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.