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Developing Countries, the WTO, and A New Round

by Ransford Smith*

Geneva, Dec—The World Trade Organization, in its 1999 annual report, makes the points that others have made, namely that the phenomenon of “Globalization” is neither new nor specific to the present era. The only thing new is its scale and scope, which trigger in turn the perennial human reaction to profound change - fear, apprehension and in some quarters opposition.

If this proposition is accepted, it is appropriate to look at the out-turn of the process over a longer sweep of time than simply being preoccupied with what happened in the nineties.

While great progress has been made over the last 50 years in integrating developing countries into the multilateral trading system, “the progress has been uneven”. In current dollar terms, the share of developing countries merchandise exports increased by a factor of 69 between 1948 (when GATT was formed), while that of developed countries increased by a factor of 100. As a result, the developing country share of world trade fell from 33% in 1948 to 27.5% in 1999. During this period, there were eight Multilateral Trade Negotiating (MTN) Rounds.  And from the very beginning the membership of the GATT/WTO included a significant component of developing countries.

The obvious conclusion is that membership in the WTO by itself and participation in its Most-Favoured-Nation benefits have not been sufficient to ensure a closing of the gap between the trade performance of developing countries and other members of the international community.

What are the structural causes of this tendency?

In the 50 years between 1948 and 1997, the trade of all countries multiplied by a factor of 17, but trade in manufactures by a factor of 30. In 1948, agricultural trade accounted for 47% of merchandise exports and manufactures for 30%; at the conclusion of the Uruguay Round, agriculture’s share of world merchandise trade fell to 12%, while that of manufactures rose to 77%.

An obvious conclusion is that countries that have had the capacity to shape or to respond to changes in the global economy were usually the most successful performers. In the fifty years between the establishment of the GATT and the end of the Uruguay Round, the global trade share of Latin America fell from 11 to 5%, and that of Africa, from 8 to 2%. During the same period, the trade share of Asia almost doubled - from 15 to 27%. At two extremes, by mid-nineties, almost 90% of exports from China and the newly industrializing economies (NIEs) comprised of manufactures while, in Africa, less than a third of exports were manufactures. Those developing countries which have performed best in the past four decades or so are those which were able to board - even if only coach class - the manufacturing locomotive of growth.

While differences in the performance of developing countries must be noted, the overall trend is clear: there has been a pattern of marginalization in trade terms of a significant number of developing countries. Even more worrying is the fact that the structure of the global economy is now changing even more rapidly and dramatically than at any time in the past fifty years. The historical evidence suggests that those developing countries that are unable to respond effectively to these developments will face a very bleak future.

It is not that there has been an absolute fall in the trade shares of developing countries over time, but a fall in their relative share of global trade - a clear indicator that despite the WTO, despite or because of globalization, most developing countries are falling further behind, not catching up.

While to some it may be self evident that there is a problem and that the WTO should be part of the solution, this is not necessarily universally recognized. Even though some may be willing to agree that countries are being marginalized rather than positively integrated, not everyone will necessarily agree that the WTO has a role to play in systemically seeking to redress trade imbalances.

Fortunately, Seattle served to heighten sensibilities and to create improved - though not ideal - conditions for change. Within the WTO, and the wider global community, a consensus must be generated to seek change in four areas: the culture and normative behaviour of the WTO, the WTO Rules, including Special and Differential Treatment (S&D), technical assistance and capacity building and negotiating ambitions for the near and medium term.

The WTO is primarily a forum for negotiating trade rules. Negotiating skills, technical expertise, and market size are some of the elements that are brought as chips to the negotiating table. The extent of the disproportion in these “resources” between developed and developing countries in the WTO is perhaps more significant than in the case of comparable indices in any other major multilateral body.

The QUAD group of EC, United States, Japan and Canada account for approximately (60% of world exports, with the US in 1999 accounting for almost 13% of world exports. By contrast the 34 WTO members with the lowest trade shares account collectively for 0.14%percent of world trade. The 55 ACP members of the WTO account collectively for just over 1% of global exports, and the 48 Least Developed Countries (LDCs) - 29 of which are WTO members - account for less than one half of a percent (1/2) of world exports.

The conundrum then is this: can decision making and rule making in the WTO be made to take account of and alleviate trade marginalization when influence and capacity within the WTO are themselves constrained by the very fact of that marginalization?

Twenty eight WTO members - primarily Island or Least Developed African, Caribbean and Pacific countries - maintain no resident missions in Geneva, while among the WTO’s more than one hundred developing country members, a significant number have very small missions with five or fewer representatives who cover WTO as well as other Agencies in Geneva, and political and economic activities elsewhere in Europe.  Western developed countries routinely maintain missions staffed by ten or more representatives, focused exclusively on WTO matters.

It should not be surprising that the broader and more complex the prospective negotiating agenda, the higher the level of apprehension that is therefore created amongst a significant proportion of the WTO’s developing country membership.

Institutional reform is on the agenda of the WTO as a means of addressing this concern. One salutary consequence of Seattle is that in Geneva serious efforts are now being made to improve internal transparency, to improve the consultative processes, and to seek to ensure inclusiveness in a meaningful way in decision-making. In short, there is an effort to move beyond the Green Room.

The challenge posed and the importance of this particular issue should not be underestimated. The WTO is no longer a small club of developed and middle level developing countries. By its own count, last year the WTO held over 700 formal and informal multilateral and plurilateral meetings, in a situation where, it must be emphasized, informal meetings are often as important or more important than formal ones.

It is difficult to involve all 139 members at all times in consultations, but the failure to do so poses risks that were evident in Seattle, and is, in any event, unacceptable given that WTO decisions and Agreements affect all members and are legally binding. No structural change has so far been made in the Organization. Although there is concern at the difficulty of taking decisions at meetings which involve the participation of all members, and although there have been proposals for establishing smaller executive or consultative bodies as part of the organizational structure, there has been little receptivity to these proposed innovations.

In fact most developing countries appear at this time disinclined to accept proposals that seek the establishment within the Organization of a small formal decision making (or even consultative) body. There is reluctance by many members to derogate to others decision-making authority, or even the making of inputs into decision-making, given the increasingly complex calculation of costs and benefits that attend WTO decisions and Agreements and, importantly, given their binding nature on national legislators and policy makers....A corollary of this reluctance is the insistence by major developed countries (and by many developing countries) on continuation of the practice of decision-making by consensus, even though the Agreement Establishing the WTO explicitly provides for the taking of decisions by vote.

Eschewing structural change, at least for the time being, increased internal transparency is therefore being sought primarily through procedural and attitudinal changes.... While commendable efforts have been made in these areas and some progress has been achieved there is a constant and quite evident tendency towards regression, and one must therefore regrettably lean towards the view that such tendencies might deepen should the negotiating agenda become more extensive and the pace of negotiations more hectic.

The issue of attitudinal and even possible structural change has thus been placed firmly on the WTO agenda in the post-Seattle period and will continue to engage attention. It is one of the keys to the future success... to the very institutional survival of the WTO. The WTO must provide full scope for effective participation and must respond to the concerns and needs of all members. It should be recognized, in this context, that it is not only in developed countries, but in developing countries as well, that important constituencies are emerging that are deeply concerned about the impact of WTO decisions on their economic and social welfare.

An unambiguous thrust towards inclusiveness and towards the conscious accommodation of the varied interests of its membership will strengthen the WTO, even if this may result in a slower pace of work. It will certainly require increased acknowledgement and acceptance of the need for flexibility in the Organization’s rules.

The second important area that needs change to facilitate effective and successful integration of developing countries into the global economy is the WTO’s rules. It is often stated that the WTO is a rules- based Organization. This proposition is sometimes advanced in the nature of emphasizing that the Organization is a value-free forum committed to formulating objective trade rules and to ensuring adherence thereto. An implicit and sometimes stated corollary, is that the WTO is a rule-making forum and not a development body.

This, at best, is sophistry. Throughout history the rules, whether at the level of institutions, nationally or globally, have in large measure reflected interests and the balance of interests. The WTO is no different. Indeed, it is sometimes said with a bit of exaggeration and a bit of black humour that the GATT/WTO processes have historically contained two distinct strands of Special and Differential Treatment; on the one hand S&D for developed countries, and on the other S&D for developing countries. The difference between these two strands is that S&D for developed countries is usually binding and implemented, such as was the Multi-Fibre Agreement, and such as is the current Peace Clause (in agriculture), while S&D for developing countries is usually non-binding and unimplemented, such as is the case of Part 1V of the GATT.

The Uruguay Round and its outcome served to deepen imbalances both because of the nature of the Agreements reached, as well as because of the broad scope of that Round. The importance developing countries attach to what are now called ‘Implementation issues’ is an effort to redress some of the imbalances and to stimulate collective recognition of and response to a number of their identified priorities and concerns.

Without being exhaustive, among some of the primary imbalances and asymmetries that are of concern to developing countries and which they consider should be addressed, one could point to the Agriculture Agreement and the Green and Blue box measures. The Green box measures covers government funded programmes for various services not targeted at particular products, as well as so-called decoupled income support (Annex II); the Blue box covers support linked to programmes to limit production (Article 6).

Developing country needs are not met by these exemptions which were obviously crafted to respond to the needs of major developed countries.  In the case of input and investment subsidies, for example, which are usually an important source of support to poor farmers in developing countries, their omission from the Green Box - even when they are made generally available - has meant that these support measures that are widely used in developing countries are not covered by the Peace Clause’s exemption from countervailing action during the implementation period. Instead, they have been made subject to the lesser protection of “due restraint” and the requirement that injury or the threat thereof be determined.

This imbalance is also evident in regard to the Special Safeguard Mechanism applicable under the Agriculture Agreement, which unlike normal safeguards can be triggered when import volumes rise above a certain level, or when prices fall below a specified level, without any need to demonstrate injury as in the case of the safeguards regime that is applicable to industry. The asymmetry in this is two fold. Firstly, this Special Safeguard Mechanism is applicable only to so-called 'tariffied’ products i.e. products regarding which quotas were transformed into tariffs at the end of the Uruguay Round, a process which was undertaken almost exclusively by developed countries for the simple reason that many developing countries had already removed quantitative restrictions under structural adjustment programmes; and secondly, the Special Safeguard Mechanism provides primarily to developed countries an easy to use trade remedy for agriculture, while no such remedy exists for the non-agricultural sector where developing countries’ emerging industries are often fragile and vulnerable to competitive pressures.

The Uruguay Round tightened significantly disciplines on the provision of domestic and export subsidies to the non-agricultural sector. Prior to the Uruguay Round, developing countries were not covered by the discipline on export subsidies to the industrial sector. The Uruguay Round Agreement on Subsidies and Countervailing Duties specified criteria for determining injury and prohibited outright for all countries the provision of subsidies linked to export performance. This effectively created a new situation for developing countries whereby the measures widely used by many developed countries for at least the last half of the twentieth century could no longer be utilized by countries that were in the process of development. Interestingly enough, this prohibition on export subsidies does not extend to agriculture, where the relevant Agreement requires not elimination but reduction in both the value of subsidies provided and the quantities of subsidized exports. Interestingly too, the potential benefit to be gained by developing countries from the provision of subsidies and other incentives linked to export performance appears to have been clearly recognized since, as provided in Annex VII of the Subsidies Agreement, developing countries with per capita incomes below US$1,000 are permitted to continue providing export subsidies. Any other conclusion would be perverse, for it can hardly be thought that if these subsidies are harmful to development, the very poorest would have been allowed to continue their use.

One of the elements of the Uruguay Round Agreements which developing countries are therefore seeking to modify is the list of countries covered by the exemption under Annex VII of the Agreement on Subsidies.  The objective is to make the list less restrictive so as to provide freedom to a larger number of developing countries to provide incentives linked to export performance.

In various other areas developing countries have voiced complaints regarding imbalances or inequities. The large textile and clothing producers of Asia, in particular, have continued to voice their concern at the out-turn of the first two stages of integration under the Agreement on Textiles and Clothing. They maintain that major importing developed countries have “backloaded” the integration of products, the result being that products of relatively little commercial interest to developing country exporters have been integrated in the first two stages. As is known, members are required to progressively bring all textile and clothing products under normal WTO rules in four stages, the first three stages to cover 51% of all products, and the final stage to cover 49% and to be implemented on 1st January 2005.  Some other areas of concern for developing countries in regard to the rules and implementation thereof include the asymmetrical treatment of capital and labour under the Services Agreement. Under the Agreement restrictions are not permitted on current and capital transactions necessary to the fulfilment of sectoral commitments, but there is no such mandatory requirement regarding the cross border movement of labour. This latter must be covered by specific commitments. Another area pertains to the Agreements on Sanitary and Phytosanitary Measures and Technical Barriers to Trade. Developing countries contend that there is unwillingness by developed countries to apply the “equivalence” principle to standards developed by them.

In regard to the Trade Related Aspects of Intellectual Property Agreement (TRIPS), a significant number of developing countries (and some developed ones) wish to see the higher level of protection mandated by the Uruguay Round for geographical indications relating to wines and spirits extended to other products. A number of the Uruguay Round Agreements, such as the Antidumping Agreement, the Subsidies and Countervailing Measures Agreement and the Safeguards Agreement, contain de-minimis provisions which establish value and quantity thresholds below which no trade remedy measures will be taken. The presumption is that at such levels there is little or no potential for trade distortion. Developing countries continue to advocate the raising of these thresholds. As a general comment in this context, it might be noted that countries which regard themselves as “small economies” make the point that because their trade shares are so small, their capacity to distort trade is negligible and this warrants additional flexibility in the rules.

Finally, developing countries maintain that although WTO/GATT Agreements and Decisions bristle with Special and Differential treatment provisions—the Secretariat has identified one hundred and forty five (145) of these—these are for the most part best endeavour clauses which remain unimplemented. Developing countries are insisting that the time has come to redress this situation.

A third area of concern is technical assistance and capacity-building.

The WTO, in institutional terms, is an outcome of the Uruguay Round.  The GATT was a contractual arrangement, the WTO is a full-blown institution. The WTO fully comprehends its new status in areas such as dispute settlement and the review of trade policies, but has failed to come to grips with that new status in one important area - technical assistance. The WTO’s regular budget for technical assistance in the current year (2000) is SF 740,000 or about $500, 000. This is intended to meet the needs of more than one hundred developing countries, many of which suffer from such severe institutional and administrative weaknesses that one of the primary areas in which they wish technical assistance is in the understanding of the WTO Agreements to which they are party. The WTO also receives contributions to its Global Trust Fund for technical assistance. In 1999, total expenditure on technical cooperation was Sf 6.05 million or US$4.0 million, of which 90% was provided from extra-budgetary sources—an inadequate and unpredictable source, particularly when it is recognized that technical assistance funds are used for activities for which planning and delivery can require significant lead time.  To put these figures into some perspective, as a result of the Uruguay Round, developing countries - as well as other member states - have been faced with the obligation to modernize legislation, train personnel, and establish administrative machinery and processes in order to ensure conformity with the requirements of a large number of Agreements. This is particularly the case in areas such as TRIPS, Antidumping, Safeguards and Customs Valuation. The meeting of these requirements is subject to time-lines agreed to in the Uruguay Round - so-called transition periods - time-lines which in many instances were decided without any input from many of the countries which must now meet these deadlines. A recent estimate by Japan suggests that the cost to APEC developing countries of implementing the Uruguay Round Agreements may be in the region of $6 million each. If this extrapolated, to the WTO’s developing country membership would mean that the price tag of legislative and administrative conformity to the Uruguay Round Agreements could be conservatively, for developing countries, well over $500 million.

The WTO invites its own public relations nightmare when it is insensitive to the fiscal and other burdens of conformity in a context of budgetary austerity in many countries and at a time when UNCTAD, as it did last year, reported that the average trade deficit of developing countries in the 1990’s was higher than in the 1970’s by almost three percentage points (3%) of Gross Domestic Product (GDP) and their average growth rate lower by nearly two percentage points (2%) per annum. The Marrakesh Agreement establishing the WTO was signed at mid-decade.

Quite apart from the paucity of resources for technical assistance, the question of the scope of technical assistance is a relevant issue.  Should the WTO confine itself to providing technical assistance that allows countries to bring laws and regulations into conformity with, and to otherwise implement WTO Agreements, or should the scope of technical assistance be wider - addressing, for example, the supply side weaknesses that prevent some developing countries from taking advantage of negotiated market access openings.

A narrow view of the role of technical assistance, as well as the low level of funding, may be consequences of the ingrained view amongst some leading developed partners that the WTO is a rule-making and not a development Organization. The danger - as always - in taking the narrow view is that we miss the forest for the trees since, as we saw in Seattle, the WTO is unlikely to be able to make rules at all in circumstances where a significant proportion of the Organization’s membership view it as uncomprehending of their fundamental needs.

What are the Perspectives for a New Round?

There have been eight (8) multilateral negotiating Rounds so far, seven (7) under the auspices of the old GATT, and the eighth being, of course, the Uruguay Round which brought the WTO into being. Even those who do not believe in historical inevitability seem to believe that because there was an eighth, there must of necessity be a ninth Round.

There is, however, no iron law of Rounds. The next Round, if it is intended that it be a truly multilateral Round, will be exceedingly difficult to launch. Those who believe that the main impediments are the matter of election timetables in major industrial countries are dead wrong. It is likely in fact that they may have missed the significance of events in Seattle.

There are three lessons from Seattle. The first is that the failure of Seattle was predictable. Why this is important is that events which can be foreseen are usually open to intervention and to prevention. This is exceedingly important for the future. The second is that scope, substance and process were at the core of the deadlock - not one nor the other, but all three. The third lesson is that Seattle was not an aberration nor a single, unique event. Rather it was part of a process that has been in train for several years - a process characterized by institutional tardiness in adjusting to an increasing and diverse membership and to the desire of all members to be more meaningfully involved, this growing interest in large measure being driven by the broadened agenda and the demonstrated impact of WTO decisions. In this particular sense, Seattle, interestingly enough, was merely the still-born child of the Uruguay Round.

The Uruguay Round was a decisive break from previous Rounds. It introduced new issues - services, trade related intellectual property rights (TRIPS) and investment measures (TRIMs). Importantly too, it introduced the notion of the ‘single undertaking’, that is, the applicability of all Agreements to all parties - thus eliminating so called ‘free ridership’ and ‘cherry picking’ by members amongst Agreements - practices which in the past had at least the merit of allowing some taking account of individual circumstance. And, finally, the Uruguay Round Agreements were made both legally binding and enforceable through strengthened dispute settlement procedures under the umbrella of a new Organization which would oversee both the Agreements in Goods and Services.

Many of these innovations were introduced toward the end of the Uruguay Round and were not part of the original terms of reference agreed to in Punta del Este, where the Round was launched, nor were they agreed to in the first preliminary months of the Round during which negotiating guidelines and objectives were set. The fact is that many developing countries were blind-sided by these new institutional proposals in the penultimate stages of the Uruguay Round as their limited number of representatives scurried around the corridors in Geneva trying to keep track of developments in fifteen (15) negotiating groups.

The impact of the decisions taken in the Uruguay Round - which are binding on all members without exception (except for time-phased and a few differential obligations) - has been coursing heavily though the legislative and policy processes in many developing countries in the five years since the signing of the WTO Agreements in Marrakesh in 1995. Domestic constituencies in these countries have become increasingly aware of the adjustment costs such as, for example, to vulnerable domestic industry and to agriculture, particularly to small farmers. The productive sectors in many developing countries as well as public opinion in general have become increasingly aware of the imbalances in the Agreements - some of which were outlined earlier— and of the burdensome nature of many of the obligations which developing countries must assume, even though in areas such as subsidies, intellectual property rights and trade related investment measures, the measures now prohibited or disciplined were utilized freely by developed countries during the process of their own development.

For e.g., some developed countries did not introduce product patent protection until relatively recently 1995 and 1996 in the cases of Finland and Iceland, respectively. And in an area such as Agriculture, the special safeguard mechanism, decoupled income support and continued permissibility of export subsidization (though at reduced levels) have protected the interests of major groups of developed countries in the post-Uruguay Round period. It is against this background that the call for a new Round will have struck a large number of developing countries as ill-timed, and the efforts to widen the scope of the proposed Round - and thus the potential range of obligations to be assumed - a misjudgment.

We need not deliberate too much on the positions taken regarding a new Round and its proposed elements. As is known, there were differences of opinion amongst major players. But there were also important points of convergence. Both the United States and the European Union sought to further empower the WTO through the inclusion of new areas such as core labour standards, environment and trade facilitation. The EU, which has continued to emphasize the importance of a comprehensive Round so as to facilitate trade-offs and a balanced outcome, sought to include investment and competition policy, but failed in this to win support from the United States, which was apparently concerned that inclusion of these issues would cause the new Round to drag on beyond three years (the desired termination date for the United States). Government procurement was another ‘ new’ issue on which the United States placed high priority - new in the sense of seeking to “multilateralize” the existing Agreement which is of limited membership and a carry over from the old GATT. As is well known, in addition to some differences on the new issues, there were also substantive differences among the major players on the old issues.

The USA allied itself with the Cairns Group to seek the elimination of export subsidies, and the EU, though not a demandeur, joined with Japan and members of the ASEAN Group to identify anti-dumping rules for inclusion, in contrast to the United States which did not see this issue finding a place on the negotiating agenda. Amongst the developing countries, leading exporters, such as Mexico, Chile and some ASEAN countries, stressed the importance of having ambitious negotiations on market access in the new Round - negotiations that should address areas of concern to developing countries, such as the prevalence of tariff peaks and tariff escalation.

While there is a strong body of common opinion there is no homogenous developing country position either in regard to a new Round or what should be its constituent elements. A number of Latin American countries have appeared willing to accept some of the new issues, such as investment, but with labour standards universally excepted. Asia has appeared on the whole to be much less sanguine about the inclusion of any new issues and has emphasized the importance of textiles and other implementation issues as prior concerns to be addressed.

Developing country members of the Cairns group have appeared to be particularly concerned that a new Round and new issues should not be embarked on at the expense of the Built-in Agenda on services and agriculture.

Given the out-turn and consequences of the Uruguay Round , and given both the heightened level of awareness and significantly improved levels of preparation amongst developing countries, it should not be surprising that a large number of countries from Africa and from Latin America and the Caribbean were unwilling to accept non- transparent procedures in Seattle or to be passive decision-takers. It is important that the strength, vigour and implication of this position be not missed nor underestimated. It is particularly easy to do so because of the fact that there were many contributing elements to the mix that created failure in Seattle. These range from the deficiencies in the preparatory process, to inadequate organizational arrangements, through less than adroit directing of the Ministerial meeting, to differences on substance among major players and, finally, the street protests by civil society. To address such issues will help the cause of a new Round - but will not answer the fundamental question that many developing countries will ask, which is “In the light of the experience of the old Round, what do we have to gain from agreeing to a new one?” In this context, the important point is that, unlike the situation previously, developing countries will have to agree, and this not through the ex-post facto ratification of decisions already taken, but as a partner in the process.

Since Seattle, the WTO has rightly been engaged in a process which the Director General and others have described as “confidence building”— including efforts at improving internal transparency and making the decision making process more inclusive; providing improved market access for LDCs; strengthened technical assistance and capacity building; extension of the transition periods; and addressing a large number of ‘implementation issues’, some of which were proposed by developing countries for immediate action at Seattle, and all of which are considered by developing countries to be representative either of imbalances in the WTO Agreements or of areas of inaction by developed countries in favour of developing countries. There has been some - though inadequate - progress in almost all of these areas.

In the area of market access for LDC members, the QUAD (EC, Canada, Japan, United States) have agreed to implement tariff free and quota free treatment for essentially all goods originating in LDCs, and to do so consistent with their international agreements. These significant qualifications will almost certainly result in the exclusion of exports from sectors such as agriculture and textile and clothing. The more recent ‘Everything But Arms’ proposal by the EC would, if approved and implemented, provide duty free, quota free access to all products from LDCs, except for arms and munitions. Market access for a number of sensitive products - sugar, rice and bananas - would be phased in over three years.

In regard to transition periods, the membership continues to address these on a case by case basis rather than through across the board extensions as a significant number of developing country members would prefer. Even though in the aftermath of Seattle, members were urged by way of a statement from the then Chairman of the General Council to exercise “due restraint” in regard to the expiration of transition periods, both the US and the EC have recently requested the establishment of panels over complaints relating to the alleged maintenance of trade-related investment measures (TRIMS) in the automotive sector by the Philippines and India, respectively. Finally, on the question of implementation issues, the General Council, at its meeting in mid- October, invited the Chairman and the Director General to continue ongoing consultations on those issues that were identified by developing countries for immediate action at Seattle, and to report to members by mid-December. The consultations will also proceed on implementation issues other than those that were envisaged for immediate action with a view to identifying ways to resolve them.

At this point, a fair assessment is that the confidence building exercise is a slow and difficult process of uncertain outcome. Also of great relevance will be the nature of the progress achieved in the current negotiations on the ‘built in agenda’ - services and agriculture - and in the various mandated reviews. The agreed timetable calls for stocktaking of progress in the agriculture and services negotiations to be carried out by 2001 March. A satisfactory level of progress in these as well as in the other areas cited, will be critical to ‘confidence building’ and to the willingness of many developing countries to consider engaging in a new Round of multilateral trade negotiations.

The scope of the proposed Round will remain of considerable importance.  It should be recognized that the use of the prefix ‘trade-related’ as the umbrella under which to usher a plethora of new issues into the WTO will only serve to make agreement on a new Round more difficult. In the final analysis a large number of issues can be held to be trade-related. These range from monetary and fiscal policy, through physical infrastructure, to population policy. Many developing countries are not persuaded that the issues developed countries seek selectively to bring under the WTO’s purview are not merely those which respond to the agitation of certain domestic constituencies, or issues which respond, often narrowly, to their specific policy or trade interests. There is genuine concern that any disciplines agreed in the WTO will be misused for protectionist purposes and genuine fear that the ‘trade-related’ slope will be a slippery one with far-reaching implications for the next Round and any that should follow. A dominant concern is that this approach will lead the WTO further away from its core business and down the path of a continuously expanding agenda with all that entails in terms of new obligations for developing countries.

One consequence of an expansive agenda is that the number of potential ‘flashpoints’ will increase as these new issues bring highly motivated and interested constituencies and increase anxieties amongst some member states regarding the appropriateness of the forum and the costs and benefits that attend engagement on these new areas within the context of the WTO. Remaining focused on its core business will be more staid, in the vernacular of the day, less-sexy, but this is also less likely to embroil the Organization in constant controversy or entrap it in stalemate which, as we have seen in recent months, can be counter-productive. There is a strong case to be made for ensuring the continued strength and effectiveness of the WTO through a focus on the narrower but more broadly acceptable core areas regarding which there is general agreement that the institution’s binding disciplines should apply.

In sum, the most predictable path to a new Round would appear to lie both in raising confidence levels and in reducing negotiating ambitions. On this basis, it might also be reasonably concluded that a new Round does not lie in the very near future.

(* The above is based on a presentation by Mr. Ransford Smith, Ambassador of Jamaica to the UNOG and WTO, at the 10th annual Transatlantic Seminar on Trade and Investment, held in Washington DC on 2 November 2000)

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