Geneva Update and Geneva Action Alert! June 23, 2002 Trade Information Project IATP Geneva
Japan to Present Fast Track Approach to Negotiating Singapore Issues in the WTO
According to a few sources in Geneva today, it is rumored that Japan is preparing a paper for the General Council meeting of July 24 where it will present its « modalities paper » on the four Singapore Issues (Investment, Competition, Government Procurement and Trade Facilitation). According to sources, Japan will acknowledge that the clarification exercise regarding issues such Investment and Competition is « over » and that members must now take decisions for the launch of the negotiations.
According to these sources, Japan will propose « procedural » modalities (already proposed by the European Communities in the Spring). These «procedural modalities» will be proposed to sidestep the deadlock that exists on each of the substantive issues regarding the negotiations. It is evident to all including the chairs of these working groups that no consensus, explicit or otherwise, exists on any substantive area of the 4 issues amongst the membership. Procedural modalities refer to drafting a framework for an agreement that only outlines the timing of the negotiations. For instance, the Japanese paper is said to mention three time periods for the beginning and ending of negotiations: Tabling of proposals by December 2003, First Draft by Summer of 2004 and the Final Revision of the Agreements by end of 2004. By doing this, Japan will challenge the majority of the membership that believe that «modalities» must be of a substantive nature if they are to be agreed upon at all.
The process leading to the General Council meeting will entail small group consultations by each of the four chairs of the Working Groups in conjunction with the General Council Chair (none of these chairs have been given express authority by the membership to consult). The membership was not in agreement that the work of the four working groups is taken over by the General Council, but the General Council Chair announced that this would be done. The « friends of the Chair», as the four chairs are being referred to, are to meet with the General Council Chair this week to further clarify the process.
Ambassadors have just begun to arrive from Sharm El Sheikh, Egypt where a mini-ministerial was held to the exclusion of all but 31 WTO members. Early reports state that « no progress » was made on any issues, including the Singapore Issues. But informal consultations were held today at the WTO and will continue tomorrow on the issue of Competition.
WTO Multilateral process for Cancun in Chairpersons’ Control New Zealand says that delegations must rely on Chairmen’s judgment “based on meetings and private contacts.”
Thursday, June 19, Ambassadors to the WTO met with the Director General as Chair of the Trade Negotiating Committee (TNC) and General Council Chair, Uruguayan Carlos Perez del Castillo. Driven by these Chairs, the process of informal negotiations has begun for a draft text for Ministers in Cancun. In fact, some members are complaining that unlike pre-Doha where at least the General Council Chair consulted with the membership on the preparatory process, for Cancun the Chairs themselves are dictating the process. The draft text for Cancun will include all of the elements of the checklist that was distributed to the membership on May 27th. The checklist includes all of the areas currently in negotiations at the WTO and those areas that the Doha Ministerial Declaration cites for action by Ministers at the 5th Ministerial Conference in Cancun.
According to ambassadors present in the room, Malaysia made a strong statement about the need to reflect differences of positions in any draft texts for Cancun. Among other things, Malaysia said that the process should be transparent and inclusive and any draft document to be transmitted should be multilaterally agreed upon. Where fundamental differences remain, they should be reflected in the text and alternatives should be suggested. This statement had support from the floor from countries such as India and China. To this Canada responded that the process should not be “over-prescriptive” and said attempts to create rules for transparency failed to reach any agreement in the General Council last December. This refers to the ongoing debate over the Like Minded Group of Countries’ submission for creating accountable preparatory processes for Ministerials and decision-making at the Ministerial itself. (The Like Minded Group is a loose affiliation of developing countries, whose membership varies somewhat with different issues).
Speaking to the two Chairs, New Zealand’s Deputy Permanent Secretary said, “We need to rely on your judgment as chairmen based on meetings and private contacts with delegations” with regards to texts for Cancun. Thus firmly supporting the idea that texts for Ministers in Cancun should be drafted on the Chair’s own responsibility and through non transparent “private contacts.”
China responded after New Zealand with a short but powerful statement saying that the process must be inclusive and transparent. According to sources, these Heads of Delegation (HOD) meetings (where only Ambassadors attend or HOD plus one where an ambassador plus someone else from the mission attends) are well attended but they are entirely informal, thus these critical debates are held without any written record to show the vast disagreement on this crucial decision making process. However this process will significantly shape the entire outcome in Cancun and the lack of transparency will render it vulnerable to power politics. Advocates of this process claim that 146 members cannot come to decisions together, and that it is not feasible to reflect differences in written texts.
However, as a multilateral institution with sweeping implications for domestic policies, the WTO, if it is to remain a multilateral institution, MUST create formal records and work through concrete texts with differences that work towards consensus. Under no circumstances should Ministers receive texts based on unelected chairs viewpoints with little indication of where the fault lines lie. It is false to assume that Ministers know the debates in Geneva and the arguments that have led to the positions drafted by Chairs. Especially since delegations have been testifying since prior to Doha that Chairmen’s texts do not reflect important differences.
To reinforce the Chairmen process, the DG who also serves as the TNC Chair reported that the reports of the negotiating bodies will be factual in nature and thus will provide little guidance for Ministers in Cancun. He said the reports will be prepared keeping in mind paragraph 45 of the Doha Declaration (take stock of progress, or provide political guidance or make decisions) and that a “brief note will be attached to them by the Chairpersons of the various negotiating bodies on their own responsibility”. He said that the TNC guidelines would be kept in mind. Currently, the TNC is overseeing the bulk of the contentious negotiations for Cancun i.e. Draft modalities for agriculture, modalities for industrial products, services etc.
According to delegations, the small group consultations that are currently being held on various issues are composed primarily of developed countries with about 3-4 developing countries. Some developing countries that may be invited are at times unable to attend because of meeting overload. The General Council Chair suggested that a draft text for Cancun would come at the end of July. Many governments objected saying that the end of July is too late to influence the process. The General Council chair responded that he would attempt to draft something by the next TNC meeting on July 14 15. According to other sources, there was “consensus” on the need to produce “something less” than an official declaration as a draft text to Cancun. However, others feel that for developing countries, perhaps a ministerial declaration is what is needed to show how little progress has been made on the so-called development agenda.
There are two extremely problematic elements to this process
The WTO is in effect avoiding its obligation to conduct its business in a multilateral and transparent manner. Allowing Chairmen to draft texts for ministerial approval on their own responsibility side steps the need to reflect differences between governments and also side steps the entire process of consensus.
The small group consultations and heads of delegations process is entirely undocumented, so that absent delegations, officials in national capitals and the wider public cannot follow what is going on. This means that Chairpersons have no accountability or obligation to represent in a balanced manner the viewpoints of the delegations.
The Chairmen themselves have no legal authority to draft anything on their own responsibility. Nor are they chosen in an open forum whereby a majority elects them. Chairmen themselves are chosen through a non-transparent process of informal consultations. Many members believe that they are “pre-selected” by the most influential members of the WTO and the Secretariat.
While many members see this as problematic and while this has been raised in past debates in the WTO, it is currently not being addressed openly in the WTO. Currently the WTO countries such as Canada, New Zealand, backed by influential members such as the US and the EC refuse to create a transparent process for selecting these chairs in the name of “over-prescription” or lack of efficiency.
This formula achieved results in Doha for member states such as the EU and the US who were able to launch a round, include environmental issues, avoid strong commitments on agriculture, and include the possibility of negotiations on Singapore Issues. All developing countries got was empty rhetoric about development needs and technical assistance. This process was opposed in Geneva and is well documented by now. The key difference in the Cancun process is that the drafting is starting with a Chairman’s text where during the Doha Process various members were engaged in drafting, but ultimately the General Council Chair put forward a text that many developing countries felt was illegitimate.
Governments must put an immediate halt to the Chairmen’s text process and ask that Head of delegation meetings be made formal with minutes. Also, a procedure for consensus must be put on place whereby drafts exhibit differences between members so that Ministers are aware what positions their government has been arguing for in Geneva during the last two years since Doha.
Finally, under no circumstances should facilitators for Cancun be announced in Cancun at the last minute. This facilitators must be chosen in Geneva through an open process whereby the facilitator is NOT a demandeur of group he/she is facilitating i.e. a Cairns Group member should not facilitate the group on Agriculture. These three elements are a minimum pre-requisite for a transparent and a legitimate process of decision-making.