Time of waiting at the WTO

By C. Rammanohar Reddy

GENEVA, OCT. 15. Close to a year after the failure of the third ministerial meeting of the World Trade Organisation (WTO), the many differences that led to the `Seattle debacle' remain unresolved though some of the more controversial issues are making a back-door entry into global trading practices through bilateral and regional agreements.

While it was known all through the past year that nothing substantial would be achieved at the WTO until after the next U.S. President assumed office, the failure of the so-called ``confidence-building measures'' - launched by the WTO after the Seattle meeting - has disappointed the Governments of a number of developing countries. The WTO process was expected, for instance, to breathe new life into the impasse over ``implementation problems'', which was the demand by the developing countries to address a number of imbalances in the 1994 GATT Agreement before carrying out any further liberalisation of world trade.

The failure at Seattle to address this demand was one of the factors that lead to the collapse of last year's meeting and a resolution of the issue this year and in 2001 was to be a key component of the confidence-building measures. While WTO officials are insistent that some progress has been made in the area, developing country representatives say that in spite of months of discussions nothing of substance will be announced when a WTO body meets to discuss this issue later this week.

Consultations have been going on with both the developed and developing countries over the implementation problems in the pacts on patents, anti-dumping, subsidies, trade- related investment measures (TRIMs), removal of quotas on textiles and a number of other areas. But one senior trade official from the Third World said he was ``bitterly disappointed'' with the progress so far. ``The developed countries have not committed themselves to anything concrete and at this point we still do not see anything other than vague and meaningless promises to address our concerns,'' the official added.

Similarly, while much is being made of initiatives to assist the trade effort by the Least Developed Countries (LDCs), the poorest countries, in this area too there is more comment and less concrete commitments. There is no talk any longer of `zero tariff access' to exports from the LDCs, which just two years ago was being projected as a key element of the sensitisation of the multilateral trading system to the LDCs.

But while it is a period of waiting at the WTO, the developed countries are elsewhere continuing to aggressively pursue their trade and non-trade interests. The demand by the U.S. and the European Union that the WTO rules link market access to the developing countries' adherence to core labour standards - minimum wages, right to unionisation, a ban on child labour and other such provisions - was perhaps the biggest reason for the Seattle debacle. Core labour standards may not yet be part of the WTO, but the U.S. and the E.U. have both travelled in the direction of incorporating these rules in bilateral and regional agreements. A recent U.S. legislation links preferential tariffs to exports from African countries to their commitment to enforce labour standards. A similar agreement has been reached with a number of Caribbean countries. And the E.U. is in the process of negotiating trade agreements with some non-WTO members from East Europe which explicitly incorporate commitments on labour standards.

Trade officials fear that this is one way in which non-trade issues like labour standards are being ``sneaked''

into the WTO. In future negotiations, these clauses in bilateral and regional trade deals with some poor countries will be presented as a fait accompli to the entire developing world which will then have no option but to fall in line on this controversial issue.

Even as some of the old problems continue to hold, there has been progress at the WTO in some areas. The 1994 GATT Agreement had committed the WTO membership to launch in 2000 new negotiations to further liberalise world trade in agriculture and services. This process, which was unaffected by the collapse at Seattle, has already begun. Officials say that they are surprised by the speed with which a number of countries have already submitted detailed proposals on agriculture.

According to the WTO work programme, the proposals are to be submitted by the end of the year and formal negotiations will be launched in 2001. But everyone is aware that irrespective of the number and depth of the proposals that have been made on agriculture, meaningful talks will take place only if the E.U., Japan and South Korea (the three countries most hesitant to reduce agricultural subsidies) are given something in return. That something is a ``comprehensive round'' of talks that covers old and new areas, a round approaching the sweep of the Uruguay Round of negotiations which culminated in the controversial 1994 GATT Agreement.

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