Canadian Participation in Events Sponsored by International Organizations
Organisation for Economic Development and Co-operation (OECD)
Fifth Annual Consultations
Report of the Informal Consultations between the OECD Trade Committee and Civil Society Organizations
October 20th, 2003
Paris, France
Prepared by:
Jason Potts
Coordinator-Sustainable Commodity Initiative
Trade and Investment Program
International Institute for Sustainable Development
Executive Summary
On October 20th the OECD Trade Committee held its 5th annual consultations with Civil Society Organizations (CSOs) on trade matters. Interventions throughout the day focused on identifying actions for OECD member countries, and the OECD itself, to ensure meaningful progress on post-Cancun WTO negotiations.
There was a broad consensus among participating CSOs that the Singapore Issues and the absence of a sound institutional foundation for dealing with the "development agenda" were the most explicit causes of failure at Cancun, and therefore that these issues needed to be addressed most immediately in bringing discussions back on track. With respect to the Singapore issues, virtually all CSOs identified a need to remove most or all of them from the immediate negotiating agenda. With respect to institutional reform, CSOs expressed a need for some basic, very practical reforms related to negotiating process, to ensure greater transparency and success in future negotiations. CSOs also underlined the need for deeper reform and coordination of WTO activities/negotiations with other global institutions in order to ensure that trade is a proactive force for sustainable development.
All CSOs reiterated the fundamental importance of making significant advances in Agriculture as key to having a successful round. There was a general sense that Cancun had made headway in this direction and that these advances needed to be retained by continuing negotiations within the shortest delay possible. Several of their representatives mentioned the importance of a meaningful counterproposal on cotton as a way of demonstrating OECD member country commitment to a "development round" and thus an important tool for winning buy-in and confidence from developing countries in further negotiations.
Overview of proceedings
The OECD trade committee called the fifth annual informal consultations with CSOs on trade matters in Paris on October 20th, 2003. The consultation was attended by 70 representatives of trade, and related ministries from 27 member countries, 38 representatives of civil society organisations (CSO) and ten representatives of the OECD Trade Directorate.
The CSOs consisted of nine business representatives, seven trade unionists, seven representatives of the international NGOs Consumers International, International Institute for Sustainable Development (IISD), the Catholic Agency for Overseas Development (CAFOD), MSF and WWF. Another six NGO representatives came on invitation of the trade committee members of Canada, Germany, Norway and United States. They belonged to Oxfam (Germany and International), IISD (Canada), The Humane Society of the United States and the Norwegian Trade Unions.
The Chair of the Trade Committee invited participating CSOs to begin a discussion with the trade committee by directing their interventions towards two specific themes:
What should the OECD itself and OECD countries do to ensure effective continuation of multi-lateral negotiations post-Cancun?
What is the proper relationship between and respective roles of the multi-lateral vs. regional trading systems?
Although the morning session and the afternoon session were technically allocated to deal with the first and second themes respectively, issues related to addressing the stalemate at Cancun clearly dominated the day's discussions. Given the open format of the consultation and the large number of participants, interventions returned to a few key themes throughout the day, with each participant providing input on the basis of his or her respective constituencies. Below is a brief description of the main comments generated by the discussion consolidated according to the predominant themes of the day.
Singapore Issues
The role of the four Singapore Issues (Trade facilitation; transparency and government procurement;investment and competition policy), both in leading to the breakdown of Cancun, as well as in determining the framework for further negotiations, was a focal point of the day's discussions. All of the CSOs present expressed their support for pursuing eventual negotiations on at least some of the Singapore issues within the framework of the WTO. A similar consistency of opinion was expressed among labour, development and environment CSOs (CI, IISD, OXFAM) that the Singapore Issues should be placed to the side for the moment in an effort to jump-start negotiations, focusing on market access and border liberalization, particularly with respect to Agriculture, for current negotiations. Members of the business community represented by the Business and Industry Advisory Committee (BIAC), as well as some members of the Trade Committee (Spain; EC, Japan) noted that the Doha agenda specifically included the Singapore Issues and therefore that the present negotiations must address all four Singapore Issues as already agreed. Business representatives did note, however, that it might make sense to reduce the number of issues on the table for the short term (BIAC). A member of the OECD Trade Committee (Mexico) pointed out the need to focus on government procurement and trade facilitation in the near future. Several Trade Committee Members (New Zealand, EU) asked what it was about "transparency in government procurement" and "trade facilitation" that bothered developing countries and CSOs so much. The EU representative suggested that the Singapore issues actually were NOT such a big issue but that they had served as a scapegoat for the failed talks. NACTU, a Southern trade union representative, noted that the G20+ was not against discussing the Singapore issues in principle-but only in linking the Singapore issues to agriculture. Several members of the Trade Committee observed the contradiction in calling for enlarged coverage of WTO responsibilities (see infra) to include labour and environmental issues while simultaneously calling for a removal of the Singapore Issues on the grounds that "negotiations are too complex" (Switzerland, Nertherlands). Several CSOs responded by noting that that one could imagine either reducing the scope of coverage for the immediate future while retaining a long-term vision of increased coverage or undertaking loose discussions on a wide range of topics without putting them all in "negotiation" mode per se (IISD, PSI).
Coherence and Institutional Reform
Many CSOs noted that the failure of the Cancun talks could be linked to the structure and approach of decision making within the WTO. These comments were more or less based on two observed "institutional" shortcomings of the WTO.
At a very practical level, some CSO representatives (Consumers International (CI), OXFAM) suggested that a complete set of guidelines and terms of reference for negotiating chairs should be drawn up to create enhanced transparency, predictability and consistency throughout the negotiations process. There was a general recognition among CSO and Trade Committee representatives alike that a certain portion of the breakdown of negotiations was a result of bad timing and miscommunication-things which might have been avoided through the implementation of some basic protocols at the institutional level. Three CSOs (IISD, TUAC, NACTU) suggested that the "single-undertaking" approach of the WTO needed to be modified as it made negotiations overly onerous for developing countries. NACTU listed four principle causes of the failure of Cancun:
single undertaking approach to negotiations;
series of missed deadline leading up to Cancun;
a mere 5 days of negotiations planned, only 1 actually used, for 148 nations to come to agreement; and
pressure on countries from larger brokers to defect from the G20+ to move on bilateral treaties. The NACTU representative suggested that the developed countries should take responsibility for having built an institutional "time bomb". Several BIAC representatives noted that developing countries could (and should) have been better prepared for the talks through prior dissemination activities.
A number of CSO participants (IISD, TUAC, WWF, PSI, ICFTU) broadly observed that the WTO is poorly equipped to deal with the wide range of issues increasingly raised by the WTO's ever-expanding body of trade rules. These groups argued that ensuring greater coherence between the objectives of sustainable development in particular and WTO structure, negotiations and dispute settlement could form a basis for building trust and ensuring the long-term survival of the multi-lateral trading system (eg., avoid future Seattles and Cancuns). The WTO's past and present focus on the economic aspects of trade issues was highlighted as a source of vulnerability over the long term (IISD). Three different but related approaches were proposed by CSOs for improving overall coherence within the WTO:
limit the scope of core WTO issues to strictly trade related matters while providing greater authority to respective international bodies on non-trade related matters (WWF);
build other issues within the existing WTO framework by providing official status for international organizations such as ILO, IHO, UNEP etc. (ICFTU); and
develop a proactive and transparent framework for distributing authority; explicit linkages and coherent governance across the WTO and between the WTO and other IGOs based on broad-based principles for sustainable development (IISD).
At least two CSOs (ICFTU, IISD) also underscored the need to integrate other international actors within the WTO in order to ensure that those with the most appropriate mandate and capacity undertake the respective work. Canada, along with the EU and Mexico, noted the need for clearer coherence between WTO policy and a broader policy framework-but underlined the point that trade liberalization and its economic corollaries found in the WTO were NOT seen as ends in themselves but rather as proactive strategy for reducing poverty and, in so doing, promoting sustainable development.
Many Trade Committee members pointed out the conflict between a general CSO call for reducing the negotiating agenda (to respond to developing country interests) and the call to expand the scope of the WTO (to reflect broader sustainable development objectives). A representative of the TUAC pointed out that they had, in the past, faced a similar range of "internal conflicts" between developing and developed country labour representatives. It was noted that the labour movement had overcome these differences, but that its ability to do so was directly linked to its having a clear and representative "framework" for international cooperation. The TUAC representative maintained that the WTO needs a similar framework to deal with these differences. In their own references to the creation of a broader "framework", many CSOs suggested that some deep institutional reforms would be required.
At least two CSOs also observed that there was also a great need to improve transparency and accountability in the formation of trade policy positions within the WTO at the national level (IISD, WWF). In response to this call, Canada's Permanent Representative to the OECD, IISD and COSAFTU noted that their respective countries (Canada and South Africa) had made significant advances in bringing CSOs into the process of trade policy formation.
Agriculture
Although perhaps self-evident, CSOs reaffirmed the need for movement on agricultural talks, particularly in the arena of subsidies and dumping, as a critical prerequisite to winning buy-in from and benefits for developing countries in any continued negotiations. In response to this suggestion, the EU maintained that it had shown great flexibility on agricultural issues. The EU rep also took the opportunity to inform participants that there had been an unwarranted perception that the initial agriculture offers put forth were somehow the "final offer"-and this without any serious attempt at negotiation. Two CSOs (IISD, OXFAM) stressed the importance of the African Cotton proposal as a "symbolic" opportunity to implement the "development agenda" as a guiding principle for negotiations. According to them, the cotton proposal was an important political 'litmus' test sent out by the African nations. One CSO (IISD) maintained that the draft text released to the public on September 13th, 2003 had been interpreted as a "slap in the face" by many developing countries. The US delegate responded by stating that cotton was an issue to be dealt with as a subset of negotiations under the Agreement on Agriculture and that there was no place within the negotiations to begin a product by product negotiating process. The US delegate went on to claim that the cotton proposal was simply an inappropriate approach to propose within the current WTO negotiating system. The representative conceded, however, that something would probably need to be done about cotton to get negotiations moving again.
Multi-lateralism v. Regionalism
Although there was only brief reference to issues of multilateralism v. regionalism over the course of the day, there nevertheless appeared to be a strong consensus among all participants that a multi-lateral system of trade rules was preferable over any form of regional or bilateral agreements. One CSO (Humane Society), noted that in addition to multi-lateral approaches, there was a significant amount of unilateral work that would need to be done by developing countries to make multilateralism work. Another CSO noted that the main drivers behind regional and bi-lateral agreements are political rather than economic and therefore that, from a perspective of economic efficiency, there should be a clear focus on multilateral arrangements. IISD noted that although generally multilateralism is strongly preferred, regional agreements have typically been able to go further on sustainability issues than their multilateral counterparts should be promoted when they can offer a "leading edge" example.
Additional General Comments by Trade Committee Representatives
On the substantive negotiating agenda, the US representative noted that, although there were a lot of references to developing countries in discussions surrounding the WTO, there was -- and continues to be -- very little consensus on what constitutes a developing country. A failure to reflect this complexity, results in a failure of understanding the roots underlying the Cancun experience. The EU representative remarked that the continuation of the negotiations should NOT build on the latest Ministerial text, because it carries too much negative baggage. He also noted that that the EU's current negotiating position is that all four Singapore issues need to be negotiated simultaneously (in contrast to the "2+2 proposal" put forward in Cancun to negotiate the Singapore Issues in two groups).
Various country representatives raised concerns related to the role of CSOs. The Mexican representative expressed his deep disappointment with the non-governmental organization (NGO) participation in Cancun-noting that the Mexican government had worked openly with NGOs in organizing Cancun, but that its Minister was not permitted to speak before a scheduled NGO event during the Ministerial. The US representative mentioned that there is a substantive difference between the legitimacy and accountability of NGOs and that of governments and that this "legitimacy gap" needs to be taken into consideration when considering the role of NGOs in the negotiating process. The delegate from Italy suggested that CSOs should agree amongst themselves before making suggestions [i.e., making recommendations in multilateral consultative for a] on what should be done at the WTO.
Canadian Perspectives
Three Canadian CSO representatives participated in the meeting: Annick Jeantet of OXFAM International; Clifford Sosnow, representative of the Canadian Chamber of Commerce on the BIAC, and Jason Potts of IISD.
OXFAM
OXFAM regards the breakdown of the talks as being principally due to three main "issues": 1. Failure to achieve secure consensus on agricultural issues 2. Forced integration of the Singapore issues and 3. Inadequate organizational structure during the negotiations. OXFAM believes that the OECD countries must address each of these problems explicitly. In the case of Agriculture, OXFAM implores OECD countries to maintain the ground achieved at Cancun without retaining unnecessary baggage. OXFAM is of the view that the treatment of the cotton proposal had a significant chilling factor on a delicate negotiating process-and demonstrated a lack of sensitivity to the desperation of many countries on seeing advances on Agricultural market access. OXFAM also believes that moving towards consensus on Agriculture would mean taking the Group of 20+ seriously without adopting divide and conquer techniques. Without commenting on the viability of the Singapore issues "as such", OXFAM calls upon OECD countries to remove them from the negotiating table for the immediate future in recognition of the political resistance to negotiating such issues prior to dealing with Agricultural access issues. Finally, OXFAM regards a good deal of the breakdown of the talks in Cancun as being a result of poor institutional organization at the micro-level. In order to rectify this most pressing shortcoming in the short term, the WTO should establish more stringent rules for the negotiating process and those responsible for guiding it.
BIAC
BIAC strongly supports trade liberalization as a tool for improving welfare in both North and South. BIAC is outspokenly in favour of the multi-lateral process for trade liberalization but nevertheless feels that important lessons can be learned on the basis of existing regional trade arrangements. BIAC believes that the OECD could promote trade liberalization in particular and the WTO process more generally by devoting more time and energy to helping developing countries understand the potential benefits of all forms of trade liberalization to their own economies. A program of information dissemination and capacity building could provide an important basis for bringing the Cancun negotiations back on track.
With respect to the Singapore Issues, BIAC sees no legitimate grounds for removing them from the negotiating table per se. The Singapore Issues were built into the Doha text (and thus following negotiations) on the basis of a consensus among all parties to the WTO. Any discussion based on alterations of the existing consensus is not a viable option. Nevertheless, BIAC representatives noted that, from a practical standpoint, it might be necessary to stage the integration of talks on these broader issues in order to allow necessary advances on basic market access issues. This also applies to NAMA negotiations as well, which BIAC regards as the single most important factor for business in the current negotiations.
IISD
IISD is of the opinion that the breakdown of the talks, although due to a number of factors, not the least of which include operational problems specific to the Cancun Ministerial itself (such as insistence on negotiation of the Singapore Issues and the flat rejection of the Cotton proposal), is fundamentally a result of a growing inadequacy of the WTO's institutional organization and mandate in light of the increasingly complex range of issues and overall policy importance which trade negotiations have taken since the completion of the Uruguay Round. The WTO's unique dispute settlement mechanism, combined with the deepening trade integration and globalization, has brought the WTO's rule making process into direct contact with a wide range of fundamental issues related to sustainable development and global governance more generally. Environmental protection, compliance with international labour standards, access to medicine and poverty reduction all bear direct links with international trade, but the WTO negotiating process lacks the tools or spirit to deal with such issues in a meaningful way.
Although the preamble to the Marrakesh Agreement explicitly places sustainable development as an overriding objective of the WTO and its associated agreements, the nature of trade negotiations per se, have tended to occur under an arena of economic bargaining where governments primarily exchange economic privileges with a view to advancing national economic interests. This focus on promoting national economic interests, albeit within a larger context of multi-lateral cooperation, has rendered the institution more or less incapable of advancing on larger issues related to the protection of public goods and sustainable development in any significant manner.
In the wake of the Seattle and Doha Ministerials the restricted scope of WTO negotiations have taken on a new importance as the developing country members of the WTO demand trade rules directly designed to aid in their development under the WTO process. In one sense, the Doha Ministerial produced an unprecedented advance for the WTO by further expanding the objectives of current negotiations, expressly stating the objective of improving the development opportunities for the poorest countries to the international trading system. However, a failure to match the new objectives outlined in the Doha text with negotiating mechanisms specifically designed for their attainment, has put unprecedented pressure on the present round of negotiations. The irony in having a "Development Round" of negotiations within an institution dependent upon a process of negotiations based on the promotion of national economic interests is anything but subtle.
The challenges facing the WTO through its current alleged focus on promoting international development, are equally salient with respect to the promotion of a broad-based conception of sustainable development. If the WTO is to operate as an effective tool for promoting either international or sustainable development goals then it will have to take positive steps to ensure the coherence of its particular processes, negotiations and agreements with larger policy objectives related to such goals. Whether this means a restriction of the mandate of the WTO (both in terms of its objectives and negotiations) within a context of a coordinated and enforceable system of other policy-based arrangements or an expansion of the WTO's mandate to ensure positive coherence between trade rules and the broader objectives of sustainable development is a matter for further investigation. What is clear after Cancun, however, is that policy-coherence and related institutional reform may be the most pressing challenge facing both the short and long term survival of the WTO.
Proposed Actions from Canadian Participants
BIAC
That the OECD undertake a "best practices" study of regional agreements, so that governments could effectively identify when and where regional agreements will have pro-trade liberalization (non-distorting) effects.
That the OECD adopt a more proactive approach to disseminating its research on the positive benefits of trade liberalization to developing countries
OXFAM
Reconvene a meeting of the General Council no later than Dec. 15th. Reconvene the cotton group as soon as possible. Maintain gains made on agriculture to date but discard the cotton text.
The EU should openly indicate a readiness to remove the Singapore issues from the negotiating table for the time being
The WTO should embark upon a meaningful process of institutional reform. In the short term the following items should be considered under such a reform process:
Decisions on which text to use for continuing discussions should be made by the General Council
Clearer terms of reference (TORs) need to be set forth for chairs and friends of chairs
Clearer procedures for preparing new drafts of text which provide ample space for "alternatives" and adequately reflect existing differences
Organization of negotiations on the basis of realistic timelines
IISD
The Singapore issues should be removed from the negotiating table for the time being until more analytical work can be done.
A meaningful cotton counterproposal should be made as a showing of good faith (and commitment to the basic principles underlying the WTO)
The WTO should embark upon a process of deep institutional reform taking special account of the following:
Creating coherence and consistency between trade liberalization rules under the WTO and the broader principle of sustainable development through proactive policy design and, in particular, the adoption of a proactively "pro-development" approach
Review of the "single undertaking" approach
The OECD (and/or specific OECD countries) should undertake a review of different options for improving the coherence of international trade rules and the relationship between the WTO and different international organizations (as input for OECD deliberations on this issue as well as for input into the "Sutherland Process").
Observations on Process
The chair opened the meeting by setting forth the format for the discussions of the day. In particular he called upon participants to refrain from reading prepared speeches in an effort to provide maximum room for actual discussion. He also invited members of the trade committee to respond to CSO interventions on an alternating basis in order to maintain a discussion format. These two guidelines enabled a surprisingly frank interaction between the CSOs and trade committee members. Indeed, there seemed to be a consensus among those having participated in the committee's consultations on previous occasions that this consultation was by far the most effective organized to date. The consultations were also well balanced with wide participation among the participants and no obvious domination by any particular interest group or nationality.
The most important weakness of the process was the noted difficulty in moving beyond formalized positions and presumptions. There were, of course, many reasons for this dynamic. Most important, the meeting was an exchange between approximately 75 people, thus making protracted discussions on any particular point somewhat difficult. Having been invited for consultations, CSOs understandably felt a need to present their positions on related issues before embarking on any more informal responses or interactive discussions.
What appeared surprising to Canadian CSO participants was the degree to which Trade Committee members chose to challenge, rather than discuss or exchange on the issues presented by CSOs. Some implicitly blamed CSOs for the failure of Cancun, while others forwardly criticized the input of CSOs into the Cancun process. The Chair went out of his way early in the first session to highlight the contradictions in different CSO positions being tabled. However sound any of these observations may or may not have been, one could question whether they reflected the true spirit of a "consultative" process (eg. where one party received input from another). This was particularly surprising given that the CSO interventions were neither relegated to nor dominated by attacks on OECD country governments during the Cancun process.
On the other hand, the frank responses provided by OECD Trade Committee members did suggest that CSO positions (both inside and outside OECD) were, in fact, being taken increasingly seriously by the policy community. Canadian CSO participants noted that this consultation process was the most open and "conversational" consultation to date and that this feature had enabled the interventions to dig deeper on key issues than in previous OECD Trade Committee consultations.
On the whole the meeting was very useful as it provided an exceptional opportunity for CSO/governmental dialogue at the international level. Any actual difficulties related to process were largely in indication of the growing role of CSOs in the development of trade policy that has also been accompanied by new uncertainties and tensions in defining the parameters of legitimacy, accountability and representativity in discussions at the multilateral and plurilateral level - dynamics which will only achieve balance/resolution if there is the commitment to continued and more substantive engagement. The OECD Trade Committee's informal consultations with CSOs offers one important tool for building such engagement.
Abbreviations:
BIAC: Business and Industry Advisory Committee
IISD: International Institute for Sustainable Development
WWF: World Wildlife Fund
CI: Consumers International
TUAC: Trade Union Advisory Committee
ICFTU: International Confederation of Free Trade Unions
CAFOD: Catholic Agency for Overseas Development
COSATU: Congress of South African Trade Unions
PSI: Public Services International
NACTU: National Council of Trade Unions
MSF: Medecins Sans Frontières (Doctors without Borders)
