6:23 AM Dec 3, 1996

CAUTIOUS, GUARDED RUGGIERO REPORT TO SMC

Geneva 4 Dec (TWN) -- The Director-General of the WTO, Mr. Renato Ruggiero, has sent a report to the Chairman of the Singapore Ministerial Conference (SMC), Mr. Yeo Chow Tong, identifying the areas of core labour standards, investment and trade and competition policy, government procurement and trade facilitation as those where there is no working consensus for inclusion in a Ministerial Declaration.

The Ruggiero report is on the outcome of the year-long informal consultations at the level of Heads of Delegations (HOD) that he has chaired as preparation for the SMC, and in particular, on a draft Declaration that the Ministers may adopt at Singapore.

The report, a copy of which has been circulated to all WTO members, has identified elements of text on which there is a working consensus as a result of the HOD process, those where some members have specific concerns or reservations that need to be addressed, before a working consensus could be claimed.

Ruggiero has stressed that no area or elements of text in his report could be regarded as settled definitively in the absence of overall working consensus. He has also stressed that the wordings set out in his letter does not purport to represent an agreed text,and the decision on the final text to be adopted lay with the Ministers.

Ruggiero says that he has endeavoured to identify in his report, in a clear and factual way, the main points at issue on the elements of the text so as to facilitate the task of the Ministers in reaching a final resolution on them.

The report on the outcome of the consultations, Ruggiero adds, "represents a good basis for the work of the Conference on the Ministerial Declaration."

Most WTO delegations were still studying the report dated 29 November, and no one seemed ready to make any comment, beyond saying that it was cautiously worded.

Some delegations also suggested that the views in the report about some members withholding consensus, or one member putting a reserve, should be read in the context of what happened on the night of 28 November -- at the informal HOD plenary.

At that stage, one trade official said, in some delegations only junior staff were present, and when one delegation put a reserve, some did not see any need to put their own.

All reservations or even a working consensus would depend on how capitals view the process and outcome, and how senior trade officials and Ministers at Singapore would look at the picture.

The Ruggiero report says, a working consensus has been reached on the paragraphs of a draft relating to the "Purpose, Trade and Economic Growth, Integration of Economies, Opportunities and Challenges," on the paragraphs on Marginalisation and the Role of the WTO, on Regional Agreements, on Accessions, Dispute Settlement, Implementation, Notifications and Legislation, Developing Countries and Least Developed Countries.

All other parts or elements, the report identifies as those on which there is no working consensus, on substance or formulation, or areas where one or other Member has put a reservation depending on the outcome in other areas.

These areas relate to Labour Standards, Textiles and Clothing, Trade and Environment, Services Negotiations, Work Programme and Built-in Agenda, ITA and Pharmaceuticals.

On core labour standards, Ruggiero says, the situation is more complex and there is no working consensus on this question. The differences, he says, pertains both to the substance and the presentational aspect of the matter.

Several Members are not prepared to have this issue dealt with at all in the WTO. Among those who could support a text on this coming out of the Conference, some prefer not to have it in the Declaration itself.

In presenting the elements of a text, Ruggiero says, this represents a basis for discussion for those who are prepared to see some agreed text emerge, although it is quite clear that even among these Members, there are still some significant concerns with the drafting as it stands, notably on the question of follow-up.

The core labour standards text, (which on US insistence, made an appearance for the first time in his revised draft of 21 Nov), says:

"We recall that all Members have subscribed to the Universal Declaration on Human Rights. We renew our commitment to the observance of core labour standards and our support for the work of the International Labour Organization (ILO) in promoting these standards. We believe that the contribution the WTO can make to the promotion of such standards is through increased adherence to the rule-based system together with further trade liberalization and the economic growth fostered by increased trade. We agree that protectionist measures should not be used to enforce labour standards, and that the competitive advantage of low-wage countries should not be put into question. We will cooperate with our colleagues, the labour ministers in their work in the ILO, to see that the positive effects of trade liberalization on job creation and labour standards are more clearly understood and seen to be mutually supportive."

On the proposals for new trade agenda issues at the WTO, placed under the overall heading of Work Programme and Built-in Agenda, Ruggiero says that the paragraph on Investment and Trade does not have a working consensus. All Members, he says, support the need for an exploratory programme in this area, but some Members believe that this matter should be explored only in the context of the programme of work on Investment in the UNCTAD, while the proponents believe that complementary work should commence also in the WTO.

The Ruggiero report then sets out the elements for a text in these terms:

"Begin an examination of the relationship between trade and investment leading to a report to the General Council. In the conduct of this work, we particularly encourage close cooperation with the UNCTAD Secretariat, both to make the best use of available resources and to ensure that the development dimension is taken fully into account."

The paragraph on Competition Policy and the WTO, he says, does not also have a working consensus. "Some proponents prefer to establish an Experts Group to conduct exploratory work on an international framework of competition rules. Others while willing to examine competition laws and policies also want to examine WTO rules as they relate to competition. Some Members however oppose work on this issue in the WTO at this time."

"There are thus two main unresolved issues: whether or not the WTO should begin work on this matter and, if so, the scope of the mandate. We also discussed without achieving a working consensus, a separate proposal on Rules in a Globalizing Economy, which includes Investment and Competition."

The draft para in the report says on this:

"Competition and WTO: Establish an Experts Group open to all Members to study issues raised by Members relating to competition laws and policies in order to identify any areas that may merit further consideration in the WTO framework and to report its findings to the General Council. The General Council will review the work of the Experts Group at the end of one year and determine how to proceed."

On Government Procurement, Ruggiero says, some Members cannot join a working consensus to begin work on this item. Others are willing to do if some alterations are made to the text:

"Government Procurement: Establish a group to conduct a study and develop a multilateral agreement on principles related to transparency of government procurement practices, with reference to domestic rules on bidding, announcement of procurement opportunities and provision for independent review, to apply on a non-discriminatory basis."

All Members except one, Ruggiero says, appear willing to join in a working consensus on the item on Trade Facilitation which would "Direct the Council on Goods to undertake exploratory and analytical work, drawing on the work of other relevant international organisations, on the simplification of trade procedures in order to assess the scope for WTO rules in this area."

On Textiles and Clothing, Ruggiero says, two delegations could not join a working consensus without changes to the text.

On Trade and Environment, Ruggiero says, the text is complete but that some Members cannot join a working consensus until the language on Textiles is agreed.

On Services, the report says, that although drafting of the text has arrived at a working consensus, some delegations have made their acceptance contingent upon a successful resolution of the paragraph on Textiles.

The language on ITA and Pharmaceuticals is described as provisional, and may need changes to reflect state of negotiations on information technology products among some Members at the close of the Ministerial meeting. Furthermore, one Member, has placed a reserve on this paragraph pending agreement on Textiles.

The Work Programme and Built-in Agenda item, the report says, also does not yet have a working consensus, as several Members have proposed a specific reference to the work programme on Agriculture, either as a separate paragraph or as an amendment. The suggested amendment did not achieve a working consensus, however.