SUNS #4345 Tuesday 15 December 1998



INVESTMENT, COMPETITION STUDY TO CONTINUE

Geneva, 12 Dec (Chakravarthi Raghavan) -- The General Council of the World Trade Organization accepted Friday the recommendations of the two working groups set up under the Singapore Ministerial Conference mandate, and agreed to the continuation in 1999 of the "educational work" on trade and investment and trade and competition policy.

This will be without prejudice to any action that might be taken at the General Council in terms of the Geneva Ministerial Conference mandate for a preparatory process for the 3rd Ministerial Conference in 1999.

The EC is pushing for investment rules to be put into a comprehensive negotiating agenda to be launched at the 1999 ministerial, and parallel to the study process, has put into the preparatory process under the General council an item 'recommendations concerning other possible future work on the basis of the work programme initiated at Singapore."

However, in the working group on trade and investment, India and some others have made clear that they cannot provide a consensus to take up the negotiations on this issue.

This view was reiterated last week at the WTO General Council's review of the developments in the multilateral trading system.

In a statement (later made available to the media by the delegation) at the review of the trading system, Egypt made a reference to the push from some of the developed countries for a  comprehensive round of trade negotiations under a single undertaking approach, and said in the
Uruguay Round Egypt had agreed only to the 'built-in agenda', and the best course of action is on a sector-by-sector basis.

The Uruguay Round itself had been onerous to developing countries, most of whom had been unable to participate or fully participate in the negotiations, leading to their marginalization with various degrees and shades.

"Pushing forward a heavy agenda which include new issues reflecting only the priorities of some developed countries will be a threat to the credibility of the WTO and would lead to further marginalization of the majority of the developing including the LDCs," the Egyptian ambassador, Dr. Mounir Zahran said.

Under any other business, India complained of the trade and technology sanctions imposed by the United States against a number of Indian entities, public and private, over the Indian nuclear tests, and said these unilateral actions were completely illegal in the WTO.

The United States however insisted that its actions were in accordance with the WTO -- presumably a reference to the 'security exception' provisions enabling a member to act contrary to obligations on the ground of its security.

And in a statement, also under other business, on behalf of the African group of countries, Egypt spoke of the great difficulty faced by many smaller delegations owing to the increasing number of WTO meetings. As a result many of the smaller delegations, who also had to cover other meetings in Geneva, had to be selective and had to sacrifice some informal meetings which often were more important than the formal ones.

Referring in this connection to the 1995 WTO guidelines on scheduling of meetings, and the Singapore Ministerial declaration about the need to minimise the burdens of delegations, Egypt said that while the preparatory process for the 3rd ministerial was a demanding task, the WTO guidelines and the Singapore declaration should be strictly enforced, and the number of formal and informal meetings should be kept to a minimum.

In 1997 alone, Egypt said, there had bee a total of 2849 meetings - ranging from formal to informal to private and bilateral. If the eight weeks or so of summer break, as well as the christmas and other
holidays through the year were taken into account, there had been an average of over ten meetings per working day. For such a schedule, each delegation needed at least five persons to cover the meetings -- attending meetings every morning, afternoon and every single working day of the year. And if to this were added the 7000 odd meetings at the UN complex, there were more than 10,000 meetings in 1997.

This proliferation of meetings added to the further marginalisation of the developing countries, and in particular the Africa countries, in the Multilateral Trading System since they could not cover these huge number of meetings.

Egypt had repeatedly raised this question and inscribed it on the agenda of the General Council. But the problem still persists. The time had come for the General Council to take a decision on this and implement it. The calendar of meetings for 1999 should strictly adhere to the agreed guidelines and to the relevant para 22 of the Singapore Ministerial declaration.

"The alternative is that we stick to the realization of the quorum for any formal meeting or challenge decisions taken in our absence, as is being done in the Committee on Market Access," Egypt added.

The committee on market access, which has been trying to put together a data base, and asking all members to provide the data in a electronically processable data format, had proposed a 'penalty' for delegations not providing in this form, by a stipulation that only those countries that themselves had provided the data this way would have access to data in such a form. Other developing countries would only get the data on a cd-rom. India had objected to such a 'penal' approach, and no decision was taken pending further consultations.

But in this case, on a date when the Indian delegation was fully stretched in attending dispute settlement body meeting, and some dispute panels -- all inside the WTO building, the market access committee (chaired by Norway) met formally and took a decision as proposed for such a penalty, without India's presence.

This was a departure from the WTO practice where on such matters, where a delegation has put a reserve, a decision is not taken in its absence or if one is to be taken it is advised by the secretariat of the meeting being about to take a decision, so that it could be present and formally object.

Such a practice has grown up because of the fact of a large number of active delegations who have very small number of bodies to field, who could otherwise object and prevent meetings being held. Under WTO  rules, a consensus is presumed if a delegation present at the meeting does not object. But with no provision for a quorum strictly observed, and meetings being 'suspended' and 'reconvened' at very short notice, without an informal gentlemen's understanding not to take  advantage of a country's absence to take decisions it objects to, the work of the WTO in practice could become very difficult.

India objected to the action of the Committee on Market Access taking a decision behind its back, and the issue was raised at the Goods Council when a number of other developing countries supported this position. The issue is to be reconsidered by the Market access committee.

Zahran's statement and reference was to this and an implicit cautionary warning that if developing country's problems of physically attending meetings are ignored, they could either prevent meetings by raising the quorum question or objecting to decisions taken in subordinate bodies behind their back and withholding consensus when it comes to higher bodies.

In other actions, the Council also agreed to the continuance of the work in respect of the Singapore mandate on transparency in government procurement.

In a separate development, the Committee on Information Technology Products Agreement was again unable to clinch an agreement for an ITA-2, expanding the list of products to be brought under the sectoral liberalisation accord, and postponed the matter to its next meeting early in 1999.

At the last meeting in November, the chairman, Martin Harvey of New Zealand, had put forward a paper with a list of products -- evolved in consultations involving Canada, US, EC and Norway -- for including some 200 new items for zero-tariff treatment, and suggested that participants should send it to their capitals.

But Malaysia had expressed its opposition at that time, on the ground that several of the products of immediate export interest to it had not been included in the list.

India had also objected that some products whose inclusion it had objected, had been put on the list, while the products that the US and EC had objected to had been removed.

The original list had contained as a product item for zero duty, fibre optic cables, a clearly identified information technology product. But the US industry had objected to its being put on a 'zero tariff' list, and the item was removed from the list presented in November.

But some radar and radar equipment whose inclusion was opposed by India was brought in. India had objected to including radar and other equipment, which have both a civilian and defense industry use, to be included in the list for zero tariff treatment. India at the November had strongly criticised such an approach to inclusion and exclusion of items from the list, and said it could not agree to it.

While the list was put forward without indication of its authorship at the November meeting, and despite an Indian challenge, its sponsors (Canada, US, EC and Norway) did not come forward to own it, nevertheless, the chairman asked delegates to forward the list to capitals as a basis for decisions at the next meeting.

But at the meeting on 11 Dec, India and Malaysia maintained their opposition and withheld their consensus.

The issue is to be taken up again at the next meeting of the committee in February 1999.