7:50 AM Dec 11, 1996

INDIA ADAMANT IN BLOCKING INVESTMENT AT WTO

Singapore 11 Dec (Chakravarthi Raghavan) -- The Singapore Ministerial Conference was at an impasse Wednesday night over the inclusion in the Ministerial Declaration of some formulations on investment and competition policy, and the labour standards question.

An informal plenary of the heads of delegations that met in the evening was quickly adjourned, having been advised that the consultations were still under way and more time was needed.

India, though alone within the small group of negotiators, has stood out and has so far declined to accept a formulation which calls for a study at the WTO on the investment and competition policy questions, and a report to the General Council.

The formulation also indirectly links the study to the WTO provisions related to investment and competition policy. Other language also makes some references to the Uruguay Round Agreement on Trade-Related Investment Measures (TRIMs), as also to the UNCTAD-IX mandate for an UNCTAD (intergovernmental) study on a multilateral investment framework and its implications for development, and for the WTO work to complement the UNCTAD work.

However, India did not accept this, and reportedly has made clear that it could at the most, consider a formulation about a future work programme, and studies for that, in terms of Art. 9 of the TRIMs agreement.

This calls for a review of the operation of TRIMs no later than 2000, and propose amendments to the Ministerial Conference. In the course of this review, the Council for Trade in Goods is also mandated to consider whether the TRIMs should be complemented with provisions on investment policy and competition policy.

Some of the developing countries who had joined in opposing consideration of investment questions in the WTO, like Malaysia (which has gone farthest now to accommodate host country, Singapore and the EU and Japan, which are pushing the issue), as well as Egypt, Tanzania and South Africa, are willing to compromise and agree to formulations that allow for a study at WTO and UNCTAD, with the former to complement the UNCTAD work.

But India has not been agreeable to this.

Indian officials explained that in private conversations, Malaysia has sought to give India assurances that it could never agree to any negotiations at the WTO on investment, and hence, India need not be worried about the outcome of the process.

The Singapore Trade Minister too, is reported to have recalled his own public statement, that Singapore could never agree to the right of establishment or automatic national treatment for foreign investors.

But the Indian officials said that if this was so, there seemed no reason to undertake a two-year study process.

But whether India was alone, or whether there are others who have spoken out against the new issues, including investment, in their plenary speeches and at the HOD process Tuesday night, will also be taking the Indian lead, is not clear. Not clear too, is whether some of those who have compromised inside the limited consultation process would be able to persuade others to follow their line.

Any event, India would appear to have made clear that it was quite ready to voice its objection and withhold consensus, even if it was alone.

Some efforts were being made tonight to persuade India, not to withhold consensus, but merely disassociate itself from that particular paragraph, as Australia did in 1982, over the agriculture formulation in the Ministerial Work Programme.

This is on the argument that the Declaration has no legal commitment value, and is a mere political statement.

But this is not a course that seems to be favoured by India.

The investment issue is not being pushed by the US, and some US sources seem to be weighing whether, it was worthwhile in a two-year old organization to break up a consensus process, when the Declaration any way, is not going to produce anything concrete in terms of trade and economic gains.

On the labour standards issue too, there has been no consensus. Some, like the Latin Americans and Europeans, who are opposed to a social clause in the WTO, seem willing to accept it in a political declaration, provided it is made clear there is no future work programme envisaged. Others are at best, ready to have something included in a Chairman's text, but a pre-negotiated one, that does not bind anyone. A third group sees no role for the WTO in this area.

Understanding has been reached on the issue of a working group to look into possible transparency requirements in the area of government procurement, though even here, there are some nuances.