TWN Info Service on WTO and Trade Issues (Dec05/22)

17 December 2005

Services saga brought to new explosive level at Ministerial

By Martin Khor (TWN) Hong Kong, 16 December 2005

The WTO's Ministerial Conference ended its fourth day with a crisis developing on how the services text in the draft Ministerial Declaration is to be treated.  A majority of developing countries have voiced opposition to it in its present form, but are increasingly frustrated that their views are not being taken into account, despite having made written submissions about their concerns and proposed amendments.

On Friday evening, delegations of many developing countries are seething with anger by the way they and their proposal were treated at a plenary meeting on services in the afternoon chaired by the Facilitator on this issue, the Korean Trade Minister Hyung Chong Kim.

According to diplomatic sources, Kim tried to marginalize the proposal made by the G90 developing countries to replace Annex C of the draft Declaration with its own alternative Annex text.  It had been submitted Thursday evening in the form of an alternative text to Annex C.

When a G90 representative asked why their proposal had not been distributed to members, the reply was that the document had not been formally submitted, and thus could not be circulated.

The impression given by the Facilitator was that he had given the G90 paper only the status of a note given to him for his information, and not a negotiating document as intended by the G90.  Procedures for requesting a document to be circulated had not been followed by the G90, said a Secretariat official.  A visibly irritated G90 spokesperson then verbally requested that the document be circulated now, as many members had asked for it.  Kim then said he would ask the Secretariat to copy the document.

The Chair had started by asking members not to repeat known positions.  Several members belonging to the G90 as well as the group of six countries that had also submitted a paper on Wednesday affirming that they could not accept Annex C, spoke in support of their documents.  They raised concerns with various paragraphs, and pointed to alternative texts that they had submitted.

Some other members were of the view that Annex C was basically acceptable, but some words should be changed, for example "shall" in paragraph 7(b) on participation in plurilateral negotiations could be changed to "should" or "may".

The major developed countries were against opening Annex C to changes.  The EC said that if anything Annex C should be reinforced.  The G90 proposal weakens the annex.

The Facilitator said of the 40 members that spoke at the meeting, only 15 had concerns with the annex.  He added that if it was a matter of numbers, it would be fair to let Annex C remain, and if no agreement can be found, we would proceed to remove the bracket.

There were many rather heated responses to this statement from members of the G90.  One member said the facilitator's way of calculating was unfair because many G90 members did not speak because he had requested members not to repeat known positions.  Another said that the G90 was a big group and its views had been made known through its proposal.  

Several said that their views must be taken into account and the facilitator's suggested action would not be acceptable.   Some suspect that the facilitator had counted the G90 as one member, thus "under-counting" the members having serious concerns.

The facilitator advised the members who disagreed to meet in small groups and sort out their differences.  At the end the Chair indicated he would "honour the consensus".  Several G90 members interpreted this to mean that if there was no agreement among the members, he would (in his input to the revised draft Declaration) proceed to remove the brackets in paragraph 21 of the main text.  This would mean that the Ministers endorse Annex C.

Several developing country members have been considering how to respond should the revised Ministerial draft retain Annex C intact, without the changes proposed by the G90, and if the brackets are removed in paragraph 21.  Some indicated they could not approve a text which so clearly disrespected the views of such a large group of developing countries.

"The process that began in Geneva that was so totally undemocratic is being repeated here in Hong Kong," said one developing country senior diplomat, referring to how the Chair of the services negotiations, the Mexican Ambassador Fernando Mateo, had insisted on keeping his own draft of the services Ministerial text, even though many developing countries had objected to large parts of it.

He also recalled that Annex C was the product only of Mateo and did not enjoy consensus of the members, and that this should have been made clear in Annex C itself or in the main body of the draft.  However, even the cover note (that explained that most Annexes were not approved by the members) of the draft that was sent to Hong Kong was removed, and thus there could be a misconception that Annex C is an agreed text.

In fact, the fears of the developing country diplomats that they would face an uphill battle to suggest changes to Annex C in Hong Kong have been proved right.  The attempts by the G90 or the six countries that sent a letter to the conference Chair to amend Annex C have been characterized as "opening Annex C", implying that they are causing trouble by disputing a text that had already been approved.

The reality, of course, is that Annex C was never "closed" and had remained "open" all along.  The understanding in Geneva is that the concerns repeatedly raised by the delegations in Geneva could be brought up as a matter of course at Hong Kong.  But when they did so, these countries are sought to be portrayed as threatening the Ministerial with collapse because they are "unreasonably" opening up what was basically agreed to.

It remains to be seen how the services saga will be played out in the two remaining days.   

There will be a small services "Green Room" meeting on Friday night.  The revised draft will be out on Saturday, by which time it will be known how the Facilitator and the persons who guide him propose to deal with this potentially explosive matter.