Internal Transparency and Decision-making processes at the WTO:
Critical Issues and Recommendations
WTO NGO Symposium, 1 May 2002
Workshop Organised by Focus on the Global South
The 3 speakers at the workshop were:
Aileen Kwa – Focus on the Global South
Sabrina Varma – South Centre
Shalmali Guttal – Focus on the Global South
The workshop was moderated by Rashid Kaukab of the South Centre.
The following are presentations that were delivered at the workshop.
1) Aileen Kwa - Focus on the Global South
It is very important to do a comprehensive unpacking of the practice of consensus.
The process of trade negotiations at the WTO does not look at what developing countries need, nor is it even about finding a middle ground between the developed and developing countries. But in the most critical negotiations, we tend to see the positions of developing countries move towards becoming in fact not very different from the original proposals of the developed countries. This process may take some time, and some ‗carrots‘ are given out along the way, yet in the final outcome, it is largely the proposals of the powerful countries that prevail.
What is happening here? How is this situation allowed by the majority? One major reason is the behind the scenes pressures exerted by developing countries. Various developing country delegates have spoken about this (although asking to remain anonymous). This presentation draws on interviews that have been conducted with delegates post-Doha. These are some comments have 3 such delegates have made:
‗September 11th is an act to be lamented by all humanity, but what gives cause for even greater regret, are the economic benefits that were attained by the industrialized countries through such a disaster. We cannot deny that many of the countries that were making a difference in the WTO have been undermined, and their officials even removed, simply for raising their voices in defence of the interests of their countries. Their requests were simply to have justice, transparency and a functioning system at the WTO. The result is that the WTO – a member-driven organization - continues to
be governed by bad practices and arbitrary decisions. These are being imposed on others as a result of the supreme power of a few.‘
‗During the preparations for the conference in Qatar, the pressure on the capitals
increased, this time requesting the withdrawal of many of the ambassadors in Geneva
who defended the interests of their countries and who opposed the launching of a new round. The truth is that the launch of this new round would never have taken place if it had not been for the lack of transparency and interference on the part of the WTO secretariat and the political pressures used by the developed countries - mainly the United States and the European Union.‘
‗The pressures for changes of position and for the withdrawal of Ambassadors is permanent, and has no apparent logic, beyond the arguments that the delegations in Geneva act as the enemies of the multilateral system, of the developed countries, and even peace in the world‘.
‗Experience so far shows that developed countries have most often insisted on their positions while pressing small developing countries to give up their positions… In
some cases there is an attempt to bypass the Geneva based delegates and even to create a wedge between them and their capitals. This unfortunately has led many delegates to remain silent. When a delegate feels that his career might be at risk, it affects his performance.‘
The Practice and ‘Manufacturing’ of Consensus
In practical terms, consensus means that no decision is formally objected to by any member present at the meeting. It does not mean active agreement, merely the absence of objection.
According to the Director General, the rule of consensus is the ‗democratic guarantee‘ of the institution, since everyone in theory has a voice. However, the reality is quite different. How democratic decision-making is by consensus, depends on the ability of countries to voice their dissent. The power politics within the institution means that dissent by any country in a formal meeting, which goes to the extent of blocking consensus, is rare.
According to a Southeast Asian delegate:
‘Many developing countries think that consensus is good, because we can singularly [sic] say no. But
in reality, this is used against developing countries. Only the US or EU can say no. No single developing country, or even a small group, can say no.’
The strategies used to manufacture consensus can be categorised into five broad areas:
1) Institutional and procedural deficiencies that marginalise the majority
2) Use of bilateral threats to arm-twist and silence developing country
3) The bias of the WTO secretariat and the fact that it meddles in negotiations
4) Technical assistance as a tool to elicit consent
5) Divide and rule strategies used by the powerful countries
This presentation will focus mainly on the first two aspects, and touch only briefly on the third.
1) Institutional and Procedural Deficiencies that Marginalise the Majority
Through lack of procedural clarity, there is much room that is left for developed countries to manoeuvre their agenda into the negotiations.
Consultations and decision-making at the WTO usually takes place through ‗concentric‘ circles - it starts from the US and the EU coming together on a decision, and from here, the group is expanded to the other QUAD members – Canada and
Japan, and then to other OECD countries and several developing countries (sometimes known as ‗Friends of the Chair‘ or ‗Friends of the Round‘), and finally, expanded to developing countries that could be resistant, but hold clout – e.g. those in
the Like Minded Group – India, Pakistan, Malaysia etc.
The following are institutional and procedural deficiencies that allow this ‗manufacturing‘ of consensus to take place:
Outright Exclusion of the Politically Weak
A significant number of delegations are left out of consultations, or included only on some issues and not others. Usually, the excuse by the majors is that they have nothing valuable or different to say, since if they did, they would have already been 1included in the core circle.
The developed countries however, are careful that the politically stronger developing countries, the ones with the most potential to ‗rock the boat‘, are included at some point in the process. Exclusion of the politically weak in the decision-making process matters much less, since there will be little risk that they will hold up a consensus.
Bulgaria recently took strong objection to their exclusion from the process of selecting the Trade Negotiating Committee (TNC) chair. Their statement is evidence of the extent of non-transparency.
‘The representative of Bulgaria, referring to the chairman’s statement (which
appointed Mike Moore, the director general as the chair of the TNC), said that he had received the document in the informal meeting just prior to the present meeting, and his delegation had not been involved in its preparation…
His delegation had made it clear that it wished to be involved in the informal consultations on the negotiating structure and other aspects, but it had been excluded from those consultations and its views were not reflected. The state of internal transparency in the organisation needed to be improved. The problem of transparency
1 Interview with a European Commission delegate, March 2002.
in the negotiations needed to be dealt with in a much more specific way through the 2adoption of clear and explicit rules’.
There are No Binding Rules About the Conduct and Role of the Chair!
The non-existence of binding rules in the area of procedures and how negotiations are conducted has given the chairperson of any negotiations enormous powers. This is highly problematic and experience with the recent ‗chairs‘ have shown that giving
such a broad mandate works against the interests of developing countries. The chair essentially has the ability to decide whether or not to consider all positions with 3similar weight, or to give prominence to one or two positions over others. Much
depends on the personality, inclination, and the ideological leanings of the person, as well as the pressures exerted on him/her, and how the person reacts in the face of these pressures.
One developing country delegate relates his experience:
‘In a situation where so many decisions are taken informally, and different
weights are given to the views of different players, and the chair follows these unwritten rules, it is much harder to get your input to the text than some players. There are no rules which say that all inputs submitted in writing must be distributed and reproduced. So you have to work twice as hard to get your input into the draft as another member.’
The problematic role of the chair was very much in evidence in the preparations for Doha. Even as the chair of the general council, Stuart Harbinson acknowledged that 50 per cent of the members disagreed about having new issues launched in Doha (and developing countries would assert that it was more than 50 per cent). Nevertheless, he removed brackets on the new issues in the second draft of the text, giving the impression of consent.
Another delegate from Africa, obviously wary about the extent of powers the chair can ‗arbitrarily‘ exercise said,
‘Harbinson’s consultations were centered on the positions of the big players.
He is somebody who says he is consulting and building consensus. It is like the same person being the accountant and the auditor. You are everything. Even if there is a mistake, you are auditing the books and you don’t see it. A number of countries made
noise that they were not being consulted on the selection of chairs for the negotiating groups in the TNC. There must be more transparency in the consultations. Maybe you make a table – you consulted 50 countries, and what their positions are. You have to show everyone the results of the consultations. Right now, only Harbinson can tell you what he did. There is no proof that he has consulted with delegations, and there is no proof that they have agreed. So the real decisions may have been made by very few. We have to have a system that we can monitor.
2 WTO, TN/C/M/1, 14 February 2002, Trade Negotiating Committee, Minutes of Meeting 28 January and 1 February 2002. 3 Narlikar A. 2001 ‗WTO Decision-making and Developing Countries‘, South Centre TRADE
Working Papers 11, November.
'What I have learnt about Harbinson’s style is that he is ‘sympathetic’ to every group. He goes to one group, and tells them that this is a very good paper. But at the end of it, he brings you the same list, and tells you that this list is what has been acceptable to everybody. Maybe it used to be good in the old days (GATT) when countries divided-up the positions and distributed them amongst the major players. But now you have 144 members.
'Regarding the selection for the chair of the general council (for 2002, Canadian Ambassador Marchi), Harbinson came to the African group to say that most members expressed reservations, but we don’t have anybody else for the job. This is the best we have. When it is a one-man show, it depends on what the man wants, not what the group wants.’
Problems with the Informality of the Process
The lack of rules and the informality of the Process, basically means that it is a process of consultation and discussion that takes place behind closed doors. In that process, it means that those with the most clout will carry the most weight. There are indeed, few countries that would challenge a decision that has been put forward as a done deal.
2) Use of bilateral threats to arm-twist and silence developing country
This is a major component of the ‗manufacturing‘ of consensus. The only reason why the majority would allow many decisions to be taken which they are unhappy about, is because of these pressures, or their reliance in some way on one of the powerful countries, which they are ‗gently reminded ‗ of in the process of negotiations.
Such pressures may not even require overt and blunt threats from the influential. These certainly do happen. However, for the majority of countries, the powerful do not have to go to this extent. Power – in its most effective form - is exercised through
internalization, so that the subject him/herself, becomes the agent of control. The clearest evidence of power politics in operation – and in its most sophisticated form –
is self-censorship and fear. Thus, the powerful exert little or even no effort yet, to a large extent, they control the behaviour of others.
Self-censorship and the inability to voice objection in order not to be on the receiving end of serious repercussions to one‘s country, puts in serious doubt, the democratic principles of decision-making.
According to an analyst,
‘Many developing countries point out that they often fear the consequences of
expressing their objections publicly, and hence choose the alternative option of remaining silent. As the absence of objection is seen as consensus, developing countries end up giving in to decisions that they actually have problems with. If a similar situation were present in a domestic political system, i.e. people were too
intimidated to exercise their vote or express their opinions, it is doubtful if the system would be classified as a democracy… if consensus is reached because some countries
are too afraid to express their dissidence, how democratic is decision-making by 4consensus?’
Indeed, following from this analogy, fear and self-censorship are the characteristics of an authoritarian state, where opinions cannot be freely expressed.
A delegate from an LDC, referring to this fear, and therefore the inability to take a strong position in negotiations said:
‘Why do you think we performed this way in the last two years on TRIPS [not raising any major objections despite the stalemate in the TRIPS review]? If the US phones my capital, they will not say, there is this boy, he is trying to change TRIPS for the
interest of his country. They will say, there is this boy working against the interest of the US, he is infringing on the good relationship between US and….’
Threats that Good Bilateral Trade Relations Will be Affected
The issue most countries worry about is their export market, should ‗good‘ bilateral relations be soured. Many developing countries are dependent on the EU or the US for a significant proportion of their export market. The difficult situation this puts negotiators in has been articulated by this delegate:
‘Small countries like us will be just caught in between. We cannot take the floor and oppose. We will never do that. There will be a lot of repercussions. 35 per cent of our exports go to the US. Of textiles, 60 per cent goes to the US, so we just have to keep our mouths shut.’
US trade representative staff, for example, play a key role in one way or another ‗threatening‘ countries. According to some leaked documents from Washington, an ambassador of a developing country related the threats he had received from the US trade representative as follows:
‘During the course of the meeting…several comments (were made) on (our)
position in Geneva with regards to the WTO issues, such as export subsidies, textiles and clothing, and access to medicines under TRIPS…At one point during the conversation, …[it was expressed] that the USTR was in the process of defining a list of those countries that were friends of the United States and those that were not, and (our country) at this point, most certainly, was not on the list of friendly countries. It was made emphatically clear to us that any USTR support in other areas of mutual interest would be subject to our support in Geneva.’
In another case, a letter by US trade representative Zoellick to a developing country ambassador just three days before the ministerial stated:
‘My deputy in Geneva, Ambassador Linnet Deily, is working hard to lead
successful talks. We have been discouraged that (your country) has so consistently, and so vocally, adopted positions counter to those of the United States. We would
4 Narlikar, A. 2001 ‗WTO Decision-making and Developing Countries‘, South Centre TRADE
Working Papers 11, November.
very much appreciate the cooperation of your team there (in Doha) in helping move forward issues of common interest’.
An African country delegate even said that pressure to support a new round was put on them using the threat of withholding entry visas to the US.
3) The Secretariat Meddles in Negotiations
The ideological leanings of the Secretariat and the Role which the Director General has taken upon himself, to promote the New Round and New Issues, has been an issue many developing countries are unhappy about.
In addition, the advice provided by the Secretariat has sometimes been unclear or even misleading. One developing country delegate, relating his experience as chair of a certain committee had this to say:
‘Chairmanship gave me the opportunity to see how the secretariat functions, and how some countries would subtly get into the drafts. It is very clever and done in a highly sophisticated manner. When a country says, I don’t agree with this text and the secretariat has to redraft, the outcome depends on the chair. If the chair is not technically competent, then the secretariat will take over.’
‘He explained that he went to some trouble trying to clarify the scope of the work his committee had been entrusted to by the general council. The secretariat’s ambiguous advice seemed to suggest that it was only in 1 tiret of the negotiating text. However, after investigations, he realised that it was 3 tirets.’
‘If I’m not sharp, we would have lost two tirets. After that, they started respecting me. If you are technically sound, then you control the secretariat. If not, it happens the other way, because you would depend on them if you didn’t know’.
One well-known example of manipulation was the removal of several pages of implementation issues in the October 6 1999 ministerial draft declaration before Seattle. This was then released as an October 7 draft. Clearly the October 6 draft had been leaked to some delegates and changes were made. According to some LDC delegates, another example was the removal of the most important paragraph for LDCs in the draft that came back from Seattle. Paragraph 72a on bound duty-free market access for LDCs arrived back as a blank.
2) Sabrina Varma, South Centre
Why are process issues at the WTO important?
Process issues are important because they currently pose as a serious problem for developing countries and the longer term viability of the WTO. Process issues are a problem because they play a significant role in determining substantive outcomes at the WTO, hence contribute to the inequity and imbalances between developed and developing countries. It stands to reason that if developing countries are not equal
and active Members in the decision making process at the WTO, then that will be reflected in the kinds of decisions which are made and whose interests they represent.
The way chairs are selected and the mandate and conduct of the Chairperson over meetings; whether meetings take place in formal or informal mode; the process of consultation and their recording, are all examples of process aspects which can have a bearing on the course of the issues being discussed.
Therefore, the importance of process issues can no longer be brushed aside. Based on their experiences such as the failed Seattle Ministerial and especially the most recent based on the process leading up to the Doha Ministerial, the Ministerial itself, followed by the discussions on the operation of the Trade Negotiations Committee (TNC), developing countries have become increasingly active in this area, having put forward various proposals for improvement.
Why are process issues a problem?
Consensus at the heart of the problem
These days voting has become viewed as a failure in the decision making process and consensus as the preferred mode of decision making in most international fora. Whilst on paper consensus appears to be a democratic and transparent form of decision making, in practise it opens the door for non-transparency and informal procedures (eg. corridor bullying, threats and enticements). Obviously it provides considerable flexibility, but mainly for those who are in a position turn the bargaining or negotiations in their favour which usually means a more economically powerful country. In addition, consensus in the WTO is a passive form of decision making whereby silence is taken to mean agreement. Furthermore it does not require that all Members should be present. This alone excludes 20 or so non-resident developing countries from being active decision makers in the WTO. Therefore lack of presence is no excuse for not accepting a decision. Also, there is no scope for a Member to enter the decision making process in the later stages. Therefore, consensus in the WTO plays on the asymmetrical relationship between developed and developing countries.
No formal rules of procedures
Another big problem with decision-making in the WTO is that there are no formal rules of procedures. E.g. no clear rules for selection of Chairpersons - which is done on a regular basis. Therefore Members are constantly faced with a mode of operation that is based on uncertainty and unpredictability, with the rules changing to fit the circumstances at the time.
Due to the above characteristics, the WTO is essentially run along informal practices, such as informal meetings and consultations, together with ‗corridor diplomacy‘ in the
form of enticements and threats which the previous speaker outlined. This poses as a serious problem for developing countries who are vulnerable to the asymmetrical relationship they have with more powerful countries.
Unfortunately, the quid pro-quo mentality of the WTO spills over into process issues. Discussions on process issues have been circular because it is seen as an additional area up for grabs, subject to negotiation whereby concessions must be made in one area if improvements are to be sought in another. This is unfortunate, given improvements in process should benefit all Members by strengthening democracy and participation.
Concerns with efficiency over democracy
As the number of the WTO membership expands, there have been concerns with the ‗efficiency‘ of the decision making process1. This is being used to justify the use of ‗consultations‘, informal meetings, open ended meetings etc as normal procedures for WTO decision making. Of course the number of meetings has also been a major issue for the participation of especially the smaller delegations. These practises have worked against the participation of disadvantaged countries due to reasons including, non-recording of positions in such meetings, inability to attend such meetings due to limited or nil human resources. It is quite ironic that the focus has shifted to efficiency whilst a substantial number of the existing membership continue to be excluded from the decision making process altogether.
Problems with records of meetings and non-transparency
Some of the most important meetings take place in informal mode which are not recorded. This is problematic since it means that decisions can be made in them or texts emerge from them with no paper trail at all. Therefore there can be a major discrepancy between the most recent formal meeting and the next formal meeting which takes place after the informal meeting where decisions have been made. However, for delegations who are unable to attend these meetings, they will not be able to follow the evolution of discussions, nor question them, having to accept things as a fait au compli.
Composition and role of the Secretariat
For 2001, of the 512.5 posts in the Secretariat (with 39.5 additional posts vacant or under recruitment), 410 were filled by people from developed countries while 94 were from developing countries. Only 60 nationalities are represented. In summary, the composition is heavily biased towards developed countries: EU countries (France has 129, UK has 71) plus Switzerland (31.5), followed by Canada (26 )and US (23.5 ). 2By contrast, all of Africa is represented by 10.
There has been very little by way of improvement in this breakdown when one compares the data above to that from 1997 which says a lot about the pace of the WTO's response to changing realities. For example, there has only been an addition of one country to make the list of nationalities reach 60 (despite the increase in staff 3levels from a total of 496 in 1997). Also, the list of countries has remained by and
1 This has given rise to discussions on the introduction of an ‘executive board’ or restitution of the CG-18, which existed in the 1970s under the
2 Based on Secretariat‘s own statistics available on website: www.wto.org
3 Based on Secretariat‘s own statistics from 1997.
large the same as has the bias in recruitment from the same group of developed countries. In other words it is fair to say there has been no real improvement in the number of people recruited from developing countries since 1997.
Many have pointed to the cultural bias as a reason for the lack of neutrality of the Secretariat. Other reasons could be the fact that professionals employed are mostly of a particular mindset, ie. neo-liberal. Evidence of the Secretariat‘s non-neutrality are,
for instance, in the discussions that have taken place on Technical Assistance, their role in drafting ministerial declaration texts and the DG‘s public statements in support of the new issues.
Linked to substance, it is clear that there an agenda overload at the WTO. The process comes under tremendous pressures because too many issues are brought into the WTO. This makes it almost impossible for effective participation by developing countries.
1. Consensus should mean active consensus whereby Members have to state explicitly
that they are in agreement (as opposed to silence meaning consent).
2. Members should consider having a system of tiered voting. This would apply to certain types of decisions such as selection of Chairs, DG and other process or administrative issues, whilst retaining active consensus for other types of decisions. This would also go a long way towards addressing the efficiency Vs democracy dilemma.
3. There should be a clear set of formal rules for all process aspects of the operation of the WTO, including selection of Chairs; what Chairs can and cannot do, etc. This should be devised by a Process Committee which reports to the General Council, and be based on the principle of improving current procedures with a view to certainty, transparency and enhanced participation. The rules would need to be codified in the Marrakesh Agreement.
4. There should be no place for informal meetings. In other words, only decisions taken in formal meetings should be considered as legitimate.
Transcripts should be the preferred form of record keeping of meetings, which will ensure accuracy and transparency.
There should be a more rigorous code of conduct for the international civil servants, including the DG. This should spell out their role and conduct and sets out principles that have to be followed for Secretariat giving advice to delegates. Again this should be codified in the Marrakesh Agreement.
7. There should be a rationalisation of the WTO agenda. No more issues should be introduced whilst developing countries continue to participate in a disadvantaged position in terms of coming to terms with the issues and the resources to examine their implications.