Jul 10, 1998

 

PR EXERCISE ON BENEFITS OF 'GLOBAL FREE TRADE' ?

 

Geneva, 8 July (Chakravarthi Raghavan) -- Better efforts should be made to inform the public of the benefits of the WTO system, several delegations would appear to have said at the "informal" heads of delegations (HOD) meeting, preparing for next week's formal session of the General Council and for a September meeting at which the processes for the 3rd ministerial in 1999 are to be set in motion. 

Other issues that figured at the informal HOD meetings, on Friday (when discussions were adjourned to enable delegates to watch on TV the world cup football match between France and Italy) and Wednesday, included how to prepare for and launch the preparatory process for the 3rd ministerial (in 1999 in the US) and further multilateral trade negotiations, the work programme on electronic commerce (a US move for tariff-free trade in this medium), and the issues of senior management (and wider representation of developing countries in the secretariat).  

On this last, Pakistan, supported by India, Egypt and others wanted specific and early decisions, not only on the number of deputy directors-general and their selection, but of other senior staff and the WTO's activities on technical support and services for developing countries. Some of the country delegations referred to the need for better and more equitable representation of nationals in the secretariat (now staffed in most key positions by North Americans and Europeans, which they said could be achieved without loss of 'efficiency' - an argument used by WTO high officials to justify lop-sided staffing.  

The need to sell benefits of the WTO system to the public came up in comments over proposals to increase "transparency".  

The US has suggested speedy 'derestriction' (making public) of some WTO documents, such as dispute panel findings and rulings, official reports, working and draft documents and 'minutes' of meetings, and involving participation of non-members in some bodies (such as ability of NGOs to file briefs before dispute panels etc).  

WTO officials said due to translation and other problems, they were even now running late on producing minutes and reports of meetings of WTO bodies. Trade diplomats said that the minutes and reports of the working sessions of the Geneva Ministerial (where the built-in agenda and future work were addressed) has merely a page or two of the 'decisions' at the informal, and the written texts and speeches of delegations have been attached.

Trade diplomats said that while a bulky document, it does not appear to include any of the comments and interventions from the floor to the suggestions from one or the other ministers at the working sessions - even though the future work programme to be set up under the General Council process is to be based on these.  

The Jamaican ambassador's proposal at an earlier meeting, for a formal General Council meeting where the issues and subjects (mentioned in the Ministerial meetings) could be identified and brought on record does not appear to have been pursued, with the General Council Chairman and others preferring the 'informal HOD process'.  

Mexico and Asean among others drew distinctions between 'transparency' in terms of the WTO's functioning as a contractual organization of governments, and the need to better inform the public of the benefits of the system. The WTO functions on the basis of contractual rules between member-countries, and not members and society at large, and ideas about 'transparency' need to be clarified, Mexico said.  

The ASEAN said that the timing of derestriction was only symptomatic of more fundamental issues. While it supported improving transparency and enhancing pubic understanding of the WTO, transparency meant access to information without violating confidentiality. WTO is a contractual institution, and it responsibility of governments to involve various sectors in their society before entering into agreements, and responsibility of governments to increase public understanding and awareness on various agreements agreed upon by their respective governments.

And while 'civil society' must be accorded the respect it deserved, member-governments are solely accountable, and not special interest groups however legitimate their concerns. But ASEAN supported the view that all WTO consultations must be open-ended (and enable every member to be present).  

Many other delegations who intervened reserved their positions, until further study in the capitals of the US suggestions.

But how to win public support for the benefits of the system, appears to be a question that baffles the trade organization, whose officials say they want to involve 'civil society', but find it difficult to define it, a problem which they share with the UN system (after the UNCED process where big business lobby groups were enabled to go around as NGOs). 

For the international officials, high economic and trade diplomats and officials (particularly of the major industrial countries) and neo-liberal academic theologians, the benefits of the neo-liberal economics (trade, investment and financial liberalisation) are "self-evident".  

Some of them dismiss the doubts of others as reflecting the 1970s thinking, though their own appears to be a throw-back to the 19th century myths of free trade, as an UNCTAD official appears to have pointed out this week at a WTO training programme. And in this view, the problem and the public apprehensions is only due to failure to convince the public and thus a problem of public relations.  

Unlike in the biblical days, and the story of Jonah, "the prophets of boom now run much more risk of being written off than prophets of doom," said UNCTAD Secretary-General Rubens Ricupero at the ECOSOC in New York this week.

In 1993, before the conclusion of the Uruguay Round, and again in 1994, after Marrakesh but before US Congressional action to accept the outcome, the GATT secretariat came out with breath-taking figures of 'welfare gains' of an annual 250-500 billion dollars and more. Vaguer projections and benefits have been made by a number of other sources.  

And there are also prophecies of future benefits of globalization, operations of TNCs and investment liberalization.  

And in November-December of 1997, the WTO head and the US trade and treasury officials, pushed for financial liberalisation by the Asians, presenting it all as a solution to the financial crisis problems.  

But the reality in Asia, felt by millions, is proving to be different, and is spreading elsewhere. 

As the International Herald Tribune reported in an analysis this week, the crisis that began in Asia a year ago, has not ended but is now spreading to other parts of the world and threatening even a global depression.

The public clearly see the proof of the pudding is in the eating. While they see large corporations, and asset holders and managements have benefited, in the North and South -- elsewhere they see reality of loss of jobs, incomes and earnings, and closure of local enterprises.  

At the ECOSOC, the general public doubts about the benefits of the WTO 'trading' system and its liberalization agendas (to extend foreign jurisdictions into domestic sovereign space of countries) and the "backlash" against "globalization" and "liberalization" processes at the IMF/WTO also figured in the speeches -- among others of UN Secretary-General Kofi Annan and Ricupero.  

The anti-WTO demonstrations in Geneva (at the time of the 2nd Ministerial and 50th anniversary celebrations), and the opposition to and failure to get "fast track" trade negotiating authority in the US and the opposition of non-governmental organisations, leading to the suspension of the OECD negotiations on multilateral agreement on investment were cited in this regard.  

The examples cited may leave the impression that the threat is all centred in the industrialized North -- in Lyon, not Libreville as Ricupero termed it.  

But while reactions in the North are perhaps more attention-catching (in the transnational media) and effective in impeding the rule-making for the IMF-WTO orchestrated neo-liberal order or back-tracking (on grounds of social and environmental standards) on liberalization commitments, already made, to benefit the South in the future, the dynamics of the social opposition and disorders in the South can't be ignored either. While developing country trade officials and elites are convinced of the gains they can make, the increasingly marginalised and impoverished public in their countries are associating their problems (arising from the international system) with their local rulers.  

In fact the anti-WTO demonstrations to coincide with the Ministerial, took place not only in Geneva, but in scores of cities and centres across the globe, though it did not receive western media attention. And the activist public interest groups in the North and South have joined hands against multilateral investment rules, not only in the OECD forum, but over the initiatives at the IMF for capital account liberalisation, WTO financial services liberalisation, and possible multilateral investment frameworks promoted in any other fora.  

The Ricupero remarks at ECOSOC on "market access" also made the point that the ongoing multilateral market access improvements (information technology, basic telecommunication services and financial services) cover sectors of export interest primarily to the industrialized countries and a few NICs. He could as well have added "electronic commerce" to that list, given the time spent on its at the WTO ministerial, and in the followup at the informal HOD.

Like information technology products liberalization at Singapore, electronic commerce is a side issue that came suddenly into the WTO, and the subject of a secondary decision of the Ministers at Geneva, but seems likely to occupy more attention in the processes ahead.  

The US and EC provided 'non-papers' on electronic commerce, and some 20 delegations intervened to speak, and the WTO secretariat (which has already produced a study on the benefits of electronic commerce) is to produce another on the current WTO legal framework on this.  

Judged by either the time reportedly spent at the HOD on individual issues and preoccupations or the time spent on and information conveyed at WTO media briefings, the WTO is preoccupied, in terms of substance, in continuing the market access liberalisation in goods and services of "export interest" to the industrial world.  

On Wednesday, for example, more time was spent, and more delegations spoke, on the "electronic commerce" issue -- with many from the industrial and developing world saying they did not know enough about it, though they have agreed to a temporary standstill on tariffs in an areas, whose ramifications, they did not understand.  

But this is nothing new either -- since in the Uruguay Round they negotiated and made commitments on trade in services without any data on the trade flows and directions of trade, and do not seem even now to be any nearer in creating via the UN statistical system (of national accounts and international accounts) the needed data.  

It was agreed by negotiators in 1990, at the time of Uruguay Round negotiations on services, that the services trade data problem would be solved before the next round of services negotiations (which are due to be launched by 2000). But the problems of national data collection on services trade (which not only involves flows across borders, but also through 'establishment' and 'commercial presence' within borders) or even differences amongst various organizations on domestic and foreign transactions have not been addressed.  

All that trade officials say in response to questions is they are working on it, but don't explain how the information can come without initial data collection in national statistical accounts or whether there would be continued reliance on the IMF BOP data, which has an annual 'black hole' of about 100 billion dollars of unexplained international transaction balances.  

On preparations for the processes leading to the 3rd Ministerial and negotiations, the US wanted all subordinate bodies to undertake their analysis and be ready with any calls on them for information and data that may be needed.

The WTO spokesman, Keith Rockwell told the media that no decision has been taken, but it is merely a question of assembling a data base where, he said, the WTO secretariat is still handicapped, since not all their activities have been computerised and readily available. 

However, India is reported to have argued at the HOD against a "fishing expedition" by the various subordinate bodies, and suggested that the General Council should identify the issues where they needed inputs for the various WTO bodies, rather than leave it to the bodies to decide what they need to do. 

The EC also is reported to have reserved its position. 

Other comments related to whether the General Council itself, through the special process should handle the preparations for the 3rd ministerial, or as indirectly sought by the US and the WTO head it should be an ad hoc preparatory committee.