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WIDER GAPS SHOW UP IN HOD DISCUSSIONS ON DRAFT TEXT

by Chakravarthi Raghavan


Geneva, 15 Oct 99 -- The informal Heads of Delegation (HOD) meetings of the General Council were due to conclude a first round of discussions on a draft ministerial Declaration for Seattle, based on the Chairman's first draft and addendum, that suggested a widening gap among protagonists.

Perhaps the only point of what a trade official called 'near consensus' is over "technical assistance and cooperation" - where everyone supports more assistance and cooperation to developing countries and the least developed among them. But even here a closer examination suggests this stop at a general level, and is not credible unless resources are committed and put in.

Most of the technical assistance so far, in the form of seminars and symposia and training courses, have been expanded in "selling" a view of the WTO and its rules and options -- which many developing country governments say reflect at best a dominant, ideological view.

With just 20 days left to meet the target of 5 November to prepare a draft that could be taken to capitals and considered, and even making allowances for countries staking out initial negotiating stances, only a drastic pruning of the agenda for Seattle seems likely to produce a workable document for serious negotiations at Seattle.

A ministerial level meeting of some countries, the so-called 'Friends of the Round' (which probably contains many opponents, depending on how the 'round' is defined) and convened by Switzerland is due to be held in Lausanne, about 60 kms from Geneva.

But judged by the clear statements and tabling of alternative formulations for texts, the outlook seems none too propitious.

In extended meetings Thursday, including a night meeting, and on Friday morning, the implementation issues (both those for decisions at Seattle and those to be addressed in the first year of negotiations) raised by a number of developing countries, the mandated negotiations on agriculture and services, and the various issues arising out of the Singapore and Geneva ministerial meetings were discussed -- with various delegations and groups putting forward their views.

Trade diplomats expect the discussions to be completed this week, and a new revised Chairman's draft text brought forward next week.

During the implementation discussions, the US made clear that in its view most of the formulations would require changes to existing texts and thus renegotiation, and that the Uruguay Round texts were "carefully balanced" and the US could not accept any renegotiations since that would upset the balance of rights and obligations. It rejected proposals that would alter its own time-table for integration of trade in textiles and clothing products into GATT (by which old MFA-type quota restrictions on some 51% of the products would be retained until 31 Dec 2004).

While the Thursday morning session was chaired by General Council Chair, Amb. Ali Mchumo of Tanzania, the sessions thereafter were chaired by WTO Director-General Mike Moore, in the absence of Mchumo, who got the news (when he was chairing the discussions in the morning about the death of former President Julius Nyerere of Tanzania) and went away - to attend to some responsibilities connected with this.

The General Council has no vice-chairs to step in, though there are persons designated and functioning as Chair of the Council when it functions as the Dispute Settlement Body (DSB) and as the Trade Policy Review Body (TPRB).

Trade officials were not clear how and who would be preparing a revised draft text for the Seattle Declaration, and whether it will be a text on the Chairman's responsibility, as the texts of 7 October were, or prepared and issued by Moore and the secretariat muscling in.

And given the controversies over the 7 October draft, and the basic differences as to whether any new negotiations is to be run and supervised by the General Council, or ala the old GATT by a Trade Negotiations Committee, established by Ministers and responsible to them and chaired by the Director-General, some developing country diplomats were not at ease.

In the discussions till Friday noon, the Like-Minded Group (LMG) of developing nations (Cuba, Dominican Republic, Egypt, Honduras, India, Indonesia, Malaysia, Pakistan, Uganda and Zimbabwe), who put forward specific proposals on implementation questions (incorporated, within square brackets in the addendum to the first draft), put forward specific texts on the structure, organization and participation in any new negotiations, and on the subjects for negotiations - agriculture, services, and other WTO rules.

In some specific amendments put forward on the principles of negotiations and the future work programme, the LMG countries proposed a "peace clause". This suggested that: "Until the conclusion of the future work programme and entry into force of its outcome, developing country Members shall not be subject to dispute-settlement procedures with regard to agreements to be implemented after a transition period ending on 31 December 1999."

Other amendments under structure, put the General Council as the "Overall Supervisory Body". The 'advisory' role sought for the Committee on Trade and Environment and that on Trade and Development were deleted.

In terms of 'subjects for negotiations', under agriculture, the proposals call for specific references to "due consideration being given to the situation of net food importing developing countries (NFIDCs) and that negotiations "shall also take into account concerns, such as food security, rural development and poverty alleviation, and shall provide flexibility to developing countries to address these concerns." They also call for the establishment of a "development box" among proposals to be negotiated. Such a "development box" in the framework of special and differential treatment, is to include as elements "flexibility in use of domestic support and establishment of certain import controls, that will ensure achievement of the objectives of food security, rural development and poverty alleviation".

Under Services, countering a veiled US move for changing the GATS architecture, the LMG countries said that the negotiations shall be under the existing framework of GATS, with due respect for national policy objectives and level of development of individual members and appropriate flexibility for developing countries.

They also formulated texts, deleting from the draft the other issues put in the first draft as among 'subjects for negotiations' and shifted to a post-Seattle work programme, the other issues (the Singapore and Geneva Ministerial conference issues, and those raised subsequently in the General Council): market access negotiations on non-agricultural products, trade and investment, trade and competition, transparency in government procurement and trade facilitation -- and calling for continuance of the study of these matters.

In the discussions on agriculture, Australia (the leader of the Cairns group) said it would be willing to consider the non-trade food security and other concerns raised by developing countries, but not the 'multi-functionality' concept of Europe, Japan and Korea.

Other Cairns group members from the Latin American region (Argentina, Uruguay and Brazil) said any reference or mention of recognition of 'multi-functionality' of agriculture would be countered by them by use of similar language about 'multi- functionality' of non-agricultural products and trade.

While the LMG countries wanted the 'market access for non-agricultural products' to be part of a future post-Seattle work programme, Brazil and others said they would not consider any market access talks on non-agricultural products, except on the basis of full integration of agricultural trade into the WTO/GATT rules. Also, any tariff reductions would be on 'bound tariffs' and not the 'applied tariffs'.

On the Singapore issues (trade and investment, trade and competition, transparency in government procurement and trade facilitation), more countries from the developing world have come out against including these issues on a negotiating track, though some have been more willing to have some rules on procurement and facilitation -- but not involving any 'market access' (a clear end objective, as the EC has made clear in its internal notes to members and its corporations) or rules that would be subject to the WTO dispute settlement processes.

Even at a more general level, changes to the draft proposed by the LMG countries for e.g., come out strongly against the way the countries seeking accessions are being asked by the majors to undertake "excessive or onerous" demands such as not invoking the special and differential (S&D) treatment principles and provisions in individual agreements, but rather, assume obligations similar to those of the industrial world.

The somewhat bland, if not positive assessments of the outcome of the Uruguay Round, mentioning only some S&D concerns of developing countries in named agreements, has been sought to be replaced by contrasting the outcome to the "pie in the sky or sky in the pie" projections of trade and welfare gains put forward as late as December 1994, and still being cited in trade literature.

One set of amendments brings out that not only have these projections been belied, but squarely puts the blame on the way the agreements have been implemented by the majors - in agriculture, textiles and clothing. The way the other agreements - technical barriers to trade, customs valuation, sanitary and phyto-sanitary measures, IPRs, TRIMs and Services -- have also been cited, in calling for priority for redressing these problems at Seattle or in the first year of negotiations - with the General Council directed to address these and resolve the implementation concerns.

In the discussions, the LMG countries that have put forward specific amendments and proposals, got support from several other developing countries, with some of the latter wanting clearer texts and bringing some of the proposals (as in agriculture) under the S&D area for actions.

The US on the other hand said that virtually every proposal was a suggestion for renegotiation of existing texts, and did not favour any reopening of the "carefully balanced" Uruguay Round texts or upsetting the balance within them. The US was still ready to look at "genuine" implementation problems faced by individual countries - but seemed to argue that this should be solved by technical assistance and case-by-case consideration of extension of time periods. Some of the other proposals, as in TRIPS and TRIMs, were part of a "review mechanism" and could not be considered in the Seattle or post-Seattle round. The agriculture agreement provided "sufficient flexibility" to developing countries, and the US could not agree to any enlargement of the "green box" or the concept of negative Aggregate Measure of Support on individual products being taken into account to increase the AMS.

The proposals for review of the balance of payment (BOP) provisions, and for decision that justifiability of BOP restrictions would be solely for the BOP Committee, and panels consider only the 'measures', was not acceptable to the US at all.

The EC took a slightly more conciliatory approach, by saying that it could accept the notion of a discussion on the implementation issues, but where changes in texts were sought, they were part of overall negotiations.

The US plainly rejected the proposals of the ITCB member countries for improving the trade liberalisation and integration process to achieve 'meaningful liberalisation' (meaning removing restrictions on items of imports from developing countries that are now subject to quotas) and said that the US had been carrying out its obligations in letter and spirit of the ATC.

Singapore, unlike its two ASEAN neighbours (Malaysia and Indonesia), felt that many of the "implementation" proposals were issues for negotiations for changes in existing agreements, and some others (such as standards set by other organizations and applicable to TBT and SPS agreements) were not within the WTO purview. And while some suggestions for changes as on the anti-dumping were "worthwhile initiatives", there would be "political problems" for some members (presumably the US and EC) to reopen or change these texts.

While later Singapore came back into the debate to clarify that it was not opposing the proposals, the approach, one of the ASEAN members privately said, was nearer to that of the major developed countries.

New Zealand said the proposals all had to be dealt with under negotiations for changes in texts, and were not implementation proposals. The New Zealand delegate also argued that several of the proposals for S&D treatment, suggested that the WTO would have two tiers of members and levels of obligations and this would militate against the "universality of the WTO", and allowing developing countries to subsidise exports would create trade-distortions that would be against development.

India came back to sharply criticise this stand, and pointed out that the S&D treatment and principles were central to the Marrakech agreement and the views of New Zealand struck at the root of the Marrakech declaration which envisages developing countries being subject to less disciplines than the industrial countries.

Japan said the proposals in the addendum to the Chair's first draft fell into two categories of issues: those that could be addressed within existing frameworks, and others needing changes. It was opposed to changes in TRIMs to enable developing countries to require local content as performance requirements.

Switzerland said that there was not much time left between now and Seattle to address the implementation issues, and they should be part of a future work programme.

But India again came back to challenge this, pointing out that the proposals on implementation had been before the General Council for more than a year - and they could not be disposed of on the basis of either the length, their number or the issue of balance.

Brazil described the reactions to the implementation questions as falling into three categories: those who did not want to deal with them, those that were agreeable but only in new negotiations, and those who agreed they should be dealt with under implementation.

The proposals would not be easy to put into a check-list. But the Ministers should be able to take a decision to address all these issues, but not as part of a negotiating package.

Uruguay said there were implementation issues needing immediate actions and implementation, others needing 'interpretations' of existing agreements and some needing negotiations. It was regrettable in Uruguay's view that this kind of discussion had not taken place many months before.

Canada wanted members at this stage not to look at proposals from a national point of view, but on how to bridge the gap.

A number of countries, all developing and many developed, specifically came out in support of extending the moratorium on non-violation complaints and disputes to be extended.

Egypt said the implementation issue was the most important one, and this had been abundantly clear over the last 12 months. This was a key objective of developing countries. To have a balanced outcome in Seattle, there should be a balanced ministerial declaration. Criticising the EC view that the addendum (specifying in detail the implementation proposals) had not been distributed in a transparent manner or that the text had been 'leaked' could not be held out against the developing countries. Egypt was disappointed with the US position on implementation.

The Dominican Republic said the implementation issues could not be dealt with through technical assistance. Morocco said that enhanced technical assistance would be useful but would cover all the problems.

Australia said that it seemed that some of the implementation issues would require renegotiation of existing agreements. Australia was sympathetic to many of these concerns. In its view the transition period for TRIMs should be extended. Also, it supported extension of the scope of TRIPS to protection of indigenous knowledge. (SUNS4531)

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

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