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CONTINUING CONCEPTUAL DIVIDES AT THE WTO

by Chakravarthi Raghavan


Geneva, 2 Mar 2000 -- Informal consultations at the WTO General Council this week has brought out a continuing conceptual divide between the major industrial nations and the developing world on ways to improve the functioning of the World Trade Organization and the public perception of it.

The consultations on Tuesday, at an informal General Council meeting chaired by Amb. Kare Bryn of Norway, related to 'pending issues' - some arising out of the Seattle meeting and others that have been pending for a long time in the General Council.

Bryn sought to focus discussions on procedure rather than substance, on how to structure the future work on the pending issues, and whether the time was ripe to hold substantive consultations and find solutions.

But the views of members and the priorities they indicated showed some continuing substantive differences, trade diplomats said. An item listed as pending issue, "Coherence in Global Policy-Making," showed that the leading industrial countries are continuing their efforts bring into the WTO 'non-trade' issues and use the trading system for normative purposes reflecting US-European political, cultural and other norms and use of trade instruments to enforce them.

A number of developing countries made clear they would not agree to go beyond the Marrakesh decision on coherence, which was confined to achieving coherence in Global Economic Policy-making, and not global policy making.

Another question which developing countries identified as needing priority attention and solution related to the WTO secretariat and the senior management structure, and the need for the secretariat to reflect, both in the senior management and staffing, the membership.

Other issues that figured in the consultations included future appointments of Directors-General (an issue pending since 1995), observer status at General council for international intergovernmental organizations, work programme on electronic commerce, revision of guidelines for scheduling of meetings, review of procedures for circulation and de-restriction of WTO documents, promotion of the institutional images of the WTO.

While the question of improving the procedures for future appointments to the post of Director-General is a long pending issue, the lack of procedures and the non-transparent consultation processes came to the fore last year in the fight between Mike Moore and Supachai Panitchpakdi for the post of the Director-General.

The bruising fight was ultimately resolved by the compromise of each taking the post in succession for a single non-renewable 3-year term. Moore's term will end in September 2002, and Supachai will take over then and hold the job till 2005.

As a part of the compromise it was agreed that consultations would be held and new procedures evolved by Sep 2000.

There was one view at the Council Tuesday that there was not much pressure or priority to decide the question now. But others felt that it would be best to tackle the issue now, when personalities and countries seeking the job were not involved, and events were still fresh in the minds of members.

While the Director-General issue was linked to the secretariat restructuring in the chair's opening comments, developing countries laid greater stress and priority to the issue of the WTO secretariat and its senior management structure. They insisted that this should be delinked from the DG selection procedures questions, and addressed and resolved immediately.

The latest information on the manning table at the WTO secretariat shows that excluding the Director-General and his four deputies (one from Venezuela, one from Burkina Faso, one from France and one from the United States), there are 26 directors of various divisions, of whom only three are from the developing world (India, Uruguay and Brazil).

There is a very large representation of nationals from the EU, thirteen out of the 22. Of these 13, four are UK nationals, three from France, two from Spain, one from Germany, and two from the Netherlands.

Of the other directors, one is from the US, four from Canada, one from Australia, one from Norway, one from Austria, one from New Zealand, one from Poland and one from Hungary.

According to trade diplomats, Moore has sought some extra-budgetary or budgetary contributions (figures in the range of 3-5 million dollars are being mentioned) to enable some of the posts of directors to be vacated (by early retirement of a few) to make room for candidates drawn from the developing regions. Alternatively, he is reported to want an expansion of the number of directors and divisions to bring in developing country nationals.

According to some trade diplomats, even the names of 5 or 6 directors, who Moore believes are too 'set' in their thinking to change, are being mentioned for early retirement.

According to trade diplomats, the EU (whose nationals now dominate) is unlikely to come forward to provide the funds to enable early retirement of its nationals, and is pointing to the fact that over the next 2-3 years a number of senior staff would retire and more equitable geographical representation could be sought then. The developing country delegations who spoke reportedly stressed the need for quick actions to ensure a proportionality of representation now, with selections made on merit and by transparent and fair criteria.

Merit is not a monopoly of any particular region of the world, and by use of any objective, fair and transparent criteria, candidates with merit could be found in all regions of the world, was the view advanced by several developing country nations.

On the issue of observer status for international, intergovernmental organizations, where there has been a long holdup and blockage in considering requests and taking decisions, a number of delegations spoke up to say that outsiders could not understand why there should be this delay in taking decisions.

Among the organizations whose request has been held up is the Conference of Islamic Countries, and a number of its members (without specifically mentioning it) spoke up in calling for quick decisions.

On the question of work programme on electronic commerce, members wanted the work programme to continue. Japan, supported by among others Switzerland and Australia wanted a 'horizontal' working group set up to look at electronic commerce issues across the board.

Pakistan, supported by India, Venezuela and several other developing nations made a distinction between their support for continuing the work programme on the E-Commerce, and the question of moratorium on levy of tariffs and duties which the US wants to be continued.

Initiated at US instance at the 1998 Geneva 2nd Ministerial Conference and agreed upon as a political commitment until the 3rd Ministerial Conference, the way the Seattle meeting ended has created some 'ambiguity' on the moratorium. This had to be resolved in the context of other deadline issues, Pakistan said.

On the question of 'Coherence', the EC and the US stressed the importance of this issue, with the EC referring to some recent statements on need for coherence coming from institutions other than the Bretton Woods Institutions. The United States wanted the Director-General to continue consultations on this issue.

At Seattle the US tried to bring in labour standards into the WTO as a trade issue, and sought the setting of a working group to look at these questions. The EC floated the idea of a global forum on coherence issues involving besides the Bretton Woods institutions, others including the UN and ILO.

Both these were rejected by the developing nations.

Hong Kong China said at the General Council Tuesday that while coherence was important, it was essential to limit the WTO consideration to achieving economic coherence, and in strict terms of the Marrakesh Ministerial decision of 1994.

Morocco, for the African group, wanted to know how 'coherence' would be tackled in a broader perspective, while Mexico said members must continue to strive for coherence, but not endeavour to widen the scope of the decision taken at Marrakesh.

Brazil insisted coherence should be addressed in the proper forum with proper content. There should be no mixing up of social and other issues with coherence and these sought to be discussed in the WTO context.

India said that at Marrakesh the ministers took a specific decision, and it was in relation to the area of economic policy making. But it seemed that at times the issue was being looked at in a different, broader perspective. India wanted an assurance from the Chair that the General Council was being asked to look at the issue only in terms of the Marrakesh decision and mandate.

Bangladesh agreed that the coherence issue must be limited to the decision at Marrakesh.

Mexico on behalf of the informal developing country group, supported by a number of developing members, attached priority to the revision of guidelines on scheduling of meetings, so that developing countries with very small delegations are not forced to follow several simultaneous formal and informal meetings and consultations.

The US, EC and other industrial nations sought to link the issues of transparency raised by the Seattle meeting, to the issues of procedures for circulation and de-restriction of documents, and to bring in environmental and other NGOs, and their ability to participate in the panel processes. A large number of developing countries rejected this approach, and made clear that the issues of internal transparency of the WTO -- transparency of its work and decision-making processes to the members -- had to be separated from the external.

On the issue of promoting the 'institutional image', before Seattle the secretariat had come with a several million franc budget for expansion of the information division to improve the image, and was turned down.

At a consultation conducted by the Japanese representative, Amb. Suzuki, there was a consensus that it was primarily the responsibility and problem of each government to 'sell' to its public the benefits of the WTO system and take measures to improve its image in the country. At best there could be a forum where members who have done a successful job of this could share their experiences with others.

Suzuki is to hold another consultation next week to conclude these consultations, and the WTO director-general who has been conducting his own consultations, is being asked to attend and report on his efforts. (SUNS4619)

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

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