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Session 2000-01
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Delegated Legislation Committee Debates

Draft Advisory Centre on WTO Law (Immunities and Privileges) Order 2001

Sixth Standing Committee on Delegated Legislation

Monday 30 April 2001

[Mr. John Butterfill in the Chair]

Draft Advisory Centre on WTO Law

(Immunities and Privileges)

Order 2001

4.30 pm

The Minister of State, Foreign and Commonwealth Office (Mr. John Battle): I beg to move,

    That the Committee has considered the draft Advisory Centre on WTO Law (Immunities and Privileges) Order 2001.

The draft order was laid before the House on 10 April. It will enable the United Kingdom to ratify the agreement establishing the advisory centre on World Trade Organisation law, which was signed by my right hon. Friend the Secretary of State for International Development and presented to Parliament in May 2000. That relates to Command Paper 4721.

The advisory centre will be located in Geneva and independent of the WTO. Its purpose is to provide free or low-cost support to WTO developing countries pursuing cases through the dispute settlement mechanism. The centre will assist developing countries to make use of the dispute settlement procedures. Most people would agree that developing countries can be at a considerable disadvantage in that respect compared with larger trading nations.

The agreement establishing the centre includes, under article 10.1, provisions requiring members to give the centre legal capacity, in particular the capacity to contract, acquire and dispose of immovable and movable property and institute legal proceedings. In other words, the centre will be given a legal personality. The draft order will enable the UK to give effect to those provisions once the agreement has been ratified and enters into force. The order will confer only legal capacity on the centre; it will not result in privileges and immunities in the UK for the centre or its staff. A similar legal personality has been granted to other international organisations in the past.

Ratification of the agreement will allow the Department for International Development to release the funds that it has allocated to support the centre. That is critical to the entry into force of the agreement, which requires 20 signatories to deposit their legal instrument of ratification and acceptance to get the centre up and running. I hope that this modest non-controversial order has the full support of all Committee members.

4.31 pm

Mrs. Cheryl Gillan (Chesham and Amersham): I welcome the opportunity to scrutinise the draft order on the WTO law advisory centre. I also thank the Minister for his courtesy in dealing with the matter. Last week, he provided me with an explanatory note on the centre from the Foreign and Commonwealth Office. That is the proper way to conduct business, and I commend the Minister because it has been most helpful.

I do not intend to oppose the order, but I want to pose a few questions. We support the principle of establishing an advisory centre. In a speech in January this year, the director-general of the WTO said that one major priority was to bring the developing and the least developed countries more fully into the WTO. This is a step along the way. The WTO has established reference centres to provide information and has even held ``Geneva weeks'' for non-resident delegations. I believe—perhaps the Minister will confirm these statistics—that 28 WTO members and 9 WTO observers do not have permanent delegations in Geneva, of which 18 are least developed countries and many are small economies. Will the Minister confirm the position of delegations vis-a-vis their permanency in Geneva?

The WTO advisory centre will no doubt be able to provide legal support to smaller countries. According to reports, such as that in Lloyd's List last year, the support will go to the countries that cannot afford the huge teams of lawyers employed by bigger nations to fight trade disputes. That is all very commendable and represents an effort to ensure that the strongest look after the interests of the weakest.

I must, however, ask a few questions to clarify some details that surround the order. Will the Minister give us more detail about the ratification process? This is an immunities and privileges order. Such matters often concern parking tickets for diplomats. Before coming into the Committee, one hon. Member said, ``I bet you someone will raise car parking tickets for diplomats.'' I am not raising that point, but, as such orders usually relate to those circumstances, will the Minister explain how this this order relates to the ratification process? Is the order the ratification process and what instrument will we deposit to establish that we have ratified the agreement?

Have only 18 countries ratified the agreement so far? Will we be the 19th, when do we expect to reach 20 and when will the necessary legal instruments be deposited? Will the Minister explain the first steps once the ratification process has reached the threshold of 20? What will happen? How long will the centre take to become operational, have premises been identified and established already and, if so, where are they? What preliminary moves have been made on working out what happens next, who does what and how the centre comes into being?

I want to ask about the financing of the operation. I understand that eight countries have paid $1 million into the endowment fund. They are listed in annex I on page 9 as developed country members: Canada, Denmark, Finland, Ireland, Italy, the Netherlands, Norway and Sweden. Ireland, the Netherlands and Norway join the United Kingdom, which is not an endowment fund member, in contributing $1.25 million to the annual budget during the first five years. Why did we not contribute to the endowment fund, and why have other countries not contributed to it? Why are we giving an annual contribution, and how will it be paid—in what instalments, when and to whom? How was the list of contributors arrived at, and why have the majority of the A-list on page 9 not contributed? Other documents report that Sweden will pay an undisclosed amount in multi-year contributions for the first five years. Is that correct and, if so, why will it do so? Also, why do explanatory documents from the trade and development centre list the United Kingdom as paying at least $1.25 million? Will the Minister confirm that that is an error, that we are paying only $1.25 million as a one-off contribution during the five years and that there is not an open-ended commitment?

Has any money been paid to the organisation by any country and, if so, who has it been paid to—the WTO? Where is the money being held, how is it being invested and what is happening to it? From the document, it appears that auditors must be appointed as a condition of the order coming into force. As another condition is the payment and receipt of $12 million, presumably by the WTO, at what stage will someone be responsible for overseeing that money and who will that be? I hope that I have not fallen over my words and that the Minister understands my meaning.

I want to ask about the departmental responsibility concerning the order because it appears to be a strange kettle of fish. The agreement was signed in November 1999 at a side meeting of the WTO by the Secretary of State for International Development. As I understand it, the money will come from her budget The Foreign and Commonwealth Office is responsible for the order and the ratification process. Why was the Department for International Development made responsible for the policy of the agreement and for implementing provisions in the UK, and the FCO responsible for the conclusions and the implementation of the agreement obligations? It would have been much better for one or the other of the Departments to have carried out all the functions.

Another question arises in our minds, to which there may be a simple answer. We have just passed legislation that highlights the exclusive poverty focus of the payments made from the Department for International Development. I am not sure that the $1.25 million over the next five years meets the criteria laid out in that legislation. Will the Minister reassure me that there are no tensions between the legislation and that payment, which appears to be for lawyers' accommodation and fees? The aims and objectives set out in the legislation are correct, but they have tied the Secretary of State's hands. Will the Minister assure me that the organisation is included in the legislation, and that there is no lacuna into which the payment and that activity of the Department fall? The payment is for lawyers and administrators and does not fulfil the poverty focus.

My final questions are on what lawyers will be employed by the centre. Will any British lawyers be employed there? Is there agreement on the nationality of the lawyers who will be engaged? Will they be related to the founding members or the contributing members? What opportunity will there be for non-contributing countries to contribute to the centre?

It is apposite that we are looking at the order today, not least because tomorrow we are threatened with the sort of disruption that we saw in Seattle. Indeed, the disruption there was so bad that the Seattle police chief quit his position as a result. I hope that nothing untoward happens tomorrow, but we must condemn any mindless violence that individuals may perpetrate, whether it be attached to the WTO or to the May day celebrations. Tomorrow should be a day of celebration, not fear, as it is becoming. I look forward to the Minister's response.

4.43 pm

Mr. Harry Cohen (Leyton and Wanstead): The hon. Member for Chesham and Amersham (Mrs. Gillan) referred to the WTO as the focus for the protest tomorrow. We are told that global capitalism is unrestrained and unrestrainable. I do not believe that that is the case; the worst excesses can be restrained and that is why it is important to make institutions such as the advisory centre work. I support the Government in making it an organisation that works for the people, not just multi-nationals. The advisory centre is a potentially important part of that, creating clarity in the law.

We are faced with the schizophrenic approach of the United States. On the one hand, it claims to be the leader of a partnership in terms of the WTO and other organisations and on the other it puts America first, without caring about anyone else. If the United States acts as a proper leader, there will be something in that for other nations, including this country. If it acts only in its own interests, the WTO will not work. I hope that the Minister will take that important point on board when he next discusses it with his American counterpart.

4.44 pm


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