8:08 AM Feb 4, 1997

FOCUSING ON NEXT WTO MINISTERIAL !

Geneva 4 Feb (Chakravarthi Raghavan) -- As trade diplomats at the World Trade Organization get back this week to a busy schedule of activities, consultations are under way to follow up the Singapore decisions in new areas, and on the commemoration of the 50th anniversary of the multilateral trading system in 1998.

On Friday, the General Council of the WTO meets, and its agenda has two items relating to the follow-up to the Ministerial Declaration of the Singapore Ministerial Conference of the WTO (9-13 December 1996).

One is for appointment of Chairpersons for three working groups on:

* relationship between Trade and Investment,

* the interaction between Trade and Competition, and

* transparency in government procurement practices.

There is considerable competition for these posts. But the agenda does not indicate there will be discussion at the General Council on substance -- the terms of reference and work of these groups.

Trade officials have been promoting the view that the decision of the Ministers was enough, and the relevant paragraphs of the declaration could serve as the terms of reference.

One view among trade diplomats is that since at this time only a study process is involved, the compromise language (on which the major protagonists, immediately afterwards, gave their own differing interpretations) should serve as a mandate for each group -- allowing details to be thrashed out within the working groups.

However, the other view is that the discussions at Singapore were within a small group of countries, and the large numbers of countries not involved, not only had no say on the decisions, but on what should be studied.

Thus, it may be appropriate to have at least some general discussion at the Council, and agree on some detailed terms of reference to ensure that the working groups (and the secretariat) study all the issues, and not merely those favoured by the majors.

However, it seems clear that developing countries need to do their own home work particularly on the investment and competition issues -- and not depend on the WTO secretariat, which has so far failed to establish its 'objectivity' in these matters.

The Singapore declaration on investment and competition issues specifically affirms and welcomes the work on these at UNCTAD in pursuance of the Midrand mandate.

But on the eve of the Singapore WTO meeting, the intergovernmental work at UNCTAD, on investment and with focus on development, as well as on competition questions were blocked by the major industrialized nations. Some of them preferred to await Singapore's outcome.

The issue may come up in March during the executive session of the Trade and Development when the UNCTAD work and identification of trade issues in the light of Singapore WTO meeting may be decided.

But it is not clear how much scope, and resources for this, will be available in the light of the 'reform and restructuring' that the new Secretary-General of the UN is to undertake.

A second item on the General Council agenda relates to the 50th anniversary of the multilateral trading system, on which the Ministers instructed the General Council to consider how best to commemorate this event.

Canada is listed under this item for making a statement.

At one stage last year, the WTO Director-General, Mr. Renato Ruggiero was talking about a "summit" meeting to be held in Washington to commemorate the event. But there were some protests and challenges on this -- particularly given the fact that it was the United States that wrecked the entry into force of the Havana Charter.

There is now talk (this started in January, soon after the negotiators, diplomats, and secretariat officials got back from Singapore and the year-end holidays) of combining the commemoration and the biennial Ministerial meetings, and holding it in May 1998 -- around the time of the annual summit of the Group of 7 countries (to be held in 1998 in the UK).

Such a commemorative session, it has been suggested, would not be an occasion for negotiations or decisions, but should focus on general issues like globalization, marginalization etc.

Mr. Ruggiero had suggested at Singapore, that the commemoration could be an occasion to agree on bringing about transparency and wider participation in decision-making. But while most of the smaller trading nations are agreed on the deficiencies, cures are not so easy.

At the root of the problem is a rule-based system where all members are equal, and individuals rights and obligations are involved, but a system which is being run on the basis of 'power' -- which is what the current informal consultations among a few, with its outcomes, rammed through the general membership is all about.

There are unconfirmed reports, in relation to the 50th anniversary commemoration, that Mr. Ruggiero wants to invite President Clinton (who will be at the G-7 summit) to participate and address the commemoration meeting and thus show visible support to the WTO.

But whether Clinton will come and do this may very much depend on the uncertain US domestic politics, and perceptions within the US on the WTO.

In this regard, Mr. Ruggiero and the secretariat are reportedly concerned over the challenge to the US Helms-Burton law, which has been referred to a WTO dispute settlement panel.

The US has been blocking (agreement with the EU) on the panellists. Article 8.7 of the WTO's dispute settlement rules provides that if there is no agreement between the parties (within 20 days after the establishment of the panel), at the request of either party the Director-General shall name the panellists.

The US is insisting that its actions are beyond question at the WTO since they have been taken on grounds of national security. The EC is equally determined to challenge the US 'unilateral actions' on this.

The WTO head and some others appear to be working to persuade both sides to 'settle' the dispute bilaterally - since a decision either way could harm the WTO.

Canada and Mexico, who have also raised the issue, have been taking a low profile on it.

But the EC, and its Commissioner Leon Brittan, have been pressing for a decision at the WTO.

Ruggiero and his officials worry that if the ruling goes against the US, this will create problems in the Congress for the WTO.

If the US view is upheld, and the very wide claims of 'national security' exception is upheld, that will blow a big hole in the WTO rules and system.

But if the issue is avoided, it will erode even further the confidence in the system among smaller trading nations, and the public in the developing countries. The view will be firmly established that the mighty are above the rules.

These are some of the clouds on the WTO horizon, as it prepares for the fifty years of the system.

If the commemoration meeting is held in May 1998 -- given the shortness of the time for preparatory work between now and the meeting -- one view is that it would have to be devoted to general themes and issues -- functioning of the WTO, globalization, marginalization etc, where none of the members would need to take real decisions with impact on trade, but could be directed to get public support for the WTO.

All new issues and reviews on existing ones would then be part of a new round to be launched in 2000.

The major trading nations, particularly the US and the EC, as well as the WTO head returned back from Singapore feeling happy at having achieved what they set out to do -- with developing countries bringing back nothing.

And while the WTO, and the host country, made an effort to interact with non-governmental groups (at Singapore), and large (for the WTO) number of Northern and Southern NGO activists turned up there -- all of them went back convinced of the total non-transparency and undemocratic decision-making of the WTO, and that its rules and functioning promote the interests of the major corporations of the world and work against the small and medium domestic enterprises of countries, both the capital and labour employed.

Many senior officials and ministers from developing countries also went back with the feeling that they had little say or influence over the WTO processes or its direction or decisions.

In the minds of the NGO groups, the WTO and its system have become identified with the impoverishment and marginalisation of the developing countries as well as the ordinary people of the North.

Many of them have gone back from Singapore with the view that they have to pay more attention and direct their energies at combating the WTO, even more than the Washington-based Bretton Woods institutions.

All these come on top of public concerns -- both in the industrialized countries of the North and the developing countries in the South, and from a variety of interests, including political economists and social scientists, and business interests too -- over the mounting negative outcomes of neo-liberalism and 'globalization'.

The view propagated of globalization and neo-liberalism, as inevitabilities, and as 'phenomenon' that will benefit everyone is no longer accepted or credible, and the signs of resistance because of increasing inequalities and social problems are mounting.

Not a day goes by without one or the other of the major western media carrying analysis and reports critical of the current state of affairs.

For the political scientists, the lessons of the collapse of liberalism or laissez faire in the country of origin, Britain, have not been lost. The liberal economics collapsed when it lost support among the people of Britain who, in the early decades of this century, found the price in terms of mounting unemployment and inequalities unacceptable.

But the establishment trade policy ideologues and economists believe that these lessons can be ignored - in the pursuit of 'efficiency'.