Changes Surrounding the WTO - Developing Countries and NGOs - Report on the WTO Symposium -

Fellow, RIETI

The symposium, entitled "The Doha Development Agenda and Beyond," was held with general public participation at the World Trade Organization (WTO) secretariat in Geneva from April 29 to May 1. This symposium was significant in two aspects. One was that it was the first opportunity for the WTO to have a direct dialogue with non-governmental organizations (NGOs) after the launching of a new round. The other was that there was a strong call during the symposium for care toward developing countries in the WTO negotiations.

Approximately 700 people, including government officials, NGOs, media and scholars, participated in the symposium. There were 18 theme-specific sessions over a schedule of two and a half days. Broad-based and vigorous discussions by both supporters and opponents took place, ranging from organizational administration of the WTO, intellectual property rights and trade in services to so-called Singapore issues such as the environment, investment and competition policies.

From the WTO side, Director General Mike Moore of the WTO, himself, played the key role as moderator of the major sessions, and Mr. Arthur Dunkel who served as Director General of the General Agreement on Tariffs and Trade (GATT) for 13 years until 1993, former United States Trade Representative Clayton Yeutter and Professor Jagdish Bhagwati of Columbia University participated as panelists. From the developing countries side, former President of the United Mexican States Ernesto Zedillo, Ambassador and Permanent Representative of the People's Republic of China to the WTO Sun Zhenyu that succeeded in the accession to the WTO last year, as well as former and present ministers and ambassadors were invited as speakers. At the same time, from the NGO side, representatives of the support group Oxfam and the environmental conservation group Friends of the Earth participated as panelists in the major sessions. Oxfam is famous for its active role in refugee assistance to Afghanistan and Nobel Laureate in Economics Amartya Sen serves as its honorary chairman. Friends of the Earth is made up of 66 participating countries in the world. Other NGOs also actively took part in such activities as coordinating various sessions on a voluntary basis.

NGOs and the WTO

Relations between NGOs and the WTO have not necessarily been cooperative. Since the simultaneous series of terrorist attacks that occurred in the United States of America on September 11 last year, the extreme activities of anti-globalism forces have subsided somewhat. However, the image of the emergency situation when NGOs advocating anti-globalism and police clashed outside the conference center at the WTO Third Ministerial Conference held in Seattle, United States in 1999 is still fresh in our minds.

In holding the symposium with general public participation, there were strong arguments for and against the plan to bring people opposing the modalities of the WTO through the door and into the process. In fact, the WTO hosted a small, but similar symposium in July last year, and Japan was one of the sponsors along with the European Commission, the United States and Canada. Director General Moore expressed in his speech that many trade ministers and ambassadors raised a series of criticisms, claiming "it is not the job of the WTO to embrace NGOs and civil society." Thereafter, the importance of deepening the general understanding of the benefits received from the WTO activities was confirmed in the Doha Ministerial Declaration, which made it possible to hold the symposium.

Was the recent symposium successful? What did NGOs expect of the WTO? It was most impressive that the word "democracy" was often used in the NGOs statements. There is no doubt that NGOs have called on the WTO to listen to opinions from a greater variety of sources. It seems that NGOs highly value the opportunity to have direct discussions through the symposium on issues concerning the WTO. Recently in Japan, as in other democratic countries, people have recognized the need and effectiveness of face-to-face dialogues between the government and general public on policy development through venues such as town meetings. Considering such a familiar example, the WTO's proactive stance on mutual understanding and confidence building with NGOs should be appreciated.

One of the advantages of NGOs is that, without being bound by "national interests," they can pursue benefits from a global viewpoint, focusing on individual issues such as environmental protection and poverty eradication in least-developed countries. In this context, their constructive contribution is expected to further facilitate a fair world trade system. In other international organizations, it seems the case that NGOs are included as government representatives. However, the WTO is "both a legally binding intergovernmental treaty of rights and obligations among its Members and a forum for negotiations." Considering such a special characteristic of the WTO, when guidelines on NGOs were established at the General Council in 1996, a consensus was reached in which "the direct participation of NGOs in the work of the WTO or its meetings would not be possible." The guidelines also emphasize that closer consultation and cooperation with NGOs can be met at the national level where primary responsibility for taking the different elements of public interest into account lies. There is to be, in principle, no change along this line for the time being, even though some attempts have been made to expand opportunities for incorporating contributions by NGOs that had not necessarily been reflected in policy-making at the national level. Through future symposia, it will be worth seeking further concrete plans of cooperation between the WTO and NGOs for their mutual benefits.

Developing Countries and the WTO

The other focal point was developing countries. Until the Uruguay Round, agreements were virtually formulated by negotiations among developed countries. Due to the fact that developed countries account for approximately three-quarters of the share of trade in goods and an equally high share of trade in services, such dominance could have been the natural course of events. Nonetheless, the emerging situation, in which approximately three-quarters of the 144 countries and regions participating in the WTO are developing countries, should not be disregarded. Moreover, developing countries have begun to pay greater attention to the WTO since the WTO has been stepping forward to work on issues that are deeply related to the economic development concerns of those countries (e.g., trade-related investment measures, competition disciplines, environmental conservation and use of intellectual property rights, in particular).

Developing countries are concerned that since developed countries are reluctant about structural reform in politically sensitive areas such as agriculture and textiles, it is only the developing countries that are being urged to open their markets and such an imbalance of obligation is causing an obstacle to their economic development. In the symposium, China's Ambassador Sun referred to the disparities between developed and developing countries in securing the benefits of trade liberalization and he stated it was urgent for the WTO to adequately take into consideration the interests and requests of the developing members.

Concretely, Ambassador Sun pointed out China's initial concerns in the negotiations. In the agricultural sector, which is critically important to China, he requested significant reductions in tariff peaks and tariff escalation, and export subsidies and domestic support provided by developed countries. He also urged the developed members to fully implement their liberalization obligations under the WTO Agreement on Textiles and Clothing (ATC). Moreover, he supported efforts to tighten the imposition criteria for import restrictive measures, such as antidumping. In essence, his speech stressed that China, as a developing country, was seeking close relations with other developing countries and expected the new "Doha Development Agenda" to be a "development" round in real terms.

Without overlooking the series of protectionist actions in the U.S., such as the safeguard measures on steel imports, the President's signing of the Agriculture Supplemental Bill and the passage of the Trade Promotion Authority (TPA) amendment, the leaders of international organizations took action. President of the World Bank Group James Wolfensohn, Managing Director of the International Monetary Fund Horst Kohler and Director General of the WTO Moore issued a statement of strong warning at the Organisation for Economic Co-operation and Development (OECD) Ministerial Meeting, held in May, claiming that increased protectionism in the world's leading economies would undermine developing countries' efforts to reform through more open economies.

According to an OECD survey, the total amount of domestic agricultural subsidies applied by OECD countries is seven times higher than the amount the same countries disburse in Official Development Assistance (ODA) to developing countries. Furthermore, according to World Bank estimates, if trade barriers were entirely removed, it would have an economic effect of $2.8 trillion (350 trillion yen) and 320 million people would be able to escape from poverty by 2015.

In September this year, the position of Director General of the WTO will be vacated by Mr. Moore and succeeded by former Vice Prime Minister of Thailand Supachai Panitchpakdi, who will be the first Director General from a developing country. Considering the statements expressed by Dr. Supachai, there is no doubt that he will take over the commitment to care for developing countries from Mr. Moore. In addition, only 30 months remain until January 2005, which is the deadline for negotiations in the new round. Reflecting the consensus rules that the WTO firmly holds as its principle, a conclusion to the current round of negotiations cannot be expected unless all the participating countries see benefits. This new round of negotiations is a great opportunity for Japan to enjoy further benefits from trade liberalization. Political strategies are now called for, through compromise and gain, in order to maximize the benefit for both Japan and the rest of the world in a cooperative manner.

June 04, 2002

June 4, 2002