TWN Info Service on WTO Issues (May04/3)

26 May 2004

Third World Network

Dear friends and colleagues


The WTO is holding a Public Symposium on Multilateralism at the Crossroads, being attended by about a thousand people as well as some of the diplomats and staff of the WTO.

At the opening session on the first day (25 May), the panelists and some participants from the floor discussed the Singapore Issues.  Most of the panelists called for the dropping of most or all of the Singapore Issues in a clear way from the WTO.

They were partly commenting on the statement by European Trade Commissioner Pascal Lamy, which gave the impression that the EC would still like to retain the issues in one way or other in the WTO.

Below is the report of the first day of the Symposium.

With best wishes

Martin Khor





Report of Public Symposium at the WTO on 25 May 2004

The public symposium on “Multilateralism at the Crossroads” at the WTO started on 25 May morning with a call by most of the opening session speakers calling for the dropping of the Singapore Issues from the WTO’s agenda.

“Speaking for myself and the business community, I want to state unequivocally that three of the Singapore issues, investment, competition and government procurement, should be dropped,” said Unilever Chairman and CEO Niall FitzGerald, who represented the business sector at the opening panel. 

He had earlier called for the “trimming” of the WTO’s negotiating agenda and clarified that the business sector had not been pushing for the Singapore issues, adding:  “I have never found any businessman who requested it, not in investment, or competition or government procurement, although perhaps we would like better trade facilitation.”

“The EU and the US should agree to dropping the Singapore Issues altogether from the WTO as an indication they want to make multilateralism work,” said Victoria Tauli-Corpuz, Director of Tebtebba Foundation and a member and representative on the panel of the ILO Commission on Globalisation.

“Since the developing countries have been resisting these issues, they should now insist that they be totally dropped from the WTO, that no further work should be done on them, and they should be removed from the WTO work programme.”

Eveline Herfkens, the UN Secretary General’s executive coordinator for the Millennium Development Goals, said the WTO should stop making new rules and instead focus on its core business, and leave other issues to other fora.

“Poor countries lack the institutional capacity to deal with new rules, which are very costly to implement,” she added. “It’s not a priority in countries to have patent offices or focus on customs valuation, when kids can’t go to schools.that create costly obligations for poorer countries....First things first, trying to meet the MDGs is more important than customs valuation.”  (Her comment on customs valuation was in relation to trade facilitation, one of the Singapore issues.)

WTO director general Supachai Panitchpakdi said the WTO should not be overloaded with all kinds of issues.  He had been asked, by a participant,  to comment on the panellists’ call for the trimming of the WTO agenda, and whether the WTO should “shrink”, otherwise it would run the danger of “sinking.”

Dr. Supachai replied it was indeed an important question of whether the WTO should shrink or else it may sink.  “I think that do manage globalisation, we need rules for predictability, and as Victoria said there is a democracy deficit in global governance, thus, can the poor have enough weight in decisions?

“But the WTO cannot be overloaded.  If the ship is overloaded with all kinds of issues, trade related or not, we run the risk of the boad being saddled with too many burdens to cope with.”

Earlier, the European Trade Commissioner, Pascal Lamy, who spoke first but left shortly after, also referred to the EC position on Singapore issues.  “We did not convince our partners on investment and competition.  We’ll have to wait for these. On trade facilitation, things are different.  I also have a glimmer of hope on transparency in government procurement though I admit there’s no enthusiasm on this.”

Lamy was asked by a participant to clarify what he meant by having a Singapore issue to be in or out, as his agreeing to “drop” an issue seemed to mean removing from multilareal negotiation but moving the process to plurilateral negotiations and agreements, or back to dioscussions in working groups, which are quite different from what he meant in Cancun, which had been understood to mean dropping from all WTO work altogether.

Lamy replied:  “My take and what I wrote in my letter (to WTO members) is simple.  Trade facilitation is in the single undertaking, part of the topics to be treated as a package.  Investment and competition are outside the single undertaking, and to be discussed by who and how remains to be seen, as with other issues, at technical or political level.  I keep some hope for transparency in government procurement, that we can convince a bit more.”   

In his talk, Lamy made clear his offers on agriculture in his letter to WTO members were “on condition others reciprocate.”   He said: “The EU is putting its agriculture subsidies on the table but it is not a unilateral gesture”.  The EU wanted parallel moves in export subsidy, and in domestic support the US Farm Bill must be reformed, whilst in market access the EU model must be respected.

On his “initiative for the G90”, Lamy said the G90 countries should benefit at extremely low cost, by committing only to bind a number of their tariffs and participate in trade facilitation negotiations.

“I know it’s raised questions, reservations and doubts.  Let’s take this initiative at face value, not a Machiavellian attempt to break the developing countries.  I din’t invent the G20 or the G90 either, they invented themselves.”

To a question how he defined the G90 in his initiative, and whether it was wise or even legitimate to accord special treatment to countries on a geographical basis rather than  objective criteria, he said:  “What is the G90?  They know. I am not the inventor.  I don’t know what are the frontiers of the G90.  The proposal should cover weak and vulnerable economies, which I call the G90.  It’s not something precisely defined, the poorest in the system, which is represented by the trade union of the G90.  In terms of substance, it’s the weak and vulnerable economies.  Where exactly is the frontier of this group is not solved, but the concept remains valid.”

French academic Jaques Berthelou commented that what the EU offered in agriculture was not good to eat as it was like putting a sleeping pill and a poison pill in the food to lull people to accept.  The proposed decoupling of domestic support of the EC is not real decoupling as it does not meet the criteria set out in the agriculture agreement.  The CAP reform is only window dressing and a shifting of subsidies from one box to another.

Lamy replied there was no time to discuss what was good and bad decoupling.  “The decoupling proposed by the EU is certainly not perfect and I understand it is of concern to theoreticians.  The CAP reforms go in the right direction even if we don’t reach paradise yet.”

In his talk, FitzGerald said “We need to trim the WTO agenda based on the Cancun lesson.”  The only concern should be market access issues and there should be a  narrowing of the Singapore issues essentially to trade facilitation.

Answering a question, he said:  “I strongly disagree with the view that some have that business groups were pushing for the Singapore issues.  I have not met any businessman who requested it, not on investment, or competition or government procurement.”  He added that perhaps on trade facilitation, business people would like there to be better trade facilitation.

Another participant said she was encouraged that the business sector had said it never pushed the Singapore issues.  Yet Lamy had said that investment and competition were not part of the single undertaking and yet remained for discussions in the WTO.  Did the speakers agree that there was a need to really drop the Singapore issues altogether instead of keeping them on in one way or other?

FitzGerald replied:  “On Singapore issues, I can’t speak for Lamy.  Speaking for myself and for the business community, I state unequivocally, that investment, competition and government procurement should be dropped.  For trade facilitation, it’s more debatable.  There’s an aid aspect to it, that more aid should go to areas that facilitate trade.”

Tauli-Corpuz in her speech, said the World Commission on Globalisation concluded that the WTO rules must allow more space for policy autonomy in developing countries.  Its report also found that “deep divisions within the WTO over the Singapore issues contributed to the impasse in Cancun” and that “it appears unlikely that progress on these issues will be made in the WTO.”

Tauli Corpuz said that at Cancun,  Lamy offered to drop the two issues (investment, competition) and even a third one  (transparency in government procurement) from the WTO Agenda altogether. This was interpreted to mean that these three issues would no longer be discussed, even at the working group level.

“Most developing countries have asserted that the WTO should stick with the EC proposal in Cancun that three of the Singapore issues be dropped from WTO. The plurilateral approach was also rejected as this runs counter to multilateralism. This is also a slippery slope towards using more and more this approach in the future which is another way of putting more pressure on developing countries to join. The 15 December 2003 joint communication of 45 developing countries reiterated this position.”

She added that at the recent OECD Ministerial meeting in Paris, the Chairman had misleadingly reported that there was agreement that trade-facilitation warrants multilateral negotiations and that on the other Singapore Issues, the consensus is moving to maintaining them in existing study groups.

This summary misrepresented what was discussed, according to diplomats present at this meeting. Even on the issue of trade facilitation there was no agreement that negotiations should start on this. Most of the developing country diplomats maintain that unless there is explicit consensus on the modalities of negotiations there cannot be any decision to launch negotiations.  

Said Tauli-Corpuz:  “These developments around the Singapore issues demonstrate the various ways in which multilateralism is undermined within the WTO. Those whose interests are best served by the Singapore Issues will not just accept the position of the developing countries. The classic divide and rule tactics are being used to create cracks within the coalition until the resistance is weakened and the Singapore Issues will be  resurrected.” 

She added that whilst Lamy offered  to take some issues out of the Doha Round and out of the single undertaking, it at the same time says WTO members should not stop WTO negotiations/work on these issues on a plurilateral basis. “This indicates that he is still intent on pushing that the Singapore issues remain in WTO, contrary to what he said in Cancun.”

To a question, Tauli-Corpuz agreed that there should now be a decision to clearly stop all work and discussions on the Singapore issues in the WTO, and the EU and other countries should not continue confuse members with the use of terms.  For example, “dropping for the single undertaking”  does not mean there will be no negotiations as by this term the EC means there can be plurilateral agreements.   As for “drop from the Doha Development Agenda”, it could imply that discussions can still revive in the working groups.

“Since most developing countries have consistently resisted the bringing in of these issues at the WTO they should remain firm in asserting that the Singapore issues be totally dropped from the WTO. This means there should be no further work in WTO on these issues and therefore these should be removed from the WTO work programme.”

Indigenous peoples and other social movements and NGOs support  this position, she said.  “We have seen how investment liberalization led to the entry of multinational corporations in our territories, with massive forced displacements of our indigenous people and sisters and irreversible ecological damage. 

“Giving equal rights or more rights to foreign investors is even worse than what we went through in the colonial era where foreign companies were basically running the country.

“Even the proposal for trade facilitation has serious implications for us. The costs of upgrading the ports, roads, computer systems and all the work which is needed to facilitate the entry of foreign products and services into our countries, will divert much needed resources for basic needs such as health, education, among others. Official development assistance, capacity-building and technical assistance can be diverted to prepare the infrastructures and services needed for trade facilitation instead of going to meet even the goals of the Millennium Declaration.”

Herfkens said the trade debate should be done in the context of the need to meet the MDGs.  The present trade rules are set by rich countries and do not take  account o fpor countries’ interests.  There was for examples no free trade in products where developing countries have comparative advantage.

The present system has reverse S and D as rich countries benefit more.  To change this, the Round must deliver tangible benefits for poor countries, and should stop making new rules that create costly obligations for poor countries.  The WTO should focus on its core business  and leave other issues to other fora.

Regarding new rules, poor countries lack institutional capacity to handle them as they are very costly.  It is not a priority in countries where kids can’t go to school, to have patent offices or better customs valuation. On trade facilitation, the real issue is lack of infrastructure in developing countries and here the rich countries should increase aid.

“I am concerned about rule setting too because of TRIPS.  The whole agreement is not pro-poor and is made according to one size fits all.  Meeting the costs of patent offices and laws is not in the priority of developing countries.”

She also called for a moratorium on regional trade agreements during the period of the Doha Round.  It would be bad if an African country, whose energy is focusing on the multilateral negotiations in WTO, should have to divert its scarce personnel to negotiate regional trade agreements like the Economic Partnership Agreement with the EU.  “The Cotanu Agreement should have room for these countries to delay the EPA negotiations, so that the countries can complete the Doha Round first.”

Guyana Minister of Foreign Trade, Clement Rohee, warned of the dangers of a plethora of regional and bilateral agreements if the multilateral system did not deliver, and this would lead to protectionism as countries scramble to seek benefits in this way.

Regional and bilateral agreement should thus be placed within the multilateral system.

He said the Cancun events were not a failure but marked the increased participation of developing countries.  “The WTO needs to recognize a new multilateralism is needed for legitimacy, where developing countries can assert their common interests and all players are given weight.

“The basic issue in the WTO is whether multilateralism can temper power politics and accommodate the poor and weak.  The multilateralism of the future should be one where the WTO creates the enabling environment where developing countries can adopt various development policies and models, where development policy space for developing countries is preserved.”