Sep 16, 1998

WTO AGENDAS MAY BE MIRED IN US CONTROVERSIES

Geneva, 15 Sep (Chakravarthi Raghavan) -- An informal meeting of the General Council of the World Trade Organization is being invited by the head of the WTO to discuss the financial and economic turmoil around the world, according to WTO spokesman.  

The meeting was set in July to prepare for the formal Special General Council meeting on 25 September to agree on a work programme on the issue of electronic commerce and on preparations for the Third Ministerial Conference to be held in the United States in the last week of November of 1999. 

In some loud thinking of his own in recent weeks, the WTO head, Mr. Renato Ruggiero, has underlined the need for the WTO to ensure that markets remain open against protectionist onslaughts. In some media reports, he has been quoted as suggesting that towards this end, the WTO should go ahead with preparations for the next ministerial conference and the launching of new negotiations at that time. 

But as trade negotiators meet here to consider this, and weigh his advice, their plans for the next round of negotiations and launching it at the ministerial meet in the United States, will be running into several problems. 

While the crisis-stricken countries can recover only by international actions to enable them to stimulate their economies and grow, and have to rely on increasing exports to the industrial country markets, the agendas for the next round of negotiations involve more "demands" on the developing world to open up even more their markets to goods and service exports from the industrial world, and through investment regimes and disciplines give a freer hand and preference to foreign corporations over domestic enterprises.  

Already, complaints are being heard in the Asian countries that advantage has been taken of their distress by the IMF via its conditionality packages, and by the efforts (through technical advice programmes) to push them into notifying and committing these trade and investment liberalization measures (in goods and services, particularly financial services) at the WTO. 

And while their trade officials and negotiators might talk of the WTO's "rule-based system" and its dispute settlement processes, and the benefits of free trade and open markets, civil societies and various interests affected in these countries have become more aware of the effects of expanding the WTO's remit into areas of domestic sovereign economic decision-making, and have begun to organize themselves to resist these and to pressure their governments.

Not only are questions being asked publicly in several of these countries on the issues and proposals being negotiated, what stance their officials took and why they did not say 'no', but also why officials and negotiators were not present to say 'no' when decisions were being cooked up in informal or formal sessions.  

Secondly, engaging the United States in multilateral (trade, economic or political) negotiations, and reaching agreements is always a difficult process for the rest of the world, since in effect they are negotiating with two parties: the administration and the Congress which is not even there at the negotiating table, but has the right to "second guess". 

The neo-liberal globalization and liberalization agenda driven in this decade by the United States and international financial and trade institutions is now faced with a severe backlash from the downside risks that have come to the forefront in the wake of the financial crisis that broke out in Asia, but has spread to Russia and now threatens to overwhelm Latin America, and also hit the United States and Europe. And sharp questions are being raised in the US and other industrial countries on these issues, and efforts of their governments to promote the interests of their TNCs over the interests of the public.  

All these difficulties will be compounded by Washington's preoccupation with the scandals surrounding the President, and its effects on ability of the administration to persuade or prevail over Congress. 

Initially, as they returned to Geneva after the summer holidays, several trade ambassadors shrugged off the likely effects of the sordid and seamy personal life of President Clinton and set out in such near- pornographic details of the Starr 'referral', published on the internet and spread over the entire globe. But Mr. Clinton's personal life has now become part of the processes of US political and public life that will run through the November Congressional elections, and the next Presidential elections. 

Even if the Republican-dominated Congress is forced, by the extent of public support for Clinton's policies and handling of the economy, to refrain from going down the impeachment road, it will not easily clear him or put the issue behind. They will try to deny him the powers that he seeks or accept his proposals - whether on funding the IMF or giving "fast track" authority for trade negotiations.

And without that, while the administration still has enough powers to undertake negotiations, it can only be on the basis of trying to make US norms and laws accepted by other countries; in other words gain concessions from others without having to give away anything where Congressional approval is needed.

Unlike in the Uruguay Round where some "illusory" gains were held out by Third World governments to justify their acceptance of the package, it will not be easy for them now to "sell" to their public new accords.