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TWN Info Service on WTO Issues (July03/7)

Third World Network

12 July 2003

Dear friends and colleagues

OFFICIAL WTO DOCUMENT OF THE 12 DEVELOPING COUNTRIES ON MODALITIES FOR THE SIGAPORE ISSUES

A few days ago we sent out a report on the paper submitted by 12 developing countries commenting on the EC approach to modalities on the Singapore Issues.

The paper is dated 8 July 2003 and can be found on the WTO website under document number WT/GC/W/501.

For your convenience, a copy of the paper is attached below.

With best wishes

Martin Khor

TWN

 

 

WORLD TRADE ORGANIZATION

WT/GC/W/501

8 July 2003

 

(03-3678)

General Council

Original:   English

 

COMMENTS ON THE EC COMMUNICATION (WT/GC/W/491) ON THE MODALITIES FOR THE SINGAPORE ISSUES

Communication from Bangladesh, Cuba, Egypt, India, Indonesia, Kenya, Malaysia, Nigeria, Pakistan, Venezuela, Zambia and Zimbabwe.

The following communication, dated 4 July, has been received from the Permanent Mission of India on behalf of Bangladesh, Cuba, Egypt, India, Indonesia, Kenya, Malaysia, Nigeria, Pakistan, Venezuela, Zambia and Zimbabwe, with the request that it be circulated to Members.

1.   Paragraphs 20, 23, 26 and 27 of the Doha Ministerial Declaration (DMD) state that negotiations will take place on so called  “Singapore issues” namely trade and investment, trade & competition policy, transparency in government procurement and trade facilitation after the Fifth Ministerial Conference on the basis of a decision, to be taken, by explicit consensus, on the “modalities” of negotiations.  Paragraphs 20, 23, 26 and 27 of the DMD state that “We agree that negotiations will take place after the Fifth Ministerial Conference on the basis of a decision to be taken, by explicit consensus, at that session on modalities of negotiations.”

2.   It is important to recall the clarification given by the Chairman of the Doha Ministerial Conference, which states: “I would like to note that some delegations have requested clarification concerning paragraphs 20, 23, 26 and 27 of the draft declaration. Let me say that with respect to the reference to an explicit consensus being needed in these paragraphs, for a decision to be taken at the Fifth Session of the Ministerial Conference, my understanding is that at that session a decision would indeed need to be taken by explicit consensus, before negotiations on trade and investment and trade in competition policy, transparency in government procurement, and trade facilitation could proceed. In my view, this would also give each Member the right to take a position on modalities that would prevent negotiations from proceeding after the Fifth Ministerial conference, until that Member is prepared to join in an explicit consensus.”

3.   The assumption in the EC paper that negotiation on Singapore issues will commence after Cancún is not correct.  Paragraph 20 relating to investment and competition policy of the Singapore Ministerial Declaration of 13 December 1996 clearly stipulates as follows:  “It is clearly understood that future negotiations, if any, regarding multilateral disciplines in these areas, will take place only after an explicit consensus decision is taken among WTO Members regarding such negotiations.”  As we are all aware, no decision of that kind has been taken on the basis of explicit consensus at subsequent Ministerial Conferences at Geneva (1998), Seattle (1999) and Doha (2001).  Thus, the status of the discussion remains the same as was decided at the Singapore Ministerial Conference. This position was reiterated in the Chairman’s concluding statement at Doha. Explicit consensus is a pre-condition for negotiations to commence.

4.   The assumption in EC Paper that Singapore issues are part and parcel of Single Undertaking is also not correct.  Paragraph 47 of the Doha Ministerial Declaration says,  “With the exception of the improvements and clarifications of the Dispute Settlement Understanding, the conduct, conclusion and entry into force of the negotiations shall be treated as parts of a single undertaking.”  In the present discussions at the WTO, the four issues are not treated as part of negotiations in the Doha Work Programme and thus do not come under the TNC.  It is thus incorrect to state that these issues are part of the Single Undertaking.

5.   The assumption in EC paper that WTO Members agreed to engage in preparatory work on Singapore Issues until Cancún Ministerial is also not correct.  As per the Doha Ministerial Declaration, in the period until Fifth Ministerial Conference, Members agreed to focus on clarification/review of certain elements relating to Singapore issues.

6.   Since explicit consensus on modalities is a pre-condition for commencing negotiations, it is very important to clarify the meaning and issue of modalities.  The Doha Ministerial Declaration itself does not define the term “modalities.”  It would thus be logical to define it from current WTO practice. It is clear that the “modalities” on negotiations on an issue contains the aspects of the issue that are agreed on and the nature and direction of obligations to be undertaken.  Consensus on modalities would therefore require agreement by all Members on the specific issues to be covered, and the substantive treatment of these issues, including the nature and direction of obligations and commitments arising from them.

7.   The EC paper offers a superficial consideration of “modalities”. It does this by:  (i) taking all the four Singapore issues together (instead of each issue by itself) and proposing to develop a “common set of options for modalities.”   According to the EC, the “options” should be “sufficiently broad and flexible” to take into account the obvious differences between the four issues, while ensuring that a  “positive decision”  is taken for the four issues in Cancún & (ii) framing the question of modalities in terms of listing the “elements of modalities”  while avoiding the substantive aspects and content of the modalities. Under the section on “elements of modalities”, the EC paper simply provides three subject matters, namely procedural issues (number of meetings, etc), scope and coverage of negotiating agenda, and special and differential treatment.  This short and superficial listing of  “elements of modalities”  fails to capture the breadth and the substance of the discussions on the Singapore issues.  Implicit in the EC paper is that explicit consensus on the modalities themselves is not required, only a listing of  “elements of modalities.”

Some additional comments

8.   Unlike the approach taken by the EC in its paper, each of the Singapore issues has its own particular aspects, each of them has their own complexities, and each issue is at its own level or stage of discussion.  It would thus not be feasible or appropriate to put the four issues into a single basket.

9.   “Modalities” of negotiations is not defined in the Doha Ministerial Declaration and the EC approach of simply listing the very broad areas for negotiation is inadequate. Since the declaration has not defined “modalities”, it is therefore rational to look at this in the context of WTO practice.  A proper and fuller understanding can be found in the way “modalities” are treated in the previous and current negotiations. In defining the meaning of “modalities”, it is clear that a mere classification of issues and a mere listing of some of the elements is not enough.  The substance of those subjects and the nature and direction of obligations form a fundamental and intrinsic part of the modalities.  The EC’s paper seeks to divert the decision needed on modalities, to a decision on “elements of modalities” or on the classification of issues rather than on agreement on the listing and substance of the issues.  On the substance and content of these subjects, it is silent. The EC’s “elements of modalities”  therefore do not constitute ‘modalities’.  Explicit consensus on the modalities is required for negotiations to commence not consensus on how to classify and group the different procedural and structural aspects of the Singapore issues.

Concluding remarks

10. We have constructively engaged in the discussion in the respective working groups/CTG on Singapore issues.  However, the discussions in the working groups/CTG, for example in the WGTI, have clearly shown that there is no clarity even amongst proponents regarding the structure of any possible multilateral framework or its components.  In fact this difference of opinion extends even to the basic issues such as scope and definition.  The differences of views between Members on various aspects under discussion have been brought out clearly in the Working Group’s Annual Report for 2002.  The divergence of views and lack of clarity among proponents has also impacted on developing and least developed Members’ ability to better evaluate the implications of closer multilateral cooperation for their developmental policies & objectives and human and institutional development - a key component of the Doha mandate. The related issue is the provision of adequate technical assistance and capacity building to developing and least developed Members in these areas. The exercise of clarification of certain elements relating to four Singapore issues is still on-going. Differences of opinion still abound, even amongst proponents.

11. It is therefore clear that more discussion and clarification would be necessary so that Members are in a position to look at the issue of modalities for each of the Singapore issues in an informed manner.  Similar position has also been reiterated at the meeting of the Ministers of Trade from Eastern and Southern Africa held in Nairobi (Kenya) from 28-29 May 2003, the Second LDC Trade Ministers’ meeting held on 31 May-2 June 2003 at Dhaka (Bangladesh), and the Trade Ministers’ meeting of African Union held on 19-20 June 2003 at Grand Baie (Mauritius).  The relevant extracts from the declaration issued after these meetings are annexed (ANNEX I).  The co-sponsors of this submission reiterate their commitment to engage constructively in the discussion in the respective working groups/CTG with a view to better evaluate the implications of closer multilateral cooperation for their developmental policies & objectives and human and institutional development.

 

ANNEX I

Meeting of the Ministers of Trade from Eastern and Southern Africa held in Nairobi (Kenya) from 28-29 May 2003

·        With regard to multilateral trade issues, we call upon WTO Members to allow the process of clarification of the Singapore Issues to continue.

[Sub-paragraph xiv of the Nairobi Declaration on Preparations for EPA Negotiations and the 5th WTO Ministerial Conference - WT/L/519].

Second LDC Trade Ministers’ meeting  held from 31 May-2 June 2003 at Dhaka (Bangladesh)

·        Continuing with the technical work and studies to clarify the implications of Singapore Issues on the development aspirations of LDCs.

[Paragraph 15(xi) of Part I of the Dhaka Declaration—WT/L/521]

Trade Ministers’  meeting of African Union held on 19-20 June, 2003 at Grand Baie (Mauritius)

·        Recognise the complexity and importance of the Singapore issues and note that WTO Members do not have a common understanding on how these issues should be dealt with procedurally and substantively.  Taking into account the potential serious implications of these issues on our economies, we call for the process of clarification to be continued.

[Paragraph 11 of the Mauritius Ministerial Declaration on the 5th Ministerial Conference of the WTO—WT/L/522.]

 

 


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