REPORT FROM A WORKSHOP ON

WTO INSTITUTIONAL REFORM: A DEVELOPMENTAL PERSPECTIVE

Wednesday 2 February, 2000, Palais des Nations, Geneva

Sponsored by the South Centre Pilot Project on WTO and Oxfam GB

The South Centre Pilot Project on the WTO and Oxfam GB jointly organized a Workshop on 2 February, 2000 in Geneva to discuss the issues related to the WTO institutional reform from developing countries` perspective.  The Workshop was attended by delegates from developing country missions to the WTO as well as by observers from some intergovernmental organizations (IGOs) and NGOs.  Following papers were circulated among the participants to facilitate the discussion. 

·         Informal note by the South Centre Pilot Project entitled, “Agenda for WTO Institutional Reform: from Cosmetic to Real Change”

·         Discussion paper commissioned by Oxfam GB and prepared by Mr. Jacob Werksamn entitled, “Institutional Reform of the WTO: A Framework for Discussion” Internal note by the European Commission on Improving the Functioning of the WTO: Suggestions for a Way Forward

·         Article by Dr. Walden Bello of the Focus on the Global South

Mr Branislav Gosovic, officer-in-charge of the South Centre opened the workshop by referring to the importance of the historical background to the present debate.  He suggested that developing countries should have been more vigilant at the time of the establishment of the WTO in 1995, and that there should have been more thinking at that time about how to ensure an equal balance of power among members of the WTO.  He noted that there is currently substantial inequality in bargaining power at the WTO, and that developing countries should seek to use UNCTAD as a political counter-weight to the WTO.  He also felt that the form of negotiations adopted by GATT for tariff concessions that was essentially based on the concept of quid pro quo is not suitable for negotiations on structural issues which have been put on the WTO agenda, with developing countries often bargaining away a major policy or systemic issue in return for a minor trade concession. 

Mr David Bryer, Director of Oxfam GB, noted that two views had emerged about the implications of the failure of the Seattle Ministerial Conference: (1) that although Seattle was a debacle, there is no real problem and WTO business should continue as usual, with an effort to improve communications about the WTO; and (2) that Seattle shows the need for a fundamental reform of the WTO.  Mr Bryer noted that institutional reforms to make WTO decision-making processes more inclusive and transparent must be complemented by substantive changes to unfair trade rules to ensure that they respect the development needs of all member countries.

First presentation to the Workshop on “Developing Countries and Institutional Reform of the WTO: Models and Precedents” was made by Mr Jake Werksman, Senior Lawyer at the Foundation for International Environmental Law and Development (FIELD) and consultant to Oxfam GB.  He presented a comparative analysis of the governance structures of other international institutions.  Mr Werksman agreed that power relations are central to the decision-making and negotiation processes at the WTO, and that tinkering with the WTO machinery will not change these.  In the longer term, only changes in WTO rules and the overall development of the world economy will affect the underlying balance of power among WTO members.

In the aftermath of Seattle, however, WTO institutional reform has been placed on the political agenda.  In considering this issue, Mr Werksman noted that the following questions are relevant:

·       Why do WTO formal rules and/or informal practices exclude the effective participation of developing countries?

·       Is reform in the interests of developing countries?

·       Is reform possible or necessary at the WTO?

·       What lessons do models and precedents from other international institutions provide for the WTO?

Mr Werksman compared the principles, formal and informal rules and procedures of the WTO with those in operation in the UN system, the Bretton Woods institutions, and some other specialised institutions, for example, the Global Environment Facility (GEF).  He noted that the WTO is an exception among large, rule-based institutions, in adopting the principle of universal participation in its committees, Councils and Ministerial Conferences. In contrast, most other international institutions have established a formal executive body of limited membership for decision-making.

Mr Werksman noted that increasing the formality of WTO decision-making processes would increase transparency but reduce flexibility, and  may require a departure from the WTO principles of universal participation and one-member-one-vote (for example, through the establishment of some form of executive body).  It may also be politically difficult to negotiate and to bring into force.  If a formal system does not reflect the reality of power relations among the membership, key discussions between powerful parties may be driven underground.

In contrast, informal processes are less transparent but more flexible.  Improving the effectiveness of informal processes may require greater clarification of common interests and objectives, however.

Ms Penny Fowler, Trade Policy Adviser at Oxfam GB, made the second presentation on “WTO Institutional Reform: Taking Stock of Proposals Made So Far”.  She presented a summary of the proposals for WTO institutional reform that have emerged to date.  These include proposals from Canada, Japan, the European Commission, the UK, a former Indian Ambassador to GATT - Mr Das, the Director-General of UNCTAD - Mr Ricupero, and civil society organisations.  The proposals cover a range of options including the establishment of a formal or informal executive body at the WTO and the creation of some kind of constituency-based consultation groups.

Ms Fowler noted that the majority of proposals have come from the Quad countries, and that there have been no proposals so far from developing countries.  All the proposals focus on internal WTO decision-making processes, at least in the short term.  With the exception of Mr Ricupero, none addresses the need for reform of the substance of WTO agreements or rules.  Nor do they address the bigger picture issues about the role of the WTO within the broader system of global governance.

Third and final presentation to the Workshop on “Developing Countries, the WTO and Global Governance: Some Preliminary Thoughts” was made by Ms Aileen Kwa from Focus on the Global South, an NGO based in Thailand.  She argued that developing countries should not be lulled into complacency by the ‘positive’ messages coming from the Quad countries on the need for institutional reform as these countries are the stoutest defenders of the inequalities built into the structure, dynamics and objectives of the WTO, and their agenda could lead precisely to the strengthening of an organisation that is fundamentally flawed.

Developing countries must assess which parts of the WTO obstruct the growth and development of Third World economies and seek to dilute or eliminate them, and identify those elements that should be retained.  Overall, the WTO’s power must be radically reduced to make the organisation simply another institution in a pluralistic world trading system with multiple systems of governance.

Ms Kwa challenged the WTO’s underlying assumption that trade liberalisation and export promotion automatically result in economic growth in developing countries, and argued that the TRIMs and TRIPs agreements undermine developing countries’ ability to pursue national industrialisation objectives.  She argued that there is a need for substantive reform of the WTO agreements on TRIPs, TRIMs, services, and agriculture.  In addition, special and differential treatment should exempt developing countries from WTO provisions that restrict their ability to implement national development policies, and the WTO principle of a ‘single undertaking’ should be eliminated.

Ms Kwa noted that the WTO’s consensus-based decision-making means that developing countries are often subjected to arm-twisting, brow-beating and threats to cut development aid by more powerful members.  Reforms that would benefit developing countries include: changing to a one-country/one-vote majority decision-making system or a voting system weighted by population size; limiting the time taken to reach decisions; eliminating the use of non-trade threats to achieve ‘consensus’ and establishing a reporting mechanism for this type of harassment;  reducing the number of WTO meetings and ensuring that all members are represented in Geneva; and removing the requirement to hold a Ministerial Conference every two years.

Ms Kwa recommended that, because of its legitimacy among developing countries, UNCTAD’s role should be strengthened to become a forum for discussion of trade policies with actual legislative and executive power in the nexus of trade, finance, development and environment.  Finally, Ms Kwa highlighted that WTO member countries will need to address the concerns of civil society organisations as they will not go away.

Key points raised by participants during the workshop discussion were:

1. Scope of WTO institutional reform

WTO institutional reform must focus on issues of substance, as well as process.  Dealing with substantive issues is the only way to alter the balance of power in the WTO.  The objective of WTO institutional reform should be to make the WTO work better for developing countries, rather than simply to avoid another Seattle fiasco.  It should extend beyond decision-making processes to cover broader questions such as transparency in the WTO accession process, and the inter-relationship between the WTO and other international institutions, particularly UNCTAD and other UN agencies.

2. Lessons from UNCTAD

There may be lessons for the WTO from the successful UNCTAD X negotiations, which saw countries organising themselves effectively into informal constituency groups.

3. Constituency-based groups

Generally, participants were not in favour of establishing an executive body or forming constituency groups based on geographical regions because of the different interests within geographical regions, which vary by issue.  Some participants suggested that it would be helpful to form and strengthen informal groups/alliances around issues on the basis of common interests.

4. Green Room

There were different opinions over whether the Green Room process has completely excluded developing countries from participation.  One participant cited examples where developing countries were included in the Green Room process.  Many others, however, felt that the Green Room reinforces the marginalisation of a large number of developing countries.  A number of participants agreed that a lack of transparency in the operation of the Green Room process is a major problem and that internal communications should be improved to address this issue.

5. Voting

Moving to a voting system would not change the balance of power in the WTO and developing countries would be subject to pressure from more powerful members in casting their vote.  One view expressed was that voting cannot work in the WTO because the major powers would leave if the vote went against them.

6. Capacity-building

There is a need to increase the resources for capacity-building of developing countries.

7. External transparency

Some participants felt that WTO documents could be made publicly available, although the majority view was that the issue of internal transparency and access to documents for member and non-member governments should be addressed as a priority over external transparency to civil society organisations.  Some participants acknowledged the importance of national parliamentary oversight of the WTO.  The consensus opinion was that there must be no change in the nature of the WTO as an inter-governmental organisation.

Mr Rashid S. Kaukab, from the South Centre WTO Pilot Project, who moderated the Workshop, closed it by thanking the speakers and participants for their participation in the Workshop and contributions to the discussion.

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WOMEN AS COMMODITIES AND NEW FORMS OF SLAVERY IN THE MULTILATERAL TRADING SYSTEM

Raj Patel

International women’s day fell on the 8^th March this year. It is a bitter irony that the first celebration of women’s day of the new millennium should be overshadowed by a practice that belongs firmly in the last millennium– a new form of slavery. Both human trafficking and sex tourism are on the increase at the beginning of the 21^st century, and these practices are in many ways more insidious than the Atlantic slave trade of the 1700s and 1800s. This new slavery is deeply gendered, and the women who experience it are survivors of a system that has everything to do with the current international trading regime.

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Most trafficking involves women for domestic or sex-work, often without their consent. The trade in women, or more precisely women’s bodies, for sex-work illustrates this situation all too well. As InterPress reports, criminal groups frequently move trafficked women working as prostitutes across international borders, 'selling' them to other gangs. Traffickers profit from non-existent or relatively lax sanctions in many parts of the world. Frequently, in over 80% of cases, the women being trafficked come from rural and marginalised groups. Traffickers often take advantage of conflict-ridden societies, promising women an escape from these trauma. Because of their responsibilities to their families, these women accept the offers of domestic work in the North, only to find the reality very different from their expectations. Human rights groups have established that most trafficked women, once delivered to their employer, have "no control over the nature or place of work, or the terms or conditions of her employment." What is more, when the woman learns she has "been deceived about the nature of the work," she finds escape "both difficult and dangerous," given the coercive and abusive situations in the brothels.

A 1998 report by the Centre for Equal Opportunities found most victims interviewed in Belgium come from (in descending order) Africa, Eastern Europe and Asia. The situation in Britain also demonstrates the impacts of ‘transition’ and conflict have had in Eastern Europe. According to research conducted by the University of North London's Child and Women Abuse Studies Unit, six out of 10 women in London's brothels have been "trafficked" from countries such as the Ukraine. The study added, furthermore, that the "criminal gangs trafficking prostitutes are not confining their activities to major cities." And once the women arrive in Britain, they are informed by the gangs responsible for their journey that they owe the gangs "thousands of pounds for accommodation, fees to the brothel and advertising."

Women need not leave their home country to be exploited, however. Sex tourism, where people travel abroad expressly to purchase sexual services, is on the increase globally. The traditional image of wealthy northern men flying to Thailand and other countries in South East Asia for sex is still predominant, but wholesale generalisations about the character of this social phenomenon are impossible. Clients can also come from the middle classes in the South, and clients aren’t always men, as the sex tourism industry in the Caribbean geared towards wealthy North American women demonstrates.

Despite an inability to generalise about the clientele involved in sex tourism, it is true that the phenomenon remains an important feature in the lives of many women in the south. Indeed, in some developing countries, the primary source of foreign exchange is the sex tourism industry. And figures suggest that, despite the an increasing incidence of HIV/AIDS, demand for sex tourism continues to grow.

It is also important to however, that the women in these situations ought not to be treated as victimised subjects. As Jyoti Sangera, a Canadian expert on globalisation and human trafficking, notes, ‘we need to recognise that even when oppressed by external factors women consistently reject the ‘victim mould’ and find negotiating spaces to assert their agency and dignity.’ The existence of these spaces for women to reassert control over their lives is all the more impressive because of the magnitude of these external factors. These factors relate directly to the multilateral trading system.

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The phenomenon of trafficking in women is, in some respects, anomalous in the current trading regime. While commodities can travel more freely between countries than ever before, restrictions on the movement of people have simultaneously increased. Today’s trade regime is, in fact, designed to facilitate the exchange the value-added of developing country labour whilst limiting the mobility of labour itself. Advocates of increased Southern growth through trade note that in the long run, by specialising in unskilled-labour-intensive goods for export, wages in the South will tend to increase in real terms. In other words, rather than having people from the South migrate to the North and work there (as was encouraged at the end of the Second World War by Northern countries), the North now wishes only to pay for that portion of the cost of labour embodied in imported commodities. This is a much cheaper option than having to pay externalities such as the  costs of social reproduction for labour in the North, such as housing, education and health for the workers and their families. In addition, as many have noted, this also enables the North to put in place immigration systems that discriminate against workers and their families in the South.

Unskilled labour is not the only kind that is subject to these disciplines. There have been moves recently by the North to keep skilled labour immobile too. Current negotiations at the WTO on trade in services will allow firms in the North to purchase the value added from skilled Southern labour. In accounting, computer programming and a range of other business to business services, educated workers in parts of the South represent a bargain for Northern firms. The General Agreement on Trade in Services facilitates this trade in value added while keeping workers firmly in one country.

In economics, there is a difference between tradable and non-tradable goods and services. The work flurry of work done debugging Northern computer code in advance of the millennium by programmers in the South is an example of a tradable service. There remain, however, services that are resolutely non-tradable. Haircuts are an enduring example of human services that require the supplier and consumer to be in the same place at the same time. Sexual and domestic services are also subject to this requirement.

When suppliers can be found who are prepared, or can be coerced, into crossing borders and working for considerably less than the market wage, high incentives exist for what has come to be known as human trafficking. Kevin Bales, a lecturer in sociology at the University of Surrey, argues in his "Disposable People: New Slavery in the Global Economy," that this mobility of people is very much akin to the slavery of the 1700s. Using the legal definition of slavery as "the ownership of one person by another", slavery has all but disappeared. Bayles argues, however, that the essence of slavery is not ownership, but effective control. This understanding provides “a good working definition of the new slavery that encompasses about 27 million people around the world”, he writes. Under this new system of trafficking in people, humans cross borders not as labourers, but as commodities.

Bales misses a crucial difference between today’s new slavery and the slave trade of the past. Under systems of formal slavery, the responsibility for providing the basis for social reproduction fell on slave owners. It was they who provided schools and health care, however rudimentary, to protect their investment. Today’s trafficked women face multiple burdens. Not only must they work for their employers, but the employment relationship itself throws the responsibility for social reproduction back on the women.

If this sounds familiar, it should. Employer’s externalisation of social cost mirrors the way in which Northern countries avoid paying for social reproduction through the multilateral trade regime. It is a feature that is inherent in the neoliberal regime, in all its manifestations. The slogan of ‘privatising profits, and socialising costs’ applies to all of today’s new slaves wherever they live. Furthermore, it is no accident that the burden of these costs  falls disproportionately on the shoulders of women. Despite the progress made by the women’s movement, the neoliberal regime remains fundamentally sexist, treating women’s bodies very differently from those of men. This also suggests that confronting issues of power and gender in international trade will involve a very profound transformation in the way in which social and economic life is lived and understood.

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FUTURE OF INTRA-REGIONAL AFRICAN TRADE UNCERTAIN

Yaounde, Feb 28 (IPS/Nana Rosine Ngangoue) -- Fruit lovers in Tunisia may not realise that their Cameroon-grown bananas were warehoused in France before reaching their final destination.

This is one of many examples cited by a Cameroonian expert to illustrate how intra-African trade in agricultural products, which many believe to be the answer to the growing marginalisation of African products on the global market, remains a pipe dream. A conference on intra-regional trade in agricultural and food products in Yaounde, Cameroon on Feb 22 was the venue for many experts to lament the paucity of agricultural trade between African countries. "It seems illogical to buy from distant countries when right next door, in our own or neighbouring countries or elsewhere on the continent, we can buy anything we need," said Bello Bouba Maigari, Cameroonian Senior Minister in Charge of Industrial and Trade Development.

The meeting, which ran concurrently with the 21st Regional Conference of the United Nations Food and Agriculture Organisation (FAO), was called to identify areas where intra-regional trade might help resolve food supply dependability issues in Africa. Delegates revealed a litany of obstacles thwarting development of the region's agricultural commerce. A major problem cited was the lack of information on surpluses and shortages in various products on the continent. The experts said those areas with surpluses in agricultural products could supply those with shortages if such information were readily available. The products in question are those which are widely produced and sold on the region such as cereals, vegetable oils, dairy products, meats, and sugar.

Bamidele F. Dada, Assistant General Director and Regional Representative for the FAO in Africa, says that generally all regions of Africa have low supplies of the larger grains. North Africa generally has large shortages, central Africa to a lesser extent. According to the FAO executive, forecasts of surpluses and shortages in the larger grains the 1999-2000 growing year revealed that only 14 out of 52 African countries had surpluses, ranging from 2,000 tonnes for Mauritania to 400,000 tonnes for Malawi. Dada also noted that because of a drop in maize production, substantial informal trading would be feasible between several eastern African countries, mainly Uganda, Ethiopia, Tanzania, and Kenya, who export maize, as do their southern African neighbours.

But the situation, unfortunately, is not that simple, as many participants pointed out. Traditional diets vary from region to region, and also, within the same region, countries tend to grow similar crops. "In west Africa, for example, everyone grows the same thing. In years when there is a shortage, everyone is also looking to buy the same thing. In good years, then everyone warehouses the same crop," said Sawadogo Omer, a delegate from Burkina Faso. "Furthermore, each country maintains more or less its own dietary habits. That means that exchanges are not always desirable," he added.

Besides availability, there also remains the problem of transportation, another bottleneck for intra-continental trading. "We need to develop a decent highway system, and a good air and sea transport network. If we want to improve intra-regional commerce, we need to base it on some solid organisation," said Diarra Sitapha of the Association for the Promotion of Rice-growing in Western Africa (ADRAO). Other obstacles include the absence of harmonised trade laws, problems with currency exchange, and the rigid health regulations of certain countries. Inter-African agricultural commerce also suffers from the fact that the industrialised world has granted African producers preferential access to its markets, making selling there more lucrative than selling within Africa. "Preferential access to the markets of the European Community and the United States means that exports to those countries command higher prices than those to other markets, including those in Africa," the conference working document stated.

The desire to break through to markets outside of Africa was also expressed by the participants. There too, however, problems exist. Djellab Said, the Algerian delegate, said subsidies for agriculture in the developed countries and restrictive trade barriers protecting their markets placed a damper on exports leaving Africa. "A reduction in subsidies and the elimination of trade barriers would constitute a form of aid to African countries to help them export agricultural products. As a consequence, it could help finance the development of African agriculture," Said said.

Economists say the marketing of African agricultural products is a particularly apt topic right now, given that the World Trade Organisation is opening new international negotiations, and that the European Union and the ACP (Africa-Caribbean-Pacific) countries plan to re-examine preferential accords linking the two groups at the end of this month. These negotiations will determine the future of African agricultural products. The African countries have vowed to act as a unified whole to defend their interests during these international meetings.

Taken From SUNS 4617, Tuesday 7 March 2000.

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DIRECTOR’S COMMENT

Five years after the Beijing Conference, the condition of women in most parts of the world remains precarious.  Much progress is made in advancing the constitutional and political rights of women.  Women are claiming equal rights to men and generally winning significant battles everywhere.  Yet their economic condition is generally worsening in most parts of the developing countries. Why?  An explanation to this requires us to look at both the overall worsening condition of the economies of the third world, and more specifically how this then throws an additional burden on poorer women. We thus have a paradoxical situation.  Globalisation has helped to advance the human rights of women, but these remains largely on paper, whilst in reality, because globalisation also further impoverishes the weaker segment of society, it has worsened the economic condition of women in most parts of the developing world and in the countries in transition.  This issue of the Bulletin looks into how women as commodities relate to the General Agreement in Trade in Services, and the contradictions that arise because of limitations placed on the movement of natural persons across boarders.  In the next round of negotiations at the WTO the developing countries are likely to raise the issue of movement of people across borders under the GATS dispensation.  Would they be bold enough to raise the issue also of trade in women as commodities?  They should.  It concerns the human rights of at least half of their populations.

This issue of the Bulletin further discusses the question of how the decision-making processes within the WTO might be improved.  In Bulletin no. 3.3 (1 February 2000), we featured the views of Mr B.L. Das on the matter.  This issue brings other views on the subject.  All these suggestions for reforming the WTO are fraught with practical difficulties.  Getting 135 members to reach consensus on high-stake trade matters is a formidable challenge in any system.  But the difficulty is worse compounded when the consensus forms the basis for legally binding agreements that have the force of sanctions behind them.  It can be suicidal for countries to take these agreements lightly.

Hence another area that needs to be looked into at the WTO is the area of sanctions.  Do all agreements need to be backed by the force of sanctions?  Is it possible to work out agreements that are not necessarily legally enforceable by the force of sanctions?.  Presently, there are many provisions in the Uruguay Agreements that are of specific interest to the developing countries and that take the form of “best endeavour” clauses.  In other words, they do not have the force of sanctions behind them. This contrasts rather sharply with many issues of concern to developed countries, which are protected by legally binding agreements.

This whole matter of what agreements should be legally binding and which ones should be, as it were, gentlemen’s agreements with less than binding character needs to be further examined.

A properly thought through system of categorization of various issues that come up for negotiations at the WTO is an imperative.  Such a categorization should take into account the specific interests and conditions of developing countries.  It should also balance the demands of equity with those of efficiently and effectiveness.

Above all, it is not enough to look at the consensus-making process of the WTO, discussed at the Workshop on WTO Institutional Reform.  It is necessary in addition, to examine  the decision-enforcing mechanisms, and to remove the sting of sanctions from certain kinds of decisions where they are unnecessary and where their removal would facilitate the consensus-making processes.

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Produced by the International South Group Network (ISGN) Director and Editor: Y. Tandon; Advisor on SEATINI: B. L. Das

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