8:11 AM Dec 1, 1994
TRANSITION A MAJOR PENDING ISSUE FOR WTO ENTRYGeneva 30 Nov (Chakravarthi Raghavan) -- While awaiting the final nod from Washington over the World Trade Organization, the Preparatory Committee Wednesday heard progress reports from its sub-committees on pending preparatory questions and set the stage for a 1 January start-off for the WTO by the Implementation Conference next week. The US Senate is due to vote on the implementation bill Thursday, and over the last few days there is no longer much talk of an 'if'. While several of the pending issues are on the way to solution or have been settled, with a few others not needing any immediate answers before the entry into force being pushed on to the WTO bodies, the 'Transition' issue is one that remains to be resolved. This relates to the transition from the present GATT to the future WTO -- and what GATT diplomats call the need for co-existence or co-habitation for a period between the GATT 1947 and the Tokyo Round code agreements and the WTO and its annexed multilateral agreements. The sticking point appears to be the fate of the Tokyo Round agreements, particularly the one on anti-dumping, and the investigations started and going on now. The WTO's agreement on anti-dumping and its requirements seem to apply only to those investigations procedurally initiated by a country after WTO entry into force. With some reportedly 200-300 complaints and investigations under way in various stages, the issue of which disciplines will apply (WTO's or the Tokyo Round code's) and which dispute settlement mechanism is seen by other trading partners as critical. At the Prepcom Wednesday, Amb. Kesavapani of Singapore, who chairs the sub-committee on Institutional, Procedural and Legal (IPL) questions, identified this as "the important and most pressing issue of the transitional arrangements" and that intensive bilateral and plurilateral meetings will be held over the next few days, with the outcome reported to the IPL subcommittee and the Prepcom in due course. Another important issue identified by Kesavapani was the composition of the Textiles Monitoring Body. The Prepcom itself is due to meet next Wednesday, before the implementation Conference of 8 December. It may meet again around 20 December to review the situation relating to ratifications and any other issues needing solutions before it finalises and adopts its report to the WTO. When the WTO formally comes into being on 1 January, the first meeting of its General Council may be convened sometime around mid-January, to take formal decisions on the Prepcom recommendations and also other pending matters. Prepcom sources said that without a solution to the 'transition' issue, the Implementation Conference might have problems in setting a date for entry into force of the WTO. Though 1 January is to be set as the date, this will be suitably hedged in to take account of the fact that the EU Council of Ministers to ratify the treaty on behalf of the EU is only due to meet on 16 December, and the French Parliament (which has to give its approval for those parts of the WTO agreement which the EU court has said lies in the domain of the members) is also due to meet only after the implementation conference. "Even if the EU or French ratification is only a procedural, and not a substantive issue, the action of the implementation conference cannot be seen as taking them for granted," one diplomat said. There has been reportedly some discussions informally at level of negotiators and officials, but the US side has still to get the okay for any deal from Washington -- where everyone's mind has been focused on getting the Congressional approval. In November, after a meeting of the Quad officials, an EU senior official had said that a solution for a one-year coexistence or cohabitation could be achieved. Other sources said that Americans don't want any new disputes to be raised or disposed off under the Tokyo Round agreement. But it is not clear whether this means that investigations initiated and already under way would then be governed by the WTO agreement and its DSU (with the special 'standard of review' clause for the Anti-dumping cases) is not very clear. The question of composition of the Appellate body (qualifications of candidates, their selection and retainer etc) also appear to have been agreed upon at the level of a drafting committee. The EU idea of the 'collegiate' functioning of the Appellate body, with those members not in the three-member panel hearing any particular appeal, being associated with the outcome (and thus following it in future to provide coherence) has reportedly been given up. In the informal discussions, some Latin American members even questioned the idea of 'consistency and coherence', stressing that no two cases could be alike and it was wise, particularly with an automatic acceptance process, to leave room for review of any decision and change in a future case. On other matters, the Prepcom heard a report from Amb. Felipe Lampreia of Brazil on the work of the Trade and Environment sub-committee. Lampreia reported that in his view there had been an impressive followup in the sub-committee on the ministerial decision about work programme in this area and that the issues had been taken up substantively. The sub-committee will continue as a WTO body and is expected to undertake work in the remaining areas, and will report to the first ministerial conference which will then decide on its future and the terms of reference. Amb. Andras Szepesi, chairman of the GATT CPs and of the Prepcom sub-committee on budget, finance and administration, referred to the work on the transfer of assets and liabilities between the ICITO (Interim Committee on the International Trade Organization, the UN body that provides the legal cover for the GATT secretariat) and the WTO. Szepesi said that while work was going on a number of technical and other issues relating to these matters, including the headquarters building and other questions, much remained to be done on the Headquarters agreement with the Swiss particularly over the immunities and privileges issue. Sources said that while some of these are minor (even if everyone does not see it the same way) relating to taxation and residence permits etc, there was were some major sticking points with the Swiss seen by the Geneva diplomatic community as trying to claw back on their earlier 'blank cheque' offer. One source said this is not a technical issue and the WTO may not only start off without a head, but without a feet too (in terms of its permanent location) and there may still be a hunt for other places, including Vienna as a current UN centre in Europe.