a draft minute of the Committee of the Whole, and blames misplaced baggage containing the tapes, suggests such a sorry state of affairs that perhaps could have been corrected only if the budget approval had been withheld, and the Friday Special Session recessed and continued this week -- for a full consultation process and an overall consensus decision.

But the anxiety of trade diplomats and WTO secretariat to take their Xmas and year-end holidays, combined with the fact that some ambassadors came late and left early, having made some interventions and proposals with some legal implications orally from the floor, but did not remain in the room to ensure a decision, appears to have left everyone in at least as much confusion as at Seattle.

That the WTO secretariat seems still unable to produce any minutes or summary record of the Seattle meetings, what happened and what was decided or not decided, is straining the credibility of the system.

But industrialized countries Monday got a taste of their own medicine, when developing countries, at the meeting of the Committee on Subsidies and Countervailing Measures, refused an extension of the time-periods for use of 'non-actionable' subsidies under Articles 8 and 9 of the Subsidies agreement.

Last week, in looking at the post-Seattle situation and the way forward, the industrialized countries had refused even a temporary blanket reliever of all provisions expiring or new obligations kicking in under various WTO agreements, offering only to consider under each agreement and on a case-by-case basis, applications of countries for extension of time-periods for compliance.

Under Article 31 of the Subsidies agreement, which provides for the 'provisional application' of the rules about non-actionable subsidies and their identification (under Art 8 and 9), end on 31 December, unless extended.

The EU, US and others appear to have made a bid for the extension of these subsidies provisions until the end of the General Council consultation process, arguing that otherwise the provisions would lapse, and "re-introducing" them would involve 'negotiations' (with the industrial world having to pay a price!)

The Chair of the Subsidies Committee (a Swedish trade diplomat) who has been holding consultations proposed an extension, but this was not accepted by a number of countries - Mexico, Malaysia, India, Pakistan and several others. The latter insisted that in terms of the statement of General Council Chair on Friday, the consultation process on the follow-up to Seattle included all the issues of deadlines, and they would need to be dealt with as a package.

The Chair of the Seattle Conference, Mrs. Barshefsky, in a statement announced that Ministers had agreed to suspend the work of the Ministerial, that everything on the table was "frozen" and the WTO Director-General Mike Moore "can" consult with delegations and discuss "creative" ways in which to bridge the gap in remaining areas in which consensus does not yet exist, develop an improved process which is both efficient and fully inclusive, and prepare the way for a successful conclusion, and the Ministerial will then resume its work.

At least one of the Ministers actually present at Seattle, the Foreign Minister of Guyana has flatly contradicted her statement that Ministers at Seattle had agreed to suspend the work of the Conference. And the Trade Minister of India, in a statement before the Indian Parliament, has denied that progress had been made and agreements reached in many areas.

By acting on Jordan's accession, and taking on board the agenda item about "Follow-up to Seattle", even if consideration was suspended and put off till a meeting in the New Year, the General Council has implicitly agreed that the Seattle Ministerial has ended, albeit without completing its work or even taking an orderly, procedural decision for the way forward.

As one former trade negotiator for a leading developing country put it, at every one of the previous GATT meetings (which too ended in deadlocks, and were unable to agree on any substantive questions), there was an orderly procedural decision.

At some stage or the other of the conferences, the secretariat and the chair came up with such a proposition, discussed it with others, and formally put it forward and adopted it.

There was no such procedural decision at Seattle, and this is mind-boggling.

To complicate the problems more -- since comparisons have been drawn between Seattle and the Montreal and Brussels Uruguay Round meetings -- those meetings were of the Trade Negotiations Committee (TNC) which oversaw and ran the negotiations in three areas of goods, services and TRIPS, but a body legally outside the GATT Contracting Parties or the GATT Council (which could act when the CPs were not in session).

The Uruguay Round TNC was chaired by the Uruguay Minister, and the official-level meetings of the TNC by the GATT Director-General who was mandated to be the Chair.

So, the then GATT Director-General Arthur Dunkel could take some initiatives as TNC Chair. But under the WTO treaty, and its normal business, the Director-General has no locus standi and authority to act in any way, excepting as the secretariat to service the organization.

Interestingly, the only thing that the US and EC, at their Washington meeting Friday (between US President Bill Clinton and USTR Mrs.Charlene Barshefsky on the one side and EU President Romano Prodi and EC Trade Commissioner Pascal Lamy) appears to have been able to agree is the statement for early trade liberalisation talks involving agriculture, services, and 'market access', a code term for 'industrial tariffs', and renewal of their efforts to bring the 'labour' issue on the trade agenda. (SUNS4577)

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

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