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Info Service on WTO and Trade Issues (Jun26/01) Geneva, 29 May (D. Ravi Kanth) -- Congo, an African developing country, has fundamentally reshaped the ongoing debate on "WTO reform" at the World Trade Organization by formally submitting a draft General Council "decision" calling for the establishment of an "ad hoc Working Group on WTO reform." The proposal (WT/GC/W/1000), circulated by Congo on 19 May, aims to ensure an inclusive, "balanced and consensus-based process." In the document, titled "Continuation of the WTO reform process: Creation of an ad hoc Working Group," Congo broadened the discussion to include "development as an integral part of modernisation" while adopting "a progressive and responsible approach." BID FOR LEGITIMACY At a time when the chair of the WTO's General Council, Ambassador Clare Kelly of New Zealand, is reportedly pursuing discussions with several countries on WTO reform - exclusively in closed-door settings where many members are being excluded and kept in limbo - Congo's proposal appears to bring legitimacy to the reform discussions. Privately, trade envoys said that it also serves as a subtle reminder that their concerns cannot be sidelined. Even at the recent WTO's 14th ministerial conference (MC14) in Yaounde, Cameroon, several members protested the manner in which they were excluded from small-group meetings, the trade envoys said. In contrast to a recent Argentinian proposal that suggested a "procedural mechanism" for incorporating plurilateral agreements into Annex 4 of the WTO Agreement and tweaking the core norm of consensus-based decision-making to benefit several Organization for Economic Cooperation and Development (OECD) and WTO members, Congo's proposal offers a credible approach to continue the WTO reform discussions, said several trade envoys who asked not to be quoted. Congo explained the context and aim of its proposal by noting that "since the Fourteenth Ministerial Conference (MC14), WTO Members have engaged in a vital process of reflection on the reform of our Organization." Congo acknowledged "the reform work undertaken to date, including the process led by the Reform Facilitator in the run-up to and during MC14, as well as the submissions made by Members in this context." It said these deliberations have highlighted "the diverse nature of Members' priorities and the complexity of the challenges facing the multilateral trading system." However, it stated that "following on from MC14, diverse and legitimate views continue to exist regarding the architecture and pace of the envisaged reforms." Congo said the adoption of an overly prescriptive work plan, on topics still requiring extensive consultations, could undermine Members' efforts. More critically, Congo warned: "it is vital to ensure that the acceleration of work in certain areas is not to the detriment of meaningful progress on the priorities of developing countries, which would upset the Organisation's balance." "For this reason," Congo said that it is submitting "a draft General Council decision." It emphasized that "the aim is to preserve and consolidate reform momentum by ensuring that the reform remains balanced, inclusive and truly Member-driven." Further, Congo argued that "the draft decision proposes a pragmatic and unifying path at the institutional level, capable of building the consensus required for the continuation of work post-MC14." BASIS FOR APPROACH Underlining the "basis for the approach," Congo said, "the draft decision is based on a number of key pillars that are designed to restore confidence and ensure a mutually beneficial reform." It underscored the need for maintaining "a balanced and consensus-based process. Consensus, as reflected in Article IX:1 of the Marrakesh Agreement, remains the cornerstone of the WTO and guarantees the legitimacy of WTO outcomes." According to Congo, "the priorities of all Members must progress in a coherent and simultaneous manner, without asymmetric sequencing and without leaving the fundamental concerns of some on the sidelines." Congo called for ensuring "a transparent and inclusive institutional framework." "To be fully legitimised, the process must be supported by a Member-driven framework," it said. It informed members that its draft decision provides for the formal establishment of an "ad hoc Working Group on WTO Reform." Such a framework, according to Congo, "will operate exclusively in open-ended formats, ensuring the effective participation of all delegations, including those facing capacity constraints." In a similar vein, it said "all follow-up consultations will be open to all interested Members and be subject to full transparency, in order to avoid restricted, selective or invitation-only groups." Congo's proposal calls for reinforcing "development as an integral part of modernisation". It said "effective reform must respond to the present-day challenges facing developing and least developed countries (LDCs)." "The development dimension must translate into operational outcomes, including the effective and operational implementation of special and differential treatment, as well as the incorporation of development into all areas of work, in order to promote harmonious integration into the multilateral trading system," Congo emphasized. Lastly, Congo called for adopting "a progressive and responsible approach" to maintain "positive momentum," stating that "tangible progress should be sought in the short term (day-to-day functioning, transparency)." Furthermore, Congo said, "any facilitation structure must be formally established by the General Council, ensuring a geographical balance and the representation of appropriate levels of development, as well as full accountability to Members." It invited all members "to engage constructively on the basis of this draft decision, with a view to taking the WTO forward as a revitalized, agile and united organization that truly serves all its Members." DRAFT DECISION The full text of the draft decision annexed to Congo's proposal is as follows: DRAFT DECISION ON THE ESTABLISHMENT OF AN AD HOC WORKING GROUP "The General Council Reaffirming the principles and objectives set out in the Marrakesh Agreement Establishing the World Trade Organization, in particular the recognition of the fact that trade and economic relations should be conducted with a view to raising standards of living, ensuring full employment and promoting sustainable development, in a manner consistent with the respective needs and concerns of Members at different levels of economic development, Recalling the commitment made in the Outcome Document of the Twelfth Ministerial Conference to work towards necessary reform of the WTO, as well as the discussions held at the Thirteenth and Fourteenth Ministerial Conferences, Recognizing the need to undertake the reform in a balanced manner to allow the WTO to effectively address the current economic, development and systemic challenges, while taking note of the variety of perspectives on how to achieve this, Underscoring the importance of ensuring coherence and balance in institutional discussions, and of focusing on formal processes that guarantee the effective, transparent and equitable participation of all Members, Reaffirming that WTO reform must benefit all, and that the development dimension is an essential and cross- cutting component, Committed to ensuring that the reform process remains Member-driven, inclusive and consensus-based, without prejudice to the prerogatives of existing WTO bodies, Decides as follows: 1. Establishment and statute The ad hoc Working Group on WTO Reform (hereinafter referred to as "the Working Group") is hereby established. This Working Group is placed under the direct authority of the General Council and is open to participation by all Members. Its work shall be conducted in synergy with the relevant existing bodies of the Organisation, and without prejudice to their mandates, to avoid duplication. 2. Mandate and priority areas of action The mandate of the Working Group is to coordinate and examine constructively Members' proposals, with a view to improving the functions of the Organisation (deliberations, negotiations, follow-up). This work shall be based on communications from Members, as well as previous Ministerial Decisions and Declarations, including discussions to date. The mandate includes, in particular, exploring practical ways and means of improving the Organization's effectiveness, including but not limited to: - improving the day-to-day operation of the WTO Councils, Committees and other bodies; - enhancing transparency in a pragmatic manner, and improving compliance with notification obligations, taking into account the differentiated capacities of Members and the need for appropriate technical assistance and capacity-building support; - supporting discussions aimed at achieving a fully functioning dispute settlement system, under the auspices of the Dispute Settlement Body (DSB); - facilitating open dialogue on emerging trade issues identified by consensus by Members; - engaging in a constructive dialogue on how plurilateral initiatives can be integrated into the multilateral architecture, in accordance with the fundamental principles of the Marrakesh Agreement; and - advancing the development dimension in all areas of work, including the effective and operational implementation of special and differential treatment and of pending development-related matters. 3. Guiding principles and methodology The work of the Working Group shall be underpinned by the following principles: 1. Transparency and effective participation: The reform process shall favour open-ended formats. To facilitate the emergence of a consensus, targeted consultations may be undertaken on an exceptional basis, provided that they remain transparent, inclusive, and open to the participation of any interested Member, and are the subject of regular and detailed reports to all Members. 2. General and consistent progress: The Working Group shall ensure that discussions are progressing smoothly in all the identified areas of work, taking care not to marginalize issues that are of vital importance to developing countries. 3. Equally ambitious goals for all thematic areas: Work on each thematic area shall follow a rigorous five-step structure, applied consistently across all areas: - concerns raised by Members shall be mapped; - the operation and implementation of existing provisions and commitments shall be analysed; - gaps hindering the effective attainment of the goals in that area shall be identified; - associated capacity-building and technical assistance programmes shall be reviewed; and - additional rules or disciplines needed to address the concerns identified shall be reviewed and assessed. 4. Governance and accountability The Working Group shall elect the Chairperson by consensus. If it is determined that thematic facilitators are needed to advance the discussions, they shall be appointed by the General Council after consultation with all Members, ensuring balance in terms of geography and the level of development. The Chairperson and any thematic facilitator shall be subject, mutatis mutandis, to the procedural rules and guidelines that apply to officers of WTO bodies, including the Guidelines for Appointment of Officers to WTO Bodies (WT/L/510) and related practices. They shall serve under a specific mandate, subject to periodic review, shall report regularly to the General Council, and shall be tasked with facilitating efforts to find a compromise. It must be ensured that the facilitators report on discussions in a factual manner, through consensus-based reports, and in no circumstances under their own responsibility. 5. Reports The Chairperson of the Working Group shall report regularly on the status of its work to the General Council. The General Council shall assess this work regularly and submit a summary report on the progress made, together with any recommendations, to the Fifteenth Ministerial Conference (MC15)." THE VIEW FROM AFRICA According to several African trade envoys, developing countries from the African continent are invariably excluded from the WTO reform discussions. Speaking on a background basis, the envoys suggested that the developing countries are facing the worst of both worlds: a decaying system that does not provide any benefits or legal compliance guarantees while generating new obligations and lock in new areas where the most developed are now ahead of the pack in competitive terms. The envoys said developing countries are also questioning the need to continue with the moratorium on customs duties on electronic transmissions, as they are the net losers. Meanwhile, the envoys pointed to unfettered "free-riding" by developed countries on tariffs, agricultural support, and market-access barriers of all sorts, as well as huge exceptions for them based on essential security and environmentally-justified protectionism. +
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