6:53 AM Nov 29, 1996

MINISTERS TO NEGOTIATE ON CONTROVERSIAL ISSUES

Geneva 29 (Chakravarthi Raghavan) -- Trade diplomats ended in the early hours of Friday their efforts to produce an agreed text of a draft Declaration for the Singapore Ministerial Conference, and left many issues for their ministers to decide at Singapore.

These questions include issues about implementation of the textiles and clothing agreement, as well as the new issues: the labour standards question and whether or not the SMC declaration should touch it, as well as the push for a work programme that could lead to future negotiations on investment, competition policy, government procurement and trade facilitation.

With the major importing countries blocking consensus on a draft paragraph on textiles and clothing (which did not really amount to much from the viewpoint of exporters), Pakistan and some other developing countries withheld their consensus over several of the earlier agreed paragraphs such as those relating to trade and environment, the built-in agenda of work under the various agreements, and the on-going or new negotiations on service sectors.

While the participants who negotiated in an open-ended "informal HOD" process, ended their year-long labours in apparent good humour (referring to each other in the talks by their first names, and cutting jokes), it has not really altered any of the stands that have been taken over the last couple of HOD meetings, several participants said Friday morning.

The informal Heads of Delegation process chaired by the WTO Director-General, Mr. Renato Ruggiero, was brought to an end about 3 am, with some compromise agreed language for several paragraphs of the Draft Declaration, but with clear divisions, mostly on North-South lines on several key issues.

These included questions on what and how the Ministers would pronounce themselves on implementation of the Uruguay Round agreements in several areas, including textiles and clothing and agriculture, the built-in work in agreements -- whether for review, further liberalisation, or specific negotiations for rule-making -- and all the controversial new issues that are sought to be brought on the trade agenda.

Ruggiero, who has held a series of bilateral and plurilateral consultations with a range of key delegations, is now expected to report to the SMC on the outcome of the HOD process, in the form of a letter to the Chairman of the SMC, Singapore Trade Minister, Mr. Yeo Cheow Tong, with copies to all member-countries and their delegations here.

Geneva-based trade officials said that on the paras of the text where there is agreement, he would use the exact agreed language, and outline to the Ministers about the process and how it evolved.

On the paragraphs where there is no consensus, the secretariat would make "another good faith effort" to prepare revised texts (which could provide a basis for further Ministerial level negotiations at Singapore) and indicate the positions of members, the officials said.

Due to the way the HOD process has evolved, there has been no legal challenge to the Director-General making a report, the officials said, noting that at an earlier stage such a challenge had been made, but that when the meeting concluded in the early hours of Friday, no one raised any objections.

Some trade officials said that in the areas lacking consensus, the secretariat might put forward revised texts (to go with the Ruggiero letter to Yeo), indicating the points of discord.

While there were some suggestions that in doing this he would also indicate those who have objections and the nature of this, other trade diplomats said that they did not believe that any report would specify the delegations withholding consensus.

"Such a step would disrupt the working level relationship of delegations with the secretariat in their daily work, and no WTO official could afford to do it," one long-serving secretariat official said privately.

Also, the fact that only one or two countries objected, did not mean that those remaining silent supported the consensus, nor could it mean that countries may not assess their positions and change their views before or at Singapore, he noted.

Trade diplomats said that the major nations have been pushing Ruggiero to promote the labour standards and new issues, "encouraging" him to report on his own to the SMC even where there is a clear lack of consensus, and at one stage it appeared that Ruggiero might put forward on his own authority at Singapore a draft text -- in effect forcing countries and their Ministers to raise their flags to object.

However, said the diplomats, as a result of frank statements of many delegations at the last informal HOD plenary on 22 November, and a number of bilateral and plurilateral consultations of Ruggiero with a number of developing countries, Ruggiero is now more cautious, and would report through Yeo to the SMC in a way that would not prejudice the positions of any side.

A diplomat from the Latin American region, whose country has had no problems about the new issues or about a political pronouncement on the labour standards question, nevertheless hoped that for systemic reasons, the Ruggiero report would not prejudice anyone.

The diplomat noted that in the Uruguay Round negotiations, and the Marrakesh meeting, where the concept of 'single undertaking', namely everyone having to accept everything prevailed and those objecting to any particular accord or portion of it had to weigh the consequences of saying no and upsetting the entire package.

"At Singapore, and in the run-up to it," this diplomat noted, this is not the case, and short of great pressure by the powerful nations on individual countries, the advantage would lie with those who say 'no' to any particular question.

"Even the SMC ending with a declaration or without one would have no consequences to the work at the WTO, and the attempt to bring new issues or involving the WTO in labour and human rights issues by withholding consensus for the entire document would not work."

As the meetings broke up this morning, the position seemed to be that there were agreed texts for the first 14 of the 20 paragraphs in the revised draft declaration put forward by Ruggiero. These covered general political statements about the world economy, trade system and the role of the WTO.

On the textiles and clothing issue, where a revised secretariat draft was put forward, and which the exporting countries seemed willing to accept (even though it did not specifically provide for genuine commercially meaningful integration in the further stages, but made some indirect references to the integration process contributing to the export earnings of developing countries), it was blocked by the United States and Canada, participants said.

On Labour standards, a number of developing countries rejected any reference to it in the declaration, while some others from the Latin American region were willing to agree to some compromise language, provided it was clear that work on it would be at the ILO and not the WTO.

In Agriculture, where Argentina has proposed a separate paragraph to work to be taken up in terms of the further reform process, Japan, Korea and the EU seemed opposed to it, and consensus was blocked.

On the in-built agenda of negotiations in services, India and a few others objected to the formulations about financial services, and on professional and other sectoral negotiations.

On the new issues, a number of developing countries made clear that it was politically unacceptable to them. In particular, they said, the study of the investment and competition question should be undertaken at UNCTAD and only in the light of that any work at WTO could be considered at some future stage.