Select Committee on European Communities Tenth Report



PART 4: WHAT SHOULD THE EU LEARN FROM SEATTLE?

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[55] 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 role—being a member of the European Union, being part of the Commonwealth and having a very good political relationship with the United States—means 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[56]. 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[57]). 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 "overall … 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"[58]., 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 342).

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 told us:

    "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" (Q 505).

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[59]. Mr Eglin (Director of the WTO Trade and Finance Division) said:

    "The distraction here for the first half of [1999] 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[60]:

    "The Geneva preparation of the WTO [for Seattle] was a nasty surprise. I really thought that … 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[61], 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 happened"[62].

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" (Q 454).

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" (p 199).

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[63] 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" (Q 49).

92. The evidence submitted by the Overseas Development Institute (ODI)[64] gives a useful—if disturbing—account 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 … The 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" (p 267).

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 their delegations:

    "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 it[65], "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" (p 61).

95. DTI supplied us with a number of the statements issued by developing countries after the Conference, which we are printing with this Report[66]. 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 and consensus … [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 Ministerial Conference".

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, told us:

    "I was in Seattle, and I am not—and 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 453).

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 negotiation—and nor were other member countries (QQ 503-505).

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:

    "It should … be 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[67], 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 obstacle):

    "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

INSTITUTIONAL ARRANGEMENTS

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 (p 2)[68]. Mr Hutton said:

    "The process of achieving consensus and agreement needs itself to be looked at because … Seattle was … 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 135 members[69] 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 eloquently:

    "[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 comments:

    "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" (Q 12).

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 crucial decisions[70] … 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 " (p 292).

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 representation—by 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) (Q 416).

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 democratic,

    "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[71], 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 … [Moving away from consensus] would undermine the legitimacy of the organisation" (QQ 459-460).

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"[72].

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 WTO—the 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"[73] 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 in public[74] (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 (pp 266-267)[75].

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 transparency—for 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).

RESOURCES

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[76]. The total budget for 2000 is just under 129 million Swiss francs (some £32 million[77])—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[78].

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[79] (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 because

    "in some of our key members … (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' willingness—so far they are not enthusiastic—about the WTO accepting money from non-government sources, foundations and the like[80]" (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" (Q 491).

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 Moltke. Back

56   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

57   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

58   Guardian, 4 March 2000. Back

59   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

60   Quoted in European Report, 1 March 2000. Back

61   See for example Department of Trade and Industry evidence at p 2, and Q 526. Back

62   Interview in the Guardian, 4 March 2000. Back

63   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

64   From Sheila Page and Adrian Hewitt. Back

65   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

66   At pp 18-19. Back

67   Because member countries had decided to split the normal six-year term of office between him and Dr Supachai.  Back

68   As far as we are aware, this suggestion has not been adopted. Back

69   Now 136, with the addition during April 2000 of Jordan. Back

70   The Executive Boards of the IBRD and the IMF are also made up of representatives of multi-country constituencies. Back

71   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

72   Op cit, p 19. Back

73   Which features several times in the EU mandate. Back

74   See also paragraph 252. Back

75   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

76   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).  Back

77   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 Secretariat.) Back

78   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

79   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

80   See also paragraph 154. Back


 
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