Seattle 99 • Volume 3 • Number 1 • January 1999
Labour and Environment Make a Controversial Appearance as First Phase of WTO Ministerial Preparations Concludes
WTO Members have completed the first phase of preparatory meetings for the Ministerial Meeting, to be held in Seattle from 30 November to 3 December in 1999. In Seattle, the trade ministers of more than a 130 countries will adopt the agenda for the multilateral trade liberalisation negotiations on agriculture and services scheduled to start in the year 2000. The last meeting of the preparatory phase, held in Geneva on 2 February, focused on ‘other issues’ countries would like to see on the post-2000 agenda, including those arising from the Singapore work programme: investment, competition policy and transparency in government procurement.
Investment, Competition Policy and Government Procurement
Egypt, India and Pakistan argued forcefully against the inclusion of new areas in the negotiations, with Pakistan submitting detailed arguments against launching negotiations on any of the Singapore work programme issues. ‘Until a clear and convincing case can be made that the benefits of multilateral rules in the area of investment would far exceed any possible costs, it would be difficult to arrive at a consensus on the need to negotiate new rules in this area,’ Pakistan stated. India pointed out that it would be ‘premature to talk about a multilateral framework’ in the area of competition policy, as the Working Group on Interaction Between Trade and Competition Policy still had not sufficiently addressed anticompetitive activities such as anti-dumping, international cartels, technical regulations, export subsidies and quotas for agricultural products and textiles. ASEAN also spoke strongly against developing WTO disciplines on investment or competition policy. The advocates of limited post-2000 negotiations also said that the working group dealing with transparency of government procurement provisions needed more time to ‘understand fully the concerns of developing country Members and least-developed country Members before it can arrive at a common ground for all Members to accept.’
Some developing countries were less categoric in their refusal of the Singapore issues: Chile expressed support for their inclusion, Brazil did not rule them out and Costa Rica said it was favourable to the development of a multilateral framework on investment. The Unites States and Australia considered it too early to decide on the need to negotiate new disciplines on investment and competition policy, but supported the conclusion of an agreement on transparency in government procurement. Among those warmly welcoming negotiations on all Singapore issues were Canada, Japan, New Zealand, South Korea, the EU and its East European member candidates, and Switzerland.
Labour, Environment and Other New Issues
While agricultural liberalisation will undoubtedly be the most difficult part of the post-2000 trade talks, the most controversial issue in shaping the future negotiations agenda will be what areas - if any - outside the built-in agenda and the Singapore work programme to include in the ‘Seattle Round’. Among these none are more hotly contested than labour and the environment.
It is not clear how these concerns would fit into the negotiations. The US proposed the establishment of a ‘forward work programme in the WTO that would address trade issues (e.g., abusive child labour, the operation of export processing zones, etc.) relating to labour standards and where Members of the WTO would benefit from further information and analysis on this relationship and developments in the ILO.’ It also recommended that the issue be addressed at the High-Level Symposium on Trade and Development in March (see related article on page 5).
Cuba, India, Pakistan, Egypt, Malaysia and Nigeria opposed any linkage between trade and labour, saying that the Singapore Ministerial Meeting had already decided that the International Labour Organisation was the only competent body to address labour-related issues. Developing countries fear the erosion of their comparative advantage as low-wage producers if trade concessions are linked to respect for core labour standards.
On addressing environmental concerns in the ‘Seattle Round’, the European Union went the furthest: ‘Clearly, trade and environment is neither marginal nor a merely technical issue. This is why it should be an item in itself on this December’s negotiating agenda.’ Canada proposed ‘mainstreaming’ trade and environment concerns across relevant negotiations.
Developing countries firmly oppose making environmental issues more central to the multilateral trading system, as such an approach could be used to justify green protectionism in a number of areas ranging from agricultural subsidies to increasingly ‘environment-friendly’ technical regulations and other non-tariff barriers. India submitted a proposal on the need to harmonise the TRIPs Agreement with the Convention on Biological Diversity, which ‘recognises the desirability of sharing equitably the benefits arising from the use of [biological] resources as well as traditional knowledge […] and acknowledges that special provisions are required to meet the needs of developing countries’. The Indian paper also proposed that ‘the TRIPs Agreement may be reviewed to consider ways and means to operationalise the objective and principles in respect of transfer and dissemination of technology to developing countries, particularly the least-developed among them.’
The United States placed the trade and environment interface in the context of ‘institutional issues’, calling on the General Council to ‘emphasise that the WTO’s forward agenda must contribute to sustainable development, including in particular maintaining and improving the levels of protection of the environment.’ Also in the context of ‘institutional issues’, the US encouraged WTO Members to improve transparency and openness by accelerating document derestriction and by providing information on their ‘various consultative programmes and mechanisms’, with a view to enabling the General Council ‘to make recommendations with respect to the organisation of the Ministerial Conference and institutionalisation of consultative mechanisms for the WTO.’ Japan and Canada also mentioned the need to improve relations with civil society.
Several WTO Members welcomed the High-Level Symposium on Trade and the Environment. Canada hoped that it would ‘provide useful insights as to the interface between trade and environment considerations in the upcoming WTO negotiations’, and the US anticipated the meeting to ‘provide valuable input for our work in this area and help framing a vision for future work.’ The EU highlighted clarification of the situation regarding eco-labelling and ‘the extent to which existing WTO rules accommodate trade measures for environmental purposes’ as possible contributions of the High- Level Symposium (see related articles on pages 3 and 5).
The proponents of a ‘Millennium Round’ got a boost when the United States finally sided with other OECD nations in supporting widening the negotiations to cover industrial tariffs. Australia submitted a detailed proposal on priority areas for tariff reductions, including tariff peaks and escalation, as well as the elimination of ‘nuisance tariffs’. Several industrial tariff lines, including forestry and fisheries products, were targeted by New Zealand, which drew attention to the ‘accelerated tariff liberalisation initiative’ that APEC members decided to move to the WTO after they failed to reach agreement on it at the regional level last November.
Scope of the New Round
In view of the large number of contradictory priorities and views presented by WTO Members during the four preparatory sessions that took place from September 1998 to January 1999, the scope of the future negotiation remains wide open. On the one hand, many developing countries, and particularly Egypt, India and Pakistan, find implementation of existing agreements and new negotiations on the built-in agenda on agriculture and services enough. On the other, developed countries have more or less agreed that industrial tariff reduction negotiations should be conducted simultaneously with the built-in agenda, and several among them are advocating a comprehensive ‘Millennium Round’, including not only the Singapore issues but possibly a range of other topics as well. Others, including Brazil, the US and Canada have indicated they might be willing to include some, if not all, of the Singapore work programme items in the round. With so many ‘wish lists’ on the table, it will not be an easy task to come up with a consensus agenda, and particularly one that is manageable in the three years that most Members have agreed as the length of the ‘Seattle Round’.
Implementation of Existing Agreements
Developing countries made an eloquent case for paying more attention to the implementation of existing agreements throughout the first phase of the Ministerial preparations, particularly concerning the application of the special and differential treatment provisions in their favour. While their industrialised counterparts clearly do not give as much weight to implementation, many of them have acknowledged that the WTO Agreements’ provisions in favour of developing countries must be more precisely spelled out and more vigorously implemented if developing countries are to be brought on board on a relatively comprehensive negotiations agenda. (For a report of the preparatory session on the implementation of existing Agreements, see Bridges Vol.2 No.7.)
The Built-in Agenda
Negotiations must start on agriculture and services by the year 2000. The agricultural talks will certainly prove the most difficult trade liberalisation negotiations ever held, with the greatest pressure falling on countries that have the most protected agricultural sectors: the European Union, Japan, South Korea and Switzerland. These countries are the staunchest advocates of a ‘Millennium Round’ that would make trade-offs possible in other sectors. Mandated reviews of some other Agreements present a grey area: could they be used to change or to ‘operationalise’ some of the existing provisions, notably those in favour of developing countries? (See, for instance, India’s proposal concerning the TRIPs review above. A report on the preparatory session on the built-in agenda appeared in Bridges Vol.2 No.8.)
Least-Developed Countries
While to a large extent, leastdeveloped countries’ (LDCs) interests in the multilateral trading system coincide with those of other developing countries, they are seeking one thing in particular: duty free access for their exports, which currently count for 0.3 percent of world trade. They also have a great interest in liberalising labour-intensive services, and securing technical assistance to address a number of trade constraints that continue to hinder their integration in the world economy. (For a report on the preparatory session on LDCs, see ICTSD’s Bridges Weekly Trade News Digest Vol.2 No.49.)
The Next Steps
Members are expected to agree at a special General Council session from 25-26 February to a process that will lead to the development of specific proposals for a post-2000 negotiation agenda. Those proposals will then be formulated as ‘recommendations’ and forwarded to the WTO Ministerial Meeting as a draft Ministerial Declaration.
According to trade sources, the ’second phase’ of the preparatory process is likely be ‘proposal-driven’, i.e. countries are expected to come up with concrete proposals for a post-2000 negotiating agenda, instead of the more general statements made during the first phase. At the February General Council meeting, Members are likely to agree to hold formal General Council sessions once a month, as well as discuss arrangements for informal work between the General Council meetings. A tentative consensus seems to exist that the second phase of preparations will last from March until the WTO’s summer break at the end of July.
The next phase of preparations will start in September with the aim of narrowing down the options tabled during the second phase and drafting the Seattle Ministerial Declaration, which should be ready by early November.