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Mountain of labour produces a dead mouse

by Chakravarthi Raghavan

Geneva, 29 Nov 2000 -- A year after the debacle at Seattle, and months of consultations by the Chairman of the General Council and the Director-General of the World Trade Organization on the ‘Implementation-Related Issues and Concerns’ seems to be heading towards the proverbial outcome: “a mountain in labour produces a dead mouse.”

Following the Seattle debacle just a year ago, and the launch of ‘confidence building’ measures and a work programme at the WTO with focus on ‘immediate’ measures to address the ‘implementation concerns’ of developing countries, the Chairman of the General Council has circulated draft decision for the Special Session of the General Council set for 14-15 December. The draft, described as representing “the best efforts” of the Chairman and the WTO DG to find broadly acceptable solutions to implementation related issues and concerns, is subject to further consultations (at an informal meeting Wednesday).

The draft decision seeks to address the various measures, “decisions with immediate effect”, set out in para 21 of the Mchumo text of the draft Ministerial Declaration that went before the Seattle Ministerial Conference.

Though the draft gives the impression of a General Council decision, and has used in several places the mandatory ‘shall’, a perusal of the actual texts under various indents show that the substance is still one of vague promises and best endeavour clauses as those used in the Uruguay Round agreements as Special and Differential Treatment to developing countries that in fact have cheated the developing world of any substantive benefits from the Uruguay Round.

The actual decisions will be so ineffective and illusory that the developing countries face the hobson’s choice of acquiescing in a false consensus, thus misleading their own public that there is to be some redressal of the asymmetries and inequities, or rejecting them and “fall” into the US-EU trap of a new round of trade negotiations to resolve these inequities (by new inequities in new areas).

The draft decision covers, mostly inconsequential areas, in agriculture, sanitary and phytosanitary (SPS) measures, textiles and clothing, technical barriers to trade, anti-dumping, customs valuation, rules of origin, subsidies and countervailing measures, the GATS and TRIPS agreements.

A flavour of the outcome of the “best efforts” of the GC Chairman and the WTO-DG is provided in some of these ‘decisions’.

Thus, on the Marrakesh decision on measures concerning negative effects of the agriculture reform programme on least developed and net food importing developing countries, where admittedly nothing has been done, the new draft says: “the committee on agriculture shall examine possible means of improving the effectiveness of implementation ... and report to the General Council”.

And on the vexed question of export credits and guarantees (disguised agricultural export subsidy programmes of the US), the draft says:

“Members reaffirm the importance of the work in the Committee on Agriculture to develop internationally agreed disciplines ... and urge the Committee ... to pay due regard to the special situation of developing countries...”

On SPS measures, where Art 10.2 of the agreement calls for developing countries getting a ‘longer time-frame’ to comply with new SPS measures, the draft decision says “Subject to conditions ... in Art.10.2... the phrase ‘longer-time frame’ shall be understood to mean normally (emphasis added) a minimum of 12 months...”

On the problem faced by norms being set by private ‘international standard setting organizations’ where developing countries are not participants, the draft says “...these organizations are encouraged to ensure participation of Members at different levels of development and from all geographic regions, throughout all phases of standard development.”

On Textiles and Clothing, the draft says:

        Members reaffirm their commitment to achieve improved market access opportunities ... and to the extent possible, consider further liberalising their textile trade..”

        Members shall consider advancing the implementation of Art.2.14(b) of the ATC on 1 January...

        Members shall exercise all possible restraint before imposing contingent trade remedies on the textiles and clothing products from developing countries

        Members shall notify any changes in their rules of origin concerning ATC products before applying them

On the anti-dumping (AD) measures, where the developing countries have focused on repeated investigations (which are trade-harassing) without any final levy of duty on the same product, on levy of duty less than the dumping margin and on use of ‘constructed normal value’, the decisions are equally misleading.

Thus as a solution to the complaints of developing countries about repeated start of anti-dumping investigations ending without any final duty and start of new investigations on the same product , the draft now calls for “investigating authorities shall examine with utmost care any application....”

Again on the levy of antidumping duty (where the agreement envisages lesser duty than the dumping margin, but is seldom observed by the developed countries), the new draft has no more than “Members reaffirm that it is desirable.... and the General Council instructs the Committee on anti-dumping practices to undertake a work programme on an urgent basis to examine practical difficulties and impediments to the implementation of this concept”.

On constructed normal values, the Committee on AD practices is instructed to examine the problems this may pose for developing countries, and pending this members are “urged to explore” use of third country export prices involving developing country exporters.

On the harmonisation of non-preferential rules of origin (where the Marrakesh Agreement mandated work to be completed within four years), the draft has no more than “members undertake to expedite the remaining work so as to complete it by the time of the 4th Ministerial Conference or end 2001 at the latest.”.

On subsidies and countervailing measures (SCM) agreement, the draft calls for

        the SCM Committee examining expeditiously the question of a specific interest rate benchmark and any other related issues for determining when export credits provided by developing country members do not constitute an export subsidy

        the SCM committee shall examine expeditiously all issues relating to Art 27.5 (developing countries phasing out export subsidies where they have reached export competitiveness) and 27.6 (relating to the criteria for judging this), including establishing export competitiveness on the basis of a period longer than two years.

In fact the UR SCM agreement 27.6 itself says the SCM Committee “shall review” these provisions 5 years after entry into force of WTO (after 1999). And one year later, there is nothing more “shall examine expeditiously...”

The SCM is also asked “to examine expeditiously” issues of aggregate and generalized rates of remission of import duties and definition of “inputs consumed in production process”, taking into account the particular needs of developing country members.

On annex VII countries (with per capita below $1000 (and/or listed there) who are allowed to use export subsidies subject to limitations, the decision says that the annex “shall be interpreted” to include countries listed in that annex until their per capita GNP reaches $1000 in constant 1990 dollars for three consecutive years, and for countries not to be deemed to have left that annex if their per capita gnp in current dollars remains below $1000.

On request from a country no longer qualified to be included in Annex VII, the SCM committee shall extend the 8 year transition period by five years.

Also the SCM committee is asked “to review” the $1000 threshold to “examine” the possibility of including members in low and lower-middle income categories as classified by the World Bank. The Director-General is asked to take ‘appropriate steps’ in accordance with usual WTO practice to rectify the omission of Honduras from the annex - the only original member of the WTO with a per capita below $1000 that was not included in that annex.

On the GATS, members “shall take steps to ensure” that their administrative practices do not constitute obstacles to full and effective implementation of commitments for supply of services by mode 4 (movement of natural persons). And the Services Council is asked to review the operation of contact points established under Art.IV.2 with a view to assessing their effectiveness in facilitating participation of developing countries’ services suppliers in services trade.

Under TRIPS, the TRIPS is “urged” to continue its ongoing work with a view to clarifying the relationship between TRIPS and the CBD, and “give positive consideration” to give observer status to the CBD secretariat on an ad hoc basis pending conclusion of wider discussions on observer status for international organizations in the General Council.

In terms of facilitating technology transfer to the LDCs (by developed countries giving incentives to firms), the TRIPS Council is asked “to give consideration” to drawing up an illustrative list of incentives of the sort envisaged and for the TRIPS Council, on a regular basis, publicising its procedures for notification and monitoring of these measures. Also, the TRIPS Council is urged to invite international intergovernmental organizations to provide information on their activities aimed at technology capacity-building.

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

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