Beyond Bangkok

Published : Mar 04, 2000 00:00 IST


ANYBODY looking for pointers on the likelihood of a new round of trade talks would have been disappointed by the outcome of UNCTAD X. Dr. Supachai Panitchpakdi, who presided over the session as the Trade Minister of the host nation, was extremely cautiou s in his final summation: "We have to learn the lessons from Seattle. Not until we find a way of removing some of the major disagreements can we start... In order to achieve a new round, a number of things have to be done to understand the development di mensions of trade."

Advocacy of a new round of trade negotiations came in the main from the European countries. Clare Short, United Kingdom's Secretary of State for International Development, claimed to speak on behalf of the developing countries in pressing for a new round . The debacle at Seattle, she claimed, had convinced her that "many of those who claimed to speak for people in the developing world did not speak for their interests". In opposing a new trade round and the WTO, she insisted, these interests were doing n othing other than "trying to save the developing world from development".

Short earned a gentle reprimand from at least two delegations representing the developing world. The Egyptian speaker was especially forceful, urging the advanced countries not to introduce new issues into the WTO agenda on the plea that these are in the best interests of the developing countries. "The developing countries can decide what is in their best interests," he pointed out.

The U.K.'s priorities are clear. Short premised her arguments on the experience of East Asia and South-East Asia, which supposedly offer the best illustration of how a large migration out of poverty is possible through open trade and investment regimes. Developing countries needed to emulate them and create conditions favourable to private investment-led growth, she argued. In the current circumstances, this is the only way they have out of poverty, she added.

THE range of issues raised by Short occasioned well-placed misgivings. Among these was the need for a multilateral agreement on investment as part of the WTO framework, a competition policy and a comprehensive agreement on financial services. She also th rew in a fresh look at the implementation of existing WTO agreements as an incentive for developing countries to join the proposed new round of trade talks. Also granted was the principle of duty-free and quota-free access for the least developed countri es (LDCs) in the markets of the industrialised nations.

With varying shades of emphasis, these themes were reiterated by the German, Dutch and European Union delegations. P. Nielson, Commissioner of the E.U., specifically mentioned environmental standards as an issue that needed to be taken up within the WTO framework.

Speaking for India, Rajya Sabha member Suresh Pachouri frontally challenged the advocates of a new trade round. Among the three reasons he listed for a negative perception of the WTO was the effort to "broaden" its agenda, even before the developing coun tries are "able to come to terms with the commitments already undertaken in the Uruguay Round". "We find," he said, "that there are proposals to negotiate disciplines in new areas like investment and competition policy, completely ignoring the difficulti es faced in implementing the agreements already entered into... The problem gets even worse when attempts are made to bring into the WTO agenda, non-trade issues like labour standards."

WTO Director-General Mike Moore remained equivocal, undoubtedly a chastened man after his subtle manoeuvres at Seattle failed to inaugurate a new round of trade talks. "We are too far apart on various issues,"he said, "and we need to show more flexibilit y." The Seattle meeting had been preceded, he pointed out, by 300 hours of open-ended negotiations in Geneva. And yet there was no sign of any meeting of minds when the decisive moment came. The WTO would not conceive of a departure from its fundamental rule of arriving at decisions through consensus, he affirmed. That made its task more difficult, though perhaps the results once achieved would be more enduring.

The intervention by M. Nahavandian, the Iranian trade representative, showed how the consensus rule has often been abused within the WTO. Iran's accession request to the WTO, he said, "has been held (up) for nearly three-and-a-half years". So much so tha t it is "yet to be brought before, and considered by the General Council of the WTO". There had been no explanation of the reasons for this delay. And though Moore had sworn fealty to the notion of transparency, he was yet to explain the failure to set u p a working party on Iran's accession.

Effectively, the consensus rule in the WTO meant that every nation had the veto power. But bilateral pressures from the main trading blocs, such as the U.S. and the E.U., ensured that developing countries rarely used their power of veto. This left the WT O field open for a progressive enlargement in line with the changing perceptions of self-interest in the richer countries.

The U.S. and the E.U. would like to take up the implementation of the Uruguay Round as a component of a new round of trade negotiations. The developing countries believe that there is sufficient cause for a review independent of a new round of negotiatio ns that would include several other issues. The rationale arises from the basic reality that many of the promised benefits of trade have failed to materialise for them. Further, they point out, negotiations on services and agricultural trade are due to c ommence this year as part of the mandate given under the Uruguay Round. There is no purpose served at this stage from overloading the agenda of the WTO.

ACTIVISTS from the numerous non-governmental organisations that gathered in Bangkok made another telling point. Under the financial services negotiations, several developing countries have unilaterally committed themselves to positions that go well beyon d the minimal requirements of the WTO. It is immaterial that these concessions were made under acute financial duress. A similar spirit of unilateralism could easily be shown by the industrialised countries, particularly in relation to the LDCs. Rather t han tie up duty-free and quota-free market access to a new trade round, the industrialised countries could grant the LDCs this concession as part of a unilateral confidence building gesture.

Needless to say, that spirit of generosity is sorely lacking. There seems little possibility that the serious crisis of legitimacy that today faces the WTO will ease in the near future. Rather than a new trade round, what seems likely is the indefinite p rolongation of the mood of confrontation that has now beset the organisation. The effort by the WTO to borrow the legitimacy that UNCTAD enjoys as a forum, has failed to come off.

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