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FROM SWANS ON LAKE GENEVA TO SUPER-TANKER ON HIGH SEAS!

by Chakravarthi Raghavan


Geneva, 8 Feb 2000 -- The General Council of the World Trade Organization agreed Monday on an organizational framework for the launch and conduct in the concerned WTO bodies of the mandated negotiations in agriculture and services and the mandated reviews of the various Uruguay Round multilateral trade agreements.

There was also a consensus that the mandated reviews including that of the Agreements on Trade-related Intellectual Property Rights (TRIPS) and Trade-related Investment Measures (TRIMS) should take into account their impact on the trade and development prospects of members.

The General Council also agreed that consultations are to continue on taking up and handling of the implementation issues, including the more urgent of these, namely agreements where transition periods have expired, as also plan of action for least developed countries and the related technical cooperation activities for the LDCs and other developing countries.

The Chairman of the General Council and the Director-General are also to continue consultations on the issue of internal transparency and decision-making at the WTO.

In some concluding remarks on the discussions, the chairman, Amb. Ali Mchumo of Tanzania took note with encouragement that issues identified by the DG in his report -- Measures favouring LDCs, technical cooperation, transition periods and other implementation issues, internal transparency sand effective participation of all Members -- were widely considered to be priorities for further consultations.

He had also noted the high importance Members had placed on addressing the range of implementation issues in an effective way. This issue should be an item on the agenda of the next General Council meeting.

In this light, and bearing in mind all the additional points made by delegations, Mchumo suggested that the Council take note of the DG's statements and other statements, and agree to further consultations by the Chairman of the General Council and the Director-General.

At a press briefing Monday evening, WTO Director-General Mike Moore said the WTO was back in business, the membership was very united and constructive and with tremendous amount of goodwill.

Moore in a press release 26 January had spoken that the WTO this year functions in a business-like way, adopting in the first few months of the year "the posture of the swan - serene on the top of water and paddling furiously under water." And on Monday, he said, the WTO was like a super-tanker which takes a lot of time turning around!

Perhaps the reality could best be described in terms of WTO membership attempting to put the Seattle divisions and debacle behind and present a picture of "back in business", but with the divisions and differences very much there and not narrowed, but lurking in the shadows.

It was clear that a large number of issues and questions raised under the 'implementation' issues during the preparatory process are very much on the minds of the developing countries, and are not going to go away but need to be addressed and resolved through the General Council.

Several of the leading developing countries pushing this issue, while making clear that they were not establishing a formal and procedural link or parity in progress on these questions with progress in the mandated negotiations and reviews, made clear there was one.

Pakistan at the informal council meeting last week had repeatedly made this point, and in an address to the Geneva diplomatic club last month, Pakistan's Ambassador Munir Akram made it forcefully and distributed his statement to WTO members. Pakistan also drew pointed attention Monday to the mandate to the General Council on this question coming out of para 9 of the Geneva Ministerial Declaration.

On Monday, India's Amb. S. Narayanan in a statement (made available outside to the media) at the formal General Council meeting said: "It should be appreciated that the WTO is an integral whole, and what it does or does not do in one area of work assigned to it will definitely be viewed against the backdrop of what it does or does not do in other areas of work assigned to it. It is therefore essential for all of us to ensure that we make meaningful progress in all areas namely, implementation, mandated negotiations and mandated reviews so that the final outcome is satisfactory to the entire membership. The political linkages that are inevitably made in such situations are a reality and we should be sensitive to this. Therefore, we have to be conscious of not only the need for parity between agriculture and services negotiations, but also the need for parity between implementation, mandated negotiations and mandated reviews, not in the narrow political sense but in the larger political sense."

And most developing country speakers at the Council under the agenda items about the Follow-up to the Seattle Ministerial Conference and the Other Aspects of the WTO Work Programme, commended the statement of the WTO Director-General last week (about his consultations) that while there was an urgency under implementation questions about the transition periods issue -- of agreements where the transition periods ended on 1 January 2000 under TRIPS, TRIMS, Customs Valuation and Subsidies agreements -- there was a need to revert to other implementation-related issues in due course.

This issue is to be put on the agenda of the General Council for its next meeting, scheduled for 3 May, though one may be held earlier. Malaysia in fact suggested that this issue should figure regularly on the agenda of future General Council meetings.

On the transition period question, the US, EC, Japan and Switzerland continued to talk about a case-by-case approach and decision, a view that surprisingly was also voiced by Indonesia.

Indonesia and a number of other developing countries have sought extension of time for TRIMS in respect of the automobile industry. The Indonesian view was picked up warmly by Switzerland, EC and Japan, as also the US. The US Ambassador Rita Hayes told the media outside that the US had been holding bilateral consultations and one had to look for practical solutions.

However, most other developing countries, whether of the Like-Minded-Group or others including Brazil, Jamaica and others, did not agree to this approach, likely to lead to bilateral pressures and demands for other concessions, and insisted on a multilateral approach.

Brazil's Amb Celso Amorim said that solutions to the transition periods issue must be truly multilateral and equitable. Amorim explained outside that while Brazil wanted to focus on the TRIMS agreement, other countries wanted to focus on other agreements too.

India said that a case-by-case approach, where Members were expected to hold bilateral consultations, lacked transparency and predictability and make the member seeking extension susceptible to unnecessary and unfair demands as a precondition for extension of transition period. India was happy that the Moore in his statement had spoken of need for finding "practical solutions to individual Members transition problems within the multilateral framework."

One developing country ambassador said that if there is to be a case by case approach for extension of TRIMs and TRIPS, they could in turn insist on a case-by-case approach for the extension of the provisions of the subsidies agreement such as on non-actionable subsidies provided by industrialized countries (at various levels of governments) including so-called development of backward regions.

Developing country delegations, in individual statements at the Council brought up the issues they had raised before Seattle under the rubric of 'implementation' and underscoring their continued preoccupation with it as also the difficulties they would have in shouldering new obligations.

Japan, Korea and the EC, among some of the industrialized countries, brought up the issue of a comprehensive round, including investment and competition policy issues, but it was clear from the comments of others there was now even less support for this among developing countries than before Seattle.

Moore at his press conference seemed to admit that Ministers would not want to be faced, as at Seattle, with such large divisions and disagreements, and until these are resolved, there could be no early ministerial meeting.

But Moore, like the EC or Japan, and some of the free trade theorists of the North, continued to talk of possible trade offs and benefits for everyone in a comprehensive round. None of them have so far been able to explain why this could take place now when the Uruguay Round with so many subjects on the agenda has resulted in few benefits and trade-offs for the developing countries, and many of them now complaining that they have been let down and there should be redressal.

Pakistan, India and a number of other developing countries, supported by the United States, said the mandated reviews should take into account the impact of the agreement concerned on the trade and development prospects of developing countries.

A number of countries also spoke on the issues of internal transparency and decision-making, but underscored that Seattle had failed not because of these shortcomings of procedures and process, but differences on major substantive issues.

As India put it, the whole issue related to internal transparency within the organization, and was one for the Members to deal with, and by inviting contributions from Members -- and not through "some outside persons, however eminent they may be."

While it was clear that the members have a nuanced approach to this issue, most developing countries were equally clear that they did not want a process of groups being represented by one or more countries, and leading to legitimisation of the present process and subverting the consensus decision-making.

One developing country ambassador said while those now represented or participant in the 'green room' process were not too unhappy, and while the Director-General and others were speaking of need to deal with the transparency issue, even now (after Seattle) there was no transparency in such simple questions of who should chair which WTO Body. Norway's Amb. Kare Bryn has been named the Chairman of the General Council (on the basis that of the three candidates - Norway, Australia and Hungary - he commanded consensus.But it was not clear who consulted whom and arrived at the consensus).

After taking over the chairmanship from Mchumo, Kare Bryn of Norway said the WTO was entering a phase where "preservation and consolidation of the WTO system" should have priority. The tasks were both of a house-keeping nature and need to ensure that all Members benefited from the system. This prioritisation was a pre-requisite not only for preventing backsliding and erosion of the system, but for making it possible to renew efforts to launch a new round of trade negotiations. The systemic consolidation and a new round were not necessarily sequential in character, but the first priority must be "to putting our house in order." (SUNS4602)

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

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