CONTROVERSY MARS WTO SEMINAR

A series of two seminars by the World Trade Organisation in mid-March saw interesting discussions on the relation between trade, environment and development. However, the debates were marred by a controversy caused by some insensitive remarks made by a panel chairman that blamed poor countries for 'marginalising themselves'. He also joined a main speaker in issuing a veiled threat that if developing countries did not give in to the North's push for a new Round of negotiations, there would be a protectionist backlash against their products. This prompted a heated response from NGOs and some developing countries which criticised the chairman for trying to intimidate poor countries.

By Martin Khor

April 1999

The World Trade Organisation held two symposia in mid-March as part of its preparations for its important Ministerial Conference scheduled for November.

The meetings discussed trade and environment (on 15-16 March) and trade and development (17-18 March).

The two topics have been contentious. Environment groups have been attacking the WTO for allegedly preventing governments from enforcing certain laws.

And many developing countries have been complaining that the trade system 'marginalises' them as they have not yet derived benefits from the WTO agreements and in some ways they are even worse off.

However, if the aim of the symposia was to win over the detractors and the complainants, they did not succeed. Most of the non-governmental organisations (NGOs) that came left unhappy, whilst several developing-country delegations were not satisfied that there would be any improvements in their favour.

It became quite clear that the meetings, organised by the WTO Secretariat, were an attempt to draw both the developing countries and the NGOs into accepting a new Round of trade negotiations which the rich nations hope to launch during the Ministerial Conference in Seattle.

At present there is resistance to any new Round from the NGOs and from several key developing countries (including India, Egypt, Malaysia and Tanzania).

They argue that the last Round (the Uruguay Round) has produced many problems that need to be sorted out first before allowing the WTO to embark on yet another Round that may give rise to even more problems and complications.

Those that had serious reservations about the new proposed Round (being advocated by the European Commission, Japan and Canada, among others) left the WTO meetings with even more reservations.

This was partly due to a controversy that erupted during the Symposium on Trade and Development. At the first panel discussion, the chairman made concluding remarks that many participants found to be insulting to developing countries in general and to African countries in particular.

At the end of the session on 'Linkages between trade and development policies', Paul Collier, Director of the World Bank's Development Research Group, made a lengthy concluding speech in which he mainly presented his own views instead of the customary practice of providing a chairman's summary of the proceedings.

One of the dominant themes of the symposium (and the one before it, on trade and environment) had been the acute difficulties faced by African countries and least developed countries due to the way the trading system and trade rules had marginalised them so that these countries derived very little share of benefits, if any.

Far from reflecting the views of several participants who spoke on this theme, Collier in his conclusions accused African countries of having marginalised themselves in the WTO by not participating in it, pressing for special and differentiated treatment which did not meet their needs, aspiring to regional trade arrangements that were a 'dead end', engaging in 'low credibility liberalisation', and fostering a 'hostile environment' by focusing their trade on a few commodities.

He then added that the African elites did not want to undertake economic reforms because the status quo benefited them.

'In political science we learn under what circumstances the elites would bite the bullet and make changes,' he said. 'Political science tells us that changes come when the elites get scared.'

He said the Africans ought now to be scared, because the future will be one of protectionism in the United States, unless the Americans could be offered something in a new round of trade negotiations.

Collier was reiterating the view of the panel's main speaker, Fred Bergsten of the US-based International Institute for Economics, who had warned developing countries that they would face 'huge risks' of an American protectionist backlash if they did not agree to a new WTO trade round.

Bergsten had urged developing countries to provide the developed countries with 'increased and eventually full access' to their markets as part of a bargain with the US and EU not to erect new protectionist barriers.

He had also told developing countries not to pursue demands for special and differential treatment, a principle that is accepted in the WTO and its rules that enables developing countries certain privileges in recognition of their lower economic status.

Collier's comments prompted a dissenting comment from the floor by an NGO representative who spoke without a microphone because the chairman had proclaimed the meeting closed. Several NGO representatives from both Southern and Northern countries then engaged in heated discussion with Collier as well as an official from the International Monetary Fund for almost half an hour.

The NGOs conveyed to Collier their strong resentment on what they said was his blatant attempt to shift all the blame for Africa's poverty and marginalisation to the Africans themselves, whilst totally denying the roles played by the international economic system and by the World Bank and IMF themselves.

In his exchange with the NGOs, Collier continued to insist that the problems faced by African countries were all due to their own policies.

Earlier, in his concluding remarks, Collier had said that the poorest countries benefit most from trade liberalisation.

This contradicted two other panellists, Keith Bezanson of the Institute of Development Studies in Sussex and Deepak Nayyar of Jawaharlal Nehru University in India, who had forcefully argued that empirical evidence showed there could not be sweeping conclusions made about the automatic relationship between trade liberalisation and development.

Several African delegations had also spoken of the lack of benefits to their countries from the Uruguay Round and the lack of Northern countries' fulfilment of their obligations to developing countries.

Egypt's permanent representative to the WTO, Amb. Mounir Zahran, had said at the same session that his country had fundamental difficulties with the Uruguay Round agreements. 'If we cannot resolve them, we cannot justify further liberalisation in developing countries including Egypt.'

He said the problems included deficiencies in the North's lack of implementation of their commitments, the lack of special and differential treatment, and the onerous costs of making use of the dispute settlement system.

'We shouldn't be asked to give more concessions in order to redress imbalances,' he said.

In an earlier session, the representative of Zimbabwe also said the Uruguay Round did not yield benefits to developing countries. 'Despite trade liberalisation, Africa has only 2% of world trade, trade liberalisation did not improve our terms of trade, there is decline in ODA, commodity markets are depressed and now the Asian crisis has reduced demand.'

On the symposium's last day, over 30 NGOs from the South and North issued a joint statement condemning Collier's views and behaviour as chairman of the session. This statement became the main talking point of the symposium.

A summary of the NGO statement was read to the plenary, and several official delegations (including two from European countries) associated themselves with the NGOs.

'We find Mr Collier's comments most insulting to African countries and developing countries in general,' said the NGO statement.

'They constitute blatant inaccuracies, tantamount to blaming the victims, whilst protecting and furthering the interests of the real culprits of protectionism.

'If the great threat to the trading system is coming from protectionist forces in the US, as claimed by Mr Collier and Mr Bergsten, then it is the political elites of the United States that should be asked to bite the bullet and initiate change in the US.

'We cannot understand why the chairman had instead blamed the Africans or other developing countries for US protectionism as they are the victims...This is tantamount to intimidation and blackmail to get developing countries to agree to a "New Round".

'At such a new Round, the aim is clear: developing countries will be pressured into giving "increased and eventually full access" of their markets (in Mr Bergsten's words) to the developed countries.

'Instead of condemning the powerful country or countries which were alleged to be having protectionist tendencies, the chairman was asking weak countries to give in because the strong country threatens to break international trade laws by going protectionist.

'He is calling on the developing countries to adopt an unacceptable policy of "Appeasement", which the civil society of the South (and indeed of the North too) would find most intolerable.'

The NGOs requested that Mr Collier apologise to the participants, and that the WTO director-general explain how and why in this important session, the main speaker and the chairman were both from the North.

'They were both criticising the special and differential provisions that are in favour of developing countries; and they both advocated that developing countries should appease the United States by fully opening up their markets in a new Round.

'The WTO secretariat should not facilitate or organise efforts that pressurise countries to agree to a new Round by using intimidating tactics.

'The great irony is that anti-development positions on several points were highlighted in a symposium where the focus is supposed to be on development.

'This leads us to the strong suspicion that the session was intended not for a scientific or objective review of trade and development policies, but to be used as a platform for propaganda and prescriptions to pressure developing country delegations to accept a "New Round with new issues", especially negotiations for an investment agreement.

'We call on all official delegations, South and North, not to succumb to such propaganda and prescription. We are very disappointed and disillusioned with what has happened and we call on the WTO secretariat to ensure such an incident does not happen again.' - Third World Network Features

About the writer: Martin Khor is Director of the Third World Network.

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