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TRIMs REVIEW, EXTENSIONS BEFORE GOODS COMMITTEE

by Chakravarthi Raghavan


Geneva, 21 Jan 2000 -- The Council on Goods of the World Trade Organization is due to meet Monday to consider the requests from eight countries for extension of time to comply with the Agreement on Trade-Related Investment Measures, and also to take a review of the Agreement itself.

An item on the agenda of the Goods Committee is the request from eight countries who have put in individual applications to the Committee on Goods for extension of time limits to comply with the obligation to remove TRIMs in their countries in specific sectors.

Some 40 developing countries had notified by 31 March 1995 about the TRIMs in force in their countries. But only eight of them have now put in individual applications for extension -- the Philippines, Mexico, Colombia, Malaysia, Pakistan, Rumania, Argentina and Chile.

Another item on the agenda is the review of TRIMs under Art.9 of the TRIMs agreement, which requires the Council on Goods to make recommendations as appropriate for an amendment of TRIMs, and also consider as part of the review whether TRIMs should be complemented with provisions on investment policy and competition policy.

Given the situation arising out of the Seattle failure, and the confusion yet to be cleared up on the 'outcome' of Seattle and result of the 17 December meeting of the General Council, the general impression among several delegations is that the Council on Goods will be unable to take any decision on either individual country extensions or the review of TRIMs itself.

This will be the first meeting of a major WTO body, since the Seattle debacle and the General Council meeting of 17 December which put off consideration of an item "Followup to the Seattle Ministerial Conference," with a chairman's statement that this issue would be taken up in the new year, and there would be prior consultations, including on the question of the provisions of the various agreements that lapse and the deadlines that expire on 31 December 1999.

A meeting of the General Council is now set for 7 February. Though at the 17 December meeting, as the chair of the General Council put it in the concluding statement, "Members have made clear that informal consultations are necessary on a wide variety of issues, including the issues of deadlines," so far, there appears to have been no consultations.

The WTO head, Mr. Mike Moore who went away to New Zealand for year-end holidays, visited India on his way back, and made pronouncements at meetings with industry and commerce leaders, and in some public statements, that have probably created more confusion about his intentions. Since coming back to Geneva, he went away to meet the EC Commission at Brussels, and then to Washington to meet the USTR Mrs. Charlene Barshefsky. He also stopped over in New York to meet with the UN Secretary-General, Mr Kofi Annan (on Annan's initiative).

The question of extension of deadlines for compliance was one of the items that figured prominently in the Seattle Ministerial agenda under the 'implementation issues'.

Before Seattle, the US, EC, Japan, Switzerland and Canada had made some noises about their readiness to consider extensions on a case-by-case basis, but not on a general basis.

This was one of the sticking points in the large number of questions on which, at Seattle, there was acute difference between developing and developed countries, and that led to the collapse of that meeting.

In the confusion of Seattle, the chairperson of that meeting, USTR Mrs. Charlene Barshefsky had declared (at a final plenary meeting on 3 December) that the Ministers have agreed to suspend the conference and that the Director-General can consult with delegations and discuss creative ways to bridge the remaining areas where consensus does not yet exist to pave the way for a successful conclusion and the Ministerial would then resume its work.

And at a subsequent press conference with Moore at her side, Mrs. Barshefsky had also announced that "everything on the table is frozen".

The official summary record now issued by the secretariat shows some 'tampering' with what actually happened or was said at the final meeting on 3 December, with the addition of words that the mandated negotiations (in agriculture and services) would commence in January 2000 and under already established WTO rules for such negotiations.

And for good measure, the summary record shows that she declared the conference "adjourned" - which implies too that the moratorium on e-commerce tariffs is over!

Since then, the verbatim text recorded by SUNS, and some delegations, of the official WTO webcast of the opening of the meeting at Seattle shows that the meeting was not called to order according to rules, but that the WTO Director-General 'usurped' the functions of the chair. In the absence of the chair or the three vice-chairs, the rules require a member of the conference taking over the chair. Instead, Mr. Moore announced that he was taking over the chair, and called the meeting to order and adopted the agenda.

The summary record now issued, without going into details, shows Moore as having called the meeting to order and occupying the chair and getting the agenda and order of business adopted on the opening day.

Thus, for a "rules-based" organization, it was a "rule-less" meeting and thus, legally, did not take place at all.

Mrs.Barshefsky's version of the final meeting and the "agreement of Ministers" has been challenged publicly by at least one of the Ministers present at Seattle, the Foreign Minister of Guyana.

The US, some of the EU members as well as the WTO head, and the World Bank which is involved in pushing trade liberalisation on the developing world, are focusing on a narrow issue of "transparency" and "decision-making".

Many others, and the UNCTAD Secretary-General, Mr.Rubens Ricupero has publicly voiced this, are of the view that a bundle of reasons was responsible for the failure at Seattle, and all of them would need to be addressed before a way forward could be found.

Among these many causes, without any hierarchial or other implications in their listing are:

* differences among the majors themselves, and particularly US, EC and Japan;

* even more serious differences between the developed and developing countries on the imbalances and inequities of the WTO and its annexed agreements and the fact that developing countries have not gained from the WTO process.

These were listed in the catch-all 'implementation' questions and issues, but trade experts now see that to gain legitimacy and acceptance in the developing world, these problems have to be addressed and rectified by changes in the agreements or interpretations, without some specious arguments about "upsetting rights and obligations";

* the issues of participation of the membership in decision-making and transparency of processes among the membership itself.

The "club" atmosphere and its ways of decision-making that suited a small group of dominant rich countries in the provisional GATT 1947 is no longer acceptable to the obligations and rights of an organization, founded by a definite treaty, and with more than 135 members. Old methods as the "green room" processes with "invited" members or the secretariat and its head being seen to be functioning in the interests of the dominant countries, and attempts to use political concepts like a "single undertaking" to force agreements, rules and obligations on everyone will no longer work.

However difficult and time-consuming, no sovereign country could be asked to assume obligations involving its domestic economic and political policy-making and decisions, without a full and prior notice of the proposals, wide discussions within countries, and the sovereign right of each member to participate.

* there is also the growing view among the public of countries that the present international economic system, and the policies promoted by some leading governments under the name of 'globalization', 'liberalization' and 'de-regulation and privatization', more so in the developing countries, has enriched a few, including the transnational corporations, but has failed to provide any tangible benefit to the general public and the poor.

The non-governmental organizations and groups, with some varying and often differing and opposing agendas, have picked up this general discontent and disillusionment with the WTO (and the Bretton Woods institutions) and several of them were at Seattle to focus on these.

There are attempts to co-opt them, either by giving them a place to observe panel proceedings, or even through gimmicks like those being proposed -- namely, establishing consultation bodies, separately for labour, capital, NGOs, and even parliamentarians.

But these may not work, and may generally complicate national and international governance - which is feasible only on the basis of legitimacy and wide perception of benefits being shared by the people. (SUNS4590)

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

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