Recommendations of a regional seminar “From Seattle Ministerial to UNCTAD-X: Issues of Concern”


“From Seattle Ministerial to UNCTAD-X: Issues of Concern”,

New Delhi, January 22-23, 2000

I. Introduction

1.1 Consumer Unity & Trust Society (CUTS) and South Asia Watch on Trade, Economics & Environment (SAWTEE) organised a Regional Seminar: “From Seattle Ministerial to UNCTAD-X: Issues of Concern” at New Delhi during January 22-23, 2000. Civil society groups from Bangladesh, India, Nepal, Pakistan and Sri Lanka, had assembled in New Delhi to discuss their concerns for being reflected at the ensuing meeting of the UNCTAD-X at Bangkok on February 12-19, 2000. It was part of a wider regional civil society consultation being organised by UNCTAD to help it by providing inputs for the UNCTAD-X.

1.2 Considering the fact that UNCTAD X is going to be the first international meeting on economic issues soon after the aborted Seattle Ministerial Conference of the World Trade Organisation (WTO), the seminar assumed greater significance. Participants welcomed the theme of the UNCTAD-X: “Developmental Strategies in an increasingly interdependent world: applying the lessons of the past to make globalisation an effective instrument for the development of all countries and all people”. To reflect the people-oriented objectives of this meet, it is also being termed as the “World Parliament on Globalisation”,

1.3 The following are a set of recommendations that have been unanimously accepted by this meeting, reflecting their concerns on:

  • Globalisation;
  • Issues pertaining to market access with a special emphasis on non-tariff measures;
  • Decision making process at the WTO
  • International Financial architecture

These need to be vigorously pursued not only at the UNCTAD-X, but also on other civil society platforms and international fora in times to come. The final set of recommendations provides broad suggestions that would help UNCTAD regain its lost status in the area of coordination and decision making.

II. Globalisation

2.1 Experiences of countries that have embarked on the path of globalisation and liberalisation show that these processes should not only address broad macro-concerns of a country but concerns of people at large. Otherwise such efforts only lead to accelerated marginalisation of the poor whilst creating islands of prosperity.

2.2 The lessons also reflect that one of the key requirements for dodging these negative impacts, is to complement domestic institutional reforms with measures that can change the attitude and functioning of international institutions and influential nations vis-à-vis problems of countries in the area of finance, trade, aid, standards, intellectual property, technology transfer, et al.

2.3 Also important is the pace at which institutional reforms are implemented at national and international level. Slackening of pace not only affects the timeliness of responses, which are meant to meet the challenges thrown up by new economic structures, but also results in affecting the quality of policy effectiveness associated with these reforms.

2.4 The above is important to make markets work in the era of globalisation. Timely and apposite institutional reforms at the national and international levels would not allow larger economic entities to use their financial muscle power for engaging in market-distortionary or restrictive practices. This would therefore help preserve competition and assist smaller players effectively integrate in the global market.

2.5 Last but not the least there is a growing realisation that globalisation will have to be effectively managed and shaped to help the peoples of both strong and weak countries reap benefits associated with it. Lack of efforts in this direction, would deprive, especially weaker sections from opportunities for raising living standards thereby increasing their apathy towards globalisation and liberalisation. Globalisation would therefore stand to lose legitimacy.

2.6 The following recommendations made to UNCTAD-X, are on the basis of the observations made above:

  • The Conference needs to suggest measures, which would help in reaching decisions on international platforms that would reflect concerns of the majority but also respect the rights of the minority.
  • A clear time-bound strategy needs to be evolved for not only taking stock of successes and failures associated with globalisation, but also to identify the challenges that would crop up in future and suggesting strategies to deal with them.
  • UNCTAD-X provides UNCTAD and other intergovernmental organisations an opportunity to kickstart a process to discuss as to how they can cooperate to effectively integrate smaller players in the global market.

III. Market access issues with a special emphasis on non-tariff measures

3.1 Although tariffication of non-tariff measures is one of the central principles on the basis of which the new trading system is being built under the aegis of the WTO, one finds that non-tariff measures in the form of ‘Rules’ such as anti-dumping and ‘Standards’ such as sanitary and phytosanitary measures, technical barriers to trade et al are impacting market access.

3.2 Realising the futility of tariff-based instruments to protect the interest of domestic interest groups in the post-GATT (1994)/WTO era, (except in the area where tariff peaks exist) countries have started using non-tariff Rules- or Standards-based measures in a big way to serve protectionist demands. This has not allowed exporting countries from the developing world to translate their comparative advantage in the trade of specific commodities and services into competitive advantage.

3.3 In addition to this developing countries have been continuously voicing their concern on how developed countries have not been implementing negotiated agreements in their true spirit.

3.4 Agreements like the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPs) and the Agreement on Trade Related Investment Measures (TRIMs) have provided a precedent for introduction of ‘trade related’ issues under the ambit of multilateral trading system. It is also noteworthy that nearly 70 countries have not been able to implement their commitments under the TRIPs agreement, while a similar problem exists for the TRIMs agreement.

3.5 Efforts are already on to overload the WTO in seeking to develop ‘effective’ linkages between trade and environmental issues, and trade and labour standards. The Seattle Ministerial Conference of the WTO has shown how these issues are being flouted for domestic political agendas.

3.6 It is important to note that even though civil society across nations is united in its opposition to inclusion of intellectual property or investment in the mainstream of WTO discussions, it is a divided house on issues pertaining to the linkages between trade and its environment, and trade and labour standards. In fact there exists a sizeable section of civil society, both in the North and the South that strongly believes that such kind of ‘linkages’ would only accentuate protectionism rather than solve problems if they are discussed on a sanctions-based platform like the WTO.

3.7 More so, these sections of civil society are also worried about proposals aiming to establish Working Groups outside the WTO to discuss such issues, as they opine that this could be a precursor to a legitimate entry of such issues in the mainstream of WTO debates.

3.8 Given these broad concerns, the following was recommended:

  • There is an urgent need for an agreement on the “Special and Differential Treatment” provisions, which would specify both positive and negative measures to protect developing economies from the perils of indiscriminate liberalisation, support their efforts to develop or industrialise through the use of trade and investment policy, and secure their preferential access to Northern markets. Such an UNCTAD-sponsored agreement would serve as overarching convention that would guide the actions of the WTO.
  • Mutual recognition of standards still remains to be the greatest hurdle in providing effective market access to exports of developing countries. Steps should therefore be taken at appropriate international fora to help developing countries in this regard. UNCTAD-X could kickstart certain initiatives that would help build capacities of developing and poor countries to effectively advocate their views on concerned international platforms in this regard.
  • In spite of substantial tariff reductions during the Uruguay Round, tariff peaks and tariff escalation in developed countries remain to be a significant hurdle for exports and industrialisation of developing countries. This issue should be on the priority list of all countries during the next round of trade negotiations at the WTO.
  • Issues pertaining to linkages between trade and environment, and trade and labour standards need to be studied ‘holistically’, i.e. discussions on linkages between trade and labour standards should not only focus on child labour issues, but should also look into the impact of labour mobility, immigration policies, on trade. Importantly, civil society needs to conduct more informed and researched discussions and debates before arriving at a final position on such sensitive issues. The outcome should be disseminated wide and far.
  • Furthermore, other concerned intergovernmental bodies at the multilateral and regional level should also participate in this process of consensus building. UNCTAD-X can initiate some concrete measures in this regard.
  • Civil Society should be watchful about the fact that governments do not use pressures emanating from globalisation as an excuse to shy away from their responsibilities to effectively deal with issues pertaining to child labour at the domestic level.
  • Intellectual property and investment have made their entry into the mainstream WTO discussions through the ‘trade related’ route. In fact, this was the only way they could be introduced during the Uruguay Round discussions. Hence they either need to be substantially modified to address concerns of developing countries or need to be removed from the WTO acquis, and taken elsewhere. Given that there exists a broad understanding among civil society on the negative developmental implications of these Agreements, they need to pressure international community to seek modifications in the TRIPs and the TRIMS Agreements including a request to repeal the same.
  • Last but not the least, non-trade issues should not be allowed into the WTO acquis either through the ‘trade related’ or any other route. Instead they should be debated on UN platforms before being addressed on independent forums.

IV. Decision making process at the WTO

4.1 What differentiates the WTO from the two Brettonwoods institutions is that every Member, irrespective of its trade share has one vote. Another important feature is the Dispute Settlement System of the WTO, which has been vested with powers to punish erring Members. The latter makes the Members more sensitive and cautious about the decision making process and the level of transparency associated with it, where as the former provides them an opportunity to exercise their influence on the decision making process without any diminution.

4.2 Increasing integration of the civil society in the process of international decision making has given a completely new flavour to issues pertaining to transparency, especially during dispute settlement. Witness the demands made by civil society groups associated with the amicus curiae briefs that were presented during the ‘shrimp-turtle’ case heard by the Dispute Settlement Body (DSB) and the Appellate Body of the WTO. Some of the WTO members have expressed concerns about the ruling of the Appellate Body on the ‘shrimp-turtle’ case that does not object to civil society organisations from presenting their views before the DSB.

4.3 In the area of decision making one finds that countries, especially the poor ones, have been expressing serious concern about their ability to influence decision-making during Ministerial Meets. Furthermore many countries have been critical about the lack of democracy, that was seen to be perpetuated by adopting the ‘green room’ negotiation process during the Seattle Ministerial Conference.

4.4 One also comes across complaints about how WTO Members have misused the ‘consensus system’ of decision making to their benefit by blocking decisions with their single vote.

4.5 Given these broad concerns, the seminar has suggested further debate on the following elements that are expected to push decision making at the WTO in a direction towards achieving a better form of transparent and participatory democracy:

  • Understanding cost and benefits associated with decision making processes like ‘simple majority’ as against those associated with a process based on ‘consensus’
  • Emulating the system being adopted by UNCTAD, which involves discussions amongst regional groupings and other important groupings of countries before seeking a final vote.
  • The impact of granting observer status to federations of civil society organisations concerned with trade.
  • The possibility of including representatives of well defined interest groups like consumers, business, farmers and labour in official delegations of Governments for important discussions at the WTO.

V. International Financial Architecture

5.1 The South East Asian financial crisis has highlighted serious anomalies in the international financial architecture. More so, the social, political and economic ramifications of this crisis have shaken the faith of people in the current financial architecture.

5.2 The magnitude of the crisis also reveals the price the world has to pay for allowing opaque organisations like the International Monetary Fund (IMF) to carry out their functions without being accountable.

5.3 The above calls for the following steps to be initiated at UNCTAD-X:

  • In light of the failure of the G-7 to seriously respond to the need for a reformed global financial system, UNCTAD should seize leadership in this area and forge an agreement among the 190-plus members that would put such a system in place. Such a system could involve Tobin taxes, regional capital controls and national capital controls, and a pluralistic set of regulatory institutions; innovations that are necessary for global financial stability. All this does not suggest that UNCTAD should replace the IMF but only goes to suggest that it should start taking active part that affect decisions in the realm of international financial flows.

VI. Some other broad recommendations

  • A vigorous UNCTAD that competes in the process of defining global rules for trade, finance, investment and sustainable development is essential in a pluralistic global economic regime where global institutions, organisations and agreements complement as well as check one another. It is in such an environment – more fluid, less structured, more pluralistic world with multiple checks and balances – that the nations and communities of the South will be able to carve out the space to develop on their values, their rhythms, and the policies of their choice. UNCTAD has a critical contribution to make in the emergence of such a system of global governance.
  • As a first step in this direction, UNCTAD needs to build at least a minimal consensus amongst its members on the pace and comprehensiveness with respective to necessary policies that need to be put in place at the domestic, regional or international level on issues pertaining to:
    1. poverty alleviation and sustainable globalisation;
    2. development dimensions associated with investment, trade and technology transfer;
    3. linkages between trade and environment, and trade and labour standards; and
    4. international financial architecture.