Power and Politics in the WTO

Power and Politics in the WTO

by Aileen Kwa, Focus on the Global South

Aileen Kwa is a Research Associate with Focus on the Global South,
currently based in Geneva. She works on WTO issues pertaining to
developing countries. A large part of her work is to track WTO
negotiations, and to send out analyses to NGO groups on the problems
developing countries are experiencing in the negotiating process. She
also works with Geneva-based developing country delegates to the WTO on
a variety of issues.

Aileen Kwa's publication, Power and Politics in the WTO, was launched at the Seminar and is available through the Focus on the Global South website www.focusweb.org


The World Trade Organization (WTO) is often portrayed as the pinnacle
of the multilateral system of global economic governance. It prides
itself for being a ‘rules-based' organisation, without which, world
trade would descend into the anarchy of the jungle. And then, we are
told, the poor and weak would go to the wall.

This report, Power and Politics in the WTO,
unveils a different reality. The WTO is in fact one of the most
undemocratic organisations around. At critical moments of WTO
negotiations, there simply are no procedural rules. The rules of
decision-making that do exist are frequently flouted.

Formally
speaking, the WTO makes decisions through consensus and a one-country,
one-vote system. Yet actual decision-making is done with a great deal
of informality, and largely behind closed doors between only about
25-30 Members. The ‘consensus' arrived at is then imposed on the rest
of the Members as a take-it-or-leave-it package. In such a system, the
majority of developing countries are reduced to damage control and
scrabbling to secure negligible benefits. Most receive nothing, and
silently acquiesce against their better judgement, condemning
themselves to a system that has so far proved highly unbalanced and
detrimental to their interests. They do this to avoid the political and
economic repercussions of displeasing the powerful Members.

The result? Highly inequitable trade rules that favour the interests of the powerful. The poor and weak are
going to the wall. And precisely because of the WTO and its rules. The
marginalisation of the majority is a serious concern since the WTO's 23
agreements have sweeping social, economic and political implications on
all its 144 members.

How
is it that the less than fair trade rules are endorsed by developing
countries? What is going on behind the scene that allows this to
happen? This report presents sordid evidence of the manipulation and
subversion of decision-making and rule-making at the WTO. It
illustrates the exact points in the process and strategies used by the
influential Members and the less than neutral WTO Secretariat, that
allow the will of the majority to be subverted.

Developing
country negotiators are the ones that bear testimony to the
decision-making and process problems at the heart of the trading
system. The report draws on extensive interviews with delegates who are
daily grappling with these problems.

Quotes from the publication

‘We
are simply asking for fair and equitable rules that would take into
account our development needs and allow us to participate fully in the
trade system. But instead we risk being pressured once again into
accepting rules we don't need and can't afford.'

Ambassador Nathan Irumba, Mission of Uganda and Representative of the Least Developed Countries (LDC) at the WTO.

This
is quite a remarkable statement. Six years after the founding of the
WTO, and three years after the debacle of the Seattle Ministerial, the
representative of the poorest members of the WTO feels it is still
necessary to ask for ‘fair and equitable rules'.

But
the WTO prides itself exactly on being a ‘rules-based' organization.
The argument is that without the rules of the WTO, world trade would
descend into the anarchy of the jungle. And then, we are told, the poor
and the weak would go to the wall.

This image, as we are about to demonstrate, is not true.

This
paper will show that at crucial points in the WTO system, there simply
are no rules. Attempts to set ‘fair and equitable' rules are routinely
rebuffed. Some rules are made up on the spot in a way that cannot be
‘fair and equitable'. And the rules that do exist are commonly flouted,
not just by the rich and powerful countries, but also by the supposedly
neutral WTO staff.

But there is one respect in which the WTO scenario outlined above is quite true. The poor and the weak are going to the wall. And precisely because of the WTO and its rules.

The
claim is made not by ideologues with an axe to grind, not by ivory
tower academics, not by people who can be brushed aside as anti-WTO
activists. It is made by the people best placed to know, by ambassadors
and government officials to the WTO. These are the people who are
supposed to represent the interests of the weak and the poor. Their own
words show how the South is marginalized in the WTO.

Developing
countries are reduced to damage control and scrabbling to secure
negligible benefits. A few with sufficient negotiating clout are given
minor rewards to ensure their compliance. Most receive nothing, and
silently acquiesce against their better judgment, condemning themselves
to the enlargement of a system that has so far proved to be highly
unbalanced and detrimental to their own interests. They do this to avoid the consequences of displeasing the politically and economically powerful.

The
marginalization of the South in the WTO is a serious concern. The WTO
now wields executive power over 23 separate agreements, from trade
related investment measures (TRIMS), to intellectual property rights,
agriculture, and industrial goods. The Fourth Ministerial Conference
at Doha in November 2001 put more agreements on the table. Member
states are required to change their national laws to ensure compliance
with WTO agreements. Non-compliance can result in a country being
hauled before the Dispute Settlement Body, the WTO's own court of law.

This
report presents evidence of the manipulation and subversion of
decision-making and rule-making at the WTO. How is it that less than
fair rules are endorsed by developing countries? What is going on
behind the scene that allows this to happen? We show the exact points
in the process and the strategies that allow the will of the majority
to be subverted.

Unless
the rules by which the WTO itself operates are made fair, developing
countries are unlikely to make progress in bringing more equity to any
of the substantive areas: TRIPS, services, agriculture, nor in the new
negotiations launched at Doha. This was felt keenly by many countries
before the Doha ministerial. One delegate had this to say at that time:

‘It
is not a question of substance. Nobody can say that we have not
participated. We have done so, and we have simply been ignored. The
text [Doha draft declaration] does not take our interests into account.
We will not have a third draft, not because we have no time. The text
came in on Saturday. By Monday, we sent a letter signed by 20
developing countries to make changes in implementation. And he [the
Chair of the General Council, Stuart Harbinson, ambassador of Hong
Kong] simply said no. We all know why he said that, because our
Ministers will have a difficult time. We are in the worst possible
situation, and it is a question of politics, not a lack of arguments.'

B.
L. Das, former Indian Ambassador to the GATT, also describes how
developing countries end up compromising their own interests:

‘If [developing
country negotiators] feel that any proposal is not in the interest of
their country, they oppose it. Their opposition is quite firm
sometimes, and they stick to their line almost till the very end. But
finally when intense pressures are built up in the capitals or if all
other countries have acquiesced in the proposal, they also drop their
objection and remain sullenly silent. Decisions are taken to which they
become parties even though they had earlier raised objections. And in
this manner their countries get bound by the obligations imposed by the
decisions. The immediate political cost of withholding consensus
appears to them to be much heavier than the burden of these obligations
in the future.'

The strategies used by the powerful to bring about such an outcome are the topic of this publication.

The
voices of developing country negotiators that appear in this paper are
seldom heard by the public. Yet they are the ones that bear testimony
to the decision-making and process problems at the heart of the trading
system. A conscious effort has been made in this document to bring
these voices to the fore. Almost thirty interviews were conducted after
the Doha ministerial for this purpose. Most delegates, out of fear of
repercussions on their jobs or pressure on their capitals, have chosen
to remain anonymous.