Democracy vs efficiency at WTO

Democracy vs efficiency at WTO

By Djauhari Oratmangun

GENEVA (JP): More than two months have elapsed since the World
Trade Organization's Singapore Ministerial Conference (SMC)
ended.

Yet the accusations of "nontransparency and an undemocratic
way of doing business", in particular in the decision-making
process of the World Trade Organization (WTO), continue to be a
controversial topic in Geneva with most of the developing
countries.

The closing remarks made on Dec. 13, 1996, by Yeo Chew Tong,
Singapore's minister for trade and industry, acknowledged the
lack of transparency when he said that the conference had been an
outstanding event in all respects despite the fact that, "due to
lack of time", he "regretted not having been able to consult each
of the ministers at every stage", are still fresh in our minds.

Minister Yeo's apologetic statement was prompted by the fact
that on the eve of Dec. 12, 1996, when the draft Ministerial
Declaration -- which emerged by consensus from a small group of
ministers at the closed-doors meeting -- was brought up at the
informal heads of delegations meeting. Some ministers from
developing countries strongly expressed their dissatisfaction at
the undemocratic process and nontransparency which had
characterized the Singapore meetings.

However, after taking into account the explanation supplied by
the chairman, they were willing to agree on the Singapore
Declaration as presented by Minister Yeo. In return, both
Minister Yeo and the WTO director general, Renato Ruggiero,
agreed that this matter would be closely examined in Geneva with
a view to agreeing on a procedure that would, as much as
possible, ensure greater transparency and a wider participation
of decision-making in the WTO and at future ministerial
conferences.

The question is, why did the allegation of undemocratic ways
and nontransparency occur in the first place in an important
multilateral negotiation such as the SMC? And does it reflect the
business which is being conducted in the multilateral trading
system -- the WTO -- the majority of whose members have placed
their trust in the organization to secure a fair, equitable and
more open rule-based international trading system?

We have to be candid in analyzing this issue since, in
multilateral diplomacy, one of the most difficult dilemmas that
conference organizers of the host country face is the trade-off
between greater democracy and greater efficiency.

Greater democracy generally implies extensive participation by
as many negotiating parties as possible. It means that small
states should be able to participate -- at least in theory -- on
an equal footing with larger, more powerful states. On the other
hand, greater efficiency is about rendering the process more
businesslike, so that stable and optional agreements are achieved
in a timely manner.

Usually, in order to overcome this dilemma in multilateral
negotiations, some sort of group system is established. It is
common that within the United Nations negotiation process, the
Group of 77, the Non-Aligned Movement, or regional groupings
(Asia, Africa, the Western countries, Latin America and the
Caribbean), have been successfully used to ensure greater
democracy and greater transparency in a negotiation. The Group of
77 and the Non-Aligned Movement have contributed positively
towards ensuring democracy and transparency in the North-South
negotiations in the 1970s and 1980s.

However, within the WTO system, where every country has its
own specific trade interests, it is sometimes difficult for
developing countries to form into a group which truly represents
a common position in pursuing their trade interests.

For example, the so-called investment group, which was led by
Indonesia during the SMC preparations in Geneva with the aim of
rejecting the inclusion of investment issues in the WTO agenda,
failed to maintain its position in Singapore due to the
differences of trade interests among the group's members when
they came under pressure at the negotiation table in Singapore.

In this respect, WTO groupings are better represented by
Informal Committees Groups which are more likely to reflect
common trade interests and which often comprise developing as
well as developed countries. Two examples are: the Cairns Group,
which deals with agricultural issues and includes Canada,
Australia, Indonesia and Fiji; and the antidumping group, which
consists of countries which are under dumping investigation.

Therefore, it is difficult to form a solid developing group in
order to take into account new issues on the international
agenda, particularly in the area of trade within the context of
the WTO, which has a contractual concept and binding commitments.

A case in point was the attempt by the chairman and the
developing group, in Singapore, to set up a group to represent an
equitable geographical distribution. They ended up forming a
group which represented key players in the international trading
system, among which Indonesia was included.

Therefore, it was obvious that the criteria for selection was
probably to get some of the key countries with some trade and
economic weight, without whose support no accord could be
reached.

After the conference, the WTO spokesman said that the chairman
and the developing group had tried to set up a group according to
geographical distribution, however, they acknowledged that it is
difficult to strike a balance.

Even the chairman and developing group in their postconference
review admitted that "no process is perfect, especially in view
of the fact that we have very limited time and a large
membership. We achieved that process well, considering that we
had a consensus when we presented the final draft."

After taking in all changes and to make the first ministerial
conference a successful one, the host country and in particular
Minister Yeo, in close consultation with the developing group and
with the "blessing" of the major trading nations, decided to go
for greater efficiency. In other words, a more businesslike
approach, with a view to producing a Singapore Ministerial
Declaration on Dec. 13, 1996.

However, in taking this approach, the chairman had to use a
high degree of diplomacy to convince the countries that were not
included in the small group that their interests were well
represented and included in the declaration. This is a very
delicate issue, since it is closely related to the sovereignty of
one country, which is able to participate in the decision-making
process.

Minister Yeo's concluding remarks, which were carefully
drafted in such a way as to reflect the interest of all
countries, while at the same time expressing an apology, could
also be seen as a remarkable diplomatic achievement.

The apologetic statement was presented without his losing
credibility as a chairman by assuring all the delegates that the
procedures to ensure transparency and wider participation needed
to be improved for the next conference. And everybody's
interests, in particular on the new issues such as core labor
standards, investment, competition policy and government
procurement, had been well protected.

In this regard, Minister Yeo made a success of choosing the
greater efficiency approach at the Singapore Ministerial
Conference.

The writer is an Indonesian diplomat based in Geneva, the
views expressed are strictly personal.