Examination of Witnesses (Questions 60
- 79)
MR NICK
MABEY, DR
PAUL JEFFERISS
AND MR
PETER HARDSTAFF
TUESDAY 9 NOVEMBER 1999
Mr Gerrard
60. Dr Jefferiss, you made it clear you think
there is a problem that developing countries do not have the capacity
to participate effectively in the Seattle Round. Can I ask WWF
what your views are?
(Mr Mabey) Yes, that is our experience.
61. If there is that problem of capacity building,
can you see any scope for concrete measures that will develop
that capacity in a reasonable timescale—multilateral assistance
perhaps from other countries?
(Mr Hardstaff) I think it is important to recognise
where the current situation lies in terms of capacity. We have
up to 30 WTO members who do not have a permanent representation
in Geneva at the moment and they are therefore not able to take
part effectively.
62. And the USA has 250?
(Mr Hardstaff) Exactly. The UK Government spends up
to £0.5m a year on ensuring effective representation at the
WTO, and that does not include the representation it gets through
the European Union. That really puts into perspective the kind
of resourcing that may well be needed to ensure effective participation
of the developing world. If that resourcing is not available then
we feel that members of the WTO should seek alternative ways of
ensuring participation. One way of doing that is through altering
the scope and the format of negotiations which take into account
the ability of those least able to participate, which may mean
a narrowing of the scope of the negotiations.
63. I understand that point, but how do you
actually set about building capacity? Surely we ought to be able
to build that capacity.
(Mr Mabey) I think there are several initiatives,
most on a smaller scale. Several countries, like the USA, have
admitted they are very small scale. You can do that through standard
capacity building techniques—training, seminars, giving
people documentation—they go on all the time. There are
two sides: firstly, they are not going fast enough, certainly
not in the time-scheme of the negotiations; and there is also
the funding of permanent people; once you train someone they still
have to have a job and not be taken off by a commercial firm,
which often happens. Also there is the funding of the environment
and other specialists inside government to do the drawing up of
government policy, which also does not happen. That is a classic
World Bank job. 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. It is not as if we do not know how to do it;
it is not always that easy. We should be measuring the outputs
and not just saying, "We're capacity building, therefore
we can move ahead".
64. Should we be doing the same sort of thing
in terms of in-country capacity? If we have further moves on liberalisation,
if we have WTO rules, then how do you develop the regulatory capacity
in-country?
(Mr Mabey) I think that is key. There is a very good
EU paper on capacity building in-country. It is aimed at implementation
of trade rules and some of the social side, but it could equally
well apply to the environment. I do not think it will happen,
but it is a very lovely paper and very comprehensive. Certainly
that is the obvious next step: after you have done an assessment
of the implications of liberalisation, you will come up with suggestions
for policies which refer to trade and to other areas; then you
have to say, "When are those policies going to be put in
place? Should there be a sequencing, that the liberalisation does
not happen until we have funded the flanking regulation".
That will be a definition of differential treatment which would
make sense to me, rather than saying, "You've got five years
to put it in".
65. Could you give us any examples of links
like that having been made before?
(Mr Mabey) WWF has been doing some work on trying
to do this in Vietnam in the forest sector, talking to the Vietnamese
Government about how they might liberalise the forest sector at
the same time as introducing forest certification to make sure
that is a sustainable move. That project is moving ahead quite
well. We are also working in Gabon on a similar process. It is
new but there is no reason why it cannot be done.
(Mr Hardstaff) There is an extremely useful World
Bank report on the capacity of developing countries to implement
the current World Trade rules, and it is referenced in our evidence.
It shows that there are real problems with the current rules that
have been formulated, and with countries actually having the money
to implement those rules. I think the World Bank is increasingly
recognising the need to put resourcing into developing that kind
of regulatory capacity.
66. You have made clear you think the scope
of negotiations could be narrowed, but one other aspect of what
is being proposed is irrespective of how wide or narrow negotiations
are. There should at the end be a single undertaking agreement.
Do you see that as a problem—a single undertaking?
(Mr Hardstaff) We do not necessarily have a problem
with the concept of a comprehensive Round and a single undertaking.
The way it is being pushed at present, with the range of issues
that are being promoted, is a problem. There are also potential
difficulties with a single undertaking and the trade-offs that
can be made. The environment is an obvious area where issues could
be introduced with the intention of trading them off. There are
also certainly procedural difficulties or problems that could
arise with a single undertaking; but if pursued properly we do
not have a problem with the concept.
67. You do see a danger of inappropriate trade-offs
being made?
(Mr Hardstaff) Yes.
(Mr Mabey) The WWF's viewpoint is that we do not like
the idea of trade-offs between tariff reductions and new international
rules on investment and competition, and government procurement,
which are going to be in perpetuity—setting principles for
global and economic governments in the timescale envisaged. There
is something deeply inappropriate about that kind of trade-off
when countries which are at such different levels of development
have such different interests in the sphere of investment and
competition policy.
68. Can I ask if you think we should be doing
something more flexible rather than a single comprehensive Round,
single undertaking? Are there parts of the agenda that could be
pursued to get some benefits out of that, rather than worrying
about a comprehensive Round?
(Mr Mabey) There are obviously a million ways to design
a package which is acceptable, and I think we will see something
out of Seattle that looks like that. Certainly we would say, move
forward on services and agriculture and some of the reviews of
the other agreements; there is plenty there to trade-off. Industrial
tariffs could be a part of that. It is not a big issue, as long
as it is on a timescale that is appropriate. Throwing in new issues
on new international rules on investment competition and government
procurement just overloads the system. Those are the unsustainable
parts of the package. There is plenty there to get on with in
agriculture, I can tell you, having worked on it for the last
year and a half, there is enough there to get on with for anybody.
69. The EU Commission has suggested if we do
not push on there is a danger we will be sliding back into protectionism.
Do you think that is a real danger?
(Mr Mabey) 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 not ground swell of protectionism out there.
(Mr Hardstaff) I think that is a fundamental point.
There is already a rigorous set of rules in place, some of which
need reforming and reviewing. Fears of sliding into protectionism
I think are somewhat overblown at the moment. There is a general
perception that those calling for a review procedure are in some
way anti-progress. I think that is very wrong. I think a process
of reviewing and reforming the current trade rules is progress.
It is providing an opportunity for informed negotiations, rather
than negotiations for their own sake.
70. Would you like to see that done before we
start to move into anything new, or do you think it can be done
alongside moving into new areas?
(Mr Hardstaff) Some reviews are already underway.
We already have a good understanding of some of the agricultural
impacts of trade, and some are less well developed. Certainly
there needs to be a better understanding of how trade policy affects
society and the environment. This is not necessarily stopping
everything happening. Developing that understanding will help
frame future negotiations. If I could just read a quote, to make
the point that it is not just NGOs saying there should be a review
process, and that this is not some marginalised opinion. Supachai
Panitchpakdi, who will be the Director General of the WTO in three
years' time has said, and I quote that, "an assessment of
the nature of implementation of the Uruguay Round commitments
must be made." He further states that "We must know
the results and consequences of the shortcomings and benefits
of the Round so that we can address future negotiations better."
71. The EU Commission have said that what we
should be looking for is an overall outcome where we can identify
the environmentally friendly consequences in various bits of that.
Do you think that is a sufficient or good enough approach?
(Dr Jefferiss) Probably what we ought to be looking
at is whether the outcome delivers net benefits; not whether there
are one or two benefits here and there but whether the costs are,
on balance, too great to justify moving in the direction the EU
wants to move in.
(Mr Hardstaff) There is a real difference between
saying an overall outcome where environmentally friendly consequences
can be identified in the relevant parts of the final package;
and saying a final package that delivers overall environmental
benefits. I am interested to know what the UK Government or the
European Union think are the relevant parts of the final package,
because we certainly feel they are extremely broad.
Mr Shaw
72. You mentioned assessment and appraisal referring
to the future chair of the WTO. On that, you and other NGOs have
been critical about the lack of assessment of the implications
etc. of the Uruguay Round. The EU has commissioned a Sustainability
Impact Assessment of its proposals and this has also been criticised.
Despite what the future chair of the WTO says, the Trade Minister,
Mr Caborn, told us that you could not "stop the clock and
start assessing" because the world has moved on and changes
had to be managed if the gains made by the multilateral trade
system were not to be overtaken by events. Perhaps you could continue
with what you were saying this new chairman was saying.
(Mr Hardstaff) Mr Caborn's is the latest in a range
of analogies that have been used. We have had a variety of commentators
say that the trade system is: an oil tanker which cannot be turned
round; a train which cannot be derailed; a bicycle which, if we
stopped, we would fall off; and now there is a clock which cannot
be stopped.
Chairman
73. Not a train moving out of a station, which
is the usual European analogy!
(Mr Hardstaff) Indeed. As I have already said, I think
there is an extremely important point to be made about the fact
that a review procedure is not stopping. There is a lot of work
to be done. It 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) You could review the implementation of
the textiles agreement, where progress is currently around 15
per cent of what it should have been. That is a review which would
involve liberalisation of an awfully large sector of interest
to poor people in developing countries. You could outlaw seasonally
based tariffs, which is how the EU keeps foreign vegetables out
of its markets at times when its producers are producing, while
maintaining the fiction of an average level of tariff. Those are
called reviews, when in fact they would provide very large gains
for very poor sectors of the world's population, and look to me
like real liberalisation has moved forward. What the EU is really
saying is, "We want to get some trade-offs from developing
countries to do those things we are committed to anyway really".
That is economic power, and this is all about the economic power
politics of the WTO. There is no clock ticking anywhere. There
are plenty of things going on. The WTO has got a schedule of agreements
which moves forward, which can keep everyone occupied; and there
is also the issue of environment and development to work on. It
is disingenuous. We have got to do it because we have got to do
it, but that is not acceptable. I really do not think that is
acceptable in modern policy-making to come up with that kind of
threat basically—it is a threat.
(Dr Jefferiss) Slowing down the pace and narrowing
the scope of negotiations on new issues is very different from
saying that trade itself will stop. Trade is going to carry on.
Nobody is arguing that we should stop trading but simply take
the time to make sure the rules about trading are the right ones.
Mr Shaw
74. Also the Minister told us that the WTO had
published an analysis of trade and the environment. Have you looked
at this study? Does it answer any of your criticisms?
(Mr Mabey) We have done a preliminary analysis of
the WTO paper, which is a real advance from where the Committee
on Trade and Environment was. The secretariat has come under some
pressure from countries because they have actually looked at the
evidence in a rather more objective manner than people have in
the past. Our criticism would be that it relies a little too much
on theoretical economics and not enough on empirical case studies
and issues of resources. Generally it was a welcome step forward
in saying, "This is complicated. Trade can damage the environment.
There is no automatic link between rising standards of living
or GDP and improved environmental protection". A lot of the
standard arguments are the rather sterile arguments we have been
having for the last few years. In that sense it has probably helped
to move the debate forward if people take it on board—and
that is an "if". It is a WTO secretariat paper and it
is not endorsed by the Member States.
(Mr Hardstaff) I think it is important to add to that,
this study was not an assessment of the Uruguay Round agreements.
75. The impact of the Uruguay Round.
(Mr Hardstaff) Yes, it was not an assessment of the
environmental and social impacts of the Uruguay Round agreements.
It did include an assessment of the transport implications of
the Uruguay Round agreements, but that was as far as it went in
terms of looking at the Uruguay Round. Mr Bridges's implication,
in the oral evidence diven by the DTI, that this was actually
an impact assessment of the Uruguay Round was somewhat misleading.
76. On the EU's SIA, do you think this is an
adequate basis for confidence that the sustainability impacts
of the Round are going to be taken into account? This is what
the Minister has referred to.
(Mr Mabey) We have to be quite careful about the SIA.
WWF bid for this assessment with a consortium of academics and
we raised problems with the terms of reference during that bid:
firstly, that it was always forward-looking and was not going
to look at the Uruguay Round assessment; and, secondly, it was
designed not to recommend sequencing or slowing down or delaying
liberalisation, and just what other policies might be put in place.
It is a six-month scoping study to identify where you have to
do real work. That is all it is. It does not claim to be anything
else.
77. It is not preparing to prepare?
(Mr Mabey) This is useful but it should have been
done two years ago. They were preparing for this two years ago.
This is a scoping exercise one does to say where you have to hire
researchers to do detailed study. As far as it goes, it is a welcome
move. It is not what the Minister was characterising it as. I
do not think the European Commission says it is what the Minister
characterised it as.
78. Canada and the US are undertaking similar
work, so we understand. Are you happy with what they are doing?
(Mr Mabey) They are both doing environmental assessments
because that is what their law requires. I have not read the Canadian
proposals but my colleagues in Geneva tell me it is quite good
and well thought through on the environment side. The US have
not started theirs yet. It is a legal obligation. We are hoping
the US will expand it to include social impacts. The bottom line
is we are just about to start negotiations and decent work on
these issues takes a couple of years. It is too late, even though
it is nice to see the principle of assessment finally being put
on the table.
(Mr Hardstaff) One of the concerns we pointed out
in our evidence is that the terms of reference for the EU's Sustainability
Impact Assessment only asks the consultants to consider how to
pursue liberalisation, and not whether to pursue liberalisation.
That is crucial in limiting the scope of the possible alternatives
which the consultants might look at.
Joan Walley
79. What shines through what you each say is
this questionmark over rules about trading being the right ones—that
is really the task in hand. I wonder who you feel should be responsible
for making sure the rules about trading are the right ones and
how that actually fits in with the framework we have in the UK
for producing the line that will then go on to Europe and the
WTO?
(Mr Mabey) Obviously we touched on all parts of government,
and the problem we have in this case—with the DTI leading
and others following rather a long way behind—is that there
has not been a strategic discussion in the UK. We have a lot of
consultations with officials, and they have admitted to us they
have not got a strategy on environmental issues. DFID has started
to develop what could be seen as a strategy on development but
it is very much a bolt-on strategy; it adds to the range of issues
and does not look at the general shape of the round, which is
what developing countries consider the development round to be
about. The other evidence—that the Performance and Innovation
Unit of the Cabinet Office is looking to develop a strategy on
long-term issues, because they identified a lack of strategy—just
adds to the fact it has not been prepared in advance; it is not
even moving forward. What we have in the European Union position
is a checklist of issues that were raised in the WTO Committee
on Trade and Environment. We are glad to see them there but (given
the signs we are seeing of their position on broader issues like
agriculture liberalisation and fisheries liberalisation and subsidy
reduction) it is blatantly obvious there is not a strategic or
joined-up approach across the issues; and certainly no level of
output indicator which would be a hallmark of a strategy, coming
back to the Commission's goal. We want that to be quantifiable
and measurable. For me it is meaningless. Environmental friendly
consequences being identified gives me no output measure.
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