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WTO STARTS WORK ON IMPLEMENTATION ISSUES

by Chakravarthi Raghavan

Geneva, 23 June 2000 -- The General Council of the World Trade Organization, meeting in Special Session approved Thursday a work programme and a calendar of work in the coming months to address the implementation issues and concerns, particularly those raised during preparations for the 3rd Ministerial Conference in Seattle.

The Chairman of the General Council, Mr. Kare Bryn of Norway described it as an 'action and result-oriented' process to assess the existing difficulties, identify ways to resolve them and take decisions for appropriate actions.

In a statement to the General Council, Bryn stressed that the work programme and process was without prejudice to the substantive positions of delegations. The draft programme would not pre-determine the outcome and the process would remain an action oriented one.

The brief debate that followed showed a general divide between the industrialized and developing countries on what 'implementation' issues cover or mean, and with some industrialized countries (Japan, Canada, Switzerland and Norway) viewing the exercise as one to enable the launching of a new round.

Several of the developing countries took the position that the exercise was part of the confidence building measures, and without prejudice to the views of either side on these questions.

After the opening statements, the General Council took up (in the order of the Marrakesh Final Act) the various issues put forward by the developing countries as requiring immediate decisions in terms of the Balance-of-Payments provisions in Article XVIII:B of GATT 1994, the Agreement on Agriculture, the Agreement on Sanitary and Phytosanitary Measures and the Agreement on Textiles and Clothing.

The Council will hold another meeting on 3 July to continue to consider these questions.

In terms of the organization of work and indicative schedules, the Council agreed to hold

* the First special session on 22 June and continuing on 3 July as necessary,

 - to adopt a programme and calendar of work,

 - to provide an opportunity for identifying activities under way that may be of relevance by addressing implementation concerns; and

 - discuss implementation-related issues and concerns, especially those reflected in para 21 of the draft Ministerial text of 19 October (Job(99)/5868/Rev.1).

-- issues that were identified by developing countries as needing decisions at the Seattle Ministerial.

* the General Council chair and the Director-General (DG) are to hold consultations to identify ways needed to resolve them, with the consultations held in a 'transparent manner', and to report on the results sufficiently in advance of the second Special Session to be held in October

* The second Special Session, October 18-19, is to begin by acting on the results of the discussions. Thereafter it is to address other proposals on implementation, especially those listed in para 22 of the 19 October draft Ministerial text, as well as others in the compilation of proposals in the document of 18 November 1999 (that was sent to the Seattle meeting).

* In addressing these questions, the General Council may refer matters to other WTO bodies with specific mandates and time-frames as necessary, and identify and address any technical assistance needs.

In the run-up to Seattle, developing countries, individually and in groups, had put forward a number of their concerns and proposals, and these were identified and included in paras 21 and 22 of the 19 October draft text for a Ministerial Declaration that the Chairman (Amb. Ali Mchumo of Tanzania) had put forward and was before the Seattle meeting.

Since then, after some considerable back and forth movement, the General Council in May agreed on a process to address these as part of "confidence-building" measures, and decided that these should be considered at Special Sessions of the General Council which would assess existing difficulties, identify ways to resolve them and take decisions for appropriate action. In this work, it was also decided, the General Council might direct other WTO bodies to provide appropriate inputs and take appropriate actions.

The programme envisages addressing issues and questions, identified in para 21 of the 19 October 1999 text of the General Council Chairman under various agreements needing immediate action, and then take up at the Second Session on October the issues identified in para 22 of the Chairman's text.

Chairman Kare Bryn told the General Council before the adoption of the programme and calendar of work that the text would not prejudice any Member's substantive position, would help initiate the process and not pre-determine its outcome. It was definitely an action and result-oriented process and committed the General Council to assess existing difficulties, identify ways to resolve them and take decisions for appropriate action.

In statements at the beginning of the process, that a trade official described as 'political', the US favoured 'full and faithful implementation' -- code words for developing countries carrying out all obligations undertaken at Marrakesh and in time. It envisaged technical assistance being provided for this purpose, but said technical assistance was not a panacea.

Japan, Canada, Switzerland and Norway viewed the implementation issue and discussions as opening the way for the launching of a new round.

Developing countries in their statements insisted that there was a lot more to implementation than technical assistance. The implementation issues related to the fact that the Marrakesh agreement had not delivered the promised benefits to the developing world. The developing co untries had not gained in terms of market access in sectors of interest to them - such as agriculture and textiles. There were imbalances in terms of rights and obligations, and the failure to observe and make operational the Special and Differential treatment provisions of various agreements.

Morocco, speaking for the African group, said that many of the countries, particularly the LDCs among them, did not have the resources to go through each agreement and find out whether they had implementation problems or not. The secretariat should assist them in identifying the problems and issues.

The EC was willing to examine any request, and any issue on the table in the context of implementation and hoped to play a full and positive part in the consultations to be conducted by the Chairman and the DG.

Japan said it was approaching the exercise for confidence-building, in the belief that this would lead to a "broad-based" (code-word for investment and other issues) new round being launched sometime soon. It referred to the Geneva Ministerial declaration view about 'full and faithful' implementation and hinted at assistance to developing countries to faithfully implement the agreements. Japan cautioned against any revision or amendments in agreements already concluded, and argued these could only be considered in the context of a new round. It was however willing to listen to implementation concerns.

Brazil stressed the importance of looking at 'transition issues' and the need to observe 'due restraint' by all Members if confidence-building was to occur.

Poland said that while implementation problems could be look at, the objective of launching a new round should not be lost sight of.

The United States said that the implementation issues concerned everyone and supported the Moroccan plea on behalf of Africa for WTO secretariat support. It was also providing bilateral support to countries for implementation. The lack of an outcome at Seattle, in the US view, had changed the context. But the exercise did not prejudice the rights of members on the negotiating format nor prejudice rights and obligations of members in the WTO.

The Dominican Republic, also speaking for El Salvador, Bolivia, Honduras, Nicaragua, Panama and Guatemala said that the implementation issue was an important one for them. They supported Brazil's statement about transition issues and confidence-building and thanked the US for its positive statement. They however stressed the deadline of the 4th ministerial conference for resolving the implementation issues.

Canada welcomed the exercise and hoped it would lead to the launch of a new round. While it was ready to listen and engage fully in this exercise, the list of issues raised was extensive and in some cases would require reopening of agreements. This could only be done in a new Round, though it would not rule out some progress in other areas in the short-term.

Pakistan said this was an action-oriented exercise aimed at decisions for appropriate action and hoped tangible progress would be made. Egypt hoped that the issues being raised would be addressed meaningfully and in a timely manner.

India said that the exercise should be seen in the background of the General Council decision of 3 May and the Chairman's statement. As for the views of some on the launch of a new round fairly quickly, India said that the exercise about implementation was without prejudice to the position of delegations on the new round. Others should appreciate India's position on this. The exercise must be led, directed and controlled by the General Council - while keeping an appropriate role for subordinate bodies. India also hoped that decisions would be taken as the Council went along in the consideration of issues. Everything should not be left to the last. In India's view, the failure at Seattle meant a 10 month delay in the consideration and decisions on implementation and these issues should be addressed without further delay.

Hong Kong China, while agreeing with those who felt that there was no link between the implementation exercise and work elsewhere, nevertheless agreed that the work in the exercise would affect the atmosphere on other work at the WTO.

Costa Rica adopted the line of Japan, Canada and others who argued for the launch of a new round as early as possible. New Zealand sought information from the secretariat to assess the relative weight of the different issues, and for a short and long-term perspective.

Switzerland, like Japan, argued for 'full and faithful' implementation and stressed technical assistance, and hoped the process would lead to the launch of a new round.

Malaysia was generally unhappy with the latest draft for the work programme but nevertheless had joined in the consensus. The exercise should be approached by members in good faith and there would be no prejudice to those that felt issues could be only addressed as part of a new round.

The Philippines hoped the exercise would lead to tangible results. If not there would be a crisis of confidence, while Thailand stressed the need to find solutions to issues. Indonesia wanted the issues to be classified into procedural, legal and technical categories, and hoped the Chair and the DG would consult on how to advance the process.

Indonesia felt that implementation issues should be addressed before any initiative to launch a new round could be considered.

Singapore wanted a realistic and pragmatic approach, with a role for subsidiary bodies, and not linked to other initiatives aimed at launching of a new round.

The General Council then took up various agreements in the order listed in the Marrakesh Final Act.

On the issue of Article XVIII of GATT 1994 (the BOP provisions), India said that the invoking of the Article by developing countries should not be made more onerous than of invoking Art. XII (applicable to industrialized countries). India was not raising the issue in terms of its BOP situation, but as a systemic issue in the wake of the panel and Appellate Body views about the footnote to the BOP Understanding and that to the Regional Agreements. The judicial organs were taking over the rights of the legislative organs - in judging whether the BOP plea for example was justified or not. While the panel in the Turkey case, and in the Brazilian subsidy case, made clear that the substantive political questions involved must be judged by the appropriate WTO body, the Appellate Body seemed to have kept the issue open. If the panels and the Appellate Body were to take this position, they would be faced with a situation where the EC's Customs Union (which had not been approved by any WTO/GATT body) could be challenged through a panel.

The Indian view was supported by Malaysia, the Philippines and St.Lucia while Hong Kong China insisted on the right of panels to judge these issues, and not merely measures or actions. But Hungary supported the Indian view that the panels and the Appellate Body were usurping the powers of the WTO bodies and issues of regional agreements or BOP should be left to the determination of the WTO bodies.

On agriculture, Pakistan said there was no level playing field under the agreement. It focused in this connection to the issue of tariff quotas and the discriminatory way they were applied and the various imbalances. Unless these were remedied, said Pakistan, it could not agree to a new round. A number of other developing countries including Costa Rica, Bolivia and Egypt supported Pakistan.

In supporting the position, India said the mandated negotiations on agriculture had been launched and they were all committed to it. But there were a number of implementation issues that needed to be tackled without reference to the course of further negotiations.

India referred in this connection to the reference prices used for imports, and the asymmetry and lack of market access caused by the way prices were calculated in local currencies, and particularly when there had been strong devaluations.

On the Sanitary and Phytosanitary agreement, developing countries said they needed adequate time to implement measures when put in place and the Special & Differential provisions of the agreement should be made operational.

While some of the discussions turned to technical matters, and this was cited as a reason why it should be dealt with in the Committee on Sanitary and Phyto-Sanitary measures, India pointed that these issues had been before that committee for five years and nothing had been done. Developing countries were not part of the process in setting the international standards, and even if they were present they were not there in a meaningful way.- SUNS 4694

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

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