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US POWER PLAY TO FORCE DOWN IT'S WILL

by Chakravarthi Raghavan


Seattle, 2 Dec 99 -- US Trade Representative Charlene Barshefsky, chair of the WTO's Third Ministerial Conference, and WTO Director-General Mike Moore, seemed poised Thursday, to change tactics and engage in power-play to spring a draft declaration on the conference and force it through.

In a day and night of informal meetings and consultations to exhaust delegations, and spring surprises on them, Barshefsky and Moore seemed set to attempt to enforce their will on the conference.

As the day advanced, there were indications that the confusion and chaotic conditions inside the conference may be part of a design to ensure that US agendas and plans prevail.

Since about late Wednesday, there have been repeated reports that a draft declaration to launch a new round of negotiations had been prepared, and would be tabled.

Questions by the media at the press briefings, and by ministers and officials inside the meetings, were met with some evasive answers, bordering on prevarication.

Some of the answers were like the testimony aired over TV for weeks and months about a famous 'gentleman' and his affairs.

At Geneva, when the General Council's preparatory process had collapsed and the 19 October text of a draft declaration, with many square bracketed texts were forwarded to the ministers, there had been statements that DG Moore would 'update' them in the light of the 'green room' consultations.

At a press conference, Moore himself indicated he would be writing a 'letter' to the conference. But when asked to cite the rule or authority and decision of the General Council under which he would do this in an organization constantly repeating its claims of being a 'rules-based' organization, he was unable to do so, and spoke of doing this in an "appropriate" way.

Some signs of the Barshefsky-Moore plans emerged at the Thursday morning meeting of the Committee of the Whole, when the chair of the various working groups began presenting reports of the discussions and state of play, which were challenged by several of the members.

Several delegations protested at the lack of transparency. The 67-strong ACP (Africa, Pacific and Caribbean) group of countries complained that their joint views (adopted at a meeting in the Dominican Republic last week) presented at the working group were not reflected in the summaries of the chairmen of the working groups.

There were also more complaints and protests over the lack of transparency, and members said while the reports of the working group chairs claimed it was the result of consultations, it was not clear who had been consulted and where. Questions were also raised about the document or text from the General Council on which consultations were being held.

Moore's attempt to intervene and defend Barshefsky, by insisting that everything was being done 'transparently', participants said, was greeted with some boos from the ministers. As participants later described it, after some fumbling, Mrs. Barshefsky said the consultations were on the basis of the 19 Oct revised draft of the Chairman of the General Council.

Hong Kong China and some others asked for confirmation that if this were so, the draft could not or would not contain any 'last minute' surprises, and there would be no formulations or texts on labour standards, since there had been no discussions on them.

Without specifically responding, Barshefsky said if needed, she would evolve her own procedures. In what was described later by several angry delegations as 'dictatorial tactics', Barshefsky was reported as saying that if the working groups were unable to come up with agreed texts, she would adopt her own procedures.

At a pre-lunch press conference, EC Commissioner Pascal Lamy, suggested that the WTO would have to address the question of how the need for transparency and efficiency of decision-making could be combined, and perhaps, decided at a Ministerial Conference.

Lamy was asked how the complaints of 'non-transparency' of decision-making at this conference would be tackled, and what credibility any declaration and launch of negotiations through such tactics would have before the public outside in countries, and even parliaments? The questioner said he had not seen such confusion and chaotic arrangements and manipulative processes in 21 years of following the GATT system.

The EC Commissioner was clearly unwilling to publicly criticize Barshefsky and merely repeated his earlier remarks on need to evolve future rules and procedures to combine transparency and efficiency of decision-making in the 135-member trade body.

Later at a press briefing, she said that if no agreed texts emerged, she and Moore will form 'green rooms' (code language for consultations restricted to invitees chosen by them) to evolve texts.

Towards the end of the afternoon, intense consultations amongst the US and Cairns Group on the one side and the EU on the other, seemed to have produced a compromise of sorts on agriculture. The compromise formulation dropped the references to 'multifunctionality' of agriculture, but used the language of Art. 20 of the Agreement on Agriculture (AoA) that further reform process is to take into account 'non-trade' concerns.

The text had a para of the objective of the agricultural negotiations, and spoke of continuing the further process of fundamental reforms through substantial reductions in agricultural support and protection sustained over an agreed period of time, and establishing a fair, market-oriented agriculture trading system based on Art. 20 of the AoA.

Another para had a formulation about the special and differential treatment for developing countries, including for net food importing developing countries, "shall" constitute an integral and effective part of the results of the negotiations, and embodied in schedules of concessions and commitments and rules and disciplines to be negotiated to make them more operational, to enable developing countries, in undertaking commitments and providing concessions, to take account of their development needs, including food security and agricultural and rural development.

This formulation, in the 19 Oct text, proposed by India and several other like-minded group of countries, was a part of the negotiating mandate in that text, but seemed now to figure in the objectives.

The negotiations themselves, based on proposals to be submitted by 1 July 2000, were mandated to cover:

* market access leading to 'broadest possible liberalization',

* export competition for substantial reductions in all forms of export subsidies and equivalent action in respect of subsidy component of other forms of export assistance, in the direction of progressive elimination of export subsidies,

* substantial reductions in domestic support, and

* rules and disciplines consistent with the objective of fundamental reform.

At the same time, the negotiations were also mandated to take into account 'non-trade' concerns including 'protection of environment', food security, economic viability and development of rural areas and safety of agricultural products. These are to be addressed through 'targeted, transparent and non-trade distorting measures.'

There were, however, reports later in the day that France (within the EU, had rejected the compromise formulation) and that Japan too had not agreed to the compromise.

There was an effort to evolve an agreed language on 'trade and labour standards' through a suddenly constituted 'informal working group' chaired by Costa Rica. But that group was quickly 'dissolved' when, at the meeting, all developing countries challenged the procedural legality of the consultations in a working group that had not been formed or authorized by the conference itself.

A separate meeting between the EU and some developing countries, on the EU proposal for joint WTO-ILO forum did not also appear to have yielded any solution.

In an interview to a Seattle newspaper, President Clinton said that at some point the World Trade Organization should use trade sanctions to enforce core labour standards.

This proved the worst fears of developing nations about the real aims and intentions of industrialized nations and their organized unions in promoting the labour standards issue at the WTO.

Later in the evening, a new text on 'implementation', more or less based on the so-called 'Hoda text' was given to delegations late at night, with consultations on them due later in the night.

While some more of the demands of the developing countries on this were sought to be taken on board, essentially the text remained one of putting these into a separate track of negotiations, where the developing world, in order  to get promised benefits and equity under the Marrakech Agreement, would be asked to make new concessions to the North and undertake more obligations!

During the night, at 'consultations' on some of the Singapore issues, some of the developing country opponents seemed to fumble, with some compromise being proposed by them, in the name of 'flexibility', to agree on continuing the study process based on some 'elements' and with a view to see whether the elements could provide a basis for negotiations, to be decided at the next ministerial.

But Malaysia, India, and Pakistan resisted any negotiations at Seattle or commitment to launch negotiations at the next Ministerial.

Late night reports showed that in some 'green room ' consultations on the Singapore and new issues, India and Malaysia were still holding out for continuing the study process without any commitments, and resisting such compromises.

There was an evolving picture that in return for the EC giving up multi-functionality, in favour of Art. 20 of the AoA language, the substance rather than form as Pascal Lamy had described it, some of its own demands (on investment and competition) would be met through commitments for future negotiations.

It was also becoming clear at Seattle that the worst charges against the WTO heard from the protestors, other than the administration-supported AFL-CIO marchers, may be proved right.

And even if the WTO and the US may win a skirmish at Seattle, as the police have in the streets, it will erode even further public support in many countries to trade liberalization, and social protests and disorders may endanger many governments.

With half of Thursday night, and Friday, day and night still ahead, the chances were more than even that power play will prevail over rules, but may make the foundations of the trade order more shaky. (SUNS4566)

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

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