First WTO meeting of 2004 sees Singapore ossues down but not out

Martin Khor The Star Asia News Network Selangor, Malaysia

The first WTO meeting of the year did not appoint new chairpersons for working groups dealing with the controversial Singapore Issues. This indicated that the working groups will not reconvene, at least for now, and that the issues will be put on the back burner. But the developed countries are still determined to put them back on the agenda.

Last week, the World Trade Organization held its first meeting of the year. What it did not do was even more significant than what it did.

After the turbulent events surrounding its failed Ministerial Conference at Cancun last September, the WTO has been trying to find back its feet.

The General Council meeting last Wednesday made a step in that direction by appointing new chairpersons for the Council itself and subsidiary bodies such as the Councils and committees dealing with goods, services, agriculture and intellectual property.

However, the Council pointedly did not select new chairpersons for the existing working groups on the so-called "Singapore Issues: trade and investment, trade and competition policy, and transparency in government procurement.

There is a fourth "Singapore issue" -- trade facilitation -- which is dealt with as a special agenda item under the Goods Council.

The implication of the WTO not selecting new chairpersons is that these working groups will not resume their work. And that the Singapore issues -- or at least some of them -- will now be relegated to a "limbo world".

This is a very important development, because most of the developing countries in the WTO have been waging a big battle to prevent the Singapore issues from being given the status of "topics for negotiations" as this would mean a commitment to set up new WTO agreements in these areas.

The Cancun talks collapsed after more than 70 developing countries, led by Malaysia and India, proclaimed they were not willing to begin negotiations on all the four Singapore issues.

The WTO General Council chairman tried to strike a compromise, suggesting that two issues (investment and competition) be put in cold storage, whilst an attempt be made to get negotiations going on the other two issues (government procurement and trade facilitation).

But informal consultations on this went nowhere, with the developing countries arguing that the issues should be dropped, the European Union saying it would like to keep them alive in one form or another, and Japan insisting that all four issues should go for negotiations.

In mid-December, 45 developing countries tabled a formal paper in the WTO (which was presented by Malaysian Ambassador Mohammad Nor at the General Council meeting) calling for three Singapore issues to be dropped completely from the WTO. They indicated a willingness to continue studying the implications of trade facilitation, without a commitment to start negotiating on it.

Last week's meeting was a good indicator which way the wind would blow.

And the non-appointment of chairpersons of the working groups points to the Singapore issues being downgraded and put on the back burner, though not killed off altogether.

After announcing the new Chairpersons for the other WTO bodies, the General Council Chairman, Carlos Perez del Castillo, reportedly said: "You see that I have not made any suggestions for the Chairpersons of the Working Groups on the Singapore Issues.

"This is for practical reasons so as not to complicate agreement on the entire slate of Chairpersons, since delegates have no convergence on the substantive areas of these issues.

We will continue to explore the possibilities of an agreement of a multilateral approach to the issues of Trade Facilitation and Transparency in Government Procurement and that this work will take place in the General Council with the assistance of the Director-General and the Deputy Director-General," Castillo said.

On the issues of investment and competition, he said: "These consultations could also offer at the appropriate point an opportunity to take up the question of what treatment they might receive in the future."

From this explanation, it would appear that a fresh attempt will be made to get negotiations started on trade facilitation and government procurement, but that less energy will be put on re-igniting talks on investment and competition, at least for now.

For the developing countries that have long fought against the Singapore issues, this is a victory, or at least half a victory.

They have been against new WTO treaties in these areas for the following reasons:

o The proposed new treaties would remove or restrict the rights of developing countries to set their own national policies on foreign investment, competition, government procurement and trade facilitation, and this would adversely affect economic development as well as social stability;

o It would also be very costly to implement such treaties and developing countries do not have the resources;

o At least three of the issues are not on trade and it is inappropriate to locate treaties on them in a trade organization; and

o There are many unresolved trade issues in the WTO, such as agriculture, industrial products and intellectual property and the limited time available should be focused on these and not diverted to negotiating new and complex issues.

The developed countries have been trying for two decades now to get a global investment regime established so that their big corporations would be able to operate as they wish in any country of their choice.

Humpty Dumpty may not be put together again, but the European Commission (backed by Japan and others) can be expected to try to pick the pieces up and get the Singapore issues on the road again.

As the outgoing Council chairman indicated at last weeks WTO meeting, the new Chairman (Ambassador Shotaro Oshima of Japan) and the WTO Director-General will try to move two issues to the negotiating stage, whilst keeping the other two issues low-key for possible re-awakening in future.

The developing countries should thus be on their guard and keep defending their turf, and who knows, they may succeed one day in getting the issues off altogether.

Last weeks meeting also could not decide when the next Ministerial Conference (which will be in Hong Kong) should be held.

It was expected to take place only next year. But the United States and European Union are known to want a meeting this year. Countries in favor of a meeting this year, such as the United States, Canada, Morocco, Singapore, Thailand and others, felt that fixing a date now for the next Ministerial meeting would put pressure for the negotiations to produce quick results.

Other countries, including China, Jamaica and Cuba, said it was premature to set a date now since negotiations have not restarted and it was hard to gauge whether there would be sufficient progress to justify a ministerial conference.

In any case, Hong Kong said it would need at least 10 months notice to prepare for the conference, indicating there would not be one this year, at least not in Hong Kong, since the meeting ended without a decision.

Now that the chairpersons are in place (excepting for the working groups on Singapore issues), negotiations at the WTO are expected to begin again in March.