WTO decision-making system criticized at WTO symposium

The opaque and exclusive decision-making processes in the WTO came in for criticism on the opening day of a public symposium organized by the multilateral trade body. Cecilia Oh reports.

GENEVA: The World Trade Organization’s non-transparent decision-making system and the controversial push by developed countries to begin negotiating new issues at the Cancun Ministerial Conference became the main focus of debate at the WTO, as a three-day public symposium got underway on 16 June.

Opening the symposium on “Challenges ahead on the road to Cancun”, which was organized by the WTO, WTO Director-General Dr Supachai Panitchpakdi said that although deadlines on many issues had been missed, constructive discussions continue.  However, he warned that if understanding is not reached on these issues, “the Ministers will have an unmanageable task in Cancun.”

In reply to questions at the opening session about the non-transparent and non-participatory decision-making process surrounding WTO Ministerial Conferences, Supachai said he was trying to find ways for all WTO Members to be involved.

He said that the Chairman of the WTO General Council, Ambassador Carlos Perez del Castillo, and he were “highly concerned to learn from the past experience of previous Ministerial Conferences and we are willing to engage with our Members to find the best solution to get everyone involved.  It is our full intention to get everyone involved.”

Supachai added that a situation should be avoided in which Members find they have little room to manoeuvre or little time to respond to drafts, and there should instead be a situation in which everyone can respond properly.

Unfair process

At question time earlier, Aileen Kwa from the NGO Focus on the Global South said that rules should not be imposed on developing countries through an unfair process.  She said that the Indian Commerce Minister Mr. Maran had complained that at the Doha Ministerial Conference, drafts of texts had been brought up at the eleventh hour for delegations to consider.  She remarked that any system that imposes drafts at the last minute on its Members cannot be a fair system.

Kwa added that although 15 developing countries had asked the WTO to adopt clear procedures, in fact more “mini-Ministerial” meetings had been held in the past few months.  There had also been a proliferation of Chairman’s texts being used, instead of texts from Members, as the basis for negotiations and this was not in line with procedures of international organizations. The Chairs should facilitate and not rule over the negotiations. She asked whether “we can expect transparency in the WTO that befits the title of a democratic organization.”

Martin Khor of the Third World Network said the main reason why the WTO had failed to reflect development concerns, despite the rhetoric in the Doha Ministerial Declaration, was the continuation of the non-participatory decision-making process in which Ministers, officials, ambassadors and diplomats from developing countries were not given the opportunity to take part in the key decisions, especially during Ministerial Conferences and their preparatory process.

He differed from one of the panel speakers, Prof. John Jackson of Georgetown University, who had  earlier said that “the Green Room process has broken down.” Instead, said Khor, the “Green Room” process had operated at the Doha Ministerial where drafts had been produced in a non-transparent way. Developing countries had complained there that their views were not reflected. And, a late-night meeting for only a few delegations had been arranged on the last night of the Ministerial, and a decision was made to extend the Conference without consulting Members beforehand.

He added that the proposal by many developing countries for the WTO to adopt rules and procedures on how Ministerials should be run was astonishing as it revealed how the WTO did not practise even the most basic principles, such as that the positions of different Members be included in drafts, and that Ministers and delegations be informed if a meeting is called, or that any decision to extend the Conference should be made by all Members.  And yet this proposal calling for such widely accepted norms had been rejected by developed countries.

Such disregard for procedures and rules, he said, was ironic in an organization that prided itself on being a “multilateral rules-based organization.” As long as the WTO did not reform this decision-making system, its legitimacy would be questioned by the public and it would continue to be a lightning rod for criticism.

After Supachai’s reply, Jackson also responded on the issue of better rules at Ministerials. “I don’t think you can do everything with 146 Ministers,” he said. “There should be a more efficient process, and the work must be divided.”  He suggested that countries could be divided into groups, and representatives of the groups could meet with the assistance of the WTO Secretariat, and the website could be used better to provide information to delegations.

Earlier, in his opening speech, Supachai said there were only 53 working days to the Cancun Conference.  Although he had earlier warned of “imminent deadlock”, Supachai said, “we have avoided the worst and although key deadlines were not met, constructive discussions continue.”

Stating that “lowering expectations will not make the outcome easier to reach,” Supachai said he was encouraged by the engagement of senior officials and Ministers and by the tabling of ambitious proposals.

He warned, however, that basic concerns remain, and the missed deadlines on TRIPS and health, agriculture, non-agriculture market access, implementation and special and differential treatment were setbacks that had entailed a cost.  Failure to reach agreement on these issues had postponed the preparatory work for Cancun.  “If understanding on these issues is not reached, Ministers will have an unmanageable task in Cancun.”

New issues

Several participants debated the desirability and effects of the new issues, negotiations on which the developed countries are working hard to launch at Cancun.

A panellist, Dr Claude Martin, Director General of WWF International, said the WTO cannot take on all issues and “to think of the WTO as a place for negotiating a rag-tag of new issues is wrong-headed.” The WTO has no expertise to deal with the proposed new issues, he added.

“Investment is one such new issue that should be dropped from the WTO agenda,” said Martin. To grant foreign investors the right to enter and establish in countries, or to deny host countries the ability to regulate foreign investment flies in the face of sustainable development goals, he added.

Stating that the proposal for a WTO investment agreement was just a watered-down version of the failed OECD Multilateral Agreement on Investment (MAI), he said such an agreement would damage the development options for developing countries and would affect their integrity.

The WTO had an opportunity to use trade policy for sustainable development.  The credibility of the WTO rested on its being able to solve existing problems, not on its hopping onto new issues before it could deliver on its core issues, he concluded.

A representative from the EC in Brussels said it was a myth that the aim of negotiating the new issues was only to open up markets.  He said there was a deep concern that transnational corporations have too much power and that states have too little.  Competition rules in the WTO would balance this perceived imbalance.

A representative from German industry disagreed that the proposed WTO investment agreement would be the same as the failed OECD-MAI.  According to him, the EU proposal is aimed at disciplining trade-distorting subsidies and would act against corruption, so it should be supported.

Shelley Chaderton, a diplomat from St Kitts and Nevis, agreed with the WWF analysis on new issues and said the investment issue should be dropped from the Doha agenda.  She proposed that the decision scheduled to be made at Cancun on the starting of negotiations “be postponed indefinitely.”

Criticizing the proposals being discussed at the WTO for reducing tariffs on industrial products in developing countries, she said that almost half the revenue from her country was derived from customs duty, and any agreement to reduce import duties will have serious effects such as social disruption.  Moreover, liberalization had already led to local companies losing their market share and to the worsening of the trade balance as the increase in imports is exceeding export increases.

Jaques Berthelot, of the French NGO Solidarite, criticized the dumping of European and US agricultural products, which he said had been permitted by the WTO rules because of a defective definition of dumping.  He said that the system in the WTO Agriculture Agreement of classifying domestic subsidies in green, blue and amber boxes was a farce that is used by the EU and US to perpetuate their dumping of agricultural products on developing countries.  He added that the EC scheme for reforming agriculture through supposedly decoupling subsidies from production was a farce and a legal and political untruth that would continue dumping.

Prof. Jackson said there was a tension between what the WTO is and what it should become.  He posed the issue of whether the WTO is a place for nation states to talk and take actions on issues addressed for the long term, or whether it is a regulatory body for new rules for new issues that can balance the need for nation states to meet the goals of its constituents but also have international coordination as nation states cannot cope with problems arising from globalization.

There was also the question of internal governance or how to administer the WTO since its Green Room process had broken down, said Jackson.  What can replace this process, and have transparency and increase the knowledge base of country missions whose capacity needed to be built? Although he supported the consensus rule in the WTO, Jackson said its use by some countries to “hold an issue hostage” was not wise, and therefore the consensus rule should be amended.

Mr. Aftab from ActionAid Pakistan and the Pakistan WTO Watchgroup said the WTO practice of reaching consensus was of little use if it did not produce deliverables for developing countries.  For example, the Uruguay Round of negotiations had created the Agriculture Agreement by consensus, yet the poor farmers in developing countries were now facing serious problems arising from that agreement.  The success of the Doha programme depended on what is delivered and not on consensus, he added. (SUNS5364)                                             

Cecilia Oh is a representative and Legal Advisor of the Third World Network based in Geneva.