A COMPREHENSIVE ROUND AND SINGLE UNDERTAKING
The demand for further liberalisation
10. The UK and the EU are committed to a new
comprehensive Round of trade negotiations lasting three years
and based on a single undertaking which the Government hopes will
be launched at the WTO Ministerial meeting in Seattle which commences
at the end of November 1999.
The Trade Minister, Mr Richard Caborn, told us that at Seattle
'only' the agenda was being negotiated and "the EU and the
UK, are asking for a comprehensive Round effectively ruling nothing
in and ruling nothing out."
Both Trade and Environment Ministers described the unequivocal
support of the Government for progress with liberalisation of
trade and its extension into new areas.
The European Commission describes the demand for progress saying
"in view of the pressures the international economy is now
under, there is a risk of slipping backwards [into protectionism]."
The RSPB said this as an overstatement of the case in view of
the existence of already rigorous rules on trade and Mr Nick Mabey,
WWF UK said that "I see no great move to protectionism out
there. We have gone through the worst financial crisis for the
last 60 years and, apart from some muttering in the United States,
there is no ground swell of protectionism out there."
11. The Government's memorandum states that "a
comprehensive approach, allowing negotiations across a wide range
of areas, will be important to building up a broad political consensus
for further liberalisation, particularly in more sensitive areas.
It should also allow greater flexibility to reflect other WTO
The European Commission's communication describes a comprehensive
Round and single undertaking as "the only guarantee of benefits
of the Round to all members and the best means to ensure an end
result acceptable to all."
The strategy therefore is of a range of negotiations on various
existing and new agreements providing the opportunity for perceived
losses in one area to be balanced by gains in others for all negotiating
parties. The Commission goes on to assert in its communication
that without a 'single undertaking', by which all WTO members
agree to the eventual package or nobody gets anything, "it
will be difficult, indeed virtually impossible, to strike a generally
advantageous balance of rights and obligations."
12. The Environment Minister, Mr Michael Meacher,
suggested that this strategy and therefore a comprehensive Round
was necessary for securing progress on the environmental agenda.
He said "The key issue from the environmental point of view
I think we are concerned with in this round is trying to resolve
this fraught issue of the interface between the multilateral
environmental agreements and the WTO system. An attempt was made
to resolve this with the WTO Committee on Trade and Environment
(CTE) at Singapore in 1996 but it failed. I think this comprehensive
Round with the opportunity for cross-cutting deals, provided there
is a measure of flexibility, is the best way of resolving this."
Mr Meacher rejected any suggestion that the strategy would act
in reverse, he said "There certainly will not be any horse
trading on [environmental principles] at Seattle, I can assure
you...There is a clear EU position on this about the involvement
of trade in the environment...There is no question of just regarding
the environment as a convenient negotiating ploy. It is central
13. However, this strategy would appear to encourage
developing countries in turn to treat environmental protection
as a bargaining chip to lever economic concessions out of the
developed countries. This rather goes against the efforts previously
described to us by Clare Short, Secretary of State for International
Development, to persuade developing countries to engage in the
sustainable development agenda and avoid the available historical
models of environmentally-damaging growth.
14. We heard a lot from Government about the suspicions
harboured by developing countries that concern for the environment
was a mask for further protectionist barriers to trade.
The WWF described the position as not so clear-cut with India
holding that position very vocally but with African countries,
for instance, softening their positions.
The NGOs, particularly the World Development Movement, were clear
that stress on green or eco-protectionism was a chimera. The problem
was one of simple protectionism in the form of the abuse by developed
countries of certain WTO provisions to maintain barriers to trade
and of the failure of the system as a whole to secure real benefits
for the developing world. There was a fundamental lack of trust
between developed and developing participants over mainstream
issues and this had to be rebuilt if the environmental agenda
was to be progressed.
Capacity of developing countries to negotiate
15. The prospect of a comprehensive Round involving
new issues and cross-cutting deals raises at this stage the issue
of the capacity of developing countries to participate effectively,
let alone manage the implementation of any agreements. NGO witnesses
described the existing built-in agenda alone as representing more
than enough to be getting on with.
The Government has accepted, in the context of the OECD negotiations
on investment, that a major failing of that process was the limited
However, despite the WTO's broader membership, there appears to
be an acute imbalance between the negotiating capacities of developed
and developing countries. For instance The US has a permanent
WTO delegation of over 250 people. In comparison up to 30 developing
countries have no permanent delegation at all.
This suggests that, despite a seat at the table, developing countries
may not be able to participate on anything like a level playing
field. The equity of the trade-off strategy for a comprehensive
Round, however, would appear to depend on participants having
the ability to keep track of extremely complex negotiations and
to analyse effectively likely outcomes.
16. This is recognised to an extent by the Government.
Mr Caborn told us "I think there are some doubts as to whether
[developing countries] could handle that comprehensive Round.
One of the things that has to be clearly put at the Seattle meeting
is: how do we assist developing countries to have the capacity
to be able to do that. The one thing which will undermine both
the negotiation and the institution itself is if people believe
they are not getting a reasonable and fair deal out of it.
It is very important that at Seattle we do resolve this problem"
Mr Meacher also said that capacity-building was important, that
the UK had a good record in this regard but "can and should
The NGOs laid a great deal of stress on this issue criticising
the not only the level of commitment and resources going into
capacity-building in developing countries but also the lack of
any real linkage between the outcomes of the various capacity-building
programmes and the proposed timetable for further negotiations.
Mr Mabey, WWF UK, put to us that "It is not that they are
not putting money into the countries, but the World Bank has not
come up with a positive programme that is sufficient to increase
capacity in time for the Seattle Round...We should be measuring
the outputs and not just saying, 'we're capacity-building, therefore
we can move ahead'."
17. We conclude that assistance to build the negotiating
capacity of developing countries to enable their effective participation
at the WTO is as important as their presence at the table. The
scope and progress of negotiations should therefore be linked
in a concrete way to achievements in capacity-building
programmes for developing countries rather than simply relying
on the provision of inputs to the process.
Lessons from the Uruguay Round
18. NGOs argued that the impacts of the last round
of trade negotiations had not yet been fully assessed and understood
and that what evidence existed, from OECD and UNCTAD studies,
revealed that developing countries had lost out. The RSPB quoted
the UNCTAD General Secretary, Rubens Ricupero, as saying that
"whatever the theoretical benefits of trade liberalisation,
the empirical record is otherwise".
This raises a question over the validity of the argument that
a comprehensive Round and a single-undertaking is an effective
way of securing equitable benefits for all participants. Mr Meacher
said "If this [a Millennium Round] was another stitch-up
between the US, EU and Japan and the Asian countries and some
of the poorer Southern countries were missed out I would be more
hesitant, but I do not believe that that is so. I think a comprehensive
Round can have real benefit for all parties in a manner that the
Uruguay Round did not."
19. We fail to see from our evidence what has
changed since the Uruguay Round that rules out the danger of another
'stitch-up' by developed countries as described by the Environment
Review, repair and reform
20. Criticisms of the last Round, including assessments
of the sheer scale of the costs of implementation of the agreements,
many parts of which have yet to be completed in developing countries
despite longer transitional periods, provides the basis for an
alternative agenda for future WTO efforts termed "review,
repair and reform".
Developing countries and NGOs have argued that what is needed
is a period of consolidation and review so that the benefits of
trade liberalisation can be maximised and the implications of
existing agreements can be understood and amended where necessary.
Both Trade and Environment Ministers argued that there was a 'clock'
that could not be stopped and that assessment was a continual
Mr Peter Hardstaff, RSPB, asserted that "a review procedure
is not...'stopping progress'; it is actually making progress.
It is a different kind of progress from that which is perhaps
perceived by some trade negotiators, but the trade system has
to progress towards being more accountable to the needs of people
and the environment."
Mr Mabey, WWF, argued that looking at the operation of existing
agreements, dismissed by some as 'review', could actually yield
real benefits to very poor communitiesjust those people
whom developed country WTO members were committed to assisting
under national and international policy objectives.
The example of TRIPs
21. Repair and reform of existing agreements was
not ruled out by Ministers but were placed in the wider context
of a comprehensive Round including new areas. In particular NGOs
welcomed Mr Caborn's statement that "With TRIPs, or any other
area people believe they have a legitimate grievance against,
I think it would be foolish to say that it is set on tablets of
stone. You cannot leave [a dispute over] agreements unanswered
or, if you do, it will always be a source of discontent. What
I said before is, we want to try to make sure we re-visit the
rules and try to make the WTO more efficient, more effective and,
indeed, a more transparent body. To allow part of the decisions
made in Uruguay not to be put on to that agenda would be foolish
in my view."
22. The agreement on Trade-related Intellectual Property
Rights (TRIPs) is an interesting case in point. The EU's position
is that the agreement was a "major step forward" and
that any initiative for further negotiations should not lead to
a lowering of standards or affect the on-going work under the
built-in agenda and that "present achievements and the current
transitional periods must not be re-opened...".
Evidence from FoE suggests that the United States, having taken
a similar line to the EU, now wants TRIPs off the agenda in the
light of difficult arguments looming with developing countries.
These arise over a number of issues relating to the treatment
of traditional and indigenous knowledge and husbandry of biological
resources by the agreement and its promotion of western-style
intellectual property regimes. The relationship between TRIPs
and the Convention on Biological Diversity (CBD) is also difficult
as the Convention reaffirms national sovereignty over biological
resources and introduces an obligation for the fair and equitable
sharing of the benefits arising out of their component genetic
resources. FoE describes the effect of the TRIPs agreement as
23. The British Government Panel on Sustainable Development
examined the issue of community and indigenous peoples' intellectual
property rights over biological resources in its Fifth Annual
Report recommending that the Government seek equitable arrangements
to ensure that such rights were acknowledged and rewarded appropriately.
This recommendation, to which the Government has yet to respond,
was set in the context of negotiations under the CBD but we
believe that the Government must apply this advice in the forthcoming
review of the agreement on Trade-related Intellectual Property
Rights (TRIPs) which is an important issue for developing countries
and which should certainly be on the agenda agreed at Seattle.
The built-in agenda
24. NGOs argue that the existing agenda for negotiations
amounted to a very large package already which included the key
areas of agriculture and textiles, the genuine liberalisation
of which, developing countries had been awaiting for 50 years.
Mr Barry Coates, WDM, described this agenda as containing sufficient
scope for cross-cutting deals as it stood
and went on to say that the main areas proposed for new negotiationsinvestment,
government procurement and competitionwere not those in
which developing countries had significant interest and he therefore
questioned the validity of their introduction on the grounds of
providing scope for gains for all parties.
25. We note that agriculture and fisheries were also
highlighted as perhaps the most significant area where liberalisation
could yield environmental and economic 'win-win' benefits by Mr
Meacher and he was supported in this by the conclusions of the
WTO special study on trade and the environment.
Mr Mabey, WWF, described the 'ticking clock' analogy as "disingenuous"
and an inappropriate 'threat' by developed countries.
We do not believe that there is a 'clock' dictating urgent progress
in the manner described by Ministers. Indeed there is a danger
of rushing too quickly into new agreements on new areas without
taking stock of the effects of existing arrangements.
26. Mr Caborn asserted that "the world is moving
on at an ever-increasing pace as we all know. Unless you try to
manage that change in a way that is conducive to liberalisation
of trade, we think that would be a retrograde step."
We would take issue with the Trade Minister and say that the changes
in the world should be managed in way that is conducive to promoting
sustainable development rather than trade liberalisation per
se which may not always amount to the same thing.
27. The case for a comprehensive round has yet
to be made convincingly. The existing 'built-in agenda' appears
- contain sufficient scope for benefits for all
- constitute an already challenging task for negotiations
in the time-scale proposed, particularly for developing countries;
- cover the key areas in terms of sustainable
A more satisfactory approach would be , in our
view, to address this agenda with a view to consolidating the
achievements of the multilateral trading system, building in environmental
and development considerations, to achieve real and lasting promotion
of development that is sustainable.
19 Ev p.2, paragraph 6 Back
20 Q3 Back
3 and 133 Back
communication, p5. Back
23 Q69 Back
p.2, paragraph 6 Back
Ev p.27 Back
communication, p 6 Back
27 Q134 Back
28 Q142 Back
1998-99, Q196 Back
31 Q56 Back
QQ93 and 103 and ev.pp 18 and 70 Back
and 115 Back
Appendix to the Report. Back
35 Q61 Back
36 Q8 Back
37 Q143 Back
38 Q63 Back
40 Q140 Back
41 Q113 Back
136 and 137 Back
43 Q73 Back
44 Q73 Back
45 Q16 Back
communication, p16 Back
p.55, paragraph 4.27 Back
paragraph 4.25 Back
49 Q118 Back
50 Q115 Back
51 Q116 Back
and see WTO special study, 1999, no, 4. Back
53 Q118 Back
54 Q14 Back