Examination of Witnesses (Questions 360
- 377)
WEDNESDAY 7 MAY 2003
MR CARLOS
FORTIN, MR
JOHN BURLEY
AND MS
MANUELA TORTORA
Q360 Mr Walter: Could I perhaps move
us on a little? We have set ourselves, or you or the WTO has set
itself, a tough agenda by calling this "the development round".
I wonder if you would like to speculate on what you think are
the key obstacles to, at the end of the process, our being able
to say, "That was a genuine development round", and
whether or not you think that the deadline of 1 January 2005 is
one that is achievable, or whether we should be thinking about
moving that deadline on?
Mr Fortin: Starting with your
second question, the fact that three of the deadlines have been
missed already does not give you a tremendous amount of optimism.
But things can change, obviously. What we hear now is that there
is a serious concern with trying to move things forward, to prevent
Cancun from being a fiasco—which it might well be. Exactly
how that will happen is unclear. There is some movement in agriculture.
How far it will go, we do not know. There is the idea that perhaps
pushing the new issues, the Singapore issues, at this stage may
not be the best way to unblock things. However, there is at least
an increasing awareness of what is at stake and the extent to
which a second Seattle would not be at all helpful to anybody.
Will that mean that the basic deadline will be met? We do not
know. It is difficult, clearly, but it is not impossible. On the
other hand, an extension is not the end of the world. The Uruguay
Round took a very long time and, for all that, it produced quite
interesting and positive results. Cancun is not necessarily a
watershed. It is another step in that direction. But what would
be bad would be if Cancun fails, in the sense that nothing comes
out of it but a lot of bitterness and bad feelings. That is why
I mentioned Seattle, which was exactly that. That should be avoided.
But to set unattainable goals at this stage for Cancun would not
be helpful. Main obstacles? I guess the complexity of the issues.
The fact that, in each of these areas that we are talking about,
there are so many detailed questions that need to be addressed.
Developing countries find it increasingly difficult to cope. Manuela,
who has been dealing with them on a daily basis, can vouch for
that. And just simply in understanding what is going on. At one
point there was a leak of the requests of the European Union on
services, which appeared on the Internet for some unknown reason.
It alerted developing countries to what they were up against.
This was a detailed study of all the situations in each of the
other countries, with specific requests to change this particular
paragraph and that particular law, et cetera. It is a very "artisan"
type of thing, but developing countries cannot begin to conceive
of it. They have to respond to that and, on top of that, make
their own requests. I would therefore say that the complexity
of the issues, the human resources and institutional deficit in
developing countries—which varies enormously, and some countries
like India would probably not have serious difficulties coping
with all of this—when you get to the least developed countries,
for them it is extremely difficult. Many of them do not even have
representation in Geneva. They are serviced from Bonn or from
Paris, or somewhere. It is a very serious question.
Mr Burley: On the question of
whether there are benchmarks against which to judge whether the
outcome of Doha represents a development round, I think that Mr
Ricupero has said, to some extent quoting Dr Supachai in an interview
in the Guardian which he gave a few days before he took
up his job, that the judgment of a development round was on three
issues: the extent to which implementation issues were realistically
addressed in the outcome of the negotiations; the extent to which
agriculture was addressed from a development perspective; and
I believe the third one was textiles—the extent to which
textiles were really dealt with in the context of the negotiations.
If the round resulted in significant movement in favour of development
and developing countries on those issues, then it could be concluded
that it was a development round. Obviously, the jury is a long
way from reaching any kind of judgment on that matter for the
moment.
Q361 Mr Walter: Could I ask you one
final question on this section, which is really the flip side
of this? From an UNCTAD perspective, what are the consequences
of a failure? What are the consequences if we actually get very
little out of the Doha Round, whether it is the date, the timetable
we already have, or whether it is an extended timetable? What
do you think the implications of failure would be for the developing
world?
Mr Fortin: I will ask Manuela
to come back on the other question but let me deal with this,
because it is very important. We think that they would be devastating,
because the economic front, and particularly the trade front,
remains a bastion of multilateralism in today's world. That you
can see daily. Things have not changed fundamentally. We are still
talking about issues, concrete issues. Everybody understands that
the way forward is to get international consensus on disciplines
and on commitments. When elsewhere the situation is different—we
see a certain erosion of multilateralism—I think that to
have a failure in trade would be very serious for the world as
a whole. Not just for traders or trading countries but for the
international community as a whole, and for the world system as
we know it.
Ms Tortora: I wanted to add to
what John mentioned in terms of obstacles. He refers correctly
to the obstacles in terms of the main topics that we identify
as key, crucial, vital interests for developing countries; but
very recently, more and more I see conceptual or systemic obstacles
emerging which are not linked to one specific area like textiles
or agriculture. We refer to Special and Differential Treatment
as a concept, as a whole. Yesterday and today we were in a seminar
with many WTO delegates, developing countries and developed countries
together, brainstorming around how to deal with it. It appears
very clear that it is the main horizontal issue, which is becoming
a concept that needs to be clarified as one of the outputs of
the negotiating process, to go ahead on all of the fronts. It
was not clearly interpreted in that way until recently, in the
last few months. Now, however, it is emerging as something which
is really an obstacle for the overall agenda, because it is how
the developing countries feel that they are being treated in the
negotiating process. They expect no reciprocity, Special and Differential
Treatment, and spaces for development policies in the different
topics and areas where they then go to the technicalities of how
to do it. But first it is the concept as such that is being discussed,
and it is not clear to them if the developed countries have this
same perception that it is needed precisely to ensure that multilateralism
is alive. They are more and more aware that Special and Differential
Treatment is one of the main instruments to keep the multilateral
WTO system working properly and accommodating the asymmetrical
conditions between developing countries and developed countries.
Linked to that, there are circumstances which are helping that
process of having this concept as an obstacle. On Thursday the
Chairman of the General Council will put on the table one more
additional proposal on Special and Differential Treatment. That
will be another parameter of how to deal with this issue, if the
proposals are accepted or not, or blocked once again. This will
continue the process of blocking everything. On 12 May there is
an important special session of the General Council on coherence,
which is also another systemic issue that is becoming more and
more linked to Special and Differential Treatment. Coherence in
the sense of what is the role of financial institutions or government
institutions linked to the WTO role, and what can they do to help
to have a development agenda. All that is part of the systemic
conceptual issues that are coming more and more under discussion,
rather than specific topics as such.
Q362 Tony Worthington: WTO is a relatively
new organisation. I was wondering, when looking at it, how you
felt the developing countries were coming together to take a common
position, or to work out a stance, or to further their own interests?
What is your view on how that is developing?
Mr Fortin: One thing that is developing
rapidly is the participation of developing countries in the work
of the WTO. The number of developing countries that participate
and the quality of their participation has improved dramatically—since
Singapore, when they were simply there to listen to what was being
proposed and, more often than not, not really understanding what
was being proposed and therefore taking the only rational position,
which was to say no. So it was a very unproductive type of dialogue.
Now it is different. In Seattle, half of the proposals on the
table had been put forward by developing countries and many of
them were of very good quality. They are therefore participating
in earnest. They are also working together, in the sense of trying
to identify areas where they do have common positions. Not necessarily
to take them in a sort of incendiary manner, but essentially to
try to clarify amongst themselves and to put forward positions
in a collective way. That is being encouraged. For instance, the
project that we have in India, financed by DFID, includes coalition-building—in
its benign sense of trying to find common positions and putting
them forward in a reasoned way.
Q363 Tony Worthington: The Group
of 77 sounds enormous, in terms of maintaining a common position.
Are you getting further splits, perhaps necessary splintering,
to say, "We are separate from how the 77 wanted us to be"?
What sort of tensions are there?
Mr Fortin: As I say, the 77 as
such do not operate in WTO, but there is a group of developing
countries in WTO. They reflect these very serious differences
in viewpoints. Agriculture is a good example. A number of developing
countries—mostly Latin American, though not only Latin American
but also other members of the Cairns Group—are essentially
trying to open up agricultural markets. Others are more guarded.
Nobody is against opening up agriculture. For example, the US
and India, where they have said, "You have to take into account
the special impact of agricultural issues in our society, because
of the way we live", and so on. On the Singapore issues there
is a substantial difference between countries which are very much
opposed to bringing, for instance, investment issues into WTO,
and others like my own, Chile, which are very much in favour—not
least because Chile is big enough to export capital.
Ms Tortora: I would just add that
the quality of the participation of the developing countries is
impressive as compared to after Seattle and the Seattle period—it
improved in less than two or three years, in fact. That is due
to two fronts. There is the quality of the missions here. Not
the quantity in terms of staff—they are still understaffed,
overwhelmed and congested; but the quality of some key negotiators
in particular has really improved a lot. Also at the capital level
the change is even more impressive, in terms of the structures
of their own consensus at the domestic level and the intra-ministerial
kind of consultations that you need to set the trade policy position
between the minister of trade, the minister of finance, the minister
of planning, or whatever—depending on the issue. These mechanisms
are also being improved in many developing countries. That then
shows in the quality of the positions that they bring to the table
here.
Q364 Tony Worthington: When we were
here as a committee last, it was just after Seattle. Then everyone
was saying, "We have to do something to build up the capacity
of these delegations". Quite a lot of effort has gone into
that. Our own government has done work on building up capacity.
What has worked in that area, and what still needs to be done?
Ms Tortora: A lot!
Mr Fortin: John was overseeing
the capacity-building programmes until he moved to his present
position, so he has a broad view of that side.
Mr Burley: I think that one very
important thing is not to create expectations that capacities
can be built over a short period of time. The reason why developing
countries have weak capacities to be able to negotiate significantly
is simply because they are underdeveloped. It is a reflection
of a level of development. The countries which are participating
effectively in WTO are those which tend to have a good administrative
structure, a good educational structure, and with certain clear
perceptions as to where their national trade interests lie and
how they wish to defend their interests in WTO. That is a reflection
of their level of development. One important consideration, therefore,
is to accept that it is a long-term process. Another important
implication is to accept that it is difficult to build capacities
in one area of society and not in other areas, because of the
trade-offs and interlinkages and so forth. The third aspect of
capacity-building, before actually getting into the substance
of trade and the work we are doing on trade and investment, is
to accept that it involves not only the public sector, the administration,
the government, but also the civil society—which, in this
sense, is the business associations, which obviously have to be
involved and have to have a good relationship with the government.
There has to be a good public-private partnership. It also benefits
when there is a certain capacity in academia, in universities
or in research institutions, and so forth, and also in public
opinion, which can influence the positions their governments take
in trade negotiations. All of that is a very complex process.
For a number of reasons, there is much greater attention to trade-related
capacity-building efforts now. In my judgment, amongst the more
important of those reasons are, first, the WTO and the WTO agenda
and issues; secondly, the recognition in the development communities—and
not just the trade communities—in the capitals of the donor
countries that a limited amount of investment in capacity-building
for trade and investment does in fact bring good returns for poverty
reduction, because of its impact on output, employment and growth,
and therefore on attacking poverty. Obviously, in UNCTAD we are
delighted, because we have been involved in this business for
a number of years and it is now common ground. That is very satisfactory,
therefore. However, there is another factor that I should mention,
which is that DFID and the Secretary of State have made an important
contribution in this area. It has not been the only donor that
has been involved in this, but it is a significant contribution
from the UK Government. I have been in UNCTAD for a number of
years, and I was present at the first meeting when the Secretary
of State visited Mr Ricupero. I was sitting behind her, and I
did have to pinch myself to say, "Is this really a UK minister
speaking to the Secretary-General of UNCTAD?". There was
a very good relationship at that time, and it has shown itself
in a number of ways.
Q365 Tony Worthington: One of the
ways of judging whether the developing countries are getting value
out of the WTO is the disputes resolution mechanisms. Are they
using those mechanisms satisfactorily?
Mr Fortin: Yes.
Ms Tortora: Yes, in general.
Mr Fortin: They have had some
substantial successes, as you know. It is true that these are
the more advanced developing countries.
Ms Tortora: In general, everybody
is happy about the mechanism as such in the developing countries
because they know the value it has, even if they are not using
it. Many of them say that this is the best result of the Uruguay
Round, so they have to preserve it and even enhance it. Many of
them are now very much involved and active in the ongoing discussions
on the proposals on how to improve the mechanism as such, basically
through different proposals to take into account the developing
countries' problems in using it more effectively. Even LDCs, which
are not users of the mechanism as often as others, are very interested
in these discussions.
Q366 Tony Worthington: In Britain,
we get conflicting advice about the new issues that are on the
agenda, as to whether the developing countries want those issues
on the agenda or whether they are imposed. What is your reading
on that?
Mr Fortin: Again, let me give
you my own impressions. I do not think that there is a single
position of developing countries on the matter or, for that matter,
on all the new issues, or the Singapore issues. I will take the
two most contentious—competition policy and investment.
A substantial number of developing countries feel that both of
those issues should be part of the WTO disciplines. In that sense,
these are not North-South issues. The most powerful argument against,
with which many developing countries would agree—and it
is a serious argument—is the argument of overload: that
there is enough on the plates of developing countries without
adding more. The counter-argument is the argument of numbers.
All of these issues are being discussed at all sorts of levels—bilateral,
plurilateral, subregional, regional, continental—and therefore
it makes more sense for developing countries to bring them into
WTO, where they can take common positions and have some kind of
power, rather than having to discuss this separately with the
United States, or wherever. On balance, I would say that the latter
argument would carry the day. I would feel that it is in the interests
of developing countries to bring it here, rather than all over
the place. But it is true that it does impose a serious set of
difficulties, and it is also an overload for the process. As you
know, the modalities of this should be decided in principle in
Cancun. No progress has been made on doing that. The two working
groups that are operating are dealing with other things, and rightly
so. They are dealing more with substance. So I think that it is
unlikely that, come September, there will be concrete proposals
on how to bring this into the agenda. That alone would suggest
that perhaps it is best to concentrate on the implementation—the
issues of unfinished business on the agenda—and on the questions
that are up for negotiation, according to the Uruguay Round.
Ms Tortora: I agree. On top of
that, there is also the tactical argument, where some developing
countries are looking at the Cancun conference as such and saying,
"Okay, the Singapore issues to one side, what is the trade-off?".
The link is in everybody's mind. It is not only substance but
also tactics and there are more and more tactics as the time for
Cancun comes closer.
Mr Fortin: John, what about trade
facilitation and that area of the new issues?
Mr Burley: This will be one to
be settled at the time of the Fifth Ministerial Conference. There
are discussions at the moment on modalities. It is obviously an
important issue. It is one issue which in a sense is in the interests
of both importers and exporters. It is something on which there
is common ground. Whether that necessarily means that there will
be agreement on the modalities at the time of the Cancun meeting
in order to establish the timetable for negotiations on that issue
and the revision of the GATT Articles, is another matter. I do
not think that at the moment it is a major issue as such in the
negotiations—certainly not before Cancun.
Ms Tortora: On that same line,
something which is very important is that we talk about negotiating
competition and investment as new issues but, more and more, what
is appearing in the service negotiations is that competition and
investment issues are there already in the offers and requests.
They are in the schedules of commitments in services, and hence
in the commitments that already exist. The back-up of investment
and competition is therefore already in the services negotiation
process anyway, and many developing countries are aware of that.
That is also coming as an element of the discussion.
Q367 Mr Khabra: As you know, trade
and development is the major aspect of the Doha agenda. You may
be aware that agriculture and food security is one of the issues
of concern to many developing countries. Can you say how the Harbinson
Draft will address the following issues? Market access for developing
countries; export subsidies and dumping; export credits and food
aid; and trade-distorting domestic support. Does it do enough
to satisfy developing countries? What would be enough to satisfy
developing countries and to ensure their continued support for
the post-Doha agenda?
Mr Fortin: I will ask Manuela
to respond. She is dealing exactly with these kinds of issues.
Whether or not she can actually answer the question is another
matter!
Ms Tortora: Let me try. Once again,
agriculture is a very tricky area, because we do not know exactly
what you are saying in terms of developing countries' support.
Let me take it issue by issue—market access in agriculture,
for instance. Many proposals are on the table, more from developed
countries than developing countries, and even less from LDCs.
However, it is not only because of the weak technical capacity
to draft the proposal; it is more substantive in that case. Even
if you take the LDCs, and within the LDCs' group as such, in theory
they should have one single, common interest—market access
issues in agriculture. You can say, "They all have the same
preferential regimes, so they are all together". In fact,
that is not the case and it is more complicated than that. Many
of them are also ACP countries which have preferential regimes
through the ACP mechanism, which are more preferential—mainly
on agriculture but also on other items—than the LDC preferences.
That greatly complicates what they can say and how they can react
to the different proposals put on the table on the modalities
for market access negotiations on agriculture. So, for the time
being, it is a question mark on market access. On top of that,
you have the different developing countries' positions. As was
mentioned by Carlos, depending on their own trade agricultural
policy, they are more or less keen to have open market access
or a more restricted or gradual formula on modalities on market
access. A whole variety of positions are still on the table in
that regard. There are more than 80 proposals that are still open.
Food security is an interesting question. It is a key question
for all LDCs and net food-importing countries—which is a
mixture of LDCs and developing countries, even big developing
countries, which have a more or less "clear" definition
of what food security may mean for them in the agricultural negotiations.
However, some other developing countries do not even take into
account this issue of food security. That definition does not
exist for them. The extreme position is the Cairns Group. They
just do not care about food security. They are exporters; they
are not importers. It is not an issue for them. Then, complicating
the situation further, what food security means in the language
of the importing countries and LDCs has nothing to do with food
security in the language of Brussels—which is basically
food security in terms of sanitary conditions of the food we eat.
It is therefore linked to sanitary and phytosanitary conditions
and the quality of the food that you import or export, while food
security for a net importing country is having enough to eat—full
stop. The quality comes later. In Brussels' language, food security
is also linked to the safety, health, animal welfare, standards,
labelling conditions—the story of the genetically modified
organism, and all these kinds of considerations—while food
security for importing countries or LDCs has another meaning which
is a very basic one. You mentioned also safeguards and other rules
which are also part of the package. They are more or less linked
either to market access conditions or to food security safeguards—which
is very much linked to that. Some of them have come up with what
they consider solutions, to have a list of agricultural key items
that could be given special consideration. They call them strategic
items or strategic agricultural products that could be taken out
of the set of disciplines that are being renegotiated, because
they are too basic to be considered as other agricultural non-vital
items. Once again, this is one kind of proposal put forward, but
the Harbinson text did not reach a consensus. The second version
of that text was submitted last month and so we are still waiting
for some kind of miracle—
Q368 Mr Khabra: Does it mean that
the least developed countries and the developing countries cannot
have the same policy? If they cannot together apply the same policy
to different situations, does it mean that the developing countries
will have to suffer?
Ms Tortora: It is just that on
the negotiating positions it is difficult to have, up front, one
single monolithic bloc. They will have to reach a consensus at
the end of the process, but the consensus means that you give
one concession here, another one there, and then accommodate all
the positions together. Starting with the positions as they are
now, by definition there is no consensus, because of this very
wide fragmentation and divergent interests amongst developing
countries themselves, and even among LDCs themselves, which in
theory should be more or less a bloc.
Q369 Mr Khabra: Do you think that
there should be a staging process for some of the countries?
Ms Tortora: That will greatly
depend on the consensus-building, and the process will greatly
depend on what some of them can get on other areas. For some developing
countries, for instance, what they can get in services or antidumping
or tariffs may be a potential trade-off to help make concessions
on agriculture, or vice versa.
Q370 Mr Battle: Next year will be
the 40-year anniversary for UNCTAD and, in that time, you have
been working hard on these issues. What, in your view, is the
reason why least developed countries have not been able to increase
added value or move more into manufacturing and trade? What have
been the barriers and what are still there, in your view at UNCTAD?
Mr Fortin: We have this special
programme for the least developed countries. As you know, least
developed countries are a category in the United Nations' terminology.
The perverse joke is that it is a very successful programme, because
when it started there were 22 least developed countries, and there
are now 49—and there will be 50 when East Timor joins. Nobody
graduates now. The only graduation was Botswana, and there are
now five candidates—but they are all small islands, which
suggests that they have other problems which are not captured
by this idea. So, yes, it is proving to be a very difficult thing
to handle. Why? The first thing is that there is a great variety
of situations among the least developed countries. Some of them,
particularly the ones in sub-Saharan Africa, have had a history
of internal strife, civil unrest and political disturbances. Addressing
that is a necessary, if not a sufficient, condition of course
for doing anything else. Others have not had that, but nevertheless
are still in some difficulty. We are trying to look into the question
of the extent to which approaches to the least developed countries
have been dominated by issues of trade and assistance, which are
all perfectly valid, but with some neglect of, on the one hand,
investment, improving productivity and competitiveness and, on
the other hand, the development of human resources and capacity-building.
Those are the two basic deficit areas. Those will not come as
a by-product of the other two. Trade access and opening of markets
are a necessary condition but not a sufficient condition to attract
the kind of investment that would produce exportable goods and
services. This is very clearly seen in the case of the ACP countries.
We are working on the issue of preferences and the ACP is a good
example of that. Preferences can be very good, but the history
is dismal. The ACP countries have a smaller share of the European
market than they did before the first Lome« Convention. If
one were to take a simplistic view, one would say, "Forget
about preferences. It does not do the job". You have to have
preferences, but you also have to have the other things. That
involves a much more complex combination of public efforts at
building infrastructure—public, national and international—which,
on the whole, are not easily dealt with by private companies;
of foreign inward investment that will supplement, both in terms
of capital and in terms of skills, the domestic complement; of
mobilisation of domestic resources; of trade policies; of fiscal,
financial and monetary stability, et cetera. When you start from
scratch, it becomes very difficult to move quickly.
Q371 Mr Battle: When the first Lome«
Conventions were drawn up and the ACP countries were gathered
together round that banner, the notion of moving people away from
being commodity-dependence was a big theme. Where are we now?
Will Cancun break through and break away from commodity dependency,
do you think?
Mr Fortin: No, unfortunately commodity
dependency continues unabated. Because of the collapse of commodity
markets, particularly agricultural commodity markets, the issue
of commodities is coming back with a vengeance. As you know, UNCTAD
was at the forefront of putting this as an issue, because the
whole theory of UNCTAD's creation was to try to move away from
the deterioration in the terms of trade. While the main recipe
or prescription was to industrialise, the other one was to improve
commodity markets. The way we went about it is now fairly discredited,
except that, when the crunch comes, people go back to it, and
not just the oil producers. I am from Chile, and the copper producers—Chile
being one of the largest in the world—operated a de facto,
if not cartel, at least a supply management arrangement. So one
has to be aware that there are certain elements of fashion here.
Commodities are very much back on the agenda, because developing
countries, particularly the LDCs, continue to be commodity-dependent
and they are the ones who suffer most in terms of international
flows.
Q372 Mr Battle: If we have to accept
where we are now and wipe the slate clean, what would be the implications
for developing countries as a whole if there were symmetric tariff
reductions? Are you looking at the issue of formulas for tariff
reductions? What would you argue for, to make some progress?
Mr Fortin: In the commodities
area?
Q373 Mr Battle: Yes.
Mr Fortin: The trouble is that,
just as for countries a one-size-fits-all does not work, it does
not work for commodities either. The most dramatic example is
coffee, of course, where the collapse has had devastating effects
on the producer countries, but no significant change at the supermarket
level. Coffee costs the same to the consumer; somebody is getting
the difference. In fact, some of our studies show that, quite
apart from the price, the proportion that goes to the primary
producer is going down. So, somewhere in between, things are getting
lost. In the case of coffee, the issue is very complex. To some
extent, the overproduction that has led to this collapse of the
market is a function of (a) increasing areas that are being exploited
with coffee plantations, and that was part of the policy by the
World Bank, to try to expand in east Asia, et cetera; (b) improvements
in productivity and efficiency. For instance, in Brazil the productivity
of the coffee industry has improved enormously and, as a result,
Brazil can literally flood the markets, even though for them coffee
is a much less important commodity than it used to be; but, for
the coffee economy, Brazil is a major player. The solution is
not to eliminate the gains in productivity—a Luddite approach,
destroying the plantations. It calls for international agreement
in the sense of concerted action, first of all to improve on information—which
is good, but not necessarily sufficient—so that informed
economic decisions can be made on the basis of reliable information.
We are trying to do some of that with our statistics on commodities.
Secondly, taking advantage of market mechanisms. Futures markets
have become extremely sophisticated, and they will not stabilise
price but they may stabilise income—and that will be good
enough for some countries.
Q374 Mr Battle: And more South-South
interaction?
Mr Fortin: More South-South interaction,
definitely. Domestic policies—stabilisation funds are a
good format. When the prices are very high, do not spend everything
immediately but put some away for a rainy day, et cetera. The
integrated programme on commodities on commodities of UNCTAD in
the 1970s promised the magic bullet. It did not deliver. In fact,
the more we get into this, the more that is not on.
Q375 Chairman: What assessment have
you made of the benefit to developing countries of the liberalisation
that may occur in services? Has anyone been doing any kind of
empirical work on to what extent GATS will be of benefit to developing
countries?
Ms Tortora: Regarding the GATS
assessment as such, in March last year, at the WTO symposium[1]—the
first on the assessment of the development implications of GATS—UNCTAD
presented its own assessment, based on the practical experience
and knowledge of the GATS implementation in many developing countries
and in different sectors, and also some sectors that, from our
point of view, are more known than others because we have the
expert meetings within the intergovernmental machinery of UNCTAD.
It is one of the instruments that we have been using to delve
deeply into the services sectors, and the assessment of the GATS
in each one of the sectors. So we have a fair picture of at least
seven or eight sectors which we know quite well. That paper was
a kind of balance, which tried to give an overview of the development
problems identified by sector; some horizontal issues that appear
in the implementation of the GATS commitments through different
concrete, specific developing countries' experiences; plus a preliminary
assessment of the process of negotiation, as it was one year ago
in March.[2]
That was before the offers and requests process really started,
however. Now what we think should happen in the medium term is,
first, regularly to assess the GATS implementation commitments
on a regular basis, with some development benchmarks—as
we tried to identify in the paper we presented in March—in
terms of employment, transport, technology, diversification of
the economy, efficiency of the services which are being improved
in each sector, and so on. Another is to assess the negotiating
process as such, which is a different assessment based on the
quality, on the development value, of the offers and requests
process. There also you need some benchmarks, depending on the
negotiating targets each country can put on the table when entering
that bilateral process of offers and requests on the sectors,
plus some targets on the horizontal issues that are being negotiated
on services and which will also determine what kind of new GATS
we will have at the end of the day. This is more or less where
we are, in terms of assessing the GATS. It is an ongoing process
in any case.
Q376 Chairman: One of the areas where
some developing countries are interested in GATS is Mode 4, the
movement of people, of which there is already quite a lot—given
the level of remittances and the importance of remittances in
some countries. As against that, however, there is heightened
security concerns and, certainly in western Europe, much greater
concerns about asylum and so on. What sense do you get of the
negotiations on Mode 4 of GATS? Is this something in which people
are engaging? Are developed countries engaging in sensible discussions
on Mode 4, or is this simply an aspiration of developing countries—that
more people from Pakistan will be able to go and work in Saudi
Arabia? Could you give us a feel of where we are on Mode 4?
Ms Tortora: What we know at present
about the negotiations on Mode 4 is basically what we know about
the offers and requests. What kinds of Mode 4 commitments are
being inserted in this bilateral process is more than the horizontal
discussion as such, which is more or less stuck. It should first
be a horizontal issue, being dealt with at the multilateral level,
and then going down to the bilateral commitment. This is how it
should be in theory, but this is not what is happening. It is
moving at the bilateral level to the offers and requests. I do
not know if it is moving in the right direction—that depends
on which specific bilateral process—and it will probably
jump again at the multilateral level. The offers and requests
that we know of now on Mode 4 are not in general very satisfactory
from the developing countries' perspective, as a general kind
of balance, as far as we know.
Mr Fortin: I would ask John to
come in here, because there is perhaps a rider to your comment
which has nothing to do with negotiation but to do with the more
general issues of security, of terrorism, et cetera, which are
affecting transport services very seriously.
Mr Burley: One of the consequences
of September 11 is the United States' introduction of security
measures in maritime transport, and the decision of the G8 summit
in Canada last July to put in place certain regulations which
will, in our view, have quite an impact on developing country
trade in a number of respects. It will probably add to their trade
transaction costs; make it more difficult for them to trade with
the United States because of the additional requirements; and
possibly lead to a diversion of trade to those ports which are
regarded as safe. Therefore the trade with the United States will
transit through those ports. We have done a little work on this
but not something that I can say is really substantial, in the
sense of being able to make a solid presentation on the point.
However, there are implications also for negotiations on trade
issues and maritime transport issues, which will take place in
other fora. Not in the WTO, but there is, for example, something
called UNCITRAL, the United Nations Commission on International
Trade Law, which will also be addressing some of these issues.
That is another factor in the present situation, therefore, which
will have an impact on developing country trade.
Q377 Chairman: We have been building
up a glossary of terms, and we have a new one. I think that we
will have to get Alan, our adviser, to put in "horizontal
issues", because the mechanics of the process in which these
negotiations take place are quite interesting. Thank you very
much for giving us of your time. All of us would have been interested
to have been able to spend more time discussing UNCTAD more generally,
but thank you for helping us with your insight and a slightly
different gloss on some of these issues.
Mr Fortin: It has been a pleasure.
Let me say that we are making an effort to try to expand the range
of our stakeholders, as it were. The UN, in a sense, is a 19th
century organisation, based on the notion of sovereign nation
states. We are trying to expand on that and we are moving towards
civil society. Parliamentarians are a very important group. We
are extremely honoured to have representatives of the Mother of
Parliaments with us, particularly because civil society is claiming
more representation. We have time for them. Some of them are very
good supporters of our work and some of them produce very significant
intellectual contributions, in the field of the environment, et
cetera. At some other point, however, we have to ask the question,
"Who do you represent?". The answer is always very confusing.
In that sense, parliamentarians do have a very straightforward
answer—"I was elected". The Inter-Parliamentary
Union is here in Geneva, of course, and they will be engaging
with us in contributing to our next conference. There will be
a major parliamentarian event in connection with it.
Chairman: It is a broader issue in that
we, as parliamentarians, are often frustrated that the nation
state, by way of governments, is represented at these things.
Thousands of NGOs are represented, but we, as parliamentarians,
are not invited! To a certain extent we slightly circumvent that
in organisations like Globe, and parliamentarians from Globe were
represented at Johannesburg. It is interesting that the Inter-Parliamentary
Union has only observer status at the UN, and these are issues
of which we are all very conscious—not least, as you say,
as "civil society". NGOs tended to have more representation
at the last ministerial meeting of WTO. Ministers took representatives
of NGOs from the UK, but not parliamentarians. This is something
we hope to rectify in Cancun!
1 Information and material from this symposium are
available at http://www.wto.org/english/tratop_e/serv_e/symp_assessment_serv_march02_e.htm Back
2
See http://www.wto.org/english/tratop_e/serv_e/symp_mar02_unctad_e.doc Back
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