MEMORANDUM SUBMITTED BY THE OVERSEAS DEVELOPMENT
INSTITUTE (ODI)
THE NEED
FOR INSTITUTIONAL
REFORM OF
THE WTO
This covers three types of issues. Two are much
over-discussed and trivial: the third is the problem:
Transparency of Normal WTO Activities to Non-government
Actors
There has been much discussion of this, but
in fact in its policy on release of documents and the willingness
of WTO officials to meet outsiders and to explain how decisions
are made and what stage negotiations or disputes have reached,
the WTO is much more open than some other international institutions
(eg International Monetary Fund) and probably on a par with the
World Bank. The WTO's website, for instance, is a model of information
access and transparency. Where the WTO had a perceived failing
was to have been late (and as the GATT Secretariat) to "organise"
NGO interests by inviting them to seminars and giving them (funded)
activities to do in collaboration. It did this, starting with
environment NGOs (not obviously the best place for an international
trade organisation to start) only three or four years ago, and
the World Bank did it 15 and the European Commission's Development
Directorate did it 20 years ago. But it could be argued that the
WTO's (and GATT's) small Secretariat and the modest size of its
budget did not allow anything more expansive, and that even the
small efforts in the past three years have been wasteful and counter-productive.
Where documents are withheld, this is at the request of a member
government. The Committee needs to consider whether it wants the
WTO to have the power to overrule governments on such decisions.
Decisions on disputes are made available in
full on the website; other documents are also published there.
The fact that meetings are closed is probably more the result
of the small size of the WTO's rooms and the lack of a budget
for the costs of public access than of unwillingness to open,
but again member governments may not support access.
There is perhaps too much focus in the public/NGO
mind on Disputes Settlement and Negotiations. For instance, the
WTO also produces regular Trade Policy Reviews of its members.
These are put into the public domain and they can prove a powerful
investment promotion tool, especially for emerging economies.
Transparency of Negotiations to Non-government
Actors
All the position papers for the Ministerial
Conference in Seattle were publicly available. Press and NGO observers
were admitted to the plenary sessions, the document distribution
facilities and delegates' lounges. While non-delegates were not
admitted to the working group sessions, these were not confidential
and delegates gave full information on them to press and observers.
Summaries of each day's sessions and full texts of ministerial
statements were on the WTO website by the middle of December.
If informal, bilateral negotiations are required to be made open,
they would cease to be informal negotiations, and the latter would
simply shift to a further degree of confidentiality between governments.
Participation by Developing (or more precisely
by Non-major) Countries
After six years of studies of what developing
countries failed to gain from the Uruguay Round and the costs
of non-participation and much rhetoric from the WTO about encouraging
developing countries to participate more fully in the WTO and
in future Rounds, it seems incredible that there were no preparations
made for them to respond. The WTO made inadequate provision for
the fact that not only many more countries, but many more subjects
were present in the negotiations, so that the old system of informal
contacts and ultimately a "Green Room" to settle final
conflicts could not work effectively. In the final meeting, the
Director-General, Mike Moore claimed (inaccurately) that the number
in the Green Room was greater than the number of founding members
of GATT, and gave this increase as an excuse for failure. But
it is hardly a surprise that there are more members now (135 at
the time of writing).
The system prepared in advance was four subject
working groups (agriculture, market access, implementation and
new issues) plus one on "systemic" issues (ie reform
of WTO procedures). But these areas were much too broad for effective
negotiations (and because they were so broad, every country had
to be in every one). (The system would have worked less badly
if the WTO had prepared Director-General's "non-papers"
as has been done in the past, or indeed if it had succeeded in
copying the chairman's drafts by the time the meetings opened,
but even with proper preparation and support the groups would
have been too cumbersome.) It is significant that the systemic
group was considered so unimportant that only one meeting was
scheduled. The system in practice switched either immediately
(the market access group met once for 15 minutes) or after a reasonable
time to present, but not debate, positions to bilateral consultations.
The final "Green Room" procedure,
of selecting about 25 countries to reach a general statement,
failed for several reasons. Some were unavoidable (very opposed
positions, political commitments, the fact that one of the principal
negotiators was also the chair), but some are susceptible to reform.
Content: if there had been appropriate
preparations and many more, smaller, working groups, the issues
left could have been narrowed down and focused. The Green Room
had to spend most of its time on the single issue of agriculture.
Composition: this was not acceptable
to the majority of the delegations. It is necessary to think for
the future of how a formal system of representation might work:
countries could combine by interest group (the Cairns model for
agriculture or the International Textiles and Clothing Bureau
among developing countries), by region, by income level (least
developed countries were the object of much rhetoric, but not
represented in the final group), or by type (small islands did
achieve representation). In Seattle, it might have been impossible
to set up a formal system of representation and reporting back,
but there was all the material for an informal one. There were
meetings of various geographical groups, such as the Africa or
Latin America groups; there were formal meetings of ministers
of the regional groups. (SADC operated very effectively). There
were groups which had put in joint positions before the meeting.
There was all that was necessary for a competent organisation
to devise a system. Instead, the Chair chose the countries. Both
the African and the Latin American groups were very dissatisfied
with the representation chosen (and in both there are formal "groups"
which could have been consulted and which had been active in the
pre-Conference negotiations in Geneva).
CARICOM, despite having dedicated negotiating
machinery, under-performed and member governments left Seattle
frustrated: the Government for Guyana in particular was rather
outspoken on this, and its Foreign Minister appeared on network
TV, including to the UK.
The problem was not (in this case) one of lack
of capacity. Many developing countries, even the smallest and
least developed, had sufficiently large delegations to cover the
formal meetings. In terms of numbers and appropriateness of representation,
this was a major change from the previous negotiating rounds.
Because for many it was the first WTO negotiation, they were inexperienced
and needed additional support from the WTO. This had been implicitly
promised in the Director-General's nomination of representatives
for the Least Developed countries in September 1999, but neither
of these was active in Seattle, and no special assistance was
provided. Some were experienced and were highly effective in bilateral
lobbying; most were not, but the central problem was the lack
of opportunity to negotiate. The working groups offered only the
opportunity for a brief statement; 110 countries were not invited
into the Green Room. This placed a premium on experience, ability
to lobby and large, well-resourced delegations. This inevitably
handicapped most developing countries.
This brings us to identify a major problem which
adversely affected the WTO's (and WTO Secretariat's) preparation
for the Seattle Ministerials. For a crucial three months before
Seattle, the WTO had not only no Director-General, but because
of this it had no Deputy Directors-General (because all four are
appointed according to a geographical weighting of the membership).
In other words the member governments of the WTO allowed the sitting
Director-General's term to expire without any viable plan or schedule
for ensuring his replacement with a competent appointed leadership
team in the run-up to the intended launching of a Millennium Round.
This neglect beggars belief (and we trust it will not be repeated
with the appointment of the IMF's new Managing Director in February).
IMPLEMENTATION OF
URUGUAY ROUND
MEASURES
The post-Seattle General Council did not come
to a conclusion on this. There is some evidence (eg from southern
African countries) that this is not as general an issue as some
countries (eg in south Asia) would argue. Given the lack of agreement
on a new agenda (which could have included this), there is no
formal way of putting revision of implementation dates on the
agenda. Improved and extended technical assistance may be more
important for developing countries than intervention.
AGRICULTURE AND
SERVICES
It perhaps needs to be emphasised that liberalisation
of services, particularly transportation, communications and other
services which are a cost to trade, is as important to some, including
many small developing countries as liberalisation of agriculture.
The opposition by a few developing countries to such liberalisation
should not be assumed to be a universal position.
TARIFF-FREE
ACCESS FOR
LEAST DEVELOPED
COUNTRIES
In the Ministerial Conference, this was allowed
to be presented as a new proposal, and an exclusively EU interest.
This was apparently slightly balanced by the EU-Canada meeting
later in December which secured some Canadian interest in it,
but it is important that it is seen as a general initiative and
not a negotiating ploy and that it be properly thought through.
The UK has never been enamoured of the Ildc Group because it excludes
India and the Commonwealth Caribbean without any good reason.
In particular, there is a risk that developing countries will
turn away from the multilateral system (because of frustration
at the lack of progress in Seattle) to bilateral deals with the
EU and the US (the post Lome proposals and the US Africa Bill,
for example). This would be potentially damaging for them because
of the effects of over-concentration of trade and trade diversion
and because of the difficulty which weaker partners have in reinforcing
their side of reciprocal deals (albeit asymetrically): the continuing
dispute over ratification of the EU's FTA with South Africa because
of obscure wines and spirits names ought to be a warning. There
will be a negotiating problem in that it is not part of the built
in agenda, so there is no formal way of requiring negotiations
on it within the WTO. This does not prevent individual WTO members
joining together to offer it, but it will require a separate initiative.
Perhaps it is time for a new start on a multilateral
trade initiative to benefit the poorest countries. It would be
worth at this stage reviewing the UN's procedure for defining
members of the Ildc group, now that valuable trade preferences
and advantages are about to be bestowed on them.
Ms Sheila Page and Mr
Adrian Hewitt
Overseas Development Institute
January 2000
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