WTO stirs again

Five months after the mauling it received during the Third Ministerial Meeting at Seattle, the World Trade Organisation has begun making the first moves towards beginning discussions, if not negotiations, on some global trade issues.

Earlier this week, the General Council of the WTO - the main decision-making body comprising representatives from all the members - decided in Geneva to discuss the ``implementation issues'' that had been raised by the developing countries. These relate to the difficulties and imbalances in the existing WTO agreements that the developing countries wanted first addressed before agreeing to any 'new round' - but could not be launched at Seattle last December. This follows on decisions taken in February to begin negotiations on further liberalisation of world trade in agriculture and services.

But it is far too early to see in these decisions a sign that the WTO has picked itself up from the floor. The decisions that have been taken are limited in nature and do not speak of a 'breakthrough' of any kind.

First of all, it was mandated in the 1994 agreement on the Uruguay Round to launch negotiations in 2000 on trade in agriculture and services. So Seattle or no Seattle, these negotiations had to begin this year. The question really is how far these negotiations could go without agreement in other areas. Indeed, the main reason why the Seattle ministerial meeting became so important was that a number of countries brought other trade issues to the table in order to counter-balance concessions that may have been asked of them in agriculture and services. (The most notable was the European Union which had the most to lose if subsidies in agriculture were to be reduced and therefore wanted 'a new WTO round' to make gains in other areas.) Hence even if negotiations were to formally begin on whether or not to further liberalise trade in agriculture and services, they would remain just that - 'formal' negotiations. The European Union, Japan and South Korea - the group of countries most opposed to liberalisation of trade in agriculture - would have found ways to stall the talks, as is so easy at the WTO.

As things stand, the member-countries of the WTO are expected to submit their proposals in both agriculture and services by the end of the year. After which the real process of negotiations would begin. So there is no 'revival' of the negotiating process here.

Second, the decision to hold ``Special Sessions'' beginning in June to discuss the implementation concerns of the developing countries certainly is an acknowledgement by the advanced countries that the problem will not go away by itself. In the year-long preparatory process for the Seattle meeting, a number of developing countries - India being one of the leaders - had argued that until and unless the problems with the existing agreements were addressed it would be premature to talk about 'a new WTO round'. The issues that were raised were many. The slow pace at which the quota restrictions on textile imports into the U.S. and West Europe were being removed was one of them. The pact on trade-related investment measures (TRIMs) which stipulated that domestic manufacturers remove local content requirements by 2000 was another. There were issues connected to many of the WTO agreements - on patents, anti-dumping and subsidies - that had been put on the table by the developing-country bloc.

Yet, the advanced countries never showed more than a lukewarm response, arguing that re-visiting the existing agreements would mean opening up all the clauses for re-negotiation. At best they were prepared to provide 'technical assistance' for help in implementation. To that extent the convening of ``Special Sessions'' from June onwards to examine the implementation issues is a big step forward.

But two caveats have to borne in mind. The WTO decision is to hold meetings to 'discuss' the implementation concerns, not to 'negotiate' the issues. And in the WTO the language is everything. This means that the member-countries could well end up talking without deciding anything about the specific issues raised by the developing countries. Second, the Special Sessions are to begin in June and end before the Fourth Ministerial Meeting of the WTO which should take place by the end of 2001. So, as in agriculture and services, the members of the WTO may well end up talking about the implementation concerns without deciding anything before the end of 2001.

Nobody expects anything to happen at the WTO until the completion of the U.S. Presidential election. The next U.S. president will take office in January 2001, which is when the first moves to piece together the negotiating process at the WTO will begin again. Until then all the initiatives at the WTO will just be attempts to show that the wounds of Seattle have begun healing.

CRR

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