Examination of witnesses (Questions (83
- 99)
TUESDAY 7 MARCH 2000
MR MIKE
MOORE and MR
PATRICK LOW
Chairman
83. Good morning. Can I first of all say how
much we welcome you here to the House of Commons in fulfilment
of your undertaking to us when we were with you in Geneva just
after the Seattle Conference. You said you would welcome a visit
to our Parliament and we are very grateful to you for coming to
talk about this extremely important issue, particularly after
the developments that have taken place now that you have had time
to think about what happened in Seattle and now you have been
to UNCTAD. Thank you also, Mr Patrick Low, for coming. You are
extremely welcome here. We are looking forward very much to what
you have to say. I understand you would like to make an opening
statement, Mr Moore.
(Mr Moore) Thank you, Mr Wells. It is nice to see
the names of this Committee again. I realise now that this is
more formal, I am on the record, and therefore I will not be as
indiscreet as at our last meeting. One of the key issues that
is taxing the minds of this Committee and certainly us in Geneva
is how trade and development work together. Globally we are faced
with some awesome challenges. Fifty per cent of humanity lives
on less than two US dollars a day. Two billion extra souls will
share our crowded planet within 30 years and we have to double
food production within 20 years, so trade and trade policy have
a part to play in the solutions to these problems. The WTO ought
to be put in modest perspective. Put simply, the WTO is a small
organisation whose mandate is to assist sovereign governments
to negotiate trade agreements and then to help police those agreements
and handle the dispute system when the agreements freely entered
into by governments do not quite work out. The WTO can make a
major contribution to creating a more just and prosperous and
equitable world. It can create a framework where differences can
be resolved peacefully. I think it is a major step to have an
institution whose rules force fairer and freer play and trade.
However, any institution, to be credible, must enjoy popular support
and popular understanding. That is why it is important for Directors-General
to get out from Geneva, to come to sovereign parliaments, to make
the case and to take advice. There is a feeling by many people,
from the riots in London to Davos, to Seattle, that globalisation
is a threat to living standards, is a threat to sovereignty, is
a threat to individual cultures. I do not agree with that. The
WTO is simply an organisation that will only do what governments
say it can do, but we ought to reach out and I am looking forward
to working with parliaments. I have been to the Senate, the Congress
in the US, the European Parliament, to your Parliament. As frequently
as I can I will make myself available to parliaments. Parliaments
are the key representatives of civil society. You are measurable,
you are accountable, and in Geneva there is enthusiasm that we
do more of this. I think parliaments ought to scrutinise the international
agencies like the WTO, and not only the WTO. After all, we are
owned by you. The WTO is not waiting to be called unwillingly
to account. We are actively getting out. We seek more accountability;
we seek more involvement. We are owned by governments and in the
end governments are sustained by the people and by the people
you represent as parliamentarians. I will be coming to governments
with some proposals of how we can enhance that relationship. This
has to be enhanced not only for our organisation. There is a feeling
that ordinary folk do not own the institutions that they create.
This is not just true of mine. It is also true of the other institutions.
International trade has a key role to play in development. The
winners of today show this to be true. Those developing countries
that have integrated themselves into the international trading
system have reaped the rewards both in terms of export growth
and increases in human wealth. Take, for example, Bangladesh.
Before Uruguay their textile exports were a few million dollars.
Since the Uruguay Round their exports of textiles are over four
billion dollars. In these days a rapid growth in exports and a
large flow of inward foreign direct investment have been paralleled
by a fall in the number of people living on less than one dollar
a day from 418 million in 1987 to 278 million in 1998. That is
a dramatic fall in the number in real poverty. We have seen the
rates of mortality for children under five drop by more than half
in 50 years. The number of people dying from hunger or hunger-related
diseases every day has fallen from 35,000 10 years ago to 24,000
today, not good enough but a dramatic fall. Today 10 per cent
of children in developing countries die before the age of five,
an appalling figure, but this is down from 28 per cent 50 years
ago. These figures show that we have made progress, that not everything
is bad or wrong. But they equally show that there is much more
to do. Trade on its own will not solve all these problems and
nobody has ever believed that. I have got members who are spending
up to nine times more on debt repayments than they are on public
health or countries that have 25 per cent of their people infected
by HIV. The World Trade Organisation does not pretend to be able
to solve all those problems but if you read the banners outside
frequently you would think that we had invented some of these
problems. We are simply a mechanism that can assist countries
through a multilateral system. I can report to you that since
our last meeting things are moving in Geneva, we are building
confidence, we have a set of negotiations and discussions under
way now. We are working on driving up a market access package
for the least developed countries; not easy, but we are negotiating
now. We are driving up and negotiating now on increasing our capacity
building budget. My core budget for technical assistance is half
a million dollars.
84. That is all?
(Mr Moore) That is it. That half million is stretched
to around 10 million because of the contributions mainly of European
development ministers. Clare Short and her colleagues have been
superb. We are driving up—and I am not that ambitious; give
us too much money and we will waste it—another 10 million
dollars. We believe we can effectively spend that. Those negotiations
are going on at the moment and I know that the British Government
has been supportive. If we can get that budget we can then plan
ahead on programmes rather than just on projects, and employ staff,
get property, market access, capacity building, negotiating, under
discussion now. The huge area that caused problems in Seattle
for a number of developing countries was the issue of implementation.
We actually spent more hours pre-Seattle negotiating and discussing
implementation issues than any other issue, more even than on
agriculture. So what are we doing in Geneva at the moment? We
are working with governments to try and achieve a mechanism to
do two things, first in the short term. There are a number of
agreements that have lapsed. One argument is to roll them all
over. Another argument, which is strong at this moment, is that,
case by case, issue by issue, we go through these agreements,
how they impact upon governments, and then (this under an umbrella
of sensitivity not to take cases against them) see how they can
be extended where necessary. Some countries want five months,
some countries want five years on some of these agreements. Then
we move into the more difficult problems of implementation which
are real and we are looking at negotiating a mechanism in a multilateral,
more open way where countries can bring their implementation needs
to us, and we can see what we can do to focus resources on solving
some of these implementation problems. They are real. I am talking
to ministers who say, "Look, I can get the legislation through
my Parliament but I cannot get a computer system up because every
time I bring a case to Cabinet the Health Minister defeats me
because their immunisation money has got to be traded off against
other government priorities." I see this as quite useful
to developing countries, and I can report to you that since we
last met the feeling in Geneva is a lot better; it is one other
area we have agreed to work on, and the Chairman of the Council
has announced his call for submissions on our internal transparency,
our own process, how we can manage ourselves better, be more open,
be more inclusive, involve more in our negotiations. We are getting
submissions from governments on how to do that and within the
fortnight we will be meeting every ambassador in the most transparent
open way to study how we can improve our own situation. The last
time we met I do not think we had begun our in-built agenda. There
were those that thought we could never even begin the negotiations
on the in-built agenda. Those negotiations are under way. Agriculture
has gone to a committee, we will have chairpersons shortly, services
are under way, we have a chairperson with a structure. I am making
a snail look like a racehorse here, but they are under way. It
is slowly beginning to work. The LDC package I consider is vital
to maintaining our credibility. It is for the wealthy countries
to show that they are sensitive and have understanding of the
needs of least developed countries. We know that least developed
countries account for less than half a per cent of world trade.
It would not be an enormous sacrifice to the nations in the north
to provide open access, tariff and quota free, to half a per cent
of world trade. The least developed countries get less than one
per cent of direct foreign investment. I will repeat again: I
do not believe that even if I got everything I wanted in regard
to the least developed countries that would change things that
dramatically. That is a report and update on where we have got
to since we last talked. I will spare you these notes but I will
pass them on to the Secretariat[1]
and perhaps we can have a discussion and you can put your questions.
85. Thank you very much indeed for that initial
statement. We welcome the notes that you have for our study. Can
I take you back to before Seattle and the preparations for that
Conference because we would like to explore why the Seattle Conference
took the unsatisfactory form that it did. Was it because the dispute
within WTO as to the succession and your appointment had taken
the concentration of WTO off preparing for the Conference in Seattle?
We understand that you started with a draft declaration of well
over 30 pages with something like 75 paragraphs, of which 73 were
in square brackets which I understand means that they were not
agreeable; they were irreconcilable issues. That sounds like a
formidable mountain to climb at an international conference when
you normally enter into an international conference with large
parts of the agenda previously agreed. If you enter it with large
parts of the agenda not agreed are you not likely to have an unsuccessful
conference?
(Mr Moore) The first point about the delay in the
appointment of myself or the Director-General is that of course
that was not helpful. We never had our deputies in place in the
same room I think until Seattle or whatever. I do not want to
create any alibis. The real reason we were unsuccessful in Seattle
(which is not the first time: ministerial meetings have collapsed
twice before) is that we were just too far apart. To have an agreement
you must agree and essentially, on matters of enormous substance
and importance to countries, we were not close enough. It was
not ripe enough. A month or so before we had a meeting of ministers
in Lausanne. I said to them, "Your ambassadors are working
too hard." It was not a question of hours. We were talking
until three in the morning, four in the morning, we had them in
on Sundays, we worked. We spent 300 hours in open session before
Seattle. This was in three months. We spent 100 hours on bilaterals
and talking in small groups. We were just too far apart, and,
as I said in Lausanne to ministers, "Unless capitals show
some flexibility, the piece of paper, the document you have had,
which you said was unworkable, will be the working document."
I am not taking sides here. I am not trying to say who is good,
right or wrong, but where was the core difference of substance?
Labour. This is an issue that divides.
86. Labour standards?
(Mr Moore) Yes, labour standards. Agriculture is not
that easy. There are enormous differences. Peak tariffs, anti-dumping,
investment, competition; there are major differences, transatlantic
as well as north/south. We just could not get there. In one or
two areas at Seattle I think we were a bit closer than some would
like to think but when it is all off it is all off. The one thing
that ministers are unanimous about is that they will not come
to another conference unless it is just about ready to go, pre-cooked.
It has got to be microwaved. It has got to be ready to go. We
were just too far apart. On confidence building the transatlantic
issue is where Europe and the United States have to get a lot
closer and are doing so at the moment. I have spent most of my
political life worrying about the big guys ganging up on the little
guys. As I said in Lausanne to the ministers, there is only one
thing worse than the big guys ganging up and that is when they
do not gang up. There has to be closeness between the major players.
87. What are the chances therefore of getting
sufficient consensus among the big players but also the smaller
players and trading blocs? What are the chances of getting this
achieved before any new Round takes place?
(Mr Moore) You have got to get very close to it. We
are working up plans. I know that Commissioner Lamy is working
hard, Charlene Barshefsky is meeting and talking all the time,
we have got groups of ministers all the time discussing how close
we can get. The Prime Minister of India has called for a referendum.
The President of the United States, Commissioner Lamy, your own
ministers, are calling for us to try and do better. I cannot report
to you at this moment that I see enough flexibility. Everybody
wants the other chap to be more flexible.
88. Are the United States presidential elections
likely to interfere with this timetable?
(Mr Moore) There is always an election somewhere,
but of course.
89. Pascal Lamy says they should not, but will
they?
(Mr Moore) I believe the US Administration does want
a Round.
90. Does want a Round?
(Mr Moore) Yes. When I talk not only to USTR but also
the other ministries, they want a Round. The question is the same
question you ask any participant: how much are they prepared to
pay? How flexible can they be? I cannot call that but I am talking
frequently to the senior ministers about how much closer we can
get.
Ann Clwyd
91. We have just come back from a visit to southern
Africa where labour standards were very much discussed with us.
When you said that labour standards divide us, could you explain
what the argument is over labour standards precisely?
(Mr Moore) A lot of developing countries believe that
the idea of a working party on labour or a forum on labour issues
and how they impact is a closet form of protectionism, that this
is the camel's nose under the tent and they will wake up with
the whole damn camel there, and all sorts of core industrial issues
will be used to hurt their competitive advantage. They then would
say that this is a job for the ILO, not for me. I am just a public
servant. I must follow the direction. The only direction I have
is the direction from the Singapore Ministerial, and that is that
we should co-operate with the ILO. But it is true that Europe
is very strong on this issue, it feels more work should be done.
The US feels very strongly on this issue, but this is one where
there is almost a north/south divide.
92. Could you spell out though precisely what
you mean by labour standards because they sometimes mean different
things to different people?
(Mr Moore) The core labour standards as represented
in the ILO are the right to organise, assembly, and so on. There
are five of them. I cannot recall them all, but one is the right
to organise. Can you think of anything else, Patrick?
(Mr Low) One is about child labour.
(Mr Moore) Child labour, prison labour. Essentially
countries that have agreed to this in the ILO who do not agree
to it in the WTO believe that the WTO is not the place for it.
That is why we have an International Labour Organisation. It is
not for me, publicly anyway, to give my view because that denies
me the chance to try and get people closer together, but the US
has been pushing very aggressively for a working party on labour.
The Europeans were pushing with their strength for a labour forum.
At Seattle a lot of compromises were thought of, but it does divide.
If you go and meet the Indian Government their ministers feel
very strongly about this.
Chairman
93. In your opening statement you said that
you thought it should be possible to achieve an agreement in relation
to the least developed countries to permit them tariff and quota
free access in the near future. First of all, is that so, and
how near is that future? Secondly, what items do you think will
be excluded from such an agreement?
(Mr Moore) I am to report back to the Council of Ambassadors
before Easter on my endeavours on those points: market access,
capacity building, implementation, and I have a few more weeks
to conclude the negotiations and the rounds we are going through.
I have said that if I get what I want that only proves I am not
asking enough. I would like the lot and backdated, but it has
come as no surprise that the two areas that have caused problems,
as always, are agriculture and textiles.
94. Do you think you can resolve those by Easter?
(Mr Moore) No. I am going to try. I hope we can make
some progress. I think we will. It will never be enough, but it
is a package of these other points I raised, although we are not
allowed to call it a package: "confidence building steps"
is what we have to call it.
95. Can I take you on to process and the question
of the Green Room process? How did this process work in the past
and how is it going to be made to work in the future or are we
going to need to change the process so that we get a more transparent
and inclusive negotiation which you have referred to in your opening
statement whilst maintaining an efficient decision-making process,
which of course has got to be one that is agreed unanimously in
the WTO, is it not? Are you thinking about changing the whole
process?
(Mr Moore) The ambassadors want to look at internal
transparency and how we can lift our play and how we can improve
ourselves and we are starting those consultations and are moving
to all the ambassadors at open meeting on what we have learned
on how we can improve our play. What is not negotiable for many
ambassadors is a simple proposition and that is to have a consensus.
If governments must sign up to an agreement some way, one way
or another they have to be in a position to be individually consulted,
so the idea of majority voting or trade weighted voting is not
on. They will not have it. I am sure there will be some learned
papers about that. We must do that. I have got to be careful I
do not get too defensive here. Seattle was not Singapore. At Singapore
Ministerial they had this one Green Room and then ministers just
gave their little five minute speeches and went shopping and only
the big guys, even inside the Green Room, had problems. We had
some of the bigger guys who wanted to do side deals. We in Seattle
had five different committees, including one on systemic issues,
because even if we had succeeded we knew we were going to fail.
Our culture makes it very difficult. There is no simple answer
to it. The Green Room is a process that is supposed to be representative.
Where we get into trouble is when I call it and as Director-General
I decide who should be in this process or the host minister calls
these meetings. I have got a few ideas on how we can improve it
but in the end I do not believe governments will allow the system
of consensus to change.
96. If you are going to get consensus you have
to get proper discussion, have you not, and the feeling of all
those present that they have been adequately consulted, their
views respected and taken account of in the decision that is eventually
arrived at? Clearly that cannot work if you have got a few in
one room and a lot of people outside without proper communications
and feeling they have not properly been talked to and consulted.
(Mr Moore) You are right.
97. So that means a different process, does
it not?
(Mr Moore) It means doing more work in Geneva and
doing more work before you have a Ministerial, so the issues of
difference are not so substantial that the system clogs itself
up. We do not get constituencies. Normally you think you are a
politician. What we are doing is running a 136-seat parliament
without a Speaker, without Whips, without time limits, without
parties, and everything is a free vote and half the people cannot
afford the bus ticket to get into the hall.
98. That sounds like a recipe for chaos.
(Mr Moore) We are doing quite well. How do you improve
it? You cannot have 136 countries in the room. The logic would
be a constituency system.
99. Or a regional grouping.
(Mr Moore) Or a regional grouping. That would be the
political logic, but we have spent a lot of time looking at how
other institutions do it. That is not going to be a starter because
the interesting thing about the WTO is the changing coalitions
that are based on products and interests rather than geography.
The key groups are north/south, east/west, and they are united
only on food. On everything else they will fight. We can have
a bit of both without formalising in my opinion. We can have a
bit of your regions but have freedom and flexibility to move outside
that. Where I think we worked well was that where there were groups,
take the EU or CEFTA or formal groups that had a history or culture
and tradition of reporting back, it went well. Where we do not
have formal groups who am I to choose which person from Central
America or who is the host minister to choose somebody representing
someone from the Caribbean, so I think we have to build up a culture
that is slightly different without formalising it.
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