INFORMAL MINISTERIAL HOD TACKLING DECLARATION

8:00 AM Dec 9, 1996

INFORMAL MINISTERIAL HOD TACKLING DECLARATION
Singapore 9 Dec (Chakravarthi Raghavan) -- The Singapore Ministerial Conference (SMC) of the World Trade Organization (WTO), got down Monday afternoon to the business of discussing and negotiating a final outcome of their meeting in the form of a Ministerial Declaration.

The Conference convened Monday afternoon, as an informal HOD process, meeting at level of the Ministers, as heads of their country delegations, when they took up the task of discussing and agreeing on the various parts of a Declaration.

According to trade diplomats, the Singapore Trade and Industry Minister, Yeo Cheow Tong, who is chairing the SMC, has been holding bilateral meetings with Ministers of key countries here, and has been left in little doubt that there is not only no consensus on the new issues, but that the differences are so fundamental that no amount of playing with words can help a consensus, and persistence of some to somehow bring them on the agenda would only make adoption of any Declaration nearly impossible.

Even the idea that these issues could be covered in a Chairman's summary at the end of the Conference, a summary that would not bind any of the participants, is not finding favour as of now. Any such text or formulation, if the WTO is to follow the old GATT practice (as it is required by the WTO rules) would mean a pre-negotiated text. This is what happened at Punta del Este, when the negotiations were launched and at Marrakesh, when it was concluded.

The Chairman of the WTO General Council (whether at level of ambassadors or Ministers, as now) and of its bodies, have no such authority or power under the rules, and any statement by them, even a non-binding one on personal responsibility, needs to be cleared by all concerned delegations beforehand.

The meeting had before it, the report, on his own responsibility, of the WTO Director-General, Renato Ruggiero to the Chairman of the SMC, Singapore Trade and Industry Minister, Yeo Cheow Tong, on the outcome of the informal HOD process (at level of Geneva Ambassadors) and year-long consultations.

The Ruggiero report, in the form of a letter to Yeo copied to all member countries had set out the elements of the text that appeared to have a working consensus, others including formulations about textiles and clothing, agriculture, further services negotiations, and new trade issues (labour standards, investment, competition policy, government procurement etc) where there was no consensus.

In the final days of the negotiations at Geneva (ending 29 November), with the US and Canada objecting to the formulation in the draft on textiles and clothing (which has a weak formulation suggesting need for commercially meaningful 'integration' of textiles and clothing products over the next stage of integration), Pakistan had withheld its consensus on a number of other paragraphs and formulations.

At the Monday Ministerial HOD meeting, the participants decided to take up the textiles and clothing formulation, since without an agreement on that, the blockages in other areas can't be tackled.

After some discussions, Canada and the US are reported to have removed their objections to the textiles and clothing formulation, but subject to agreement on other paras of concern to them. Some of these include the labour standards and investment questions.

Some of the developing country delegations said privately that nothing in the textiles or agriculture text was of any real benefit to them, to warrant any consideration being given to including any of the new issues.

The draft para on textiles and clothing says:

"We confirm our commitment to full and faithful implementation of the provisions of the Agreement on Textiles and Clothing (ATC). We stress the importance of the integration of textile products, as provided for in the ATC, into GATT 1994 under its strengthened rules and disciplines because of its systemic significance for the rule-based, non-discriminatory trading system and its contribution to the increase in export earnings of developing countries. We attach importance to the implementation of this Agreement so as to ensure an effective transition to GATT 1994 by way of integration which is progressive in character. The use of safeguard measures in accordance with the ATC provisions should be as sparing as possible. We note concerns regarding the use of other trade distortive measures and circumvention. We reiterate the importance of fully implementing the provisions of the ATC relating to small suppliers, new entrants and least developed country Members, as well as those relating to cotton-producing exporting Members. We recognize the importance of wool products for some developing country Members. We reaffirm that as a part of the integration process and with reference to the specific commitments undertaken by the Members as a result of the Uruguay Round, all Members shall take such action as may be necessary to abide by GATT 1994 rules and disciplines so as to achieve improved market access for textiles and clothing products. We agree that, keeping in view its quasi-judicial nature, the TMB should achieve transparency in providing rationale for its findings and recommendations. We expect that the TMB shall make findings and recommendations whenever called upon to do so under the Agreement. We emphasize the responsibility of the Goods Council in overseeing, in accordance with Article IV:5 of the WTO Agreement and Article 8 of the ATC, the functioning of the ATC, whose implementation is being supervised by the TMB."

This particular formulation has so little even as a best endeavour undertaking by the importing countries that one must wonder why the exporting countries compromised on such a weak formulation to be used by the North to trade-off and get concessions on other demands. There is nothing of any value or concrete commitment that would enable exporters to increase their exports and earnings.

The statement about importance of ATC integration process for its "contribution to the increase in export earnings of developing countries", is so trite that only an institution like the WTO can include it in a Declaration and hope to fob it off as a gain for the developing countries warranting their concessions on new areas.

The informal HOD process is set to resume this evening to tackle the agriculture formulation, proposed by Argentina and the Cairns group. This too, does not take the WTO process, of further agricultural reform to be taken up in 2000, beyond what is in the Agreement on Agriculture.