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Africa should insist on implementation solutions

by Chakravarthi Raghavan

Quatre Bornes, Mauritius 1 Nov 2000 -- African countries should continue to focus on implementation issues and, with other developing countries, raise the pitch and insist on solutions to the problems of implementation and not agree to roll them over into a new round of trade negotiations at the World Trade Organization (WTO).

This was a strong message that came out of presentations by panellists and several interventions and comments from participants at a SEATINI workshop here, attended by senior trade negotiators from capitals, and representatives of the private sector from countries in the Southern African region.

In opening the meeting Monday, the Mauritius Minister of Industry, Commerce and International Trade, Mr.J.Krishna Cuttaree, said that in the context of the international trading system and in the negotiating process, member-states were often “too apt to forget that liberalisation is not an end in itself but a means - a means to improve the welfare of our people.”

Cuttaree added: “It cannot therefore be a blind instrument that is used to promote trade at the expense of people’s welfare. We, in Mauritius could not endorse a liberalising path that engenders a race to the bottom. Instead we see liberalisation as an instrument that should lead to the democratisation of control, ownership and management of productive assets and resources among and within nations.”

The failure of the Seattle Ministerial Conference last year, he said, was a set-back for confidence in the multilateral trading system, bringing to the fore the opposition to the WTO process both from within the membership and from civil society. The breakdown of negotiations sent a clear message that developing nations, even the smallest amongst them, were no longer agreeable to stand by and watch the process move forward at their expense. “It was a clear signal for the WTO to start its democratisation process,” Cuttaree added.

Acknowledging some steps taken so far in the efforts at rebuilding and renewing confidence in the WTO system and in supporting them as ‘building blocks’ towards integration of African and other developing countries in the multilateral trading system, Cuttaree insisted however, that “they are not sufficient and in themselves will not bring a reversal of the marginalisation of Africa and some other developing countries in the international trading system.”

A more comprehensive approach was required whereby fundamental constraints such as supply-side constraints and resource limitations are addressed alongside the need to retain preferential access until such time as products from these countries become capable of competing internationally. Also, “a more active and informed approach” was required of the member-states in the on-going negotiations so that they could contribute in a meaningful manner to the shaping of future rules.

In the context of some of the mandated negotiations under way, in particular in agriculture, Cuttaree underlined some specific African concerns that bind these countries together—the need to preserve and promote a commercially viable agricultural sector, the fact that many of them are food-deficit countries and thus are net food importers, the fact of being essentially producers and exporters of a few primary products where they are price-takers on such products, the fact that most have no access to state-of-art knowledge, and their responsibility to ensure a viable rural development, environmental protection and food security.

Mauritius, he underlined, was particularly sensitive to the issue of food security, which was linked to its capacity to generate sufficient foreign exchange earnings to import foodstuffs. These earnings in the agricultural sector were derived essentially from sugar-cane.

As for GATS, he noted that Mauritius had submitted on behalf of the African group, a paper setting out common positions on negotiating guidelines and procedures. This approach reiterated that the negotiations remain strongly contingent upon the preservation of the GATS architecture, due respect being given to national policy objectives, levels of development of countries, and the preservation of flexibility for developing countries.

“Developing countries should not be expected to undertake further obligations for liberalisation of trade in services beyond those of interest to them,” the Minister said. Mauritius, he noted, had offered commitments in the Uruguay Round in the tourism sector and then in the telecommunications and financial services sectors, “but we do not seem to have obtained the benefits which this act of faith was expected to bring.” The services negotiations therefore must advance in ways that “rebalance outcomes to the benefit of all Members, and with due credit being given for autonomous liberalisation undertaken by countries.”

The meeting, which began Monday is due to end Saturday, and will be discussing in depth, various issues under consideration and/or under negotiations at the WTO, as well as the US Africa Growth and Opportunity Act (AGOA) and the EC-ACP Cotonou agreements.

The SEATINI workshop is also taking place on the eve of a WTO-sponsored meeting of African Ministers in Libreville in Gabon (13-15 November), which is expected to be attended by the EC Trade Commissioner Pascal Lamy (and perhaps, by senior officials from the US) -- where the WTO head and the EC are apparently planning to make a pitch to persuade the African Ministers to endorse the EC’s idea of a comprehensive new round (in return for and in appreciation of the EC proposal to extend duty-free market access for least developed countries, except in respect of arms).

A view that is sought to be projected at the Libreville meeting is that since African countries have agreed to a wide range of measures (including such things as labour rights and investment issues) ‘bilaterally’, either in the context of AGOA or in the context of Cotonou or both, there is no reason to oppose these issues at the WTO, but rather, support them.

Several trade officials here said that bilateral commitments was one thing, and it was quite another to allow these to come on the WTO agenda and its framework of rules.

Several African trade officials present here who did not want to be identified, in private conversations, complained of the way the Libreville meeting was being organized, with a declaration to be issued by the ministers being prepared so far without any inputs from their trade diplomats in Geneva or senior trade officials in capitals. Some of them said that they suspected it was being prepared behind the scenes by Libreville, the WTO and the EU’s Executive Commission. They said that their efforts to get a copy of the draft declaration being prepared in Libreville, for the African group in the WTO to consider and make recommendations to their ministers was being thwarted.

One African official said he could not understand the raison d’etre for the Libreville meeting, considering that the African trade ministers had only recently (in mid-September) met in Cairo and had considered and taken positions on the WTO issues and had issued a declaration.

At a session on implementation issues, Mr. Bhagirath Lal Das, former Indian Permanent Representative to the GATT and Director of the Trade Programmes at UNCTAD, said that the developing countries should continue to focus on the implementation issues—items listed in paragraphs 21 and 22 of the General Council Chairman’s draft declaration that was presented to the Seattle Ministerial Meeting (the ‘Mchumo text’).

The view that was being promoted by some of the industrialized countries, that the implementation issues could be addressed and resolved only in the context of a new round of trade negotiations with new issues, was not credible and was against all logic, several of the participants in their interventions from the floor said.

Das said that the implementation issues had come on the agenda of the WTO as a result of the hard work of the developing countries for over two years, and the courage shown by the then chair of the General Council, Amb. Ali Mchumo of Tanzania, in having incorporated these proposals in his revised draft text of 19 October 1999.  The implementation issues, he said, could be a rallying point for all developing countries and would help to slow down to some extent the steam-rollering tactics of the industrialized countries to bring new issues to the WTO, Das said.

The industrialized countries, he suggested, would try to offer something, some superficial solutions, in order to get the issues pushed aside, and launch a new round, including these new issues.

Several participants in the discussions said that the priorities of Africa were different from those of the industrialized world. They also said that while, particularly in the context of the ‘consultations’ on the implementation questions, there had been more openness and attempts to be inclusive, the bad old habits had not gone away, and quite often when some of them had been called in for consultations, they did not know who else was being called, or even when other consultations on the same subject had been held by the WTO officials or chairs of WTO bodies, and who were present and what was the outcome. Often, they found themselves ‘negotiating’ with the WTO officials, instead of with their major trading partners. This was unsatisfactory.

Some trade observers said that two years after they made proposals on ‘implementation issues’, to address the imbalances and inequities against the developing countries under the WTO and its agreements, and a year after they forced the issues on to the agenda of the Seattle Ministerial Conference, developing countries may be in danger of their concerns being talked out or side-tracked into endless ‘consultations’ without decisions. They may also be pressured or misled into thinking that by agreeing to launch a new round and putting these issues into the new round, there would be relief to them. Rather, they would find themselves with the old inequities and imbalances unresolved, and new ones added on to them via the new round and new issues.

While not taking any actions to resolve the implementation issues, some trade observers and diplomats fear, the US and EC are having recourse to the dispute settlement processes to start disputes and get rulings in their favour.

At the SEATINI workshop, some participants pointed to this danger and wondered whether it would not be useful to find quick solutions or decisions on doables, and launch a new round with the other issues to find solutions by trade-offs.

But trade experts like Das warned against this. The DSU and the need to cure it of the tendencies of the judicial organs to encroach on the legislative prerogatives, and other violations of legal norms and judicial behaviour, must be pursued as a priority, including by recourse to voting for authoritative interpretations of the limits of the panels and Appellate Body. But there can be no benefit or trade off, under the threat of the DSU processes, to settle for vague doables, Das and other experts at the workshop warned.

The General Council of the WTO has decided to address the ‘implementation issues’ at Special Sessions, and to take decisions, referring, where needed, technical issues to the subordinate bodies for consideration and report back.

The discussions and consultations so far have been structured around para 21 of the Mchumo text, which has 54 tirets (indents) or proposals, put forward for the Seattle meeting and calling for immediate decisions on them. Para 22 of the Mchumo text, which calls for an implementation review mechanism to complete the review of the UR agreements and take or propose appropriate actions within one year, lists nine subject areas as indents, and within them, 39 sub-indents in all.  The industrialized countries have been trying not to engage in direct substantive discussions and consideration, but rather act through the ‘Norwegian’ chair of the General Council and the Director-General (with his deputy, Miguel Rodriguez, actually running the consultations). At the same time, the industrialized countries, particularly the US, EC, Japan and Canada, have not said ‘no’ outright or rejected any of the proposals.

At the last meeting of the Special Session of the General Council, sitting as a special mechanism on 18-19 October, there was an attempt to start the consultation process on issues under para 22, without completing the work on 21 and/or taking decisions even where some consensus was reported as possible (the new term is ‘doable’). Some developing countries whose implementation concerns figure in para 22 of the Mchumo text want to take up the para 22 issues, while the majors too want to take them up, rolling the para 21 issues into them, and then take some small procedural steps and roll over all the issues into a new round.

The African group of countries, and several of the members of the Like-Minded Group, did not accept this, though they suggested that they would not stand in the way of consultations also being held on para 22, so long as the priority of decisions on all para 21 issues was not being abandoned or even slurred over.

As a result, the WTO director-general was asked to hold further consultations and report back, with the next Special Session of the Council on Implementation set for 18-19 December.

The 18 October Special Session of the General Council had before it a progress report on the consultations sent out to delegations on 17 October by the Norwegian chair, and this was presented to the General Council Special Session. While the industrialized countries welcomed the report and supported it, several of the developing countries demurred or expressed reservations.

Mauritius presented the viewpoints of the African group, while India made a lengthy oral presentation (see separate story on the two presentations, copies of which were in the SEATINI workshop background documents). In effect, both pointed out that the progress report actually showed that consultations had been held only on 20 of 54 tirets of para 21, which meant that 34 had not been taken up at all.  And even of the 20 proposals on which consultations had been held, 12 were being sent to subordinate bodies, the chair was to hold further consultations on six, and the director-general was to hold consultations with the relevant international organizations on two others.

Thus, as Mauritius put it in its intervention, there had been ‘scant’ progress on the para 20 issues. India said the outcome was that even on the 20 tirets or subjects on which consultations had been held, they were far from resolving the problem, and the convergence achieved on the issues (mentioned by the Chair) related only to modality of dealing with the proposals further.

India’s assessment was supported by interventions from Pakistan, Egypt, the Dominican Republic, Cuba, Uganda, Honduras, Bolivia and Sri Lanka.

On the suggestion of the chair to take up consultations on para 22 issues (without resolving the para 21 issues), India reserved its position. Mauritius for the African group also made clear that consultations and actions on para 21 had to precede that on para 22.  And while Africa would go along and have no objection to work beginning on para 22 in an interactive manner, the priority for para 21 issues in terms of hierarchy of immediacy of results should be observed and maintained.

Brazil said issues of anti-dumping, subsidies and TRIMs would be of high priority to it, even if all the para 22 issues were not of equal importance to Brazil. Argentina said the issue of TRIMs, Special and Differential (S&D) treatment and subsidies would be important to it while Colombia emphasized S&D, de minimis in anti-dumping and safeguards, transfer of technology and voluntary standards vs.  regulations. Thailand wanted the chair to hold intensive consultations on para 21 issues, even while willing to show flexibility on para 22 issues.

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

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