TRADE: Clamour For Reform Knocks On WTO’s Door

By IPS Correspondents Reprint | | Print |

Analysis - Martin Khor

PENANG, Malaysia, Dec 23 1996 (IPS) - The World Trade Organisation (WTO) has to heed the growing clamour from developing-country members for a review of a negotiating process that is often secretive and limited to the trade body’s bigger, more vocal, countries.

The demand for greater transparency and equal participation in the way WTO does business emerged at its first ministerial conference in Singapore earlier this month, an issue that may well shape the credibility of the world trade body.

WTO director general Renato Ruggiero and WTO conference chairman, Singapore Trade Minister Yeo Cheow Tong, conceded that the organisation should in the future discuss how its decision- making process can be improved and made more transparent.

“We shall need to improve the procedures to be applied in the next ministerial conference,” Yeo said in his concluding speech in Singapore, apologising for the lack of consultation with members.

Ruggiero said the 50th anniversary celebration of the multilateral trading system next year would be a good occasion to see how to “join more transparency with efficiency”. He added: “We have to face it even though it is a difficult issue.”

They were responding to complaints from delegations from developing countries, non-governmental organisations and the media about the lack of transparency and participation of many WTO members, aired during the Singapore conference.

The high-profile conference opened the eyes of many ministers, senior officials, NGOs and media themselves as to how the two-year old organisation, which replaced the General Agreement on Tariffs and Trade, is run.

While ministers delivered set-piece speeches in a huge, practically empty hall, the real, intense negotiations on the future agenda of the 128-member WTO was being conducted among an “informal group” of 30 countries behind closed doors.

Critics say the process, which is also how the WTO works in Geneva, allows stronger economic powers like the ‘quadrilateral group of countries’ or the ‘Quad’, made up of the United States, European Union, Japan and Canada, to set the agenda.

Their clout makes it easier for them to use persuasion and pressure, via the so-called informal process, to produce a “consensus” on issues that developing countries may not be agreeable to, these critics add.

NGOs in Singapore said the conference dwelt largely on the rich countries’ agenda, such as ‘new issues’ like links between trade and investment and competition policy. The meeting touched little on developing nations’ call for rich countries to open their markets to textile and agricultural exports, they added.

The informal group in Singapore was selected by Ruggiero and Yeo to speed up negotiations and to draft the ministerial declaration, but the selection process was not explained and the group’s composition not formally announced.

Many delegations took issue with the fact that while developed countries were more than fully represented in the group, developing nations were under-represented though they make up four- fifths of the WTO’s membership.

Many ministers and officials from small developing countries found themselves as much in the dark, or even more uninformed, than some media and NGOs.

On the night before the conference ended, they were asked to assemble. The conference chairman then appealed to them to endorse controversial parts of the declaration that the informal group had reached agreement on, and to do so without reopening the text for discussion.

There, several delegations from developing countries expressed dismay about the ‘shabby way’ in which they had been treated, and complained about the lack of transparency and participation.

WTO spokesman Keith Rockwell confirmed the misgivings at a midnight press briefing after that session. “Developing countries expressed their concern over the lack of transparency of the process,” he said.

“The director general and the chairman agreed to look into their concern and promised to see how the WTO could be more transparent without compromising efficiency,” Rockwell added. Still, he said, it was difficult to get all the WTO’s members to draft the declaration.

“The chairman and director general put together a group balanced according to geography. There is an acknowledgement it is difficult to strike a balance. The director general is trying to find a way, without hindering a process that’s complicated,” he added.

Tommy Koh, Singapore’s ambassador-at-large who helped Yeo run the WTO meeting, said the chair first met with the delegations with strong views on sensitive issues like trade and labour issues, then chose “influential delegations from each region” to work out the declaration.

At the WTO closing session, Yeo said: “Due to lack of time, I regret not having been able to consult with each of you at every stage. Our approach has been empirical. We shall need to improve the procedures to be applied at the next ministerial conference.”

The same issues also arose at a press conference held by Yeo and Ruggiero after the ministerial meeting.

Though they lauded what they saw as a successful meeting, they were swamped with questions about lack of transparency, the marginal role of developing countries and the WTO’s image as a “rich man’s club”.

Many comments dwelt on how issues of implementation of new rules on world trade reached in 1994 were hardly discussed, in contrast to new issues and the accord to cut tariffs on information technology products that was pushed by the U.S. and the E.U.

Ruggiero conceded that informal meetings focused on new issues. And while the implementation problem was raised by many ministers in plenary speeches, it “was not discussed but has been considered. We have noted the contents and we’ll make an analysis,” he said.

Asked if the WTO’s future work programme would include changes toward more transparency and democracy, Yeo replied that “we tried to achieve the maximum (participation) possible” by taking a “cross section of views”.

“We do admit no process is perfect, especially since we had very limited time and yet a large number of members,” Yeo said. “It was not a perfect process, so there is a need to improve”.

He said the Singapore declaration recognised that smaller nations, some of which could not afford to post delegations in Geneva, lacked resources that prevented more active participation in the WTO.

He added: “We must make sure that the decisions from this conference does not impose additional burdens on them. Therefore in Geneva, there will be no more than three to four meetings a year on investment, competition and government procurement (the three new issues the WTO will discuss).”

Asked if the WTO could adopt the consultation model used by the United Nations Security Council, Ruggiero replied that there was awareness of the need to improve the WTO’s way of functioning but that “it is difficult to consult everyone all the time”.

A minister from a developing country dissatisfied with the WTO’s set-up suggested using a “grouping system” where countries could form groups by region or some other basis, and nominate coordinators.

An activist from a developing country found the Singapore meeting an eye-opener. “We came here to lobby for greater transparency and participation of NGOs in the WTO,” he said. “But we found that most of our ministers and officials knew as little as we did, and had even less to do than the NGOs.”