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SEATTLE, AGRICULTURE AND 'SINGLE UNDERTAKING'

by Chakravarthi Raghavan


Geneva, 10 Nov 99 -- There are signs that the United States and the European Union may be near a deal on the mandate for agricultural negotiations by a formulation that eliminates both the Cairns group's details of what is to be negotiated and the EU's non-trade concerns -- 'the multi- functionality' of agriculture, trade diplomats said Wednesday.

Meanwhile, two EU agricultural producers organizations (COPA and COGECA) came to the WTO to meet Director-General Mike Moore, and held a press conference at the WTO to insist on a 'multi- functional' nature of agriculture, no concessions beyond the EC's present CAP reforms, and to bring other issues (food safety, quality, environment, animal welfare, and rural communities and rural welfare) to be brought on the agenda as an integral part of the negotiations and treated appropriately.

While there was nothing new in the EC agriculture groups seeking to protect themselves, what was odd was that not only was the press conference held at the WTO, but a WTO press officer and another senior person from a substantive part of the secretariat, were on the podium of the press conference with the two organizations.

In the 'green room' consultations held by WTO head Mike Moore of New Zealand, the focus on agriculture has overshadowed other problem areas, including the "implementation" questions on which Moore convened and held only one 'green room' meeting, diplomats said.

Meanwhile, the Like-Minded Group (LMG) of developing countries met with Moore Tuesday, both to complain that the implementation issues raised by them were not getting any positive responses from the majors, and Moore himself has held only one 'green room' consultation on this - where the US and the EC, in effect, turned down the LMG proposals which have received support from a large number of other developing countries.

Moore reportedly advised the LMG members that he was continuing to press on the major industrialized countries to come up with responses.

But the LMG members have said that what they need is not "any response" but a positive one. If there is no positive response, developing countries would find it difficult to react positively to other issues on the agenda.

The US-EU deal on a formulation for further negotiations on agriculture would merely postpone till after Seattle the resolution of the dispute, and appears to be aimed at ensuring that Seattle does not end in a fiasco for the US, and to enable both the US and the EU to jointly apply pressures on the developing countries to yield to the two majors in their further demands on them on other subjects and areas.

As in the past (at Punta del Este, mid-term review of 1988-89), the US-EU deal would just put off the wrangling over what is to be negotiated under agriculture.

And in attempting to meet the objections of India and others to the formulation in the chairman's text (Job 5868/Rev 1) that the launch, conduct and conclusion of the negotiations to be launched at Seattle, shall be treated as a 'single undertaking and the results to be adopted in their entirety and applied to all WTO members', Moore and his secretariat appear to be coming up with the talk of a 'single package'.

The 'single undertaking' concept -- sought to be re-introduced into the Seattle Ministerial Declaration, with some change in phraseology, but in fact even going beyond the Punta del Este Declaration -- would then be used by the US and EC concluding an agriculture deal, as in 1993, to suit their own interests, and force the developing countries again to accept all other demands, observers warn.

And if outside observers sense deja vu in reading about the current diplomatic wrangles, they are right.

These disputations have a long history and are even repetitive. They figured in the long preparations before the launch of the Uruguay Round -- from 1981 when the US unveiled its "wish list" for a new round of negotiations, 'a North-South Round' as the US called it, through the 1982 GATT Ministerial where it unveiled an agenda that mounted an assault on EC protectionism in agriculture and the subsidised exports, even as it presented its own textile and clothing restrictions and the GATT agriculture waiver as "pragmatic" policies, and sought to bring new areas like 'services' into GATT, by defining goods to include services. The 1982 meeting became so controversial and confrontational that it could only agree on a work programme on 'goods' issues and allowing interested countries to an exchange of information on services.

By 1984, the EC realised it had more to gain on 'services' both from the US and the developing world, and joined hands with the US in a preparatory process, first in the GATT Council, and then in a preparatory committee (Prepcom) for a new round set up in the 1985 session of the GATT CPs.

But in 1984, the Committee on Trade in Agriculture (CTA) at the GATT, which had been seized of the agriculture part of the work programme, came up with recommendations which formulated some specific goals of negotiations -- improved and more secure terms of access to markets; greater disciplines on subsidies affecting trade, especially export subsidies and other forms of export assistance; more clearly defined limits under GATT rules to the impact of domestic agricultural support policies on international trade; better disciplines concerning sanitary and other technical barriers to trade; improved transparency; and more effective implementation of the GATT provisions providing for differential and more favourable treatment for Third World countries.

At the June 1986 prepcom, the developing countries as a whole criticised the demand from the developed world for liberalisation of trade in services, while the developed world refusing to liberalise the textiles and clothing trade and restricting the scope in agriculture -- with the EC taking the position that it was only ready to discuss restoring order and stability in world agricultural markets.

And in the Prepcom, the Group of 10 developing countries, led by Brazil and India had put forward a proposal for a decision by the GATT Contracting Parties to launch a new round of negotiations in Goods which said they did not want to see a repetition of the Tokyo Round where despite the terms of incorporation of its results into the GATT, there was unconditional MFN for the GATT articles, and a conditional MFN for the Tokyo Round codes interpreting these articles and incorporated into the GATT framework, but available only to members of the codes. Brazil and others also put as part of their proposal, the call for a standstill with the launch of the negotiations, making clear it should apply also to the EC's variable levies.

The stand of the G-10 was backed by other developing countries. In the initial meetings of the prepcom in 1986, the developing countries all insisted that the unfinished business of the Tokyo Round including a comprehensive safeguards agreement should be the priority. And in the May 1986 meeting, the third session, of the Prepcom, where both the US and EC agriculture protectionist and subsidised exports came under fire, Argentina (then a member of the G-10) insisted that the negotiations should be on the basis of the 1984 CTA recommendations.

In the Prepcom, the US and EC and others wanted to launch negotiations covering services, investment, and intellectual property rights (their initial non-paper called for setting norms and standards too), while the G-10 with support of other developing countries refused a GATT round on non-goods issues.

At the same time, the EC supported by Norway, Switzerland and Austria talked about the 'specificity' of agriculture and how negotiations on agriculture could not be treated on the same basis as that in other sectors, with India complaining that the earlier EC stand in the CTA about 'specificity' of agriculture, a term used to refer to problems of rural populations and their problems, had now become 'specificity of agriculture negotiations'.

The US made clear it would not accept any standstill on MFA trade, and the EC made clear it would not accept any restrictions on variable levies. And there was complete deadlock.

At this stage, with encouragement from the US and EC and the then GATT Director-General, Singapore (at a summit level meeting of the ASEAN) persuaded other ASEAN countries to agree to a new round with new issues in exchange for market access for developing country exports. This split the developing country unity at the GATT and in UNCTAD on trade issues.

Ultimately, Colombia and Switzerland organised a group of developing and some other developed countries, with US, EC and Japan participating in meetings.

This group drew up a paper that put all the issues on the agenda of a new round, with references in the agriculture part of the text to the 1984 recommendations of the Committee on Trade in Agriculture, and mentioned the idea of a 'single undertaking', but within square brackets, indicating no agreement within the group.

But it soon became clear that the 'single undertaking' had been put in at the instance of the EC.

With the EC taking the position it did on agriculture, the US (clearly critical of the 'single undertaking') criticised the EC in the Prepcom for preventing early conclusion of negotiations and results in some issues like agriculture.

At a subsequent meeting of the 'friends of the chair' (an extended 'green room' by the prepcom chair, GATT Director-General Arthur Dunkel), Australia said agriculture was a priority area, whereupon the EC's Amb. Tran Van-Thinh said that the EC's "four main preoccupations" had to be addressed - agriculture, 'globality' of the negotiations (issues in the new round being dealt with as one package), rollback, balance of rights and obligations (an euphemism for EC-Japan trade relations).

But with its 'preoccupations' not being accommodated, the EC withdrew from regular meetings of the Colombia-Swiss group and participated thereafter only as an observer.

In parallel, it began talks with the G-10 to find a modus vivendi on services, particularly its missions to New Delhi and Brasilia came back with the view that the capitals were more hostile than their Geneva GATT representatives.

This led to the pre-Punta del Este 'compromise' forged between India and Brazil on the one side and the EC on the other -- the so-called 'common platform' approach, which envisaged two parallel tracks of negotiations, one in GATT on goods and another outside of GATT on services.

At Punta del Este, the US too came around to the view that Brasilia and New Delhi would not be shaken in their opposition to the US view, and the compromise talks at Punta del Este amongst Brazil, India, the EC and the US led to the compromise in the Punta del Este Declaration.

This made the 'goods' negotiations of the GATT into a 'single undertaking' and a parallel services negotiations launched as a separate decision of Ministers, with the understanding when the results of all these negotiations were available, the ministers would decide on their implementation.

Subsequently, the US accused the GATT secretariat of not having 'cleaned up' the text properly, in the light of the compromise resulting in a situation of standstill as a GATT obligation, but its surveillance in a limbo with parallel jurisdiction between the Group of Negotiations on Goods a GATT body, and the Trade Negotiations Committee which was a non-GATT body responsible to the Ministers.

The US took advantage of this to announce in end of 1986 that it was about to breach the standstill in a number of areas, but that others would also be doing the same, and GATT could not exercise any surveillance. The US then went on to enact into law, as part of the Congressional fast track negotiating authority to the President, the entire family of S.301 laws ('Special 301' and 'Super 301') to enable the US to threaten unilateral sanctions to improve its negotiating position in the Round.

With some corridor comments from the EC and others about both the goods and services negotiations being a single undertaking, at the February 1987 meeting of the Group of Negotiations in Services (GNS), the Indian and Brazilian ambassadors made on record statements, "as those present at the creation", spelling out the parameters and underlying assumptions of the compromise agreement at Punta del Este.

Both Brazil's Paulo Nogueira Batista and India's Srirang P Shukla, in separate statements which they made available to the media, drew a distinction between declaration of the ministers launching the Uruguay Round as a single political undertaking and the GATT decision on goods negotiations as a 'single undertaking'. Shukla said the "globality" was recognized only "in a political or qualitative sense, not in a legal, quantitative or organic sense."

And Batista said that the two separate decision-making processes at the Punta del Este meeting meant that "from the start it thus ruled out 'the premise of trade-offs' between goods and services." Substantially too, he said it would be economically unjustifiable and politically unfeasible, and limit legitimate aspirations of developing countries to become producers and suppliers of high-technology goods and services. And Batista also said that while insisting on the two legally separate negotiations, it would not resile from its political commitments to implement the outcome of the two negotiations.

The US Services negotiator, Richard Self, who was at the Group of Negotiations (GNS) offered no challenge to the Indian and Brazilian views and statements.

Speaking at the TNC meeting earlier (Jan 28 1987) Amb. Tran had made the same distinction between "the political 'globality' of the Uruguay Round and the 'technical and organic globality' of the negotiations in goods," and later circulated a note to the members of his statement.

Shukla and Tran returned to the same issue at the February 1988 meeting of the TNC and the GNG, where the progress of the negotiations in the first year were reviewed, and India and others had pressed for some progress also in the negotiations on Textiles and Clothing.

In complaining as other developing countries, that the negotiating groups under the GNG were having varied progress, with the groups in areas of interest to the US and EC meeting oftener and making more progress than those in which developing countries were interested, Shukla said "the Part I of the Punta del Este Declaration (relating to GATT MTNs in Goods) was a single organic, legal undertaking and there must be a determination to achieve progress across a broad front in all the negotiating groups under the GNG."

The EEC delegate, Amb. Tran Van-Thinh, spoke about 1990 (the contemplated end date for the Uruguay Round negotiations) and said that was the only harvest date for the EC (and it did not envisage any other 'early harvests'), and said for the EC 'globality' in the negotiations meant progress and agreements on issues in the GNG and in the Group of Negotiations on Services.

Thereupon Shukla came back and said the Punta del Este Declaration was a single political undertaking in the launching of the negotiations.

But this concept, he said, had to be clearly differentiated from the 'single undertaking' concept used in Part One of the Punta del Este mandate relating to the MTNs in Goods.

This fact, he noted, had been acknowledged by Amb. Tran himself in his statement to the TNC in January 1987.

Shukla added that the political significance of the 'globality' of the Uruguay Round lay only in terms of four elements:

* unity of time and place for the Punta del Este meeting,

* establishment of a Trade Negotiations Committee (to oversee both the GNG and the GNS),

* common points of time for commencement and conclusion of the two distinct processes of negotiations (in goods and in services), and

* the provision that the decision on implementation of the results of negotiations in the two processes would be taken at a ministerial meeting on the pattern of Punta del Este (GATT CPs meeting of Ministers, and a separate meeting of Trade Ministers for Services).

"No other linkage - legal, procedural or otherwise - has been envisaged in the two separate processes of negotiations in goods and services," Shukla reportedly reiterated.

And in the 1988 December mid-term review Ministerial Meeting in Montreal, when agriculture was still in deadlock, but the US and EC seemed willing to try to go ahead on other issues (including IPRs and Services), the Latin American members of the Cairns group objected and held up an accord. Initially, the US was irritated with the Latin Cairns group members, but agreed to further consultations.

By the time the mid-term review meeting reconvened in Geneva in April 1989, the US and EC reached an understanding on agriculture, and the Cairns group told India that they could not hold out against both the US and the EC. This forced India, which had been resisting TRIPS, to give way, and agree to negotiate norms and standards, but tied up implementation to the process agreed in Part III of the Punta del Este Declaration.

If these and other linkages crept in subsequently (after the mid- term review), and some of the premises were forgotten to produce the WTO and all its agreements having to be accepted (with the DSU interpreting their obligations as cumulative), it is because negotiators seeking "progress" forgot the words of George Santayana (in Life of Reason, 1905-06): "Progress, far from consisting in change, depends on retentiveness. Those who cannot remember the past are condemned to fulfil it."

And to those who repeat 'liberalisation' and 'globalization' in the WTO discourse, because they are now fashionable in trade jargon, Santayana for good measure said (in Winds of Doctrine, 1913) "For an idea ever to be fashionable is ominous, since it must afterwards be always old-fashioned."

And those from the developing world (in government and outside) who want to prevent a repetition of their fate in the 19th century, might find useful, Karl Marx's words (in Theses on Feuerbach, 1888): "The philosophers have only interpreted the world in various ways; I want to change it."

And in a letter to Engels, he said, "I am no Marxist."

[Sources for unofficial negotiating history: contemporaneous reporting in SUNS #657-660, 899, 1406, 1407, 1460, 1461, 1474, 1494, 1497, 1500, 1506, 1519, 1521, 1524, 1528, 1529, 1533, 1534, 1544, 1546, 1547, 1554, 1559, 1560, 1594, 1601, 1609, 1664, 1881, 2029-2135.]  (SUNS4549)

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

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