by Chakravarthi Raghavan

Geneva, 8 Nov 99 -- An European Community move to get the trade-labour link issue on to the Seattle WTO agenda was shot down Monday by developing countries at the informal heads of delegations meeting (HOD) preparing for Seattle.

A range of developing countries spoke at the HOD rejecting the EC proposal which got the support of other industrial nations, save Japan.

Meanwhile, 'green room' consultations on resolving the deadlock over the mandate for further agriculture talks have not made any progress on resolving the basic difference of the parameters of the further negotiations, though some minor peripheral issues had been tackled, trade diplomats said.

Talks were also continuing in parallel on the other issue of blockage, the questions relating to implementation -both those to be resolved and decided at Seattle, and those to be identified and on which there will be a commitment to resolve them in 2000. The former WTO Deputy Director-General Anwarul Hoda, who demitted office on 1 May, has been brought back by Mike Moore as an advisor to tackle some of these issues.

On the labour question and the issue of inviting the ILO head to speak at Seattle Ministerial, trade officials said the question of an invitation to Mr. Juan Somavia to speak at Seattle was up to the General Council, and the secretariat did not want to face the embarrassing situation it did at Singapore, where an unofficial invitation to speak was issued to the then ILO head, Michael Hansenne and then had to be withdrawn.

At that time, an invitation to the OAU was blocked by the US, and in turn the US sponsorship of invitation to the ILO head, Michael Hansenne, was blocked by some of the African countries. And the information on this, leaked to the press, blaming India and others, ultimately traced by trade diplomats to the ILO press office, only helped complicate the relations between the then ILO head and developing countries. Since taking over, Somavia has sought to reassure developing country governments. But the US proposal for a working group on trade and labour at the WTO, and the EC proposal for a joint forum may have complicated the situation.

This time around, the International Confederation of Free Trade Unions (ICFTU) is holding a meeting in Seattle at the time of the WTO meeting, and the ILO director-general had been invited to that meeting, trade officials said. But there is no indication as of Tuesday noon that Somavia has agreed to go to the ICFTU meeting, and thus put the ILO right into the midst of the controversy, in the face of the broad range of opposition from developing countries to the labour-trade linkage issues.

The United States on 30 October, at the end of a Saturday meeting of the informal HOD had put forward a proposal for a WTO Working Group on Trade and Labour (WGTL) and  to produce a report in two years. The General Council chairman, Mr.Ali Mchumo had said then he would bring it up for discussion at a future time. But several developing countries left little doubt that they would not even entertain it.

The new US paper, going beyond the 'core labour standards' (of whose six ILO conventions, the US has ratified only one, that on 'abolition of forced labour') that had been proposed earlier and rejected as an issue for the 1996 Singapore Ministerial, wanted the working group to address additional issues of employment, social protection and safety nets, child labour, derogation from national standards (including in export processing zones), and the link with trade and investment.

The EC's paper, 'Addressing the challenges of globalization: The role of the WTO in cooperation with other international organizations', speaks of the need for enhanced international cooperation with other international organizations and among others for a joint ILO/WTO standing working forum on trade, globalization and labour issues.

In introducing the paper, the EC also said that it did not envisage any trade sanctions approach for labour standards, but rather incentives (such as linking labour standards to preferences under the generalized system of preferences).

But this did not impress any one in the developing world who have seen repeatedly, seemingly innocuous moves or promises of benefits turned into onerous obligations and instruments of pressure.

Earlier, the HOD took up consideration in the revised draft declaration of the paragraphs relating to decisions to be taken at Seattle - 'transparency in government procurement' (para 76), 'WTO transparency' (para 77) and 'Agreement on Subsidies and Countervailing measures - Review of Articles 6.1, 8 and 9' for extending the 5-year span of these subsidies, largely used by the industrialized world.

Also taken up was a paragraph about 'Small Economies', the APEC initiative for Accelerated Tariff Liberalization (ATL) in nine specified sectors and the ITA-2.

The transparency in government procurement had been addressed in terms of the Singapore agenda issues (with a large number of developing countries unwilling to go beyond the continuation of the study process). But the US and the EC who have been having 'consultations' and have draft agreements which they want to be concluded and signed at Seattle are not yet ready to put them forward.

The issue of WTO transparency (and plans for a wider 'outreach' programme by the WTO) had also been discussed at the informal HOD Saturday, with more countries including Egypt coming out, as other developing countries before, against including the item on the Seattle draft, and seeing no reason to go beyond a description of what was already being done now.

On the small economies issue, summing up the discussions, Mchumo said that most speakers would like to see a fuller integration of these countries into the multilateral trading system and 'main-streaming' them into all WTO activities.

A number of developing countries made clear that their position on the extension of the initial 5-year period on Articles 6.1, 8 and 9 of the subsidies agreement would depend on the decisions for immediate action at Seattle in paras 21-22. A number of developing countries have proposed that the 'green box' provisions of the subsidies agreement should be expanded to include the kind of subsidies that developing countries need to provide, and also contingent on use of local content and export performance.

The Dominican Republic (for the like-minded-group) said their attitude on extension of time on the subsidies agreement articles would depend on the decisions for immediate action on implementation issues. Brazil too shared this view.

Switzerland was agreeable to the extension, but only for four years, while Australia opposed it. Singapore was agreeable to extending the life of the subsidies provisions (enabling subsidies for regional development and so-called environmental protection).

Malaysia said that they could agree to the extension on subsidies, only if the subsidy issues of importance to the developing world were reflected and included in the green box. Jamaica said any decision at Seattle on the subsidies issue should be linked to decisions on implementation.

On the ATL, while some of the APEC members (US, Canada, Mew Zealand, Hong Kong China and Singapore) spoke in support, several developing countries said there was no need to include this in the main Ministerial draft.

But several others said that they could not consider any sectoral tariff negotiations, but only a general one under 'non-agricultural' market access. Mexico did not see why the ATL proposal, which did not apply to all members but only to APEC, had been included in the part of the draft for immediate decisions at Seattle, when there were many other more important tariff issues to be discussed.

On the EC labour proposal, Morocco read out from the recent G-77 Ministerial Declaration at Marrakech which had cited the Singapore WTO declaration about labour standards, identified the ILO as the forum, and rejected any formal linkage between trade and labour standards.

Mexico did not also see any reason to bring up the labour issue.

The US said it could agree with a great deal of the EC proposal and supported the idea of a WTO-ILO dialogue.

Brazil said it appeared that the only motivation behind bringing up the labour question appeared to be one of protectionism.

India shared the views of Morocco and Mexico and reserved its right to return to the subject at a later opportunity.

Hungary for the CEFTA countries said the approach to labour questions set out in the Singapore declaration was the correct one and there was no need to go beyond it.

Indonesia supported the Morocco position on labour, while Malaysia said it was not a subject within the WTO competence. Bringing the labour issue into the WTO would lead to use of trade sanctions.

Japan said it had carefully considered the US and EC proposals but had come to the conclusion they could not be supported. However, Japan would be willing to consider giving observer status to the ILO, if there was an application from the ILO, and this satisfied the criteria set out for international organizations seeking observer status.

[The ILO is currently an observer in the WTO's Committee on Services]

Thailand rejected any moves to link trade and labour, while Venezuela said the WTO was not appropriate forum. Uganda supported the G77 declaration, and said bringing the issue into the WTO was a protectionist move.

The Philippines said that both the US and EC proposals would meet with firm opposition from the Philippines. Including this issue would have a negative effect on the successful outcome at Seattle.

Honduras said that the extension of the duration of the subsidies provisions articles would depend on actions on implementation.

El Salvador said the labour standards issue belonged within ILO competence, while Hong Kong China complained the issue had been brought up at this late stage. Pakistan, Bolivia, Costa Rica, Guatemala and Sri Lanka also said no to labour standards.

The EC responded by arguing that it would be a mistake not to include the subject in the Seattle draft.

In summing up the discussions, Mchumo said that those who had made the proposal needed to convince the other members on need for inclusion. (SUNS4548)

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

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