Prominent Speakers Criticise "New Issues" at official WTO Symposium
by Cecilia Oh
The World Trade Organisation held a public symposium on "The Doha Development Agenda and Beyond" in Geneva on 29 April to 1 May. It was intended as a forum for debate and dialogue between the WTO and the public; namely, representatives of civil society, academia, the business community, parliamentarians and the media, who were described by WTO Director General Mike Moore as the "end users" of the multilateral trading system.
The most interesting session of the symposium must have been the opening session. If one had to pick a theme that arose from the presentations during this session, it would have been "No New Issues for the Doha Development Agenda."
Former Mexican President Ernesto Zedillo, free trade economist Jagdish Bhagwati, China's WTO permanent representative Ambassador Sun Zhenyu and two NGO leaders (Jeremy Hobbs of Oxfam International and Tony Juniper of Friends of the Earth International) spoke out against the inclusion of investment, competition and other proposed new issues in the WTO's negotiating agenda. Zedillo even warned about the danger of the whole process "imploding", whilst Bhagwati cautioned about the trade system falling into disrepute
It must have been discomfiting for the WTO Director-General that so many of the first panel's speakers opposed the "new issues", given that he himself has been vigorously campaigning for investment and competition to be brought under the WTO's wings through negotiations for new treaties.
Mike Moore, in his introductory remarks, had said he expected tough debates during the symposium on issues such as whether or not the WTO needed investment and competition rules. But there did not seem much disagreement on this point with the panel of speakers. Five of the six speakers made it clear that they did not support the inclusion of new issues in the WTO.
Jeremy Hobbs of Oxfam International first clarified that Oxfam's recently-launched trade campaign is against the way rich countries and the institutions under their control - IMF, World Bank and the WTO - have rigged the rules of international trade to suit their interests. He wanted to dispel the notion that Oxfam has been "born again as a cheerleader for free trade".
He called it an "upside down world", where rich countries preached the gospel of free trade that they were unwilling to practice themselves. Another feature of this "topsy-turvy" world is the fact that in the so-called "development round", developing countries were now being asked to take on new issues that will benefit rich economies and TNCs, in return for progress on things they were promised 10 years ago.
"Developed countries are pushing developing countries into multilateral rules on investment and competition which they don't need and cannot afford", Hobbs said. He added that there was no evidence of increased investment flows as a result of the bilateral investment treaties entered into. "But there is little doubt that rules on the model or NAFTA or the MAI (multilateral agreement on investment) put governments at risk of losing millions of dollars whenever they try to exercise their legitimate right to regulate the activities of foreign investors to minimise environmental costs or respect labour rights."
The second speaker, Ernesto Zedillo, the former President of Mexico, hailed the Doha agenda as a renaissance of multilateralism, and noted that this new multilateralism has, as its central issue, the development of developing countries and least-developed countries. However, he pointed to signs of trouble, emanating from US, in the form of the fast track legislation and the steel safeguards decision. These, he said would "reverse the good that was achieved at Doha". He also criticized the recent US farm bill, which increases subsidies for US farmers. "It is a contradiction for the US to do this at the moment when agriculture is to be negotiated seriously", he said.
He also had criticism for the Doha mandate on investment, competition and environment. Zedillo questioned "whether it is wise to condition the success of the other issues on the success of the new issues". He said that the new issues pose a problem for the Doha development agenda. He was concerned that there would not be full consensus to negotiate the new issues by the 5th Ministerial Conference. "There must be a formula to solving these issues before the 5th ministerial conference. Otherwise, the whole process will implode", he warned.
Ambassador Sun Zhenyu, in his address as China's Ambassador to the WTO, talked about China's role as a new Member of the WTO, and outlined the measures taken to implement its obligations. China, he said, as a responsible member shall abide by the WTO rules, but he asked for understanding and sympathy from other members because "while China is opening its market, the domestic industries and agriculture are facing great pressure from foreign products flowing into China, especially the agricultural products heavily subsidized by the rich countries".
He also criticized the US steel safeguard measures, stating that Chinese steel export has been seriously affected b the measures. "China's domestic steel market is under serious threat of diverted steel exports", he said, adding that Chinese steel import in the first quarter of 2002 increased by 17.5% to 4.9 million tons, while exports dropped 33.9% to 1.2 million tons.
He said that implementation of the trade rules is not only with China, "it involves all members of the WTO and particularly the developed members. Their thorough implementation of the obligations under the agreements of the Uruguay Round would set a good example for others to follow".
He pointed to the disparities between developed and developing countries in securing benefits of trade liberalization. "The interests and requests of the developing members have not been adequately taken into consideration and ensured for a long time. This phenomenon is of course, unequal and unfair ... It is high time to change this situation", he said. "Nobody would like to see a development round in name only. What we want to see is a development round in real terms."
When asked for his final comments on the presentations, Ambassador Sun said he shared the concerns expressed by other panel speakers on the new issues. He said that there were too many subjects for the next round. He said, "The WTO is trying to do too much and to achieve too much. The more subjects we have the more difficult the task. I doubt if we can make the deadline. We'll have to consider this seriously to make the new round a successful one".
Prof Jagdish Bhagwati of Columbia University, introduced by Mike Moore as "the renowned economist who has done much to propound the benefits of an open multilateral trading system that the WTO", cautioned against entering into bilateral agreements. He said that agreements between hegemonic powers such as the US or EU and smaller, weaker countries would be "disastrous". He called for the ban on such bilaterals, although he added that there could be bilateral agreements between poor or developing countries.
Prof Bhagwati also warned against the inclusion of the new issues in the WTO. He said that the WTO would do well to deal with the problem of the new issues. Otherwise, he said, "the multilateral system will be in disrepute". Prof Bhagwati cited the example of the TRIPS Agreement and the controversy surrounding the agreement, which he has publicly called to be taken out of the WTO.
For Tony Juniper, Friends of the Earth International, the Doha agenda was an expansion of WTO discipline into investment, competition policy and government procurement, and trade facilitation, where "impacts on people and the environment especially in developing and least-developed countries have been, and might be more, negative than positive". FOEI was of the position that such expansion is not necessary and would only "serve to skew the global trading systems even more in favour of the 'haves' and even more against the 'have nots'".
The next day, in a workshop session on "New Issues in the Trading System", discussions on the new issues of investment and competition raised a number of questions on how WTO agreements in these areas would adversely affect the developing countries. The moderator of the workshop, Richard Eglin from the WTO Secretariat, intervened to say that he thought the key question should be whether developing countries would be in a better position negotiating investment agreements in a bilateral situation or in a multilateral context.
The Chilean Ambassador to the WTO intervened from the floor to say that since developing countries were weaker, it would better to have investment agreement in the WTO. He said that the great majority of the bilateral investment agreements are intended to protect the investment made, but did not guarantee access. "It is important to envisage an agreement where we can gain access, and also have the implementation of the principles of non-discrimination and transparency", he said.
He further added that there is an added value to the negotiations on investment in the WTO; namely as a trade-off in the agriculture negotiations, to encourage movement in agriculture by EC, in particular.
Konrad von Moltke, one of the presenters in the workshop replied that a deal on investment in return for agriculture is a possibility but warned that, "unless we know more about the costs of an investment agreement, it is a hazardous deal". He cited the developing countries' experience of the Uruguay Round, where the deal was acceptance of the TRIPS Agreement for textiles and agriculture, where developing countries have yet to see the benefits. "We need to know if everyone will get to see the benefits", he said.
Transparency in practice?
Discussions on Singapore or new issues have been focussed on investment and competition, and not on trade facilitation or transparency in government procurement. However in one of the sessions, transparency of another kind became the topic of discussion.
When an NGO speaker during a workshop session on GATS (the services agreement) referred to the recently-leaked EC documents requesting several countries to open up their services market to European firms, an exchange of words took place between the UK NGOs present and the EC representatives, which may have provided workshop participants some insights to the decision-making processes in the EC and its member-states.
According to the Belgian delegate -- who responded to the moderator's comment that the leaked documents could be downloaded from an NGO webiste -- the leaked documents were not official documents, as they had not been discussed nor agreed to by the EC member states. He also added that NGOs were not the only ones complaining about the request documents. In fact, the first complainants were the big multinationals. Perhaps, this was an indication that perhaps the right balance had been achieved!
The UK delegate, John Sims, said that it was astounding that DTI would say they were not interested in development. He explained that development was very much part of the decision-making process, which also involved DFID. He pointed out that very few EC member states have development agencies involved in their WTO decision-making processes.
John Hillary from Save the Children, UK replying to the Belgian intervention said that he had been made to understand that the draft requests had been prepared with substantial inputs from the member states. He said that he had spoken to the UK Department of Trade and Industry (DTI) officials who had said they were "pretty happy" with the requests because they reflected their views. Asked about the development agenda - the reply was "don't ask us about it, we're interested in business".
In response to the UK delegate's comments, Hillary said that both DTI and DFID had been specifically asked if they had done any studies or assessment of the impact on developing countries - to which they answered no. "If the developing countries were interested, they could do the studies themselves", the officials were reported to have said.
Clare Joy of World Development Movement, said that whilst she could appreciate that the EC may not wish to make available documents that had not completed the consultation process, it was unacceptable that such documents will still not be publicly available even after they have been finalized. "As NGOs based in the EC, we want to be able to understand the implications of such requests, and to have accountability", she said.
She further said that the leaked documents demonstrated the EC negotiating strategy in GATS was clearly about commercial interests. She also raised concerns regarding some of the common features in the leaked request documents; namely the incorporation and use of the re-classification and clustering proposals, which have yet to be agreed to within the GATS negotiations and the systematic targeting - for elimination - of the limitations listed by countries in relation to their specific commitments, which would effectively negate the flexibility allowed in GATS.
Cecilia Oh is a representative and Legal Advisor of the Third World Network based in Geneva