Developments and challenges
in trade and trade policy
meeting of the Ministerial Conference, in Singapore, was also the first occasion for a
full stock taking by WTO members of their new organizations achievements and
ministers were happy with what they saw, although they were anxious at the time about the
telecommunications and financial services negotiations, whose outcome then hung in the
balance, and also identified some practical problems in applying the new agreements.
work, apart from the studies already mentioned on trade and investment,
competition policy, transparency in government procurement and trade facilitation, they
agreed to start exchanging ideas for the coming negotiations on agriculture and services.
difficult discussion in Singapore concerned labour standards. While some countries
believed this was an appropriate issue for the WTO, most did not.
was a statement in which ministers renewed their commitment to recognized core labour
standards, affirmed their support for the work of the International Labour Organization
(ILO) as the responsible international body, stated their belief that trade and trade
liberalization helped in promoting these standards, and agreed that the comparative
advantage of countries must in no way be put into question. They endorsed existing
collaboration between the WTO and ILO Secretariats, but did not support any WTO work on
event in the world economy between the Singapore meeting and the second Ministerial
Conference in Geneva, in May 1998, was the sudden financial crisis that swept East Asian
countries in the summer and autumn of 1997. The effects in the region were severe, and
were also felt, to a lesser but significant extent, as far away as Latin America and
Russia. Low demand in Asia, including Japan, and falling commodity prices, slowed the
growth in world trade.
By the time
of the Geneva meeting, however, it was clear that the trading system had stood up well to
the crisis. There had been no perceptible shift towards protectionism, and strong import
demand in the United States, in particular, had helped offset weakness elsewhere. There
can be no doubt that a negative trade policy response to the crisis would have had serious
consequences for economic recovery and for trade relations more generally.
WTO, the year had brought successful conclusion of the market-opening negotiations on
basic telecommunications and financial services, as well as the important special meeting
on least-developed countries.
also brought to the fore increasing concerns on how some of the Uruguay Round agreements
were working out. Developing country exporters of textiles and clothing argued forcefully
that removal of bilateral restrictions blocking access to developed-country markets was
going very slowly.
countries, for their part, insisted that implementation of the integration process was
being enforced and consequently, the restrictions would be removed on schedule. Developing
countries also maintained that they were not receiving special treatment envisaged under
several agreements, that other practical problems had arisen, and that some of them might
not be ready to assume the full obligations of the agreements by the end of their
A number of
highly publicized trade disputes, some of which had reached the WTO, suggested that
serious conflicts could arise unless greater efforts were made to reconcile trade rules
and public concerns about environmental problems or food safety.
members, but not all, felt that the time was ripe to prepare for a new round of
negotiations to tackle these issues and also push liberalization forward across a wider
front than just the negotiations on agriculture and services.
Even those in
favour of new negotiations were divided on whether it should be broad or narrow in scope,
and whether or not the whole enterprise should, like the Uruguay Round, be a single
undertaking with no substantial agreements concluded before an overall settlement was
The road ahead
in 1996, ministers had decided that WTO work should continue on essentially the same lines
as laid down by the Marrakesh agreements.
added the studies on trade and investment, trade and competition, transparency in
government procurement and trade facilitation, but these were clearly, for the time being
at least, secondary matters, focused on exploring unfamiliar issues rather than taking
action. They did not agree to bring the issue of labour standards into the WTO.
agriculture and services, they agreed to exchange and analyze information to allow members
to understand better the issues involved and to identify their interests before
undertaking the negotiations on these subjects that had already been agreed to at the end
of the Uruguay Round. There was no question of starting these negotiations ahead of
meeting of 1998 was different. Only one new subject electronic commerce
was added to the work programme. Dramatic though its growth and implications may be,
electronic commerce falls squarely within the WTOs mandate: the core issue is
whether the existing trade rules are adequate to cover it.
decision in Geneva was to instruct the WTOs General Council, in which all member
countries are represented, to prepare recommendations for Ministers regarding the
WTOs work programme, including further liberalization sufficiently broad-based to
respond to the range of interests and concerns of all members, within the WTO
framework. The decision specified that the recommendations should cover:
built-in agenda, made up of issues concerning the implementation of existing
WTO agreements and decisions, together with negotiations and other work agreed on at
- other possible
future work based on the subjects added to the work programme by the Singapore meeting
- follow-up to
the 1997 high-level meeting on the trade needs of least-developed countries, and
matters proposed and agreed to by members concerning their multilateral trade
headings obviously differ not only in subject-matter but in status.
group, all members agree, consists of mainstream WTO responsibilities and mutual
obligations. No one questions that member governments have to work together on these
questions, and that they have indeed already agreed to negotiate on some of them.
group, the Singapore subjects, consist of matters which, up to now, members
have agreed only to discuss, without undertaking any obligations, without prejudice to
the meeting on the least-developed countries, the third subject, has been given special
mention because all members recognize this as an issue that must have priority attention.
fourth heading allows any member to put forward proposals on any other matter relevant to
multilateral trade relations, but at the same time authorizes inclusion of these proposals
in the recommendations to ministers only if the other members so agree.
September 1998. the WTOs General Council has been working continuously on
preparation of its recommendations. In a first stage, it reviewed each of the main
subjects specified by ministers. From the beginning of 1999, individual member countries
were invited to put forward specific proposals.
200 such proposals have been made, many in considerable detail. They range far too
widely to be summarized in a few words, but cover issues under all four headings,
including all the concerns voiced at the Geneva Ministerial meeting last year. Most of the
proposals can be found in the documents section of the WTO website . Some call
specifically for new negotiations; others do so by implication; yet others clearly do not.
of this year, the General Council embarked on the third and final stage of its preparation
work, that of drawing up recommendations to ministers.
adopted, following long-established practice, and experience of what works best, has been
to bring together these recommendations in the form of a draft agreement, or declaration,
which ministers could discuss, and then agree on after making whatever changes they think
At the time
of writing, the draft is under discussion in Geneva, in the General Council, and much
remains to be settled. Any substantial comment on the position reached could well be
invalidated before these words are printed, and in any case the final decision rests with
ministers, at the Seattle meeting. It remains to be seen, in particular, whether ministers
will decide that the recommendations require that a new round of multilateral trade
negotiations be launched.
As of now,
some members have yet to be convinced that new negotiations, other than those already
scheduled as part of the built-in agenda, would be in their interest. Their final
judgement seems likely to depend on their overall assessment of what would be on offer
in other words, on the detailed content of the whole package of recommendations
presented to ministers.
meantime, public discussion of issues for the third Ministerial Conference, and of the WTO
itself, may well focus on a number of issues that have raised controversy, particularly
among non-governmental organizations that are likely to be well represented in Seattle.
The WTO has
been accused of many sins, including dictating policy to governments, destroying jobs, and
harming the environment. Right or wrong, these accusations raise important questions, and
deserve careful responses. By implication at least, many of these questions were answered
in the previous chapter. The next section, however, discusses them directly.
< PREVIOUS BACK TO TOP NEXT >