02 February 2004	Monday	10 Zilhaj 1424

The World Trade Organization (WTO) seems to have been made hostage to Singapore issues by the West since Doha ministerial session held in 2001 and no meaningful progress in negotiations on any vital area has taken place.

Even the 5th ministerial session held in Cancun in mid-September was also a victim of the same bullying attitude of the rich states. The only exception, if any, has been the pre-Cancun Trips accord on pharmaceuticals for Africa's Aids victims and that too remains unimplemented.

The Singapore issues - investment, competition policy, transparency in government procurement and trade facilitation - are, in fact, the agenda of the multinational corporations and unless there is an accord between the developed and developing worlds on this matter, the very survival of the WTO shall remain under threat. This is so because a favourable agreement on these four areas (the investment in particular) is closely linked to the ultimate triumph of capitalist-led globalization.

To be precise, the Singapore issues is a new name of the OECD's discredited proposal of the Multilateral Agreement on Investment (MAI) launched in late 1990s but later withdrawn in the wake of massive protests and agitation. The MAI's agenda was to let the multinationals enter the Third World countries without any hassle and invest there on their own terms.

So far, the WTO members have failed to reach any basic understanding on how to deal with the controversial Singapore issues though there had been a series of informal consultations during the last two years. The latest round of talks on these issues was held in mid-December during the course of General Council meeting and the West's insistence on taking up this matter on an urgent basis led to its failure.

Since then, the negotiating environment remains clouded by distrust, uncertainty and confusion. Developing countries are against their introduction fearing newer commitments which they can ill-afford to make. The formation of G-21 bloc and its bold stance on key issues has infused a new element of resistance in the power play within the WTO and put the US-EU on the defensive for the time being and prevented them from wresting a forcible agreement from the poor countries.

Although Pakistan's position on Singapore issues is not clear as it remains too eager to attract foreign investment and can be willing to go to any length in realizing this objective, it did, however, join a group of countries which made a presentation on the obligations of investors and home countries at a meeting of the Working Group on the Relationship between Trade and Investment held in Geneva on July 11, 2003.

The other countries were China, Cuba, India, Kenya and Zimbabwe. They brought into focus the disparity between the economic power and global reach of the multinational corporations on the one hand, and the limited scope for regulation of their conduct by host countries on the other. Such a situation can lead to conflict of interests between the objectives of MNCs and those relating to development policies of the developing countries, the group pointed out.

India, where it is the multinationals which are too keen to invest, remains a bitter opponent of the Singapore issues and has, along with Brazil, South Africa and Malaysia, been effectively making efforts to thwart any initiation of talks on these issues. India's main argument at the Cancun summit was that the Singapore Issues are not trade related and hence the WTO is not the appropriate forum for taking up these issues.

There is much weight in New Delhi's contention that trade negotiators are not the right people to decide, and determine rules, about how capital should move in and move out. The WTO can compel governments to observe its rules, even penalize them for the violations: it cannot keep control on the investors or the multinationals. It is governments who are members of the WTO, not the corporate entities.

According to the original decision taken at 1996 ministerial session held at Singapore - which gave the name to these four issues - any negotiations on them were subject to a decision to be taken at the next ministerial session "by explicit consensus". What happened later has been a bitter pill for the West. No "explicit consensus" has emerged so far. The developing countries remain unconvinced of any need for discussing these issues. They find them to be of primary interest to the developed countries alone.

Since Doha, the West, the EU in particular, has been very anxious to somehow convince or lure the developing countries into some kind of talks that could lead to a thaw. During the consultations, various proposals have been floated to break the deadlock. As a result, some developing countries are now willing to talk about these issues but not more than one issue - trade facilitation - to begin with and would like the other three issues to be dropped from the WTO agenda altogether. Some other countries say they could talk on two issues - trade facilitation and government procurement.

Brazil surprised its fellow members by declaring at WTO General Council meeting held on December 15-16 that the Singapore issues were very much part of the Doha Agenda but then made it clear that the 'demandeurs' would have to pay to keep them there. The EU, however, maintained that it could consider the possibility of one or more of the Singapore issues being negotiated outside the single undertaking.

The EU, Canada, the US and Switzerland gave support to a "two plus two" formula, proposed by the Council chairman, which means taking up negotiations on trade facilitation and transparency in government procurement first and on the other two later when the Third World thinks their time has come.

The most urgent issue for the developing world, it goes without saying, remains the elimination of one billion dollar a day subsidies given to the farmers in the West. These subsidies plus high tariff on imports of agricultural products are, in fact, destroying the agriculture of the poor countries and rendering their exports worth peanuts while the western countries continue to dump their farm products in the Third World in an unabashed manner.

At Cancun the West made a hard bargain to secure opening of talks on Singapore issues without "explicit consensus" and even without conceding much on the burning issue of farm subsidies. This only expedited the failure of the conference.

In December, the European Union floated the idea of having "plurilateral" agreements on all the four issue. This was resented by most of the WTO members and the leading G-21 members dismissed it saying it was a 'slippery-slope'. Some countries felt that if the plurilateral approach - talks between two or more than two countries - was accepted in this case, it would set a dangerous precedent for other issues such as environment, labour and geographical indications. Even some developed countries also felt uncomfortable with this idea.

The fact remains that plurilateralism kills the spirit of multilateralism which is the basis of the WTO trading system. In other words, it amounts to creating a WTO that operates at two speeds and ultimately converts into a two-tier institution.

Many developing countries, particularly least developed countries (LDCs), African, Caribbean and Pacific (ACP) countries are willing, as they indicated in December talks, to have further discussions on modalities for trade facilitation within a working group. Once the modalities had been sufficiently clarified, they could agree to negotiate. The LDC group, however, made an agreement on developments in other areas as a precondition. Certain developed countries, including Canada, the US and Switzerland have reportedly declared themselves 'demandeurs' for talks on trade facilitation. Latin American group also showed consent for negotiations on trade facilitation as well as transparency in government procurement provided there was some movement in other negotiating areas, especially agriculture.

Meanwhile, the European Union's trade negotiator Pascal Lamy said in Geneva on December 19 that his 15-nation bloc "may be willing" to drop Singapore issues altogether from the current round of WTO talks. "Removing some of them or all of them from the single undertaking" is an option he is considering. But he may face difficulties in mobilizing support for his proposal.

Pascal Lamy, who did not attend informal round of 30 trade ministers convened in Davos by Swiss government on January 23 on the sidelines of World Economic Forum, said he was looking at options which could address the concerns of developing countries. However, any radical option that EU could come up with in the WTO would require a prior agreement among EU member states as well as the European Parliament.

The fact remains that owing to the current lop-sided balance of power at the WTO between the developed and the developing countries, the latter will always remain subjected to various pressures to accept the negotiations on the Singapore issues. As the West did in Doha, it might use strong-arms tactics in the mid-February session of the WTO General Council to seek forced introduction of the Singapore issues and, in case it meets failure, it may threaten to frustrate progress in key areas of interest to the developing countries such as agriculture, Trips and public health.