How the North got its way

At the Ministerial Conference of the World Trade Organization (WTO), the rich countries hijacked the agenda and the process. As Ministers spoke to increasingly sparse audiences in the open plenary sessions, the real negotiations went "underground" in small informal groups to which most developing countries were not invited. Thus, the Conference's focus was on the rich countries' agenda of prying open more markets for their companies whilst the problems of developing countries were brushed aside.

by Martin Khor

SINGAPORE: The WTO Ministerial Conference confirmed that the major trading nations are still holding the trade organization in their grip and able to use it to use it for their own interests, depite the dissatisfaction of many developing countries.

The meeting started with politically-correct statements that it would focus on a review of the Uruguay Round trade agreements and developing countries' problems in implementing them. But it was soon after hijacked by developed countries pushing their own agenda, which was the further opening up of markets in the South to their companies.

By the end, nobody was seriously talking about the developing countries' needs. Instead, they had to agree to new issues being injected into the WTO, which are likely to put them at an even greater disadvantage in the global economy.

Delegations from developed countries were jubilant that they got everything they wanted, or almost, from the Conference: an information technology agreement (ITA), and concessions from the South to incorporate the new areas of investment policy, competition policy and government procurement into the WTO's future work.

On the other new issue, labour standards, the developing countries also had to accept the US insistence that it be mentioned in the Ministerial Declaration, but were able to put in their viewpoints in this paragraph.

Although the developing countries form four-fifths of the WTO's membership, and the WTO is supposed to decide by consensus, the minority of Northern countries were able to force the agenda with their priority issues, forcing the South countries in the frontline of the discussion to react in a bid at "damage control."

The imbalance at the Conference was reflected in the way liberalization of their information technology products was put on a super-fast track via the ITA, whilst liberalization of products exported by developing countries (for example, textiles and clothing) were neglected.

Concerns of the South over continuing protectionism by the North (for example, by the extension of the unialteral trade actions of the US and the protectionist use of anti-dumping measures against Third World products) were brushed aside.

The developed countries succedeed in using the Conference to extend the boundaries of the WTO's authority to cover new areas (investment, competition, government procurement) that they intend to use to further pry open the markets and resources of the developing countries.

How did the majors get their way when everyone is told that the WTO makes decisions on a consensus basis, and moreover, four-fifths of its members are from the developing countries?

"Lack of transparency"

The answer lies in the decision-making process and practice of the WTO system, which in turn determined the manner the Conference was run. The reality of this "informal practice", in contrast with the formal appearance of decision by consensus, enabled the minority of rich countries to have their way over the majority.

At the Singapore Conference, all Ministers were allocated time to make speeches at the open plenary meetings. But most developing countries were never even invited to the real discussions that took place in "informal groups", and for most of the Conference their Ministers and senior officials were kept in the dark on what was going on.

"Lack of transparency" was the buzz-word used by delegates, NGO representatives and journalists alike to describe the Conference's manner of operations.

The "open" part of the Conference was the plenary session where Trade Ministers of 120 countries made speeches. Those from developing countries were often articulate in pointing out their problems in having to liberalize their economies after the Uruguay Round agreements, which came into force in January 1995.

Many made the plea that no new issues (especially non-trade issues) be brought into the WTO since they were still unable to cope with the problems arising from their existing WTO obligations.

But, embarrassaingly enough, the Ministers were speaking to an increasingly emptier hall. There were no discussions at all on their speeches, and thus no opportunity to seek solutions to the problems raised.

Negotiations going "underground"

Meanwhile the "real" negotiations of key issues had gone "underground" in many informal meetings to which only selected countries were invited.

The US started a group on 9 December afternoon itself, when the Ministers were still speaking, to push for the ITA (their main priority at the Conference). No one dared to point out that it was bad etiquette to pull away so many Ministers and officials to a private meeting when the official plenary of Ministerial addresses was proceeding.

Soon after, the Conference Chairman, Singapore Trade Minister Yeo Cheow Tong, and WTO Director-General Renato Riuggiero, created their own "informal group" of about 20 to 30 countries, to negotiate whether and how the Northern proposals on labour standards and the new issues could be brought into the Declaration.

How countries were selected to the informal groups was unclear, and became a source of discontent. The developed countries were well represented in all the informal groups, but only a few developing countries, in relation to their proportion of membership, were invited.

The Northern countries were thus much more able to put pressure on the developing countries present to give in, than if the discussions had been held in an open forum (as is usual in the case of most United Nations meetings).

Meanwhile, the majority of developing countries were shut out of the negotiating process, and their Ministers, Ambassadors and senior officials were left hanging out in corridors or in the lounges, as much in the dark as the media and NGOs as to what was happening.

Indeed, some journalists and NGOs knew more than the delegates. The Trade Minister of an important developing country, that was not invited to the informal meetings, was shocked to learn from an NGO from his country that the text being discussed on the key issue of investment was very different from what his country had in mind, and from what he had been told was on the table.

With the real meetings having shifted to the closed-door "informal group process", the plenary session of Ministerial speeches in the huge and plush Conference Room 602 became a farce as nobody was paying attention.

Many delegates privately expressed their frustration of being left out of the process and being expected to merely "rubber stamp" whatever agreement or Declaration emerged from the closed doors.

Midway through the Conference, an NGO statement from the Third World Network criticized the "secretive and undemocratic nature of the Ministerial Conference."

NGO's concern over the non-tranparent and undemocratic process

The NGOs expressed concern that this non-transparent and undemocratic method of functioning "is most biased towards the developed countries who, with their large delegations and well- prepared agendas, are able to make use of the small informal group system to isolate the majority of WTO members and get their way in the negotiations."

"In the end the real winners of the Conference will be corporate greed, whilst the interests of the people, especially in developing countries, will be sold out further."

This concern proved legitimate. It was only on 12 December night, the eve of the Conference's closing, that all the WTO delegations were called together and provided copies of some pages of texts on the controversial issues that the informal groups had pieced together after long negotiations.

At that meeting, many of the delegations that had been left out complained about the lack of transparency at the Conference. The Chairman, Mr. Yeo of Singapore, and the WTO Director-General acknowledged their complaints and promised that the WTO would be more transparent but "without compromising effciency", and asked the members to give their approval to the texts.

At such a late stage, it would have been difficult, if not impossible, for anyone who had not been in the process, to make objections, for then that country would be accused of preventing a consensus and of wrecking the whole Conference.

"Our job was simply to say yes and give the stamp of approval to something we did not know and could not participate in," a senior diplomat, who did not want to be named, said privately to the press.

"Although many of us in the developing countries are unhappy with the way the meeting was run and also with the results, which have benefitted the developed countries more than us, we had no choice but to put on a brave front and join the consensus."

At a closing press conference on 13 December afternoon, many questions were asked of Yeo and Ruggiero about the complaints of lack of transparency and what could be done to change the WTO's image of being a "rich men's club".

Yeo admitted that there should be improvements to how future WTO Conferences operate. Ruggierio however, denied that the WTO was a rich men's club and even claimed that "the real value of the WTO compared to other organizations is the active participation of developing countries."

That is certainly a tall claim which few, if any, besides the Director-General, could try to defend.

The "informal group" system of negotiations used at the Singapore Conference is an extension of the way the WTO operates as a matter of routine in Geneva. What the Conference did was to expose to the international press, to NGOs and to the Ministers themselves how untransparent and to the disadvantage of developing countries is this WTO system of operating.

The Conference's neglect of the issues of importance to developing countries and its imbalanced results in favour of the North are also reflections of the way the world trade rules in WTO are tilted against the poorer countries and how their concerns are marginalized.

The main lesson from this Conference, therefore, is that developing countries have to prepare as well as organize themselves better, to prevent the industrial countries from further tightening their already strong grip on the WTO.

For a start, they should insist that the WTO in Geneva does its important negotiation work in the open, with all members being able to participate as a mater of right, and not in the closed-door secrecy of informal groupings selected undemocratically by the Director-General.

The complaints by Ministers from developing countries at being marginalized by the decision-making process at the Singapore Conference, and the promises by Conference Chairman Yeo and Director-General Ruggiero to do something about this, could form the basis of changes to the informal system, starting at Geneva. (SUNS3893)

Martin Khor is the Director of the Third World Network.The above first appeared in the SUNS.