(Paper Prepared for the Workshop "Briefing-Debriefing Qatar" Brussels, October 16, 2001)
The World Trade Organisation (WTO) is founded and maintained on many myths. The most all-pervasive myth is that the WTO upholds and promotes free trade for all countries through a rules-based, multilateral trading system. In truth, the trade regime enforced by the WTO is hardly free, nor are the rules of this system favourable for developing countries. The WTO has facilitated unfettered, global economic and political expansion by a handful of rich and powerful countries, who use trade as a political instrument with impunity. In another time and era, this would be called imperialism.
An equally misleading myth is that the WTO is democratic. On the contrary, from the very process of its establishment to its current rules of operation, the WTO is fundamentally undemocratic, both internally and externally. Despite numerous attempts by both government and non-government actors in the developing world, power imbalances within the WTO continue to remain deeply entrenched.
Internally, the WTO does not provide an equal platform for all its member countries to represent, negotiate and defend their trade and development interests. Decision making within the WTO is dominated by the QUAD countries: the United States (US), the European Union (EU), Canada and Japan. Next in the pecking order are the rest of the OECD countries. And at the fringes sit the developing countries who, despite good faith efforts to build a genuinely multilateral trading system, continue to remain at the periphery of decision making more than six years after the establishment of the WTO.
Externally, WTO rules and agreements do not come under the scrutiny of national parliaments or other democratically elected bodies. Nor are they subject to public debate and assessment by genuinely multi-stakeholder processes or bodies. Although trade delegates at the WTO are appointed by national governments, the WTO acts as a supra, global government, but without the system of checks and balances required to render it publicly accountable and responsible. The WTO’s relationship with civil society organisations (CSOs) in both the North and the South has been ad hoc at best and centred around tightly structured meetings where CSOs have little legitimate voice in the institution’s official deliberations. In contrast, private corporate entities, particularly from the North, find themselves well represented in the WTO through their respective national delegations and other avenues for advocacy that ensure their interests in trade negotiations.
The WTO Secretariat, in its composition, is not representative of the WTO’s member countries. It is also not impartial in the interests it promotes. Most Secretariat staff are from developed countries and this is reflected in the intellectual and political culture of the work of the WTO. Despite the fact that they are not supposed to represent any country, Secretariat staff have shown their partiality in how they organise, schedule and run meetings, the content of their reports and papers, and even in the advice they give to developing countries regarding WTO agreements and operations. Like their counterparts in the International Monetary Fund and the World Bank, WTO Secretariat staff are international beaurocrats without a clear or visible system of accountability and responsibility.
For several year now, CSOs, peoples’ movements and local-national elected officials all over the world have questioned the growing power of the WTO, especially its ability to override national laws and regulations. Some WTO Agreements also contradict existing UN human rights goals and conventions. In mid-August this year, the UN Sub-Commission on Promotion and Protection of Human Rights called for an independent and comprehensive study of the impacts of economic globalisation and certain trade agreements on human rights. In particular, the Sub-Commission highlighted the agreement on Trade Related Intellectual Property Rights (TRIPs) and the General Agreement on Trade in Services (GATS), both of which threaten existing conventions such as the UN Convention on Biological Diversity and the International Covenant on Economic Social and Cultural Rights. The Sub-Commission recommended that national governments and multilateral institutions immediately undertake detailed studies to assess the impacts of TRIPS and GATS on the universally accepted rights of all peoples to health, education, food, housing, work and self-determination, and the promotion of ecologically sustainable technologies among all countries.
Instruments of Coercion
At the heart of decision making in the WTO is the so-called process of "consensus," which has been systematically abused to render it a process of coercion. Voting, although technically permitted has rarely been used in the WTO. Nothing moves in the WTO without consensus, and even crucial decisions related to food sovereignty and the pricing of AIDS drugs can be blocked by those for whom, commercial interests are more important than questions of life and death.
Consensus in the WTO is not based on principles of equity and fairness, or a commitment to open and inclusive process. On the contrary, it implies a process by which the priorities of a majority can be subsumed under the interests of a minority through political manipulation, bullying, backroom deals, and even threats.
The WTO-style rules of consensus work well for more powerful members, who have the capacity to develop proposals of interest to them and negotiate deals with reluctant counterparts to win their support. But for those with less economic and political power-which includes most developing countries-the rules of consensus place them in a perpetual position of opposition and leave them vulnerable to manipulation and domination by the more powerful members. Many developing countries have made proposals that simultaneously defend their own national interests and advance a more open and equitable trading arena. But these proposals are either ignored by the rich, developed countries or sidelined through deals that that they are able to make with less powerful WTO members. Rich countries give nothing away in negotiations unless they can exact a suitable price for their complicity from their weaker counterparts. At the same time, they usually find ways to win support for their own proposals by offering developing countries benefits or privileges in specific areas.
For example, over the past three years, several developing countries have put forward proposals to address the imbalances and shortcomings in key agreements and clauses that have been carried over from the Uruguay Round of negotiations (also called implementation issues). These include, Trade Related Intellectual Property Rights (TRIPs), Trade Related Investment Measures (TRIMs), Anti-dumping, Subsidies and Countervailing Measures (SCM), textiles, and the Agreement on Agriculture (AoA). Although these issues have been on the table for several years, the rich WTO members now argue that they can only be addressed in the framework of a new trade round. This position is defended by Mike Moore, the WTO’s Director General, who has argued, "But dwelling on the perceived injustices of the past does nothing to prevent even greater injustices in future."
Unfortunately, Mr. Moore is unable to offer credible suggestions about how a new trade round will prevent greater injustices in the future. Agreeing to a new round means that developing countries would have to agree to further liberalisation commitments in exchange for implementation of past promises, thus increasing rather than decreasing the trade imbalances between developed and developing countries. This was pointed out by Pakistan’s Ambassador Munir Akram when he asked, "Are the major trading partners politically incapable of responding to the main implementation concerns of the developing countries?… Alternatively, are they holding back their responses on implementation issues mainly for tactical reasons, in order to extract concessions from developing countries on their ambitions and objectives for Doha?"
A common tactic used by delegates from developed countries-particularly the US and the EU–is to harass developing country delegations by using other policy conditionalities to elicit consent for their proposals. Official Development Assistance (ODA) and bilateral trade agreements that already exist outside the WTO can be called into question or put on hold if a developing country delegate does not "behave" well. The trade office of a rich and powerful country (such as the US or Britain) even has the clout to move trade delegates from less powerful countries to other posts, should they be seen as obstructing the interests of the richer country.
The obstacles to democratic process and internal transparency posed by informal consultations and Green Room negotiations in the WTO are already well known. Despite admissions by senior trade delegates from the US, UK and EU that the exclusionary and manipulative nature of Green Room-type consultations resulted in the collapse of the Seattle Ministerial meeting in December, 1999, the WTO Secretariat is unwilling to make any significant changes to its decision-making procedures. The practices of exclusive, informal consultations and negotiations continue, and conclusions made by delegates from selected countries continue to be presented as consensual agreements by all delegates. The WTO Secretariat has argued that it is necessary to organise consultations by invitation since large groups would impede the efficiency of decision making. However, most developing country delegates–who are usually not invited to these consultations-cannot accept closed room decisions unless these decisions can be shown to be fair and beneficial to the countries they represent.
Another practice that continues without change is that declarations are drafted and presented to delegates without previous consultation with them. Often, these drafts do not reflect the priorities of the majority of the WTO membership. Not surprisingly though, these declarations do reflect the priorities of the QUAD and other OECD countries with the consent of perhaps a handful of developing countries, whose inclusion extends undeserved legitimacy to this process.
For example, the recently released draft of the Minesterial Declaration for the upcoming Fourth Minesterial meeting does not address developing countries’ priorities of implementation issues, Special and Differential Treatment (S & D), market access, and reviews of TRIMs, TRIPs and GATS. Nor does the draft reflect concerns raised by CSOs regarding the WTO’s rules and operations and deficiencies of the multilateral trading system, which have caused serious problems in areas such as food security, health, employment, protection of local biological resources, and local livelihoods.
The draft declaration praises the role of the WTO regime in promoting growth and alleviating poverty. But it does not acknowledge that existing imbalances within the system close off options for smaller countries to gain from the assumed benefits of free trade. Similarly, the draft does not discuss the need to bring development into the centre of the WTO’s agenda. Instead, it promotes new issues such as competition, investment policy, government procurement, trade facilitation, etc. Despite clearly stated positions by most developing countries that they are unwilling to go into a new round until past issues of implementation and decision-making are addressed, the draft declaration favourably positions the launching of a comprehensive new round with an open agenda.
The Manipulation of Consent
For many of the smaller developing countries and the Least Developed Countries (LDCs), participation in the WTO is hampered by challenges in their technical, institutional and economic capacities. Most of these countries have small delegations at the WTO, limited communication with their capitals, and are ill equipped to deal with the daily plethora of simultaneous meetings and consultations. With sometimes as many as five to six meetings per day, delegates from these countries either cannot attend all the meetings, or if they can, they are unable to participate effectively out of sheer fatigue. Many delegates have also expressed unfamiliarity with key issues under discussion. They have repeatedly requested more time and technical support to consider the strategic implications of specific proposals and discuss them with their national capitals.
But neither the time to consider, nor timely technical support are as forthcoming as promised by the major players at the WTO. Technical support from the Secretariat is usually biased in favour of the positions of developed countries and it is difficult to get adequate support for alternative analyses even if a significant number of members require it. Timelines for responses to new agendas are also biased in favour of developed countries since delegates from these countries have greater contact with secretariat staff and can respond much quicker to new timetables. More often than not, delegates from smaller countries are just herded along until they agree, or until their views can be sidelined .
This is in sharp contrast to delegations from developed countries who have many more staff in their delegations, experts on every agreement and well developed communication facilities between Geneva and their capitals. In fact, negotiation and decision-making processes in the WTO are deeply biased in favour of the capacities of developed and richer countries.
Challenges in capacity also affect the say that smaller delegations have in procedural matters. More often than not, it is not delegates from their countries or regions who are appointed as Chairs or Vice-Chairs of committees and meetings, but those from the US, EU or other, relatively well-off countries. Delegates have also complained that they are practically blackmailed by more powerful countries to agree to resolutions, or to extend themselves beyond existing commitments through "carrots" and "sticks." The "sticks" can include threats to cut off market access, quotas, aid, debt relief, etc.; similarly, carrots can include offers of visas, market access and aid.
Developing country delegates have pointed out time and again that the WTO is institutionally deaf to their main concerns. In addition to appropriate attention to implementation issues, developing countries have also called for assessments of key agreements (such as TRIPs, TRIMS and GATS) before further negotiations proceed. However these proposals have been more or less stonewalled by the Secretariat and the developed countries. The WTO Secretariat has also manipulated past assessment processes to satisfy the agendas of the more powerful WTO members.
A good example here is the stocktaking process of the first phase of work on the AoA, that took place in late March this year. Although two days were set aside for the stocktaking, only one morning was used for the process and a pre-prepared work programme for Phase Two was adopted with little discussion at the end of the morning. Much of the "stock-taking" had already been conducted in Green Room-type consultations beforehand. Many developing country delegations had actively participated in the earlier phase of study regarding the AoA and had submitted a range of analytical papers and proposals on agriculture trade. However, their analyses were not brought into the stocktaking process and their concerns were marginalised in the agenda for the Phase Two work programme. Dissatisfied delegates at the stocktaking meeting were able to effect few changes in the work-programme since they were told by the Chairperson of the Special Session that substantial changes would lead to the EU and Japan stalling the entire process.
The WTO’s institutional deafness is accompanied by selective listening and selective reporting. Delegates from the LDCs and other developing countries claim that the WTO Secretariat does not accurately report the substance of discussions in meetings and reviews. Mis-reporting is evident in the overly optimistic and "non-factual" reporting by the Chair of the General Council on implementation issues, as well as attempts by the Secretariat to portray consensus on a new round of trade talks. In response to a report by the Secretariat for a "reality check" on delegates’ thinking about the upcoming Minesterial meeting, an African delegate privately remarked that the report was "not a reality check. We do not think it reflects what went on in the consultations. It is quite unbalanced in the way weight is given to one position over another."
Delegates from countries such as Malaysia, India, Pakistan, the LDCs and the Africa group have pointed out that the draft Minesterial Declaration does not fairly reflect the differing positions of delegates on various issues. Developing countries have insisted that the WTO stay within its core mandate of multilateral trade and not enter into the realm of labour or environment where it has neither the expertise, nor legitimate authority. These calls too have fallen on deaf ears as developed countries continue to push for new non-trade issues to be brought into WTO negotiations to serve their current needs and interests. Despite clear opposition by developing countries, the draft declaration carries language that opens the door to labour and environment linkages.
Trade in a Time of Terror
Since the September 11 attacks on the World Trade Centre (WTC) and the subsequent "war on terrorism" launched by the US and Britain, advocates (especially among the EU and other wealthy countries) of a new round of trade negotiations in the WTO have gathered extra steam. They squarely equate the launch of a new trade round with the fight against terrorism and the promotion of modern, democratic values. Before September 11, the litany in support of a new round was "trade is good for the poor;" now, the litany is "trade is an important weapon to fight terrorism." Robert Zoellick, the US Trade Representative was quick on the draw. Soon after the attacks on the WTC, he outlined the complex system of carrots and sticks that the US would use to ensure allegiance from key countries in its impending war. Not surprisingly, trade deals were central to the US counter-offensive strategy. The rest of the G-8 countries and even the United Nations needed little convincing to quickly follow suit.
Despite legitimate and well founded opposition to the launching of a new trade round in the next Minesterial meeting, developing countries are now being bullied into supporting a new round. While the support of some countries has been garnered through threats of economic isolation and sanctions, consent from others has been bought with promises of debt-relief, more IMF financing, increased ODA and new trade privileges. The WTO, the IMF and the World Bank are now explicitly and officially part of the US and G-8 counter-offensive against shadowy, changeable foes. This is not the work of democracy, but the work of Empire.
We are witnessing a new redistribution of privilege today, guided by the Bush-Blair doctrine of "You are either with us, or you are with the terrorists." This reasoning is being used by WTO advocates to silence all those opposed to the launch of a new round of trade talks-and is already showing results. Many developing countries are retreating from principled positions on a new round because of concerns that they will be economically and politically isolated. Some CSOs have either completely abandoned, or significantly toned down their campaigns against the abuse of trade agreements by northern government and corporate entities for fear that they may lose their funding base and/or domestic support.
The explicit manipulation of the upcoming Minesterial meeting puts questions of democracy in the WTO in a new light. Genuine democratic values cannot-and must not–be simplistically equated with trade liberalisation and advancing the commercial interests of a handful of wealthy, powerful countries. The "trade and terror" nexus has provided the QUAD countries with new and powerful avenues to ignore decades-in some cases, centuries-of systematic exploitation of the South, and to abdicate responsibility for their part in the social and economic inequalities that characterise our world today. And the WTO, in the guise of "multilateralism," is lending legitimacy to these expanding power imbalances through its control of the global trade regime.
The WTO has a long way to go before it starts to resemble a democratic institution. To move this transition along, we-civil society– must oppose every non-democratic action pushed through the WTO. Of utmost importance now is opposing the launch of a new trade round.