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Skimpy ‘package’ keeps implementation issues alive, just

by Chakravarthi Raghavan

Geneva, 14 Dec 2000 -- A Special Session of the General Council of the World Trade Organization is now expected to adopt Thursday or Friday a very skimpy package of decisions on ‘Implementation Issues’ raised by developing countries, whose only merit perhaps is that it keeps alive the issues on the table for consideration and work next year.

The draft decisions covering only a few of the implementation issues raised by developing countries, is as sparse in operative decisions as is atoms in outer space.

And though it uses in several places the mandatory ‘shall’, in substance it is no more than a ‘best endeavour’ package—with the mandatory language ‘shall’ rendered meaningless by using it only for examination or consideration or taking into account etc—by the countries or the WTO bodies.

Perhaps the only real ‘mandatory’ language is to reinforce the notification requirements in some areas where even other industrial countries have an interest - such as one on transparent and non-discriminatory administration of tariff rate quota regime in agriculture, and another requiring steps to be taken to ensure that administrative practices do not impede full and effective implementation of commitments on supply of services through movement of natural persons (Mode 4) - which incidentally also sometimes involves movement of managerial and highly technical personnel for supply of services through commercial presence etc.

“It is a nicely wrapped, X'mas package, without any content, and its only merit is that the implementation issues have not disappeared and cannot be brushed under the carpet in the preparations for a new Ministerial meeting in 2001,” a trade diplomat observed.

The WTO and its agreements are full of such ‘best endeavour’ language on questions that involve some benefits to developing countries, and after six years of the WTO, developing countries have gained nothing.  And while developing country trade ministries and establishments are trying to fend off internal opposition from legislatures, domestic enterprises and civil society, about the benefits of a rules-based system, these are increasingly wearing thin, the diplomat noted. And a year spent on ‘confidence building’ measures have merely eroded confidence further in the system.

In two informal sessions Wednesday afternoon and this morning, the General Council Special Session, functioning as a mechanism to address implementation issues, discussed a draft decision proposed by General Council Chairman, Amb. Kare Bryn of Norway, following weeks of ‘consultations’ by the secretariat and at a later stage by Bryn.

Faced with the dilemma of either rejecting the package, thus making clear to their own countries and the wider world that nothing had been achieved, or accepting the very meagre package but ensuring the issues are kept on the WTO agenda to be addressed next year, the developing countries appear to be in favour of accepting the package, but with specific language in the decision on the issues still to be addressed.

In the light of comments and discussions over two long meetings, Bryn is now expected to modify his draft to add an operative paragraph making clear that the other implementation issues are to be pursued in further work programme in the New Year.

Developing countries, both those opposed to a new round and those supporting a ‘comprehensive round’ joined together Wednesday in objecting to and killing an attempt of the EC, Japan and other industrial nations that sought to link a solution to implementation issues to a new round with a ‘broad and balanced agenda’.

The EC and Japan and (the secretariat too) had tried to do this by having some oblique and coded language for a new round included in a chairman’s statement to accompany the decision on implementation.

The draft elements of a Chairman’s text that was before the Wednesday informal (along with the draft decision) spoke about the suggestions made in consultations about specific modalities and scheduling of the work programme for next year, and mentioned as among these “the point that we should set implementation work more clearly in the context of a wider WTO work programme, so as to take full advantage of the positive synergies that may exist between the effort to resolve these issues and the effort to advance a broad and balanced agenda overall.”

This provoked considerable opposition and comments at the informal meeting, trade diplomats said.

Not only did countries like India, Pakistan and others in the like-minded group object to such attempts to tie the ‘implementation issues’ to new round of negotiations and with new issues, but even several of the supporters of a new round of negotiations.

Any such attempt, Amb. Celso Amorim of Brazil, is reported to have said at the informal meeting Wednesday evening, will “de-legitimise” the WTO processes and a new round of trade negotiations.

Though its views on some of the new issues are different from those of Europe, Japan or other major industrial nations, Brazil in the runup to Seattle and since then too has been among those developing countries who have been supportive of the idea of launching a new and ‘comprehensive’ round of negotiations, with an agenda including the built-in and mandated negotiations (such as agriculture and services) but other issues too. Brazil has viewed this as the only way to get the EU and other agricultural protectionists to the negotiating table.

A new revised draft elements for a Chairman’s statement at Thursday morning informal meeting eliminated the sentence objected to, but spoke of all parties being united in the desire to find solutions to these issues and do so in a way which contributes to ‘strengthening and advancing’ the WTO.

It then said that “the first thing we need to do is  to consider the modalities of how best to advance our work”. The statement also said that the Chair, with the Director-General and his colleagues, would carry out further consultations aimed at “defining thee modalities” by the next regular meeting of the General Council (February 8-9, 2001).

But several members did not like the references to ‘modalities’ either.

Pakistan and others wanted the various implementation issues not dealt with or addressed to be listed in an annex to the decision, while the US wanted its own issues (including labour etc) to be included in the annex. A compromise in the form of an operative paragraph about addressing the issues on the table, without listing them, is now expected to be included in a revised draft decision that will come up before another informal General Council Thursday afternoon, followed by a formal session to adopt it.

Of the 13 agreements and issues of the WTO agreements (and 54 indents) in the para 21 (immediate action) implementation issues, the draft decision mentions only 7 agreements - agriculture, sanitary and phytosanitary measures, technical barriers to trade, customs valuation, rules of origin, subsidies and countervailing measures, and the general agreement on trade in services.

Among the agreements or issues that have figured in the year-long consultations, but now omitted include the agreement on textiles and clothing, anti-dumping and TRIPs.

The decisions proposed in the GC Chair’s draft are:

1.      Agreement on Agriculture:

1.1 Members shall ensure that tariff rate quota regimes (TRQs) are administered in a more transparent, equitable and non-discriminatory manner. In that context they shall ensure that the notifications they provide to the Committee on Agriculture contain all the relevant information including details on guidelines and procedures on the allotment of TRQs. Members administrating TRQs shall submit addenda to their notifications to the Committee on Agriculture (Table MA:1) by the time of the next regular meeting of the Committee.

1.2 The Committee on Agriculture shall examine possible means of improving the effectiveness of the implementation of the Decision on Measures Concerning the Possible Negative Effects of the Reform Programme on Least-Developed and Net-Food-Importing Developing Countries and report to the General Council.

2.      Agreement on the Application of Sanitary and Phytosanitary Measures:

In accordance with the request to the Director-General to work with relevant international standard-setting organizations on the issue of the participation of developing countries in their work, these organizations are urged to ensure the participation of Members at different levels of development and from all geographic regions, throughout all phases of standard development.

3.      Agreement on Technical Barriers to Trade

In accordance with the request to the Director-General to work with the relevant international standard-setting organizations on the issue of the participation of developing countries in their work, these organizations are urged to ensure the participation of Members at different levels of development and from all geographic regions, throughout all phases of standard development.

4.      Agreement on the Implementation of Article VII of the GATT 1994

Noting that the process of examination and approval, in the Customs Valuation Committee, of individual requests from Members for extension of the five-year delay period in Article 20.1 is proceeding well, the General Council encourages the Committee to continue this work.

5.      Agreement on Rules of Origin

Members undertake to expedite the remaining work on the harmonization of non-preferential rules of origin, so as to complete it by the time of the Fourth Ministerial Conference, or by the end of 2001 at the latest. The Chairman of the Committee on Rules of Origin shall report regularly on his own responsibility, to the General Council on the progress being made. The first such report shall be submitted to the Council at its first regular meeting in 2001, and subsequently at each regular meeting until the completion of the work programme.

6.      Agreement on Subsidies and Countervailing Measures

6.1 Taking into account the unique situation of Honduras as the only original member of the WTO with a GNP per capita of less than US$1000 that was not included in Annex VII(b) to the Agreement on Subsidies and Countervailing Measures (SCM Agreement), Members call upon the Director-General to take appropriate steps, in accordance with WTO usual practice, to rectify the omission of Honduras from the list of Annex VII(b) countries.

6.2 The Committee on Subsidies and Countervailing Measures (SCM Committee) shall examine as an important part of its work all issues relating to Articles 27.5 and 27.6 of the SCM Agreement, including the possibility to establish export competitiveness on the basis of a period longer than two years.

[These two paras of Article 27, Special and Differential Treatment, relate to the developing countries that have some flexibility to provide export subsidies, who have to phase them out when they reach ‘export competitiveness’.]

6.3 The SCM Committee shall examine as an important part of its work the issues of aggregate and generalized rates of remission of import duties and of the definition of ‘inputs consumed in the production process’ taking into account the particular needs of developing-country Members.

7.      General Agreement on Trade in Services

Members shall take steps so that administrative practices do not impedethe full and effective implementation of their commitments under the General Agreement on Trade in Services (GATS), particularly as regards the supply of services under Mode 4 as provided in Article 1.2 (d) of the GATS.-SUNS4805

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

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