7:51 AM Oct 12, 1994


Geneva 12 Oct (Chakravarthi Raghavan) -- Discussions within the Preparatory Committee for the World Trade Organization on its future relations with the UN appear to be getting muddied and mired in the controversies over the UN Secretary-General's proposed Agenda for Development including recommendations for a UN Economic Security Council or Executive Board of ECOSOC.

The Marrakesh Final Act (agreement for the WTO) has no specific provision or reference to the UN, but Art V.I of that agreement provides that the WTO's General Council "shall make appropriate arrangements for effective cooperation with other intergovernmental organizations that have responsibilities related to those of the WTO", and this is one of the items on the agenda of the WTO Preparatory Committee established at Marrakesh.

But many developing countries appear to have become concerned over reports of Boutros-Ghali proposals about the Economic Security Council or Executive Board with overall decision-making direction-giving capacity to the specialized agencies, and are favouring only a WTO-UN coordination, without WTO becoming a specialized agency.

This has resulted even in styming their own push for UNCTAD/WTO relationships and UNCTAD's complementary roles in policy analysis and consensus-building as well as technical assistance.

The UN Secretary-General Boutros Boutros-Ghali is yet to formally submit his Agenda for Development document to the UN General Assembly, but is to do over the next few weeks.

A draft of elements for such an agenda was put forward by him earlier this year, and was the subject of extensive comments (and criticisms by the Group of 77) and discussions at the ECOSOC and public hearings organized by the President of the 48th UN General Assembly.

In the light of them, Boutros-Ghali is to revise his draft and present the document with his recommendations to the current General Assembly. But a revised draft has been sent by him to the heads of all specialized agencies for their comments prior to his officially presenting his proposals to the current General Assembly.

In March, Boutros-Ghali had written to the GATT Director-General, Peter Sutherland, indicating the UN's readiness to cooperate fully with the WTO and seeking further exchange of views for developing common approaches to guide the two secretariats in making submissions to their inter-governmental bodies on this.

In his response, Sutherland reminded Boutros-Ghali that the WTO's relations with the UN would be considered in the context of the consideration of the WTO's relations with "other organizations"

In September, Boutros-Ghali forwarded copies of his revised draft Agenda for Development to the heads of all UN Specialized Agencies, including the IMF and the World Bank as well as to the GATT Director-General for comments before its finalisation and and submission to the General Assembly.

In this draft, Boutros-Ghali has said some elements of policy and programme coordination with BWIs might be "more manageable" and suggested provisions for the proposed ECOSOC Executive Committee to make recommendations regarding policy for Specialized Agencies, including the BWIs.

The IMF and World Bank heads are known to have reacted strongly against the Boutros-Ghali proposals for bringing the BWIs into a better coordination relationship with the UN and its systems,

In his revised draft, Boutros-Ghali has a paragraph on international trade which says: "There is another area of development cooperation - international trade - which is of growing importance in the global economy and where the role of the United Nations system needs to be carefully defined. The recent initiative to set up a World Trade Organization is an important milestone in this field. But it is imperative that the proposed WTO is set up from the outset as a Specialized Agency of the United Nations. One initiative of which I urge consideration is for the WTO and the UN together to negotiate a code for international investments and accredit transnational companies which agree to it."

Sutherland and the GATT secretariat, the US and EU, as well as several of the developing contracting parties have reacted strongly against the specialized agency relationship. But many GATT contracting parties are reported to have advised Sutherland that as GATT D.G. he could not make any direct comments of his own and it was for the CPs to discuss it.

Many developing countries are worried that through the socalled Economic Security Council or the ECOSOC Executive Board and its decision-making on peacekeeping, humanitarian, environment and social policy goals, and the recommendations for policy to the specialized agencies, their contratual rights and obligations in the trading system could be easily further eroded. Where it suited the major industrial countries, they would choose the Executive Board route to impose their will on the developing countries in the WTO, but the developing countries would never be able to do the same visavis the developed, whether in relation to the BWIs or WTO, they fear.

These concerns of large number of developing countries over the moves, appear to have resulted in many of them instructing their delegations to the GATT/WTO Prepcom to ensure that the future WTO is not brought into any specialized agency relationship (and thus under an Economic Security Council or ECOSOC Executive Board), but only provide for working level coordination.

They cite in this connection the examples of the IMF and World Bank and their relationships with the UN, and the WTO as a third pillar of the Bretton Woods architecture.

It is an extent of the confusion and muddied discussion over the issues, UN specialized agency relations vs nature of that relationship, that many developing country delegations to the GATT are not even aware that the BWIs (IMF/IBRD) are UN Specialized Agencies since 15 November 1947.

At that time though, when the two BWIs and UN signed the agreements and it was approved by the General Assembly, at the instance of the United States, the two BWIs virtually got away with murder in terms of their escaping even remote accountability to the UN that the Charter requires.

While the then UN Secretary-General, Trygvie Lie (a Norwegian) entered into the agreements, his real views were perhaps reflected in the reservations and complaints of Norway in the General Assembly at that time, and since then, over the last three decades complaints by developing countries on the way the IMF/World Bank not only function independently as international financial institutions, but have taken over, in developing countries, the entire area of economic and development policy across all sectors that is within the ken of the UN and the specialized agencies.

Unlike normal multilateral treaties and charters which specify the UN Secretary-General as the depository, the GATT Director-General (who in strict legal terms is there only as the Executive Director of the UN's Interim Committee for International Trade Organization) was designated as the depository of the WTO.

It will be interesting to see whether the WTO will register the agreement with the UN.

The kind of relationships that the future WTO should have with the UN is one of the items on which the WTO Prepcom has to make recommendations to the WTO's General Council. Discussions within the Prepcom are taking place within its Sub-Committee on Institutional and Legal issues, which is chaired by Singapore's Amb. Kesavapani.

At a meeting of this subcommittee in the last week of September (preceded by some earlier informal discussions) the US and EU said there was no need for the WTO to make any arrangements for relationships with the United Nations.

At the meeting of the subcommittee on 7 October, Kesavapani would appear to have merely mentioned the issue of relationship with the UN and UNCTAD to indicate that the solution would have to be addressed in the wider context.

Meanwhile, the Prepcom has proposed some informal arrangements for relationships with the World Intellectual Property Organization.

The WIPO governing bodies at their meeting last week have reacted positively to this, but have taken three-pointed decisions in terms of WIPO/WTO-GATT relations.

Under this, the governing bodies have said that the WIPO too would like to ahve mutually supportive relations with the WTO and towards this end, the WIPO establish an Ad Hoc informal working group (open toall WIPO members) (i) to advice and cooperate with the WIPO Director-General in his talks with the competent organs of the GATT/WTO, (ii) to discuss possible cooperation between WIPO and WTO and (iii) to consider the establishment of an ad hoc informalWIPO/GATT consultation group on all matters concerning possible cooperation.

The WIPO international bureau (secretariat) would be at the disposal of countries expressly seeking its advice on questions of compatability of their existing laws and planned legislation not only with the treaties administered by WIPO, but also other international treaties including TRIPs, However, this advice will not constitute any official interpretation of any international agreement.