More disappointment at WTO for developing countries

THE GENERAL Council of the World Trade Organisation (WTO) last week adopted a decision on implementation issues that the Chairman, Ambassador Bryn of Norway himself said was `modest', but which many developing nations described variously as ``extremely disappointing'', a `glass without water', and an outcome with `non-existent results'.

(The implementation issues refer to a set of demands articulated over the past couple of years by a large group of developing countries covering modificiation of the GATT Agreement of 1994. The rationale of these demands is that the developing countries have not gained from the Uruguay Round agreement because (a) the industrialised world has not implemented in spirit those clauses beneficial to the developing countries and (b) certain clauses of the GATT Agreement also placed a heavy burden on the developing countries. The Implementation Issues therefore cover a whole range of demands to correct asymmetries in TRIPS, anti-dumping, movement of natural persons, TRIMS etc. Following the Seattle debacle, the Director-General of the WTO, Mr. Mike Moore, saw the adressal of the implementation issues as a central element of the ``confidence-building measures'' of the afflicted organisation.)

The very skimpy results in the draft decision that had been subject of informal General Council consideration in three meetings on December 14-15 became skimpier in the final version adopted, with the elimination of any reference to the General Agreement on Trade in Services (GATS) and Mode 4 for supply of services.

There were in fact only two operational decisions: one relating to Honduras, which was a six-year belated attempt to rectify an error of the secretariat in preparing the Marrakesh documents in having left out mention of Honduras in the list of Annex VII(b) countries, and the other on further work on implementation issues.

The Further Work on implementation, in para 7 of the decision said: ``The General Council decision of 3 May on Implementation- Related Issues is reaffirmed. The General Council shall address outstanding implementation-related issues and concerns, including those set out in paragraphs 21 and 22 of the revised Draft Ministerial Text dated 19 October 1999 (Job899)/5868/Rev.1) as well as any other implementation-related issues raised by Members, as envisaged in the Decision of 3 May and the work programme agreed on 22 June 2000, with a view to completing the process no later than the Fourth Session of the Ministerial Conference.'' (The fourth ministerial conference of the WTO is to be held in late 2001.)

Some industrialised countries, who had unsuccessfully attempted through the Chairman's statement to link the future work on implementation to a ``wider work programme ... with a broad and balanced agenda overall'' but had to agree to this being dropped, came back to the issue on December 15. The U.S. said that the process of dealing with the implementation issues next year should not be a burden on the principal work of the General Council next year, namely preparing for the 4th Ministerial and that many of the new issues would need new negotiations.

Pakistan from the opposite side of the debate said it was very important not to link implementation issues to wider negotiations since this could have ``negative synergies'' that have a ``chilling effect on the rest of the organisation.''

Tardy progress

And India, which with Pakistan and other members of the Like- Minded Group has been a major force in bringing the implementation issue to the top of the WTO agenda, said the results were at best ``a minimal first step'', and in countries such as India the implementation issue and how it was resolved would alone build confidence in the WTO and enhance its image. The outcome of the process so far has to be judged in terms of its operational benefits for developing countries and whether the inequities and asymmetries of the past would be redressed even partially. A frank assessment must lead to `an emphatic NO' as the answer.

Far from building confidence in the system, developing countries are ending the year of confidence-building exercises, with even less to show than when they began the year - with the General Council decision to start a confidence-building measures. Even the only operational feature of the decision Friday, namely, for continuing the work on the implementation issues and completing the process before the next Ministerial Conference (in 2001) may well get submerged in the preparations for the 4th Ministerial Conference, or tying solutions to the new Round, unless the developing countries who have forced the majors to deal with the issue, persist in the New Year and not allow the WTO leadership and the major trading nations and their `allies' in the South to sweep these issues off the table. And, judged by past experience, the latter is a distinct possibility: developing countries have no institutional memory, and their many intergovernmental bodies and think-tanks, depending on the North for finance, have not been very successful either. And with a new crop of trade diplomats who would replace the current ones, the issues may well be relegated to the background as in the past.

At the meeting, the U.S. said that the continuance of the process on implementation (at the General Council) next year should not become a burden on the Council in its main work of preparing for the 4th Ministerial. Some of the `implementation' issues would require new negotiations. The U.S. did not believe continuing the present process would be to any advantage and advised other members to take a ``realistic approach''.

Pakistan's Ambassador Munir Akram underlined that of all the trade-related issues for developing countries, `Implementation' was the most important issue on the agenda of the General Council. Progress on the issue was supposed to build confidence after Seattle. While he appreciated the patience and efforts of Chairman Bryn, it was clear that most of the concerns of the developing countries had not been addressed and the results were modest indeed. In responding to the usual comments about half- empty or half-full glass, Mr. Akram said the `glass had no water'.

India's Ambassador. S. Narayanan expressed his appreciation of the Chair's efforts, but expressed his country's ``profound disappointment''. The major delegations themselves had characterised them as ``modest and meagre''. For India, he said, it was ``less than modest or meagre; it is below our lowest expectations.'' Of the 54 items in para 21, the decision covered nine, and of these five merely were referrals to subsidiary bodies and two `appeals' to other international organisations. There were only two meaningful decisions - one of rectification of an error in Honduras case, and another on the tariff quota regime in agriculture. Qualitatively, the fact there had been no decisions in textiles, anti-dumping and subsidies ``spoke eloquently'' for the real impact of these decisions in terms of trade or economics for developing countries.

Indian concerns

The results achieved, Mr. Narayanan added, was at best ``the first minimal step''. India had always maintained that the issues raised under `Implementation' required a certain amount of `political sensitivity' and could not be dealt with in a `narrow and legal straitjacket'. This was why India had been reluctant to refer these issues to subordinate bodies, but in a spirit of compromise and in deference to Mr. Bryn's wishes, India had agreed to refer some issues to subsidiary bodies. Since then, said Mr. Narayanan, he had read the reports of the subsidiary bodies. Having gone through those on TRIPs and customs valuation, for example, India was disappointed at the lack of substantive results on progress. In the TRIPS Council, for example, it had not even been possible to grant observership to the secretariat of the Convention on BioDiversity (the U.S. has been opposed), much less conduct a serious examination of the relationship between TRIPS and the CBD on the basis of a Chairman's check list on a factual note of the secretariat. And for the Customs Committee, India had sent an expert all the way from Delhi to participate in the meeting. But despite clarifications provided, India had not been able to persuade that Committee to accept ``even a simple proposal on exchange of information on export values in doubtful cases, with a view to reducing the scope for fraud.''

``It is a matter of serious concern,'' Mr. Narayanan added, ``that the best endeavour clauses in existing agreements do not figure in the domestic legislation of some of our major trading partners. Even if it is a best endeavour clause, we think it is important that this be clearly provided for in legislation, if not already provided for. This would be in line with the letter and spirit of the WTO agreements...''

The exercise on Implementation-related issues and concerns was, and should continue to be about confidence-building. This could be achieved only through a combination of political will and good faith.

The results achieved demonstrated that these factors were not available to the extent needed. India hoped that in the new Year, delegations would find the necessary political will, god faith and courage to address the remaining implementation issues and find meaningful solutions well before the deadline for the 4th Ministerial Conference.

``This alone will build confidence in the WTO and enhance the image of the WTO in countries such as mine. On our part, we shall continue to persevere in our efforts to persuade major trading partners to be more forthcoming and demonstrate greater political will to find meaningful solutions to the outstanding implementation-related issues and concerns.

This will be the most important common endeavour for all the delegations in the year ahead'', Mr. Narayanan said.

Chakravarthi Raghavan

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