APPENDIX 1
APPENDICES TO THE MINUTES OF EVIDENCE
TAKEN BEFORE THE INTERNATIONAL DEVELOPMENT COMMITTEE
Memorandum submitted by J R Seagrave
AFTER SEATTLE—CONSTITUTIONAL
REFORM OF
THE WTO
The Committee will have received submissions
from Christian Aid, Oxfam, ActionAid, and many other NGOs. The
NGO community has displayed a remarkable unanimity in opposing
an ill-considered expansion of the role of the WTO, whilst generally
recognising that free trade can bring benefits to the poorest.
Committee members will recognise the depth and scope of NGO day
to day contact with the poorest, and that the views they express
need to be set out clearly alongside the views of major commercial
and trading interests.
It is crucial this NGO perspective is given
proper weight in the UK contribution to attempts to restart the
discussions and set a new agenda.
It should also be remembered that trade is about
more than trade. It is worth recalling that a US trade restriction
prompted the Japanese attack on Pearl Harbour. The current system
is clumsy and devoid of the finesse required to manage successfully
the complex relations between sovereign states.
It is suggested that two key issues for the
present rules-based trade system to survive and flourish are:
(a) It is seen to be absolutely fair and
impartial in adjudication of disputes, and decisions managed
in a fair and realistic way (in particular allowing adequate
time for adjustments in countries and communities which have limited
capacity for change). The extensive experience of the EU in managing
such transitions is relevant here.
(b) That it supports individual rights
and freedoms, and that free trade rules do not impinge on
legitimate cultural and individual perceptions, and desire to
express opinion and choice. (Notably in relation to food and genetics).
THE POTENTIAL
FOR IMPROVEMENT
IN ITS
RULES AND
PROCESSES
An examination of the decisions of the WTO (and
the context of NAFTA decisions using similar procedures) suggests
that the mechanisms that have existed historically and with relatively
little contention, to resolve disputes about levels of subsidy
and tariffs in manufactures, do not work satisfactorily when the
process is extended to environmental and agricultural remits.
Recent cases relating to bananas, shrimps/turtles.
EU v Massachusetts Burma ban make the WTO appear to enter areas
where it has no democratic mandate to do so, and equally, appear
subject to improper pressures eg the allegation that Chiquita
campaign contributions were the main reason for US pursuit of
the banana issue.
In the UK and Europe at least, the growing popular
revulsion to corrupt political practice, suggest that there will
be major consequences if procedures do not establish rules that
put both WTO and its technical advisory bodies totally above suspicion.
It is therefore suggested that if the current
rules-based system is to survive (and history has many examples
of failed and abandoned trade arrangements), a rigorous review
similar to that carried out by Nolan is required, to ensure that
the WTO only has the highest standards of impartiality. This needs
to consider both probity and technical competence.
A particular concern is the reliance that WTO
uses UN technical specialist groups eg Codex in relation to food
safety. These bodies are currently largely drawn from industry
representatives, and whilst this may be helpful, indeed essential,
for many aspects of their work, creates an impression of partiality
and vested interests when issues such as GM foods arise.
IMPARTIALITY
The basis for impartiality are well established
in public administration. In this context, it is suggested a review
of the rules needs effective procedures to ensure that:
Membership of panels is drawn from a pool
representing a wide international spread, not just American and
European trade lawyers.
Arbitration panels include relevant experts
eg environmental or labour law specialists, as well as trade experts,
and/or the resources and ability to commission totally independent
reviews where there is any doubt on technical matters.
Where technical issues are substantial, a
larger panel than three would be appropriate. Small panels may
be efficient, but are less convincing of objectivity.
An appeals process is essential, especially
if new technical information appears.
Transparency of process is essential.
A major and central reform would be to ensure
that the chair, and a majority on technical advisory committees,
and a majority of specialist advisers on related panels, are always
drawn from independent sources eg academic or governmental agencies.
If evidence that a case is being brought
as the result of corrupt pressure on the Government concerned,
the panel should have the power, and be expected to use it, to
delay the case and remit it to the Government concerned for review.
All members and advisors are subject to stringent
rules on subsequent employment.
A much greater use of interim and time limited
judgements, which give adequate time for adjustment. Any judgement
that potentially involves a major impact on a community (eg bananas)
needs to be accompanied by a report that analyses that impact,
and it is mandatory that that is taken account in the judgement.
INDIVIDUAL RIGHTS
(a) EU v State of Massachusetts
It is clearly bizarre for the EU to take action
against Massachusetts because it has imposed a state government
purchasing boycott on Burmese goods because of objections to human
rights abuses there. The good citizens are furious at this intrusion
(look at their websites). Clearly there is no issue of substance
here, the amount of purchases is trivial, if any.
What the EU is really doing is seeking to prevent
Massachusetts citizens from expressing their disgust at the Burma
regime—a ludicrous intrusion.
Whilst extensive arbitrary boycotts would clearly
lead to an anarchy in trade, any robust system must have some
tolerance towards expressions of this kind. One way of achieving
this would be to have carefully framed de minimis rules, and procedures
for screening cases for intrusions of this kind.
(b) Food labelling
There is no need to rehearse the arguments on
food origins. It is suggested that no system that simply ignores
the deep religious, cultural and personal significance of food
and its origins has any chance whatever of earning global public
respect.
POSITIVE DEVELOPMENTS
There are many ways in which DFID could assist.
I make two suggestions:
(a) Whilst the proposal to offer unlimited
trade access to the 48 poorest countries is very welcome, it will
be an empty gesture without focused packages of assistance. There
are not many "growth poles" in sub-Saharan Africa .
. . When I visited North Ghana in 1995, the only realistic prospects
seemed to be cashew and possibly shea butter. The irony is that
any effective package would seem to really need privileged access
to markets for a time, just like bananas . .
It is suggested that a detailed study of how access
would be followed through with aid and promotion would help convince
that this was a substantial opportunity.
(b) India has a booming software trade,
which shows that third world countries can benefit substantially
from trade in services. The UK has a chronic shortage of technicians
in the NHS and the prospect of far worse to come as individualised
genetically-based treatments come to the fore{Such treatments
also pose a likely trade drain in larger numbers of well off patients
seeking treatment in the North, if services are not developed
in the South.
Potentially, some of this work could be done
abroad with appropriate communications and logistics. Institutional
and legal barriers also need to be considered.
DFID could undertake a review of barriers
to service trade, notably medical technical services, and feed
in any conclusions to the post Seattle rounds.
J R Seagrave
January 2000
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