SUNS4511 20 September 1999

Trade: The Empire Strikes Back

Geneva, 17 Sep (Chakravarthi Raghavan) -- Trade negotiators at the World Trade Organization begin at the General Council on 20 September the new phase of the Seattle Preparatory process -the drafting of a declaration for adoption by the 3rd Ministerial meeting of the World Trade Organization at Seattle from 30
November.

At the informal meeting of the General Council last week, the chairman, Amb. Ali Mchumo of Tanzania, had put forward, 'on his own personal responsibility' what he described as an outline text of a draft declaration, which he hoped could "serve as a basis" for further work.

The draft has a Part A which is a statement of objectives of the trading system, a Part B titled Future WTO Work Programme (subdivided under three headings) and a Part C of 'Immediate Decisions at Seattle.'

The draft was distributed at the end of the General Council meeting on 8 May, and there was no discussion. The first opportunity for this would come at the informal General Council on 20 September.

A series of informal, and some formal, meetings have been scheduled from next week - with Mchumo suggesting that the draft should be finalised by the first week of November to enable capitals to consider them before going to Seattle.

The chairman's text, presumably prepared with the help of the secretariat division dealing with ministerial conference (which is now headed by New Zealander Evan Rogerson), has several disputed points in square brackets, but nevertheless appears to be asymmetric and tilts the balance against the developing world.

Mchumo reportedly consulted key delegations, including some of the developing countries, before he put forward the draft outline. But it is not clear how far he has accommodated their views, beyond placing square brackets around some items.

In Marrakech, at the G77 Ministerial meeting, Pakistan said it was "very unhappy" with some parts of the draft outline, and there would need to be considerable negotiations even for agreement on the outline.

In fact some parts are so structured that, whether intended or not, they are capable of being used by the industrialized nations against the developing world to create 'mischief' and divide them, and force their negotiators to spend their all their energy and time to fend off more demands and prevent more mischief,
rather than address the current asymmetries and inequities of the WTO trading system.

At Marrakech, at the G77 Ministerial meeting, Mchumo had told a "Roundtable on the Multilateral Trading System and Development," that the draft outline put forward by him must be polished up and developing countries should put meat on to the skeleton.

However, trade observers said, the skeleton was structurally defective, and could ensnare the developing countries if it is taken as a basis.

At Singapore, Geneva and, since then, in the preparatory process to Seattle, developing countries have been consistently attempting to focus further work on the implementation problems, and need for understandings, interpretations and changes. Several of them have been insisting that these must be addressed and resolved before any further liberalization or negotiations.

The US and EU, and other majors at Singapore just brushed aside implementation problems, and at the final press conference, Director-General Ruggiero and the Singapore Trade Minister who chaired that meeting blandly said that the implementation issues had been addressed in the plenary where ministers had spoken (to
virtually empty halls).

Even at the Geneva Ministerial meeting, at a final press conference, the US Trade Representative Mrs. Charlene Bershevsky said on implementation "we implement our obligations, you implement yours."

It was only during the preparatory processes to Seattle, when developing countries formulated the problems of implementation, some arising out of their own difficulties, and many others due to the way the agreements have been drafted, and implemented, that the US and others began talking of willingness to consider these.

The EU, whose internal processes are more circuitous and non- transparent than those of the United States, in its anxiety to get a new round, with new issues, has been talking of an open- ended agenda with every issue by every country being on the table.

But successive multilateral trade negotiations in the GATT trading system - under the old GATT, and in the Uruguay Round - has shown that issues and concerns of the developing world are often put on the agenda (in a very attenuated way some time), but they are never addressed directly and resolved. They are just shoved on at the end to a future work programme.

With developing countries, at least some of them, insisting on priority for their concerns and implementation problems and need to address and resolve them with decisions at Seattle, the North appears to be adapting a different tack.

The idea has been floated in private talks by some of them that the problems should be tackled in the various WTO bodies overseeing individual agreements, and the implementation difficulties of individual countries resolved in them by extending the time, through waivers etc.

The Mchumo draft, under Future Work Programme, titles B.1 as Implementation with two sub-headings, Action on specific implementation problems, and Establishment of improved mechanism for overseeing implementation and addressing problems. Under the latter are two alternatives in square brackets: [establishment of a standing body on Implementation] or [Regular General Council Special Session devoted to implementation issues].

Either way, this will cosmetically show that developing country concerns and problems are being addressed - even as through a new round, the industrial world will press ahead with new rules and disciplines in new areas to lock the developing countries into an international laissez faire.

In a final part 3.C. 'Immediate Decision at Seattle,' there is a square bracketed item [Immediate action on certain implementation problems]. Since there have been no negotiations and specific solutions identified so far on these at General Council preparations, it is difficult to see any decision other than shoving them to a separate track process of consideration by WTO bodies, or putting them as part of a round of negotiations, where the developing world could be asked to pay a new price on other issues.

The developing countries who have been fighting shy of frankly demanding renegotiation and setting right the asymmetries and inequities of several of the agreements concluded in such haste and secrecy in Nov-Dec 1993, would once again find at the end of the new round that the problems raised by them have again been
bypassed.

Both in terms of views and discussions of delegations within the formal and informal meetings of the WTO, there is no consensus on the launching of a new Round or further trade liberalisation and its benefits.

But the Mchumo draft's B.2 has the heading, without any square brackets or qualification as "New Negotiating Round", and within it, as B.2.(a) under "Overall Principles" are two items in square brackets, [single undertaking] and [maximum three-year] duration. Three others are: development objectives to be a priority, special and differential treatment, and recognition of autonomous liberalization measures.

A sub-head 3.2.C, lists the subjects for negotiations, with 'agriculture' and 'services' where negotiations are mandated, without any square brackets.

But put into the part, within square brackets, are the items: non-agricultural market access, issues relating to other existing agreements and mandated reviews, investment, competition, transparency in government procurement, trade facilitation, and an ubiquitous item 'functioning of the WTO system'.

A part 3.3 lists, all in square brackets, four other items: continuing work other than negotiations arising from Singapore agenda or the reviews and other work provided for under existing agreements and decisions; coherence; electronic commerce; and a catchall 'other'.

When the Uruguay Round was launched by the Punta del Este Declaration, much attention and focus was on issues like services, agriculture etc.

An item was put in, almost at the last, about "Functioning of the GATT System", which was shortened into an acronym as "FOGS".

As those who followed carefully the 8 years of the Uruguay Round talks and its outcome know, the FOGS was a catch-all item, with talks shrouded in fog, that was used to advance in private the ambitions of the GATT secretariat and others.

And at the end, FOGS was used to bring in, without any mandate from those who launched the negotiations, the idea of a multilateral trade organization (MTO), and which ultimately became a World Trade Organization and an integrated dispute settlement mechanism, which is now used to enforce asymmetric
rules and iniquitous burdens, with panels and the appellate body, contrary to the language of the agreement, are extending the WTO remit over developing countries and whittling down their S&D rights.

In 1993, in promoting the idea (of an MTO) at Quad meetings, Canada had said that by this process, UNCTAD's and UN's involvement in trade could be ended, and the single-undertaking concept of the Uruguay Round used to force developing countries to accept all the agreements and their obligations.

And when it became a definitive WTO, it was also said that the merit of the WTO was that it would be a permanent forum for trade negotiations in areas covered by the WTO, and there would be no need, ala the provisional GATT, to have periodic ministerial meetings to launch and conclude negotiations and incorporate them into GATT.

And developing countries, and their negotiators, accepted all these and even went about proclaiming it as a great achievement of theirs -- though some of them in private at least admit they were wrong.

Now the developing world is told that there is need for ministers to launch a new 'round' of trade negotiations, and seem destined to be ensnared further by two items "Functioning of the WTO system" and "Coherence".

In some private meetings among some industrialized countries, the US, France and Germany reportedly have said that they want to bring in under this concept - coordination between the WTO, IMF and the World Bank, and bring in labour and environment indirectly.

The executive heads of the ILO and the UNEP have already begun to talk of these, but neither they nor the major nations are yet ready to formulate things specially and seek negotiations.

They clearly plan to bring them up later under the WTO/Millennium Round version of some foggy negotiations - when the present generation of trade diplomats here and officials in capitals would have left office (and some would have joined the secretariats or the transnational corporations) and the developing world would not even have any collective memory of what actually happened.

It was possible to do it in the Uruguay Round, because most parts of the governments everywhere, and the public (including domestic enterprises) were largely ignorant, and the 'secrecy' of negotiations was used to force things, and developing country governments said there was no alternative.
Public interest NGOs, of the North and South joined hands and organized themselves to defeat the foreign investors charter, the proposed multilateral agreement on investment, and have begun to organise themselves against similar "rights" at WTO.

Unlike during the Uruguay Round, now many more civil society organizations have become active and aware -and most of them have not allowed themselves to be coopted by the charm offensive and periodic lunches with the power structures - and are organizing themselves for Seattle and beyond.

Aware, the neo-liberal establishment has begun a concerted attack against the NGOs, with some western media and columnists (Martin Wolf, 'Uncivil Society' and Guy Jonquiers interview with Moore, both in Financial Times) who see nothing wrong in their espousal and preaching the gospel to the governments, or business influencing governments and the WTO, but find NGOs presenting their views and lobbying the public objectionable. And the new Director-General, Mike Moore, at his first press conference and some press interviews has also begun that tack.

It is almost like the Empire Strikes Back.
In 1977, when George Lukas brought out what he had envisaged as a 9-part series of films, the first film that he put on the screen was "Star Wars: A New Hope", in fact the first part of a middle triology. The next two (in 1980 and 1983) in that series, were "The Empire Strikes Back" and "The Return of the Jedi" (where the
evil emperor is defeated).

It was space opera of sorts -- about 'good guys', the freedom loving and oppressed and the 'bad guys'; of the evil Galactic Empire, and the "Evil Emperor" who takes over the galaxy, and a few who 'steal' his plans of domination through a space ship, and destroy the evil empire. It was portrayed as a story that took place a long time ago in a galaxy far, far away, and with the good prevailing over the evil -- a mixture of (European)
classical mythology and history, Arthurian Legend, Wagnerian myth and the US Western.

Lukas has now come out, with the first of the prequels, "The Phantom Menace," playing in cinema houses.

In terms of the international trading system, and the neo- liberals mouth-watering hope of establishing at the world level, a international laissez faire, it is an attempt to go back to Lukas first prequels, and replicate the laissez faire of the 19^th century, but with 'globalization' substituting for 'colonialism'.

It is only in films and fiction, one can go back and forth. In real life, attempts to go back and repeat history often ends in disaster for those trying to repeat it.