Examination of witnesses (Questions 221
- 239)
TUESDAY 28 MARCH 2000
MS SHEILA
PAGE and DR
CHRISTOPHER STEVENS
Chairman
221. Good morning. You are very welcome to the
Committee this morning, and thank you for coming. Our first question
is to ask you briefly to state in what capacity you have been
examining issues associated with the World Trade Organisation,
especially with regard to its impact on developing countries.
I know, Sheila, you have a lot to tell us on that.
(Ms Page) Thank you, but it is probably not the most
interesting part of the meeting. My name is Sheila Page. I work
with international trade issues at the Overseas Development Institute.
We first became involved in this when we were assessing the results
of the Uruguay Round and its effects on developing countries.
Subsequently (as one of the problems, we discovered, was that
they had not participated actively in that) we have been trying
to advise developing countries on how to identify the issues that
were important to them before the next Round began. We were particularly
involved in advising two of the African countries, Zimbabwe and
Malawi, in the run-up to Seattle.
222. We heard you were involved with the Malawi
delegation training of some of the civil servants.
(Ms Page) We helped them prepare background papers
on all of the issues for Seattle. We organised in-country workshops,
government, private sector, NGOs, to discuss what the country's
position should be. Malawi asked me to go along as a member of
their delegation at Seattle.
(Dr Stevens) I am Dr Christopher Stevens from the
Institute of Development Studies. My trajectory towards the WTO
was slightly different. I became involved as a consequence of
the problems that the Lome Convention has had with WTO compatibility;
and also with my work on the impact on developing countries of
reforming the Common Agricultural Policy. Our interests have merged,
as it were, in the last couple of years and we too provided assistance
for Seattle, working with the South African Government in developing
their position.
223. That was with the South African Trade Minister,
was it?
(Dr Stevens) The Ministry of Finance.
224. Who is the South African Trade Minister?
(Dr Stevens) Alec Erwin.
225. We were hoping he would come and give us
some evidence, but I do not think we have managed to arrange that
so far. He speaks adequately on behalf of these issues, does he
not?
(Dr Stevens) He does.
(Ms Page) He gave an excellent presentation at Seattle
on this which you might want to get a copy of, and I can send
you one.[1]
Chairman: Yes, I do not think we have
seen that. Thank you.
Mr Robathan: We have heard a lot about
the Seattle negotiations and quite a lot of problems, particularly
regarding procedural and organisational issues—the Green
Room springs to mind, but many others as well.
Chairman: Green Boxes now too!
Mr Robathan
226. Can the problems faced at Seattle be overcome
through procedural and organisational reform, or were events at
Seattle indicative of the fact that the interests of the participants
are so disparate as to be irreconcilable? Is it fundamental or
procedural?
(Ms Page) It was both in Seattle, of course. The point
of having trade negotiations is that you have extremely deep differences
between countries which can only be resolved in this type of forum.
I think the procedural problems—to take those first, although
I do not think they were the most important—were able to
be overcome. There was an inexperienced Director- General. He
did not prepare as well as even he could have done in the three
months before Seattle. There was a lack of the sort of identifying
of possible compromises which one expects sherpas to do before
a ministerial meeting. There was a lack of simple preparation
of background papers, or organising sufficient detailed meetings
as opposed to the very broad topics.
227. You are laying the blame for this really
at the WTO's door?
(Ms Page) The WTO in the broadest sense. The WTO including
the representatives of countries in Geneva. They had not reached
the point you should be at before the first day of a ministerial
meeting. That said, there is no question there were very fundamental
differences on agriculture between the EU and the US. These would
have been very difficult to resolve during a Round. I do not think
they were unresolvable in terms of setting the agenda for a Round,
which is all you really needed to do in Seattle. There was the
question of whether you could put the wording as "elimination
of subsidies" or just "gradual reduction of subsidies";
this is the type of thing decent drafts people are paid to work
out. It is not an irresolvable problem for an agenda. I think
there were the makings of a compromise by the Friday which, if
they had been there by the Monday, could have been achieved in
the following four days; but starting on Friday afternoon you
could not achieve them by Friday evening.
(Dr Stevens) I agree with Sheila, it was both procedural
problems at Seattle and fundamental differences. I do not think
they are irreconcilable but an attempt has to be made to reconcile
them. What is most worrying in the period since Seattle is the
absence of serious political will to take even token gestures
towards resolving them. I think the two fundamental problems are
that there have been two areas in which the WTO has expanded very
rapidly and that change has not been digested: one area is in
membership, moving from a small group of countries with fairly
similar interests and backgrounds, to a much larger group with
much wider interests—and we have seen the inadequacy of
decision making in that. And the other area of expansion is in
the scope of trade policy. It was much easier to forge a consensus
when trade policy meant tariffs and quotas; but when it means
the system of the administration of justice on intellectual property
or whether or not the United States is allowed to have a certain
tax treatment for its offshore companies, you are dealing with
issues which are inherently much more contentious. Until those
two areas of fundamental difficulty have been resolved we are
not going to be back on a smooth path of governance of international
trade policy.
228. It is very interesting, you are really
saying the fundamental problem was exacerbated by the procedural
problems?
(Dr Stevens) Yes.
229. As regards the WTO itself and Mr Moore,
it was put to us that people expected there to be a Plan B?
(Ms Page) Yes.
230. There was no Plan B, would you agree with
that?
(Ms Page) There was a Dunkel draft in the case of
the Uruguay Round prepared by the then Director-General; but there
was not a Moore draft. I think it was assumed he had one in his
pocket!
231. Linked with procedural problems is the
lack of negotiating capacity in many of the developing countries—we
have representatives in Geneva. To what extent does that lack
of capacity limit the ability of negotiating countries to participate
fully? What should the priorities for donor assistance be in building
up negotiating capacity of developing countries both short and
long term?
(Ms Page) There is a problem. It is partly, of course,
a problem of money—it costs money to keep a delegation in
Geneva. It is a question for some countries of priority. It is
not all developing countries that lack the capacity, and not even
all poor countries that lack it. Tanzania is very good at it;
Mauritius is outstanding; Brazil is outstanding. There are some
very good negotiating capacities, because these countries have
identified trade as being a priority and have put resources into
it. As a trade economist and a trade policy person, of course
I believe there should be a lot more money put into this sort
of thing, but if you heard my colleague who advises Malawi on
seeds you would be getting a different story. These are countries
that need a lot of assistance for a lot of things and you have
to identify how much priority they need to give to trade—at
the moment, given negotiations, I think it is more than normal.
You have to be a little cautious on this. That said, I think this
simple question of negotiating capacity—in the sense of
knowing what needs to be done in a WTO Round, and how you behave
in Seattle or Geneva—is an important one and that needs,
above all, experience and perhaps a bit of internship-type experience
of actually knowing how other countries do it. There is no single
model; the EU does not do it the same way as the US; but there
are possible models for doing this. You need actually to know
the people involved. To me, that was one of the fundamental disadvantages
of the countries that did not have Geneva delegations. When a
lot of the work is being done by grabbing people in the corridors,
if you cannot recognise the people then you cannot grab them.
It is harder to do informal negotiations when you do not know
what you are doing than to do formal negotiations.
232. As a donor country the UK can assist in
doing what you describe as "internships", which would
not be a great effort in, for instance, Geneva?
(Ms Page) The WTO has courses for trade officials,
and these are quite good. It is three months at a fairly early
stage of someone's career, and 15 years later he probably still
literally knows his way around the building but it has been a
long time.
(Dr Stevens) The lowest common denominator of all
the comments on what to do after Seattle is to boost developing
country capacity, and that is obviously the case. I would endorse
everything Sheila has said. There are two elements to it: what
I think is particularly necessary is to increase capacity in national
capitals for understanding the way in which international trade
policy can impact upon them in a way which did not occur in the
past. A lot of our work on food security is to persuade people
who know a lot about the domestic elements of food security that
there are things happening on the global stage which could sweep
away a lot of what they are doing or make more feasible other
things which they would like to do. One of the reasons why the
political will to boost the Geneva delegations is not there is
because the potential impact of what happens in Geneva is not
fully appreciated. So it needs to be technical assistance and
support, not only directed to the WTO as such but to develop in
national capitals an appreciation of the international dimension
of what they are doing.
Mr Rowe
233. Do you think that the inadequacy of the
Director-General's response was simply because he was new, or
do you actually have doubts about whether he is the right man
for the job?
(Ms Page) It is unfair to judge anyone after five
months in the job, I suppose. It is a very difficult job. I do
not think we appreciated how difficult a transition from national
politician to international civil servant was under his two predecessors,
because they had both been in a halfway house; they had been European
Commissioners which is intermediate. I do not think you can realistically
say that no-one should ever become DG without having been a European
Commissioner first; but you do need some way of converting people
into understanding the difference between being a Minister and
being a Director-General of an international organisation. He
had not had that. He also brought in as his deputies four people
with equal lack of experience, which was unfortunate. He has not
done very much since Seattle. I was very discouraged by his first
statements—there was a mini-ministerial in December immediately
after the Round and then one in February, both of which seemed
to be "Well, let's wait and see and hope something turns
up".
(Dr Stevens) I would not like to comment upon the
capacities of the incumbent, but there are a number of factors
which you have to take into account. One is that his selection
was highly divisive. The role of a DG is a very strange one, because
the WTO Secretariat is a very small organisation; that is one
of the reasons why developing countries' national capacity has
to be boosted it up. It is not quite so necessary in the World
Bank and the IMF because there are staff members who can do the
work for you, as it were, and that is simply not the case in the
Secretariat. With the Director-General, if he has any influence
at all, it is through being able to bring people together informally
to hammer out consensus. Some of the current incumbent's predecessors,
like Sutherland, were extremely good at that. Someone who comes
to office already opposed by half of the membership is not well
placed to do that. The second point is, because of the compromise,
splitting the normal turn into two, he is effectively a busted
flush because there are probably not going to be serious broad
negotiations before the end of his term.
Ann Clwyd
234. Could you tell us what the process of selection
is? How is selection carried out?
(Ms Page) It makes the Green Room in Seattle look
transparent. It is the same as, unfortunately, we have seen for
the IMF; it is consultation among the countries—particularly
among the more important countries; and very active canvassing
in both of the last two cases by the candidates.
Mr Worthington
235. It would be fair to say that whoever had
got the job was being given a hospital pass really, that no matter
what their skills were the likelihood of a satisfactory outcome
out of Seattle was pretty minimal given what had occurred before
in terms of the delays in appointing?
(Ms Page) Out of a Round I agree the chances were
dim. Seattle, let us remember, was not supposed to reach a settlement—it
was supposed to reach an 18-20 page agenda. That is more of a
civil service drafting, finding agreed forms of words that cover
both sides—which you cannot do in the final draft but you
certainly can at that stage. I do not think Seattle had to be
a failure. From that point of view, in a sense the demonstrations
helped. What struck me was how many people were saying, "We
have to show them; we've got to get something out of this".
236. We are now faced with the situation of
a new Director-General in 18 months?
(Ms Page) Yes.
237. Is there anything that can be done to help
there to be some kind of progress over the next few years—because
that sounds like a recipe for paralysis at best?
(Dr Stevens) I think there are two political gestures
that need to be taken on board, and perhaps two more fundamental
political changes which could be flagged. Whether they can be
done depends not upon the Director-General but upon the members.
One gesture is to extend duty free treatment to least developed
countries. As both of us have said many times before, it is very
much a gesture; it means almost nothing in terms of change for
industrialised countries and it means pretty little to the least
developed. But, by the same token, an unwillingness to do even
that is a pretty strong slap in the face to those who say, "We
need to involve developing countries more in the WTO". The
other political gesture is to adapt the pace of negotiations,
or to promise to adapt the pace of negotiations, to developing
country capacity. There has been a lot of discussion of whether
it should be a broad Round or a narrow Round; I think that is
misguided. It is not the breadth of the Round which counts, it
is how major a change is being requested under each item. You
could have a narrow Round which involved huge amounts of change,
or a broad Round which involved only quite small changes. The
problem for even the better funded and resourced developing country
delegations in Geneva is that it is jolly difficult to monitor
more than a limited amount of negotiations at any one time. A
willingness on the part of developed countries to exercise due
restraint in the negotiations would be very helpful. Both of those
could be done within the next 18 months without any technical
difficulty at all; it is purely a case of whether there is the
political will in Washington as well as in other national capitals.
Two more fundamental changes which could not, I think, be completed
within 18 months but could be flagged—one of which is to
amend procedures on dispute settlements so as to recognise vital
interested parties; and the other is to revisit Special and Differential
Treatment and to make it more relevant to the trade issues of
the 21st century, instead of being a rump left over from the debates
of the 1950s and 1960s.
Ann Clwyd
238. What do you think would be the ideal method
of selection for a new Director-General of the WTO?
(Ms Page) I think you have to decide whether you want
a senior politician type, in which case you should go for someone
who is fairly senior from one of the major countries—which
has disadvantages from the point of view of commitment and
parti pris, but advantages from the point of view of someone
with weight—or whether you want to go back to the Swiss
civil servant model. I do not think you can go back to that. You
might be able to go back to some form of joint appointment with
a single deputy who was more of a manager and a negotiator, and
a senior person who was a minister and permanent secretary type.
Barbara Follett
239. Do you have any personal preference?
(Ms Page) I think that would be the type of model
you would want. That does involve identifying someone who is senior
and willing to take the job. The field at this time was not that
good. It was not as good as it was when Ruggiero, the predecessor,
was appointed.
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