OPEN DIFFERENCES, AND SOME CONFRONTATION, AT SMC

7:53 AM Dec 10, 1996

OPEN DIFFERENCES, AND SOME CONFRONTATION, AT SMC
Singapore 10 Dec (Chakravarthi Raghavan) -- As the first Ministerial Conference of the World Trade Organization went into its second day, delegates and observers with long experience of the GATT/WTO process were struck by the level of open differences and confrontations.

One Latin American diplomat, who did not want to be otherwise identified, noted that in the informal heads of delegations process here (which is tackling the draft Declaration), on the Monday evening session, when the issue of work on an agreement to ensure transparency in government procurement was taken up, several developing countries, and many of them small trading nations, were speaking up and challenging and questioning the proponents (United States and the WTO secretariat).

Another participant, noted that while at earlier GATT Ministerials -- the 1982 Geneva Ministerial, in 1986 at Punta del Este (where the Uruguay Round was launched), the Montreal Mid-Term Review meet in 1988, the 1990 Brussels Ministerial, and the 1993-4 Marrakesh meeting -- there had been differences and contentious issues, they were never so much in the open as now.

They attributed this new development to both the preparatory process, and the willingness of the Asian economies, who are now imbued with self-confidence and resent their growing weight in world trade and world economy, being ignored (except when demands for trade concessions are made on them).

There has been some basic deficiencies in the preparatory process, and even some mishandling, by the WTO power structures, including the secretariat, who seemed to be out of touch with the realities of the WTO treaty and its institutional arrangements, and the weight of the self-confident Asian economies who are no longer willing to brook old habits.

As a result of the deficiencies in the preparatory process, including the informal heads of delegations process chaired by the WTO Director-General at Geneva, the problems of the developing countries and the LDCs arising out of the implementation of the Uruguay Round Agreements, received little or no attention and were brushed aside, or the South countries fobbed off with repetition of what is already in the accords, and no meaningful recommendations to deal with problems.

More, from the beginning the focus was on the new agenda issues -- with the agendas of the Americans and the Europeans, and the WTO Director-General, who ignored the reality of the WTO system where he is only a "contracted party" and went about as the WTO leader who could meet and deal with the heads of government (of developing countries), bypassing their negotiators and officials to push his own agenda. His recent interview to the Wall Street Journal where the idea of a WTO Security Council has also been aired, appears to have queered the pitch.

Some participants said, there was a behind-the-scenes tussle as to how to handle the 'Draft Declaration' and resolve the points of contention -- with the host country idea of the Chairman of the Conference taking over the process and operating through "friends of the Chair" and the industrial nations, or at least some of them, who felt their interests would best be served by Ruggiero continuing to be involved and guide the process.

The result was an informal HOD process here, with a Minister and an Advisor, meeting in plenary and expressing their views on each of the elements of a draft in contention.

On Tuesday, a smaller group of countries began meeting to address the new issues: investment and competition policy, and labour standards.

This group appears to include the EU, US, Canada, Japan, Australia, South Korea, India, Indonesia, Pakistan, Malaysia, Singapore (which is chairing the process), South Africa, Tanzania, Egypt, Morocco, Chile, Brazil and Hong Kong.

The informal HOD process here is due to end by Thursday, and the Conference itself is set to wind up Friday.

At the first HOD meeting, the textiles and clothing issue was taken up and the blockage against the consensus on a relatively innocuous reiteration of the terms of the agreement were removed (by the US and Canada) so as to enable other related blockages to be cleared.

It was also decided to take up, and attempt to evolve a consensus, on agriculture, on government procurement, investment and competition policy, and labour standards.

The agriculture and government procurement issues, are being dealt with through a plurilateral process of protagonists on both sides.

While several developing countries appear to have expressed their readiness to take on board the issue of a framework to ensure transparency in government procurement (given that this is already their national practice), others were balking at the idea that their domestic companies should be subject to competition from the major TNCs.

The issue is still to be fully resolved, but the expectation is that, some compromise emerging for a process that could produce a set of principles for transparency in government procurement.

The investment and labour standards issue seems more difficult, though there are some signs that one or two countries may back away from their stands on investment in the WTO, and could compromise on a study process in the WTO parallel to that in UNCTAD.

How the Chair and Ruggiero will handle it in the next 36 hours or so, and how they will bring a new draft commanding consensus on the contentious elements, or just shove them off to the next Ministerial (now a regular once in two year affair of the WTO) is not clear -- either to observers outside or even to the main participants.