WTO brief expansion opposed

By Alfons Samosir

GENEVA (JP): Nearly 18 months have elapsed since the WTO came into effect in January 1995. The huge package of the Uruguay Round as embodied in the Final Act took more than seven years to conclude.

Although nearly all developing countries claim it does not satisfactorily accommodate their interests, they can nevertheless say with considerable pride that the document is the result of successful negotiations.

Unlike previous rounds, the Uruguay Round, the most complex and ambitious round ever held, not only dealt with trade in goods but also trade in services, and trade related intellectual property rights and trade related investment measures.

The Uruguay Round proved no less difficult than the previous negotiations. The routine work required to implement all WTO agreements burdens all members.

According to the Marrakesh Final Act, a ministerial implementation review will be held every two years. The first ministerial conference will take place in Singapore between Dec. 9 and Dec.13, 1996.

While nearly all WTO members consider this momentum to be very important, the preparation for this conference is nevertheless controversial because many developed countries, led by the U.S. and the European Community, are proposing new issues to be included in the agenda.

Many meetings, both formal and informal, have already been initiated at head of delegation level. Even more have been proposed at the informal ministerial level.

The fixed agenda of the Singapore Ministerial Conference is being hotly debated. Conflicting interests between developed and developing countries are still a stumbling-block.

Article IV of the Marrakesh Agreement establishing the WTO does not explicitly layout the task of the conference. Developed countries have used it to propose new issues for the ministerial agenda. Almost all developing members believe the article only allows the review of the implementation of the WTO, not the discussion of other topics.

WTO Director General Ruggiero is trying to formulate a consolidated agenda which accommodates all interests. He wants to:

(i) review the implementation of the WTO Agreements (the built- in agenda);

(ii) review ongoing negotiations/unfinished negotiations;

(iii) review trade and environment;

(iv) review possible trade liberalizing initiatives;

(v) review regional trading arrangements and;

(vi) review new issues (bribery-corruption, labor standards, competition policies, and foreign direct investment).

Only the new issues and trade liberalizing initiatives have polarized WTO members.

The U.S. has stated that the Agreement on Government Procurement needs to be strengthened to counter corruption by addressing transparency, openness and due process. The U.S. has sharply pointed out that corruption exacts a costly toll which creates unpredictability in international commercial transactions and undermines public confidence in the role of government.

The U.S. believes that the WTO could address these issues more broadly and directly through political level discussions in order to change the status of government procurement from a plurality agreement to a full pledge agreement.

Labor standards

Meanwhile, the American stance, and that of several Organization for Economic Cooperation and Development (OECD) members, on labor standards reflects the uncertainties workers face in the future. The U.S. delegate said that American workers face serious uncertainties and that this could sow fertile ground for those who wish to meet their own, often cynical, political ends.

Hence, through this effort, the U.S. wishes to assure workers that the trading system does not ignore basic human rights and that liberalizing trade will encourage true economic development by promoting a higher standard of living in all countries participating in the international trade system.

Further liberalization is also a U.S. proposal, focusing on market access opportunities. The proposal, made during the Uruguay Round negotiations in the early 1990s, is generally known as a "zero for zero initiative and chemical harmonization" for a sectorial approach.

The U.S. (and other OECD members) strongly stated it would continue to insist that American products and services should be able to enter foreign markets on equal terms to those which foreign exporters enjoy with the U.S. The U.S. believes that focussing discussion on this matter will accelerate tariff reductions and expand market access.

Many developing countries are absolutely opposed to discussing foreign direct investment at the Singapore conference, but the African Group believes the discussion is essential for capital movements, the transfer of technology and for the creation of jobs.

Developing countries are facing more than a review of the way the WTO functions as an ongoing forum for negotiations, and they are clearly unhappy with the pressure exerted by developed countries in favor of including new issues in the Singapore conference.

It appears the developing countries will stand firm by their insistence that the Singapore conference follow only the "built- in agenda" and not discuss new issues.

ASEAN, like the developing countries it is comprised of, is opposed to discussing corruption, labor standards and competition policies in Singapore.

At the ninth session UN Conference on Trade and Development (UNCTAD) in Midrand, South Africa in April 1996, developing countries implicitly recognized the relationship between international trade and the new issues. They strongly urged, however, the new issues be balanced with the pursuit of the built-in agenda and consider the concerns of developing countries.

The UNCTAD IX theme, A Partnership for Growth and Development, implied that developing and developed countries should endeavor to cooperate in trade and development. Other than discussing institutional matters, UNCTAD IX focussed on how UNCTAD (maybe a New UNCTAD?) could assess the full realization of anticipated benefits from the conclusion of the Uruguay Round. Also discussed was how UNCTAD could best enable developing countries, especially the least developed countries (as marginalized countries?), to respond to opportunities arising from the Uruguay Round Agreements to the maximum available benefit.

Can developing countries stop the new issues being included in the Singapore agenda? It seems that despite their continuous opposition to the new issues, they are likely to encounter difficulties because the U.S. has emphasized the new issues in its U.S. Presidential Report 1996 on the trade policy agenda.

Moreover, OECD members have already signaled which direction their trade policy will follow. As was already reflected in at UNCTAD IX, developing countries, especially Group 77 members, have reached a median on certain of the new issues.

It was recognized that the challenges and difficulties faced by developing countries in the context of globalization and liberalization need to be thoroughly examined to identify ways to expand trading opportunities from the results of the Uruguay Round.

Introducing more issues while most developing, and all least- developed countries, are in the middle of adjusting their domestic procedures, seems to be overloading the agenda.

Contemplating the complex situation ahead of the Singapore conference, some trade diplomats from developing countries are asking themselves "quo vadis WTO?" and "to whom do you really belong?". Developing countries, however, fully realize that globalization and liberalization cannot be avoided. The most they can do is attempt to wrangle the best trading opportunities from the WTO and beware of losing multilateral trade relationships.

Alfons Samosir is a staff member of the Commercial Office of the Indonesian Mission to the United Nations in Geneva.

Window A: The developing countries are clearly unhappy at the preasure exerted by the developed countries for the inclusion of new issues in the agenda of the Singapore ministerial conference.

Window B: Introducing more issues while most developing, and all least-developed countries, are in the middle of adjusting their domestic procedures, seems to be overloading the agenda.