FOCUS ON TRADE
NUMBER 68, OCTOBER 2001

(Prepared for the Workshop "Briefing-Debriefing Qatar" Brussels,
October 16, 2001)

by Shalmali Guttal*

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 political instruments 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 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 G-7 and 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
genuine 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
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 they put in reports
and papers, and even in the advice they give to developing countries
regarding WTO operations. Like their counterparts in the
International Monetary Fund and the World Bank, WTO Secretariat
staff are international bureaucrats 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 in 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 on 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.

These 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 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 countries or sidelined through
deals with less powerful members. Rich countries give nothing away
in negotiations unless they can exact a suitable price from their weaker
counterparts. At the same time, they usually find ways to win support
for their own proposals by offering developing countries benefits in
specific areas.

For example, over the past three years, many developing countries
have put forward proposals to address the imbalances and
shortcomings in key agreements including Trade Related Intellectual
Property Rights (TRIPs), Trade Related Investment Measures
(TRIMs), Anti-dumping, Subsidies and Countervailing Measures,
Textiles, and the Agreement on Agriculture (AoA) that have been
carried over from the Uruguay Round (also called implementation
issues). Although these issues have been on the table for several
years, the rich members now argue that they can only be addressed
in the framework of a new round. This position is defended by Mike
Moore, the WTO's Director General, who has argued that "...
dwelling on the perceived injustices of the past does nothing to
prevent even greater injustices in future."

Unfortunately, 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 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 they 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 Declaration for the
WTO's upcoming Fourth Ministerial 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,
bio-piracy, 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 technical, institutional and economic capacity. Most
of these countries have small delegations at the WTO, limited
communication with their capitals, and are ill equipped to deal with the
daily round 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.

Smaller delegations are also at a disadvantage when it comes to
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 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.

INSTITUTIONAL DEFICIENCIES
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 developed countries. The WTO Secretariat has also
manipulated past assessment processes to satisfy the agendas of more
powerful 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 and submitted
a range of analytical papers and proposals on agriculture trade.
However, their analyses were not brought into the stock-taking
process and their concerns were marginalised in the agenda for the
Phase Two work programme. Dissatisfied delegates at that meeting
were able to effect few changes in the work-programme since the
Chair of the Special Session told them 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 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 Doha 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 and Pakistan, the
LDCs and the Africa group have pointed out that the draft
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 the
UK, advocates (especially among the EU and other wealthy
countries) for a new round of trade talks 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, it is "trade is the
weapon against 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 ministerial meeting, developing countries
are now being bullied to support 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 reasoning 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 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 Ministerial meeting puts
questions of democracy in the WTO in a new light. Genuine
democratic values cannot be equated with trade liberalisation and
advancing the commercial interests of a handful of wealthy, powerful
countries. 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.

* Shalmali Guttal is coordinator of the regional micro-macro linkages
programme at Focus on the Global South.

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