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TWN Info Service on WTO Issues (Oct03/4)

23 October 2003

Third World Network

 

Dear friends and colleagues

STATUS OF THE SINGAPORE ISSUES AFTER CANCUN

The status of the Singapore Issues has been one of the most important and interesting issues after the Cancun Ministerial Conference.

This is because the Ministerial did not take any decision on the Singapore Issues, and also because the European Union had offered on the last day in Cancun to drop two and possibly three of these issues from the WTO agenda altogether.

Below is a paper by Mr Bhagirath Lal Das on the status of the Singapore Issues.  It looks at the technical, practical and political aspects.

The paper argues that the working groups on these issues do not have a mandate after Cancun since their mandate was only up to the Fifth Ministerial (i.e. Cancun).   The Cancun Ministerial did not renew their mandate.  On the practical and political levels, it is also appropriate that discussions on these issues do not proceed.

We hope you find this paper useful.

With best wishes

Martin Khor

Third World Network

 

ON THE STATUS OF SINGAPORE ISSUES POST-CANCUN

 

Introduction

In the aftermath of the failure at Cancun ostensibly over the Singapore issues - though every one is aware that agriculture (where the US and the EC did not want to move or make real concessions to the developing countries in accordance with the spirit of their commitments at Marrakesh, 1994) is the real cause of the failure - there are reports from Brussels and elsewhere that some EC officials still think they should persist with these issues, and extract a price for taking them off the table.

Apart from the EC, the main demandeurs on this, there also appear to be others who are still promoting this - some international organizations and other groups (business and think tanks) - and appear to be still seeking to promote or justify trade rules on one or the other of these issues.

Technical aspect

Technically, the WTO Working Groups on three Singapore issues (investment, competition and government procurement) or the Committee on Trade in Goods (CTG) on trade facilitation, do not have any mandate after Cancun, in spite of the confirmation at Cancun of the Doha Work Programme (DWP).

The DWP gave the Working Groups (on investment, competition and transparency in government procurement) and the CTG on trade facilitation, a mandate only up to the fifth Ministerial Conference which ended in Cancun. The Cancun decision merely confirmed the DWP. It did not give any new mandate beyond that.

The DWP has not said what should be done by the WTO bodies on the Singapore issues after the Fifth Ministerial. Hence the mandate ends. The Working Groups themselves may not have been abolished; this may require a specific decision toabolish them. However,  they have no role at present. They cannot be automaticallyconvened (by the chairs or the WTO secretariat) to work on the Doha mandate, as that mandate is now over.

The WTO bodies created in the Marrakesh Agreement (WTO Agreement) and its annexes derive their mandate and role from the relevant provisions in that agreement and its annexes. But the ad hoc bodies like these working groups do not have a mandate and role beyond what is given to them by specific decisions of the body creating them, i.e., the Ministerial Conference in this case. The same is true also for the specific role of the Goods Council in respect of trade facilitation.

They can get a further mandate and role only by a decision of the Ministerial Conference. It is doubtful whether the General Council meeting in a routine way (once in three months) can do it. It needs some clarification.

The Working Groups on Singapore issues do not have a mandate after Cancun, in spite of the confirmation at Cancun of proceeding with Doha Work Programme (DWP). DWP gave them a mandate only up to the fifth Conference which ended in Cancun. DWP has not said what should be done by these Working Groups thereafter. Hence the mandate ends. Of course, the  Working Groups themselves are not abolished as it will require a specific decision to abolish them. But they have no role at present. They cannot be automatically convened to work on Doha mandate, as that mandate is now over.

They can get a further mandate and role only by a decision of the Ministerial Conference. Even the General Council meeting in a normal way cannot do it. It needs some clarification.

The Marrakesh Agreement (WTO Agreement), in Article IV.2 says that “in the intervals between meetings of the Ministerial Conferences, its functions shall be conducted by the General Council”. Hence, the General Council (meeting at any level) has the authority to take decisions in between two Ministerial Conferences to conduct the functions of the Ministerial Conference. While conducting the function of the Ministerial Conference, it certainly cannot act contrary to the decisions taken earlier by the Ministerial Conferences. This sets limits to the authority of the General Council in respect of the Singapore issues at this stage.

Creation of these Working Groups and their role and mandate are very special issues involving the combined mind of the Ministers at Singapore and Doha.  This combined mind in Doha gave the mandate only up to Cancun. It is not expected of the General Council working in a normal course to guess what the combined mind of the Ministers would have been in Doha in the situation that emerged in Cancun. Had the Ministers wanted the Working Groups to continue with their work, they would have said so clearly.

They did not do so. They only confirmed the Doha mandate, which envisaged the role of the Working Groups only up to Cancun. The General Council cannot assume that the Ministers would have wanted the Working Groups to continue with their work.

Following this line, the General Council meeting in a normal way must not ask the Working Groups to continue the work on Singapore issues. If it does so, it will be acting contrary to the decision of the Ministers in Cancun read with the decision of the Ministers in Doha. Of course, if the General Council meets at the level of Ministers, it can perhaps be argued that it will then be acting almost like the  Ministerial Conference and can give mandate to the Working Groups beyond Cancun.

Practical aspect

In any case, it is too late now for the Doha work programme to settle the grave differences on the issue of modalities of negotiations. Since agreement on modalities is a necessary condition for starting the negotiation, there is no possibility of having negotiation in these areas during the process of the Doha work programme. In this background it is better to drop these issues and continue with the progress in other areas of the work programme.

Also one must presume that the EC was serious when it proposed to drop the three Singapore issues (investment, competition, transparency in government procurement) from the WTO. One hopes it was not engaging in negotiating tactics at that time, for it was too serious a decision on the part of the EC to propose dropping these issues. And the reports indicate that it had held consultations with the EU countries in Cancun before making this offer.  Now there is no reason for the EC to back out of it. If it does back out or tries to use it as tactics or strategy in negotiations in the WTO or elsewhere, its good faith will be in serious doubt.

Political aspect

Singapore issues have met with strong resistance from the developing countries right from the time they were proposed by the EC in preparation for the Singapore Ministerial Meeting in 1996. The developing countries view it as an unnecessary and harmful addition to the WTO. Earlier, the EC tried to brush off the opposition by pretending that it came from only a couple of countries. But Cancun exposed this myth when nearly 80-90 countries expressed themselves clearly and decisively against launching negotiations in these areas. In fact, this opposition was the final breaking point in Cancun, as the Chairman declared immediately thereafter that no agreed conclusion was possible in the Conference.

Over the years, EU countries, represented by EC at the WTO Ministerial Conferences, have been appearing as anti-developing countries mainly because of EC’s insistence on these subjects. The situation came to a boil in Cancun. If the EU countries wish to regain their political image as friendly to the developing countries, the first step is to withdraw Singapore issues from the WTO, particularly the three of them, viz., investment, competition and transparency in government procurement. There will be immediate recognition of it in the developing world. The atmosphere in international economic relationship may change considerably. This will result in an environment of goodwill in the negotiations in other areas in the WTO.

Besides, the EU countries should realise that they are not going to have any significant gain even if the negotiations on these issues are forced on the developing countries in the WTO. Hardly any strong and effective economic lobby in the EU has been demanding it seriously. Hence the EU countries are unnecessarily losing immense goodwill by insisting on the negotiations on these issues.

Thus without losing in fact any thing, the EU countries can turn the political atmosphere in their favour by just taking away these issues from the WTO. They will lose that advantage, if they have to drop it later in the WTO process under pressure. And that pressure is inevitable, as the strong sentiments in Cancun have demonstrated . A suo moto and unconditional withdrawal of these subjects will raise the EU countries in the estimation of the developing countries.

Also the EU countries will create an image for themselves as one that is for multilateralism and constructive cooperation at the international stage. In the current atmosphere of unilateralism being adopted by some big powers, it can emit a powerful signal for respecting the collective will of a large number of countries as against imposing the will of big powers on the world.

 


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