3rd December 1999
BRIDGES Daily Update - 3 December 1999 (English)
The Odd Genesis of a Working Group on Labour
A working group on trade and labour was established on 2 December under unusual circumstances. Although the United States and the European Union had both tabled proposals for a group to examine this contentious issue, neither proposal figured on any of the ministerial draft texts, and thus did not fall under the mandate of any of the WTO negotiating groups. Hong Kong requested information on the status of the proposals in order to make sure that no eleventh hour surprise would be produced at a stage when it would be too late to refuse it without undoing the entire Seattle results. As a result of this request, a working group, chaired by Costa Rica, was established to decide whether the Seattle Ministerial Declaration should contain a directive to set up some kind of body to look into the trade and labour relationship. The working group only met for forty minutes. Although no formal conclusion was reached, it was clear that four-fifths of WTO Members firmly opposed the creation of any such body. Discussions continued in small groups late into the night to determine whether some compromise formulation might be found.
The US proposal to set up a WTO Working Group on Trade and Labour was practically a non-runner before the deliberations began, and the more so after President Clinton said on Wednesday that establishing the working group was only the Administration’s first goal. ‘[A]nd then that working group should develop these core labour standards, and then they ought to be part of every trade agreement, and ultimately I would favour a system in which sanctions would come for violating any provision of a trade agreement,’ the President said on his arrival in Seattle, surrounded by angry demonstrators many of whom were trade unionists.
On Thursday, US Trade Representative Barshefsky tried to reassure developing country delegates that including sanction-backed labour provisions in WTO provisions was only a long-term policy goal and not part of the proposed working group’s mandate, but her ensurances clearly failed to convince developing countries. A way ahead might lie in something along the lines of the EU’s proposal for a Joint ILO/WTO Standing Forum on Trade, Globalisation and Labour to examine a broad range of issues related to trade and labour. Commissioner Lamy stressed on Thursday that the EU did not believe that trade sanctions were an appropriate means of promoting respect for core labour standards.
Transparency of Negotiations Emerges as a Major Issue
The WTO should hold a Ministerial Conference just to determine how to conduct trade negotiations in a transparent yet efficient manner, EU Trade Commissioner Pascal Lamy told the press on Thursday. While all delegations must be involved in decision-making, progress on a vast agenda of complex issues would be impossible to achieve if 135 countries were to seek consensus without breaking into smaller groups. Transparent, efficient and multilaterally-agreed negotiating procedures must be put into place, Commissioner Lamy said.
The present working group/green room system is perceived as non-inclusive and high-handed about small economies’ concerns, as witnessed by numerous complaints, particularly by the smaller delegations. Statements were drafted on Thursday by several Latin American and Caribbean countries, as well as the Organisation of African Unity on the lack of transparency and participation in the negotiations. Both draft statements, not yet finalised or released at press time, expressed concern over ‘the stated intentions to produce a ministerial text at any cost, including the modification of procedures designed to secure participation and consensus,’ and warned that unless the situation were remedied, the signatories would not be able to ‘join the consensus required to meet the objectives of this Ministerial Conference’. While it was unclear late Thursday night whether the statements would actually be presented, the anger and frustration of the signatories was very clear indeed.
Sir Shridath Ramphal, a former foreign minister of Guyana and the Chairman of the Caribbean Communities, expressed grave concern over the general lack of transparency at the Ministerial talks. Citing an instance where a Caribbean minister was barred from attending a Green Room discussion on agriculture, Ramphal said part of the blame for the process rested with the WTO. He was also doubtful that there would be any successful conclusion to the Ministerial. ‘This is a conference convened before its time,’ he said.
Ambassador Barshefsky, on the other hand, said that multilateral trade negotiations had never been conducted in a more open and participatory manner than in Seattle. Unlike in Singapore, for instance, there were five (six, with the later-established labour group) open-ended working groups on clearly-defined subjects where all Members could participate, instead of small, semi-secret gatherings of key countries forging text between themselves and presenting it at the eleventh hour for the approval of Members. As of Thursday morning, the substance of all bilateral and plurilateral discussions undertaken by the Chair must be reported to the entire working group before it is forwarded to the Committee of the Whole.
Multifunctionality Disappears from Chair’s Ag Draft
A new draft on agriculture was presented on Thursday by the agriculture working group Chair George Yeo of Singapore. The text seems a compromise between the positions of the Cairns Group and the United States, on the one hand, and the European Union on the other. However, it is not a negotiated draft and changes are likely to be introduced depending on the outcomes of the other negotiating groups. The term ‘multifunctionality’ has disappeared from this version, which only notes the need to take into account non-trade concerns, such as food security and rural development. According to sources close to the negotiations, the European Union could be prepared to renounce explicit reference to multifunctionality if the US were to give up the demand to include a reference to the ultimate goal of bringing trade in agricultural products under the same rules as trade in other goods.
With regard to market access, the text proposes that the negotiations should lead to the broadest possible liberalisation, particularly concerning products of special interest to developing countries. It also requires reductions in domestic support. The paragraph on subventions is a sheer wonder of negotiated compromise: it attempts to reconcile the US/Cairns position that the Seattle Round should ‘eliminate export subsidies’ and the European stance that the negotiations should result in ‘reductions in all forms of export assistance’ (including export credits, state guarantees, etc.). This reconciliation effort yields the following: ‘Substantial reductions in all forms of export subsidies, and equivalent action in respect of the subsidy component of other forms of export assistance, in the direction of progressive elimination of export subsidies’.
Developing Countries See Little Movement on Implementation
According to some observers, much work remains to be done over 3 December in the working group on implementation. The US has submitted its own proposal on implementation and has objected strongly to paragraphs from the previous 1 December implementation text on subsidies, anti-dumping, and textiles, contrary to the positions of most delegations. Developing countries in particular are pushing for movement on outlining future talks on these and other areas such as Trade-Related Intellectual Property Rights (TRIPs) and Trade-Related Investment Measures (TRIMs).
The Chair of the working group, Canadian Trade Minister Pierre Pettigrew, has sent an updated text to the Chair of the Committee of the Whole, US Trade Representative Charlene Barshefsky, for compilation with texts from the other working groups. The new, scaled-down implementation language contains proposed immediate decisions, subjects for negotiations, a new plan of action for the full and effective integration of Least-Developed Countries (LDCs) into the multilateral trading system and reinforcement of technical cooperation for developing countries.
One WTO official described the implementation document as an improvement over the version released on 1 December, as it demonstrates ’substantive progress towards the demands made by developing countries.’ Notable among the changes is a possibility for non-applicability of the WTO Dispute Settlement system to certain areas of the Agreement on TRIPs and an extension of deadlines for developing countries’ commitments under TRIPs.
The new text has also moved many of the issues found on the 1 December version’s Annex II (for later decisions) to the higher priority Annex I (Possible Decisions at Seattle on Implementation). In addition, there is substantiated text on LDCs and on technical cooperation that was not on the 1 December document. One official hinted that negotiations in the implementation group were linking up with payoffs in Agriculture and New Issues groups.
The working group on implementation will be meeting more or less continually through 3 December in an effort to secure agreement on the contentious issues.
Market Access Group
The working group on Market Access focused its 2 December discussions on the modalities for determining how market access talks would be conducted in the context of a new round. Members remain in disagreement over whether to work towards a ‘zero-for zero’, or a ‘formula’ approach, for instance. A number of delegations are proposing a so-called ‘common approach,’ which would facilitate comparisons of tariff reduction proposals. The Accelerated Tariff Liberalisation (ATL) initiative was also discussed, but there was little progress on any issues other than methodologies for framing future market access negotiations. Inside the Convention Centre, forestry activists berated the US for its support for ATL.
New Issues Group
Like discussions in the Market Access working group, there was little forward movement in the Singapore, or New Issues, group. Similar to 1 December, Members spent most of their time focused on investment and competition. As a result, other areas under this heading such as trade facilitation, environment, and government procurement received scant attention. The talks on investment and competition remained inconclusive; the EU remains the strongest supporter of including these areas under the negotiating mandate for a new round. In a related incident, José Bové, a vocal French farmer’s representative, engaged in a heated discussion with EU Director of Press and Public Affairs Willy Helin. Inter alia, Bové called for increased pressure for negotiating an agreement on competition policy ‘in order to stave off the growing influence of monopolising agriculture firms such as Monsanto and Cargill.’
Food and Agriculture Day at NGO Forum
Passionate discussion took place on 2 December at the United Methodist Church in Seattle. Mark Ritchie from the Institute for Agriculture and Trade Policy and Vandana Shiva moderated sessions on TRIPs, food security and transparency. Both spoke of the urgent need to make changes to WTO policies on agriculture. Shiva and Ritchie want the rights of farmers and communities respected and demand equality for developing country concerns.
Walden Bello from Focus on the Global South spoke of the need to remove agriculture negotiations from the current WTO agenda. ‘The dumping of exports from the developed countries to South East Asia has caused much dislocation amongst farmers,’ he argued, ‘while trade has driven many farmers from their land.’
Panel speakers including Anuradha Mittal from Food First and Doreen Stabinsky from the Council for Responsible Genetics spoke firmly on the issue of biosafety. It is currently the burden of countries opposing the import of genetically modified organisms (GMOs) to scientifically prove that these organisms are harmful or damaging to health. The burden of proof needs to shift, they said. The question of what is ’sound science’ was also heavily debated by panelists.
Environment Ministers Urge Delegates to Take Meaningful Steps on Sustainable Development
The issue of GMOs and the Biosafety Protocol was further discussed at a Seattle Host Committee luncheon on Trade and the Environment on 2 December. Sved Auken, Minister for Environment and Energy in Denmark, told delegates and NGOs that countries such as the US must not force WTO rules onto the Biosafety Protocol. He argued that if countries make trade rules override the Biosafety protocol, it will further weaken other MEAs and encourage countries to discount these very important international environmental laws. The minister stressed that this was the most controversial political issue facing international negotiators in Seattle.
Auken also raised the issue of WTO public status. ‘The fact that many people see the WTO as ‘bad’ needs to be taken seriously,’ he said. ‘It would not be possible to leave Seattle without the inclusion of the environment because this will be a cause for disaster.’
Together with Auken, UK Environment Minister Michael Meacher urged the summit to ensure that the declaration from Seattle balance trade interests with environmental imperatives. ‘We cannot continue to ignore the dramatic imbalance between the rich and poor nations of the world,’ stated Meacher. ‘Urgent steps must be taken by this summit to introduce truly sustainable international trade that benefits everyone.’ Despite statements from many Members — notably the US and the EU — advocating greener trade and sustainable development, substantive movement on inputting environmental language in substantive Declaration sections has yet to transpire, particularly in the ‘New Issues’ working group.
CUTS Meetings Address Anti-Dumping, Dispute Settlement, Environment and Labour
Together with Nepal-based South Asia Watch on Trade, Economics and Environment (SAWTEE), the Centre for Unity and Trust Society (CUTS) — a prominent Indian consumer advocacy organisation — convened its second of two daily workshops on 2 December. Entitled ‘Anti-Dumping and the WTO Dispute Settlement Mechanism,’ the panel featured speakers from a diversity of environmental, academic, consumer and private sector organisations.
A highlight of the meeting was the proposition that the use of anti-dumping measures are often used as a political tool to appease domestic protectionist lobbies and are not based on logical assessments of economic realities. A more strategic application of anti-dumping actions was proposed that would be based on designing effective legal cases first, supported by the later threat of anti-dumping duties. With respect to the fuller participation of developing countries in the WTO dispute settlement system, panel members pointed to the need for technical assistance supported by domestic capacity-building. Beatrice Chaytor of the Foundation for International Environmental Law and Development emphasised the importance of internal capacity-building, particularly in terms of training lawyers to bring developing country concerns to the WTO in effective ways.
The 1 December CUTS workshop, entitled ‘The Vexed Issue of Linkages,’ addressed environment and labour standards and their use as trade measures. Speaking on the occasion, noted trade expert Professor Jagdish Bhagwati was categorical that although an interface exists between trade and environment, this is not an area that should be adjudicated by the WTO. On the question of labour, he added that concerns pertaining to labour standards could be addressed by ‘putting teeth’ in the mouth of the International Labour Organisation. Pradeep Mehta of CUTS forwarded the argument that child labour is a complex socioeconomic phenomenon and thus trade sanctions are the wrong mechanism to deal with this issue.
DSU Review Winds Its Way Onto Seattle Agenda
Although mention of the review of the WTO’s Dispute Settlement Understanding (DSU) will not be part of a Ministerial Declaration, Members are expected to aim to include a decision on it for ‘Immediate Decisions at Seattle’. In addition to all other items on the WTO’s agenda, informal consultations on Dispute Settlement review are proceeding, chaired by the Japanese Minister Suzuki.