PART 4: WHAT SHOULD THE EU LEARN FROM
81. The WTO Ministerial Conference in Seattle in
November 1999 was intended not to consider matters of substance,
but only to agree an agenda for the next Round of negotiations
(already described by the then Sir Leon Brittan, the former Trade
Commissioner, as "the Millennium Round"). In fact, not
even this limited objective was achieved. The outcome was a suspension
of the work of the Conference, with an indication by many of the
participants that in their view none of the texts which had been
provisionally agreed would remain on the table. One of the Deputy
Directors General of the WTO called the Conference "the disaster
of Seattle" (Q 336), and Mr Byers described it to us as "a
fiasco" (Q 523).
82. In our first evidence session for this inquiry,
Mr Hutton (for DTI) told us:
"There are those who
argue that all that was wrong in Seattle was a shortage of time
and that if we had been given a little longer we could have resolved
the differences. There are those who think that many of the differences
went rather deeper than that" (Q 2).
This inquiry has not been a post mortem. But we agree
with the International Institute for Sustainable Development
that as one of the major members of the WTO the EU "bears
a special responsibility for its future" (p 286). So does
the UK Government; Mr Byers believes that:
"our strategic rolebeing
a member of the European Union, being part of the Commonwealth
and having a very good political relationship with the United
Statesmeans that we probably have a more important role
to play than most other countries in terms of making sure that
the WTO can reform itself" (Q 523).
83. If the EU and the UK are to take a constructive
role in sorting out the problems, the first step is to identify
and understand them. None of our witnesses believes that procedural
changes alone can solve the difficulties which arose in Seattle;
all see these difficulties as reflecting real problems of substance.
Nevertheless, there were significant problems of process in Seattle.
Some of them should be susceptible of relatively easy solution;
others will be more intractable. They do not relate solely to
the procedures at Ministerial Conferences, but also to the overall
structures and functioning of the WTO, and some have argued that
they must be solved before there is any attempt to start significant
new negotiations. They are considered in this Part of the Report.
Problems in Seattle
84. The views of our witnesses on what went wrong
in Seattle coincided to a remarkable degree, albeit with understandable
differences of emphasis.
We consider the various elements below.
85. The much publicised NGO-organised demonstrations
obviously made the Conference more difficult, and aroused the
ire of those who were insulted or mis-treated, or who were unable
to reach meeting venues (either because of the demonstrations
or because of the resulting heavy security arrangements).
However, even NGO representatives themselves hesitate to claim
a decisive role. The World Development Movement says that "while
the media coverage emphasised the street demonstrations in Seattle,
these did not significantly influence the negotiators or the negotiations"
(p 61), and indeed Dr Holmes and Professor Rollo claim that "some
NGO observers were frustrated by the effect of the Seattle demonstrations
on the consultative process" (p 90). Ms Westin says that
delegates did not believe that the protesters
changed the outcome of the Conference" (p 200). And the WTO
itself is adamant. The Director General, Mike Moore, has said:
"We didn't need [the NGOs'] help to fail".,
and Mr Hoe Lim told us:
"You have no doubt come
across many analyses which suggest that the failure at Seattle
was caused by NGOs. If I may say so, our members were probably
quite able not to agree even without the NGOs outside" (Q
86. For any Conference of this kind, one would normally
expect significant preparatory work to have been done in advance,
both through the WTO itself and through bilateral negotiations.
There is general agreement that this had simply not happened.
The preparatory process among national delegations in Geneva had
identified very little common ground in advance, either among
major trading partners or between developed and many developing
countries. In particular, there was a yawning gulf between the
EU and the US. Mr Carl told us that it was the first time that
he had ever seen "a situation like that" (Q 109). The
result was a negotiating draft of 32 pages. Mr Cuddy of UNCTAD
"It was absolutely absurd
to go into a meeting with over 600 square brackets in the text,
where in some passages there were eight depths of square brackets.
To give this to ministers to resolve in three days was not feasible"
The text represented an amalgamation of different
positions rather than a reflection of common ambitions, and it
required text to be removed in order to reach a consensus; Ms
Westin quotes a WTO official as saying that it is more difficult
to remove text in negotiations than to add it (p 199).
87. Part of this failure must be attributed to the
WTO member countries themselves. The delay in appointing a new
Director General, and hence in the appointment of the four Deputy
Directors General, left a vacuum in the organisation.
Mr Eglin (Director of the WTO Trade and Finance Division) said:
"The distraction here
for the first half of  was complete; nobody was doing anything
to prepare for Seattle" (Q 423).
This no doubt goes some way to explain the situation
which surprised Commissioner Lamy:
"The Geneva preparation
of the WTO [for Seattle] was a nasty surprise. I really thought
the WTO would have become some sort of fully-fledged
institution, able to cope with these new challenges. I was surprised
that the WTO just could not do it".
88. It was suggested to us that the problem with
the draft agenda resulted from the fact that certain member countries
were trying to "prenegotiate" on issues of substance,
even though all that was ostensibly at issue was agreement on
an agenda. DTI also considered that member countries' representatives
in Geneva lacked negotiating flexibility (Q 4), a problem which
Mike Moore has confirmed:
"We were too far apart
[in Geneva]. It was not a question of more time, it was a question
of having more flexibility from capitals. I could have kept trade
ambassadors here for another 300 hours and nothing would have
89. Mr Stoler told us:
"The only way we could
have ended up with a result at Seattle would have been if the
ministers had looked at the text and said to the Director General:
'There is no way we are going to negotiate this in the next three
days: give us your best guess of a compromise text and we will
see if we can get out of here with a result'. The Director General
had a compromise text that he could have given them but it is
not his business to offer it without being asked and he was never
asked by the members to do it and that is why we got what we got"
Asked about this, Mr Byers did not appear to be aware
that the Director General's draft existed:
"I think he may have
had more than one draft, but the draft that I saw was, I think
with the exception of one item, all in square brackets, which
meant it had not been agreed by anybody, and it was extremely
long" (Q 528).
90. As the host country, the US provided the Chair
for the Seattle Ministerial Conference. Ms Westin suggests that
"perceptions about the
US role as chair may have affected the negotiating dynamic. For
example, it may have raised questions about US neutrality in brokering
compromise, or raised WTO members' expectations about US willingness
to make concessions to ensure the Ministerial Conference's success"
She concludes that "holding high profile WTO
meetings in countries that are major trading partners, such as
the US and the EU, may present difficulties" (p 200). Mr
Carl referred to the absence of flexibility on the part of the
US in Seattle, and
"the very negative reaction
by many developing countries not only to President Clinton's remarks
on trade and labour and trade sanctions
but, more generally speaking, to the way that they were treated,
or thought that they were being treated" (Q 109).
In one sense, he found the apparent lack of political
will on the part of the US was surprising; having invited the
WTO to Seattle, they "did not assist negotiations".
On the other hand, a President with elections pending had to consider
economic reality, and there were no direct pressures on American
companies to cause them to favour liberalisation (Q 134). The
CBI pointed out the significance of the fact that Congress had
not given the President a fast-track negotiating mandate (Q 47).
91. Several of our witnesses suggested that the actual
organisation of the Conference left a lot to be desired. For the
Trades Union Congress (TUC), Mr Rodney Bickerstaffe (who attended
the Seattle Conference) commented tellingly that "people
did think that things were probably happening but they did not
know about them" (Q 31). For the CBI, Mr Donald Anderson
(who also attended the Conference) made a similar point:
"Even we did not know
where events were being held. Times would be changed and you would
suddenly find, say, that a press conference was being held which
was quite important. It was difficult for some of us, not to mention
for the developing countries
That created a lack of transparency"
92. The evidence submitted by the Overseas Development
gives a usefulif disturbingaccount of the way in
which the Conference was organised:
"The system prepared
in advance was four subject working groups (agriculture, market
access, implementation, and new issues) plus one on 'systemic'
issues (ie reform of WTO procedures), scheduled to meet only once.
But these areas were much too broad for effective negotiations
(and because they were so broad every country had to be in every
one). The system would have worked less badly if the WTO had prepared
Director General's 'non-papers' as has been done in the past,
or indeed if it had succeeded in copying the Chairman's draft
by the time the meetings opened, but even with proper preparation
and support the groups would have been too cumbersome
system in practice switched to bilateral consultations either
immediately (the market access group met once for 15 minutes)
or after a reasonable time to present, but not debate, positions"
93. Developing countries faced particular problems
in the course of these negotiations. However, according to ODI
their problems were not in this case due to the small size of
"Many developing countries,
even the smallest and least developed, had sufficiently large
delegations to cover the formal meetings. In terms of numbers
and appropriateness of representation, this was a major change
from the previous negotiating rounds. Because for many it was
the first WTO negotiation, they were inexperienced and needed
additional support from the WTO. This had been implicitly promised
in the Director General's nomination of two officials to assist
the least developed countries in September 1999, but neither of
these was active in Seattle, and no special assistance was provided.
Some delegations were experienced and were highly effective in
bilateral lobbying; most were not, but the central problem was
the lack of opportunity to negotiate. The working groups offered
only the opportunity for a brief statement; 110 countries were
not invited into the Green Room. This placed a premium on experience,
ability to lobby and large, well-resourced delegations. This inevitably
handicapped most developing countries" (pp 267-268).
94. Most criticisms of the lack of "inclusivity"
focused on the so-called "Green Room" procedure, first
used in the Uruguay Round, whereby towards the end of the Conference
a limited number of member countries (chosen by the Chair and
the Secretariat) are invited to thrash out draft conclusions to
put to the membership as a whole. As Mr Ronald Stewart-Brown puts
"the developing countries understandably resisted being railroaded
into deals cut by developed countries in restricted Green Room
negotiations". The World Development Movement claims that
the countries in the Green Room were "perceived to have been
selected on the basis of their support for the US and EU positions"
95. DTI supplied us with a number of the statements
issued by developing countries after the Conference, which we
are printing with this Report.
They express the "profound disagreement", "anger"
and "disappointment" of "a majority of WTO members
with the Seattle process. CARICOM Ministers, for example,
"are particularly concerned
over the intentions to produce a Ministerial text at any cost,
including the modification of procedures designed to secure participation
[They] express their strong conviction that
as long as due respect to the procedures and conditions of transparency,
openness and participation that allow for adequately balanced
results in respect of the interests of all members do not exist,
[they] will not join the consensus to meet the objectives of this
Others use similar, and equally strong, language.
96. In the light of these statements, it is particularly
interesting that Mr Ricupero, the Secretary General of UNCTAD,
"I was in Seattle, and
I am notand I emphasise "not"of the opinion
that the problems with developing countries were the decisive
factor for what happened in Seattle" (Q 497).
Moreover, Mr Carl made the point that it was not
only developing countries which were dissatisfied with the Green
Room procedure: it was also important for developed countries
to have the right interlocutors:
"We are always in there
but we are not always faced with participation on the other side
of the table which really reflects the kind of core section of
the membership that we would like to see" (Q 123).
He said that the EU was insisting to the US that
the issue of access must be taken seriously:
"We have to make sure
that there is a reasonable degree of representation of countries
not only from different parts of the globe but at different levels
of development, etc" (Q 130).
97. We have considered the causes of the collapse
of negotiations in Seattle. The demonstrations were obviously
not helpful, and were a distraction from the real issues; if NGOs
want to be kept in touch with the progress of negotiations, they
will have to realise that they cannot throw bricks at the same
time. But the demonstrations were not the prime cause of the failure.
It must be largely attributed to the lack of the thorough and
sustained preparation which is crucial before a Conference of
this kind. The problem was not, on this occasion, made any easier
by the fact that the Conference was being held in the country,
and therefore under the Chairmanship, of the United States, one
of the major trading nations, with a presidential election casting
its shadow before. We urge the EU to seek to ensure that the next
Conference is held wherever the WTO Council considers that it
will have the greatest chance of success; above all, the choice
of venue must not be driven by political imperatives in potential
host countries. Finally, it is clear from the reactions of developing
countries after the Conference that their participation was handled
insensitively. None of this must be allowed to happen again; there
is too much at stake.
Should the Seattle conference have been cancelled?
98. Mr Stoler, one of the Deputy Directors General
of the WTO, told us:
"It was not a surprise
to me at all that Seattle failed to achieve a result because the
preparations for the Seattle meeting were not complete" (Q
Ms Westin considers that the attempt to launch a
new Round "may have been premature" (p 200). Mr Ricupero
was more definite: "everybody knew here in Geneva" months
before Seattle that the developing countries were not ready to
go into a negotiationand nor were other member countries
99. The breakdown of talks is not without precedent.
Ambassador Charlene Barshefsky, the US Trade Representative who
chaired the Seattle Conference, reminded the House of Representatives
Sub-Committee on 8 February 2000:
no surprise that we at times have encountered deadlocks. This
happened at the creation of the trading system, in which the founding
of the GATT in 1948 built upon a failure to set up an 'International
Trade Organisation' in 1947. The creation of the WTO five years
ago followed a failed attempt to launch a Round in 1982, a mid-term
breakdown in 1988, and failures to conclude the Round in 1990
and 1993. More recent negotiations on financial services and telecommunications
also broke down in 1996 and 1997, in all cases to be followed
by success. The experience in Seattle was similar to many of these
previous negotiating deadlocks" (p 203).
100. Mr Richard Eglin, Director of the Trade and
Finance Division of the WTO, suggested that there were three reasons
why the Conference was allowed to go ahead despite the lack of
preparation. With a term of office of only three years,
the new Director General was "looking for a result";
given the expectations raised by his predecessor, Commissioner
Lamy was not prepared to call a halt; and the US was not likely
to stop the first Ministerial Conference to be held there (Q 423).
Moreover, it was not impossible that agreement might be reached.
Even Mr Stoler conceded that sometimes Ministerial meetings have
been known to succeed even when preliminary official negotiations
have failed, and Mr Ricupero echoed this (focusing on a specific
"People always hope
that at the very last moment the EU will make a concession in
agriculture because many times it happens, but sometimes it does
not happen" (Q 507).
Mr Byers said wistfully:
"When one considers what really were the
relatively modest objectives of Seattle, which were to agree an
agenda, it was reasonable to expect that we might have been able
to achieve that" (Q 526).
101. We acknowledge that the rules-based trading
system has survived similar setbacks in the past, and that postponing
this Ministerial Conference would itself have been seen as a failure.
But the highly-publicised collapse in Seattle has done severe
harm to public confidence in the system, and a further failure
cannot be contemplated.
What must change
102. The Uruguay Round created a new formal structure
of rules, but did not create new procedures within the organisation
to agree on changes to those rules or on the introduction of new
ones. Immediately after Seattle, there was much talk of the need
for institutional reform. DTI said in January that the Government
wanted to see an "inclusive process" launched to consider
reforms, suggesting that a "Group of Eminent Persons"
should be formed to consider the problems and solutions to them
Mr Hutton said:
"The process of achieving
consensus and agreement needs itself to be looked at because
a systemic failure rather than just a matter
of disagreement between the member [countries]" (Q 2).
ODI claims that the current procedure "does
not provide either legitimacy or efficiency", seeing it as
"incredible" that no specific preparations were made
for developing countries to play a full part in the new-style
organisation (p 267). Commissioner Lamy is said to have described
the negotiating procedures in Seattle as "medieval",
while Sir Shridath Ramphal is reported to have used the term "neo-colonialism"
(evidence from RSPB: p 277).
103. The need for change arises partly from the sheer
increase in the number of members of the WTO. For DTI, Mr Hutton
pointed out that it is difficult to devise mechanisms by which
can participate fully in the discussion and negotiating process
(Q 4). According to ODI, Mike Moore claimed in the final meeting
that "the number in the Green Room was greater than
the number of the founding members of GATT, and gave this increase
as an excuse for failure" (p 267). Mr Samuel Laird, Counsellor
in the Trade and Development Division of the WTO, put the point
"[The 55 new members]
were told they had a place at the negotiating table, they had
a place in Seattle, and they were there to make decisions
I do not think we fully appreciated how high the expectations
were of many of those people. They felt they really had to be
in there and wanted to be in there" (Q 339).
Naturally these member countries were disappointed
when many discussions took place in small groups and were reported
back to the main body, as had traditionally been the case. Oxfam
"A major challenge for
the WTO is to find a way to reconcile the reality of different
members having highly unequal levels of economic and political
power, with the objective of achieving a more transparent and
democratic negotiating process that allows for more equal levels
of participation by all members" (p 270).
104. Various proposals have been floated for new
institutional structures to deal with this issue. For example,
Mr Hutton said:
"Maybe [the General
Council] will have to become not a negotiating forum but more
a general debating forum where people will put forward their views"
According to War on Want,
"one option on the table
is a two-body design such as the United Nations General Assembly
and the Security Council, where key country representatives make
Another proposal is the establishment of an advisory group
of 20-30 WTO members from developed and developing countries to
ensure greater transparency in the decision-making process "
Sheer force of numbers clearly makes it impossible
for all member countries to participate in all drafting groups.
One solution might be introduce a structure in which "representative"
member countries would report back through a formal mechanism
to their "constituencies". The submission from ODI suggests
various possible bases of representationby interest group,
by region, by income level, by type (for example, small islands)
(p 267). Mr Ricupero did not think that such a structure should
be too great a problem, since at present only about two dozen
developing countries participated regularly in working discussions
at the WTO:
"What you need to do
is to have a provision for some sort of representativity through
actors who are able to attend, knowing perfectly well that relatively
few will speak".
A system like this worked in UNCTAD, where regional
or sub-regional groups chose a main spokesperson, but the other
members of the group were also present at meetings (Q 517).
105. Mr Eglin maintained that in practice such an
approach already existed in the WTO: the countries in the Green
Room were those "who their peers realise can contribute to
this debate and help us to find solutions". Moreover,
"the good part of the
membership who are being excluded know very well that if [reaching
agreement on a draft to submit to other members] does not happen
in this rather formal Green Room process it is going to happen
somewhere else which will be even less transparent".
He also pointed out the difficulties of a formal
representation system when interest groupings would vary according
to the topic under discussion (for example, Argentina and Brazil
would agree on agriculture but not on the liberalisation of manufacturing)
106. A change to majority voting (qualified or otherwise)
might be another way of moving matters forward with an increased
membership. Some are sceptical about the present system, which
the World Development Movement describes as "the current
charade of WTO consensus decision-making" (p 64). CAFOD
argues that, although consensus decision-taking is superficially
"it has created a byzantine
and opaque process of decision-making which favours bilateral
horse-trading between powerful nations and blocks. The real decisions
are taken behind closed doors and the less powerful nations are
cajoled or coerced into agreement" (p 228).
Sally and Woolcock suggest that while decisions on
scope should continue to be taken by consensus as at present,
decisions on the application of existing rules could perhaps be
taken in some circumstances by majority voting,
perhaps weighted (p 281).
107. However, Mr Stoler was adamant that consensus
should be maintained:
"In a rules-based system,
when the decisions that are taken affect all the members' rights
and obligations in a way that can be brought to dispute settlement,
there is no substitute for decision making by consensus ... The
only way you are going to have sovereign nations buy into the
system is if they can say they have a part in making the decisions
If you turned it into majority voting you would have a
situation like you have in other international organisations where
those who do not vote for the result tend not to feel bound by
the result and that would be the end of this place
away from consensus] would undermine the legitimacy of the organisation"
108. Asked about the relationship between the WTO
Secretariat and the WTO General Council, Mr Stoler said that it
was different from that between the European Commission and the
Council of Ministers. The WTO is
"a member-driven organisation
where initiative rests with the members
Only in a default
situation such as can be produced by a failed ministerial meeting
do you find the Secretariat taking much of an initiative at all.
Normally that is not what members expect
We see our job
as facilitating the interaction of the members and making sure
that the agreements that they have negotiated with each other
are administered in a fair way so that everybody gets what they
expect to get out of them
I think still today there is
a very strong feeling among the members that the initiative rests
with them and not with us" (QQ 481 and 485).
It has been suggested that the function of the WTO
might be improved if the Secretariat were given a more pro-active
role. For example, for DTI Mr Hutton said: "You may need
to look at the role of the General Council as against the role
of the Director General and the Secretariat" (Q 12). But
some have doubts. In the view of Wang and Walters:
"The WTO Secretariat
might play a more active role than previously, but it must ultimately
be seen to remain neutral in negotiations. Moreover, it is developing
country delegations as much as developed country ones that have
kept the Secretariat so closely under the control of members in
the past. Thus, there will need to be both a broad agreement between
members and a much greater sense of tolerance and trust in Geneva
before the Secretariat can start to explore and develop initiatives
independently as a means to resolving some of the conflicts that
a Round will throw up".
109. As to the institutions and procedures of
the WTO, it has been suggested that the current consensus decision-making
is a charade. We think that the experience of Seattle proves the
exact opposite: it was precisely the lack of a consensus which
caused the Conference to break down. A wholesale move away from
consensus decision-making would undermine one of the main strengths
of the WTOthe fact that it gives an equal voice to rich
and poor, to strong and weak. But practical considerations suggest
that the preparation of proposals needs to take place in smaller
meetings, where groups of countries could usefully select a single
member to represent their interests in discussion, subject to
a formal procedure for reporting back. We suggest that the EU
should support this as a useful way forward. We also think that
consideration should be given to the role of the Secretariat;
in order to ensure more adequate preparation for the new Round
than was apparent at Seattle, the EU may wish to argue that the
initiative of the Director General should be strengthened.
110. The term "transparency"
has become a catchword, though it is not always clear exactly
what is meant by those who use it. DTI's evidence emphasises the
need for communication with stakeholders and public opinion (p
2), and Mr Hutton said: "We want to make [the WTO] an institution
which is more responsive to civil society and their legitimate
concerns" (Q 1).
111. The CBI argues that, while a welcome start on
this has already been made, there is still scope for improving
the availability of documents and holding dispute settlement proceedings
(p 34). ODI contends that in fact the WTO is much more open
than for example the IMF, and at least as open as the World Bank.
Where documents are withheld, it is at the request of member governments,
and it is not self-evident that the Secretariat (or indeed the
WTO General Council) should be empowered to overrule their wishes;
meetings are closed because of small rooms and budget limitations.
It suggests that the public focuses too much on negotiations and
the dispute settlement procedure (where access is indeed limited)
rather than on the regular programme of (published) Trade Policy
Reviews. For Seattle, all the position papers were publicly available,
and observers were admitted to plenary sessions; working group
meetings were not open, but briefing sessions were organised afterwards
112. In his submission for the International Institute
for Sustainable Development, Mr von Moltke agrees that the WTO
is "more transparent and participative" than the GATT
was. However, he urges that the same openness should apply at
the level of member countries: the WTO "should develop simple
criteria for domestic-level openness in the development of national
trade policy and positions", to ensure that trade policy
does not simply reflect the interests of commercial groups (p 288).
113. It seems that the demand for "transparency"
covers a range of issues. As far as we can see, the WTO is remarkably
transparent compared with many other institutions, making a wide
range of documents available on its web-site and (its officials
told us) welcoming visits and enquiries. Nevertheless, we think
that the EU could usefully encourage the WTO Council to consider
possible increases in transparencyfor example holding dispute
settlement procedures in public. However, we note that some of
the organisations calling for transparency may also be looking
for a seat at the negotiating table (which we consider inappropriate
in an international organisation whose members are governments).
114. The WTO is financed by contributions from its
member countries, which pay on the basis of their share in the
world trade in goods.
The total budget for 2000 is just under 129 million Swiss francs
(some £32 million)which,
said Mr Stoler, "is infinitesimal ... compared to any other
international organisation" (Q 489). It compares with a budget
of SF 120 million in 1999, and is expected to pay for a total
of 533 person/years, compared with 507 in 1998 and 1999. Yet between
1998 and 1999 there was an average increase of nearly 50 per cent
in the workload indicators used by the WTO.
115. We were impressed that members of the WTO Secretariat
did not complain about the shortage of funds until we pressed
them; then, they made it clear that in various areas they did
not have enough resources to do what they regarded as a proper
job. Mr Ouedraogo, one of the WTO Deputy Directors General, said:
"Unless [WTO member
countries] give us a hand by authorising [their] governments to
increase the budget of the Secretariat, we will be stuck
We are less than 600 people with all these complex issues to handle,
with all these negotiations to conduct" (Q 341).
Asked what he would most wish for, Mr Stoler said:
"Probably the resources
to do what we really need to do in a better way than we are doing
it today. We are being squeezed rather badly on the resource front
I am not talking about empire building here" (QQ 460-461).
The most important lack seems to be funds for technical
co-operation and capacity building, where the "wake-up call"
of Seattle showed the need for an increase in the budget
(Q 341). Interestingly the problem which Mr Stoler instanced was
not this, but the delays in translating documents which were holding
up the issue of the results of dispute settlement procedures;
he described this as "an abrogation of members' rights because
they are not getting what they are due to be getting just because
of a resource constraint" (Q 461).
116. Decisions on the size of the total budget, like
all other decisions in the WTO, are taken by consensus. We were
told that it was not possible to achieve a more realistic budget
"in some of our key
(the US, Germany, Japan, to some extent Canada)
there is a government policy of zero nominal growth in international
organisation budgets which they stick to religiously, no matter
what the organisation is" (Q 492).
As a result, the WTO was looking for extra voluntary
contributions, and exploring "members' willingnessso
far they are not enthusiasticabout the WTO accepting money
from non-government sources, foundations and the like"
(Q 488). We were glad to hear that
"the UK is one of [the
WTO's] extra-budgetary contributors, and very generously too
If everybody followed your example we would not be in this position"
117. We were struck by how well the WTO Secretariat
was performing with very limited resources; comparisons with other
international organisations were telling. We were glad to hear
that the UK was one of the member countries giving adequate financial
support, but we find it extraordinary that some of those member
countries which stand to gain most from the smooth operation of
the WTO are apparently denying the Secretariat the resources which
it needs to operate effectively in accordance with the mandate
which it has been given by its members. We do not think that the
WTO should have to beg for resources to do its job properly: the
EU should insist that its financing by member countries be put
on a firmer footing. We considered whether the WTO might accept
commercial private sector contributions to some aspects of its
operation, but concluded that this would risk damage either to
its impartiality or to perceptions of that impartiality.
55 An independent, not-for-profit corporation headquartered
in Winnipeg, Canada, established and supported by the governments
of Canada and Manitoba, whose submission came from Mr Konrad von
We are particularly indebted to the comprehensive analysis in
a statement by Susan S Westin (Associate Director, International
Relations and Trade Issues, National Security and International
Affairs Division, United States General Accounting Office) before
the House of Representatives Sub-Committee on Trade of the Committee
on Ways and Means on 8 February 2000, helpfully provided to us
by DTI with Mr Hutton's letter of 6 March 2000, and reproduced
in full at pp 195-201. Back
In a statement issued after the Conference, a number of Latin
American and Caribbean countries declared "to the host country,
their profound surprise and resulting anger at the organisation
and lack of concern for providing the high dignitaries and delegates
attending this Ministerial Conference with minimum conditions
of security, and for allowing, in some cases, physical and verbal
aggressions against its distinguished guests" (p 18). Back
Guardian, 4 March 2000. Back
Ms Westin comments: "The lengthy and contentious selection
process left WTO members without leadership for 5 of the 11 months
they had available to prepare for Seattle". Moreover, "many
US and foreign officials said that the divisiveness of that experience
had dampened the mood for compromise in Seattle" (p 200). Back
Quoted in European Report, 1 March 2000. Back
See for example Department of Trade and Industry evidence at p
2, and Q 526. Back
Interview in the Guardian, 4 March 2000. Back
There is general agreement on this point. Mr Bickerstaffe told
us: "The President of the US flew in and made a very powerful
statement, which was not particularly helpful at that time of
negotiations, and that was because of elections which are coming
along" (Q 32). Ms Westin says: "According to some officials
from developing countries, the US insistence on resurfacing the
issue of labour in Seattle and the President's remarks potentially
linking labour standards to trade sanctions were counterproductive"
(p 199). Back
From Sheila Page and Adrian Hewitt. Back
In "Sidelined in Seattle", eurofacts, Volume
6 No 6, 7 January 2000. eurofacts is published by Global
Britain, an organisation founded by Lord Stoddart of Swindon,
Lord Harris of High Cross, and Lord Pearson of Rannoch, which
takes the view that: "Today, there is scarcely any area of
British life which is not influenced-often controlled-by Brussels.
Efforts are now being made to persuade the British people to abandon
the pound and to accept the euro instead. If this strategy succeeds,
the United Kingdom will cease to be a self-governing nation within
a few years". Back
At pp 18-19. Back
Because member countries had decided to split the normal six-year
term of office between him and Dr Supachai. Back
As far as we are aware, this suggestion has not been adopted. Back
Now 136, with the addition during April 2000 of Jordan. Back
The Executive Boards of the IBRD and the IMF are also made up
of representatives of multi-country constituencies. Back
There are precedents within the WTO arrangements for this (WTO,
op cit, p 60). At present, interpretations of multilateral
agreements and waivers of obligations imposed by them on a particular
member can be approved by a three-quarters majority. Some provisions
of multilateral agreements can be amended by a two-thirds majority,
though the amendments then take effect only for the members which
accept them. And a decision to admit a new member is taken by
a two-thirds majority. Back
Op cit, p 19. Back
Which features several times in the EU mandate. Back
See also paragraph 252. Back
In the view of Wang and Winters: "While there is plainly
a case for wide debate on many issues and for hearing the views
of many parties, there seems little virtue in allowing non-governmental
actors into decision-making or adjudication, nor, indeed, even
[in] allowing them to observe the Council or intergovernmental
negotiating sessions. To be sure publics observe their parliaments
at work first hand, but they never observe the executives"
(op cit, p 19). Back
Because EU Member States are individual members of the WTO, intra-EU
trade counts for this purpose, with the result that EU Member
States together finance 47 per cent of the WTO budget; this would
fall to 23 per cent if only the EU itself were a member (Q 487).
At the exchange rate of 5 June 2000, 1 SF = £0.396. This
excludes the costs of the Appellate Body, budgeted at a further
SF 2.3 million (some £900,000). (Figures supplied by WTO
Translation and documentation up 45-50 per cent; number of formal
meetings up 81 per cent; number of days of free-lance interpreters
up 33 per cent; average monthly expenditure on dispute settlement
panels up 63 per cent; estimated hours on technical assistance
activities up 19 per cent. Back
This budget is at present less than $500,000, though it is topped
up by additional contributions from member countries to trust
funds (Q 341). Even so, the amount spent by WIPO on assisting
developing countries with the implementation of TRIPs is said
to be more than three times what the WTO spends in total on its
overall technical co-operation programmes (Q 437). Back
See also paragraph 154. Back