7:09 AM Feb 22, 1996


Geneva 22 Feb (Chakravarthi Raghavan) -- The WTO Director-General Renato Ruggiero has again sought to promote framing rules within the World Trade Organization on investment and competition policies and starting informal discussions on labour standards issue to avoid its becoming one of confrontation at Singapore.

Ruggiero's views is in a speech at Brisbane (for a meeting of ministers and officials of a few countries convened by Australia). The text of the 8-page speech, which he characterized to his Brisbane audience as a 'short version' of why the world needs a strong WTO, was put out by the WTO press office here.

In terms of the existing negotiating agenda, Ruggiero mentioned dealing with subsidies, public procurement, safeguards and standards in the GATS, wrapping up the negotiations on basic telecom and maritime services, further tariff cuts in goods trade and faster implementation.

All these -- as also making the plurilateral government procurement code as a WTO multilateral agreement (and single undertaking approach) -- as well as the new trade agenda issues being promoted by the US and the EU were mentioned at a meeting of the socalled G-10 at Nyon, Switzerland on 15 February. While the US, EU and Japan raised these issues, the few developing countries present were either critical or opposed and there was no consensus whatsoever.

Nevertheless, Ruggiero at Brisbane has voiced this Northern agenda, but interestingly has not mentioned, for e.g., the demand of some of the developing countries for accelerated integration of the textiles and clothing agreement (or the agriculture agreement (where the tariffication has resulted in little or even more restrictive market access for developing country exports).

In promoting the investment issue and its exclusion from GATT as a historical aberration, ignoring the classical trade view theory which saw trade taking place in comparative advantage only as a result of immobility of factors of production, nor touch on the lack of asymmetry involved in making investment totally mobile while restricting labour.

At an UNCTAD-sponsored seminar at Divonne, in neighbouring France, on 12 February, Ruggiero after a luncheon address to promote WTO investment rules declared a consensus when no questions were raised. And at the end of that seminar, while the UNCTAD official who chaired drew no conclusions, the Canadian ambassador, as a country cosponsoring that seminar, drew the conclusion that there was a consensus for discussions. But the next day, at a private consultation convened by Canada, a number of developing country delegations objected to or expressed concerns over WTO investment rules, and also challenged the view that 'investment' in some form was already in the WTO.

Undaunted, Ruggiero has continued his line of promoting investment and claiming it was already in WTO in various agreements. He claimed at Brisbane that GATS was "largely founded" on the notion that service suppliers need to invest and establish themselves inside a market in order to supply those markets.

Here again, he has merely taken the initial demands of the US and EU, ignoring the fact that this was rejected by others, and the GATS became possible only when the "right of establishment" was given up, and survived only as 'commercial presence' as a mode of delivery, and subject to a positive list of commitments and limitations that a country imposes.

On the Social Clause, Ruggiero referred to "sensitivities" on both sides of the issue and need to avoid confrontation at Singapore. He then went on to suggest as a compromise discussions in an informal way, and said that chances of this would be enhanced by accepting that protectionism was no answer to concerns over labour standards and also that countries should not increase their competitiveness though deliberately exploiting vulnerable sections of (to all WTO members), he said, would improve transparency of government procurement which was the enemy of corrupt practices.