Failure of the Seattle Ministerial 

1. The Third Session of the World Trade Organisation Ministerial Conference in Seattle was suspended on Friday 3 December. There was therefore no Declaration. Ministers and officials, and the WTO Secretariat, will now consider how to take the process forward.

2. The failure of a Ministerial Conference on trade issues is unusual but not unique. It is important to consider why this happened.

3. Key are the systemic or organisational issues. The long negotiations on the appointment of the new Director General deflected Geneva officials from the pre-Seattle process and the absence of a Director General deprived the Secretariat and the procedures of guidance during this period. This problem was compounded by the lack of political leadership amongst the key Members before the Conference. The draft documents, as a result, left too much to be settled at Seattle.

4. It was clear that procedures which worked in the early days of the GATT, designed for the order of 30 active Members to reach consensual decisions, do not work satisfactorily for a membership of 135. This is especially so for developing country Members, who now constitute a significant majority and who, often through lack of expertise, were excluded from important restricted meetings in Seattle, where only a limited number of key players participated. However, developing country participation in WTO activities and in the preparations for the Ministerial is in deep contrast with their relative lack of active participation in the previous rounds of multilateral trade negotiations, where only a handful of developing countries had the expertise and interest in trying to influence the negotiations in accordance with their national objectives.

5. Indeed, developing country participation in the preparatory process leading to Seattle was unprecedented, witness the large number of proposals tabled by developing countries on all major subjects of negotiation. Thus, the process at Seattle, described as "medieval" by a major developed country group negotiator, was not up to the expectations of developing countries which felt marginalized from the mainstream of the decision-making process at Seattle. They let this be publicly known with formal statements from the African and CARICOM groups expressing their "disappointment and disagreement" with the way the negotiations at Seattle were conducted and the lack of transparency of the Seattle process. Before the Conference reconvenes considerable thought will have to be given to achieving transparency and greater participation without sacrificing efficiency.

6. Another element contributing to the Seattle fiasco is related to the relatively recent perception of lobby groups and NGOs that the global trading system is responsible for restricting national government rights to protect health, workers, the environment and consumers; and their increased ability to attract publicity, puts pressure on negotiators. Linkage between such as the recognition of labour and environmental standards and trade sanctions became as a result more sensitive and divisive. There will be a need to be clear on the role of the NGOs, national governments and the WTO.

7. Finally circumstantial elements, such as holding the conference in the United States, where political posturing become paramount with the approach of the presidential race, further contributed to complicate an already problematic situation. An illustration was the US insistence on including, for political reasons, the conflicting issue of core labour standards in the Ministerial Declaration, which was strongly opposed by developing-country Members. Similarly, the lack of flexibility (and political will) by all negotiators across the board, already visible in Geneva on the eve of the Conference, did not presage well for a successful outcome of the meeting. The launching of a new round appeared to have been in nobody's interest.

8. On the structure of the Ministerial Conference, the main bodies were:

• Plenary Session

• Committee of the Whole

• Ministerial Working Groups

- Agriculture, Chairman Mr. G. Yeo, Minister of Trade and Industry, Singapore.

- Implementation and Rules, Chairman Mr. P.S. Pettigrew, Minister of International Trade, Canada.

- Market Access, Chairman Mr. M. Malie, Minister of Trade, Industry and Commerce, Lesotho.

- Singapore Issues, Chairman Mr. A. Lockwood Smith, Minister of International Trade, New Zealand.

- Systemic Issues, Chairman Mr. J.G. Valdes, Minister of External Relations Chile, Co-Chairman Mr. Anupkumar, Minister of Commerce, Fiji.

9. On the substance of the negotiations, in addition to the lack of pre-Seattle preparation mentioned above, there was evidence that many key delegations were attempting to negotiate the outcome of a new Round, rather than its parameters; and it is also relevant that many developing country participants were being particularly demanding, which is not surprising given the poor results of the Uruguay Round from their point of view. Another important factor was the conflicting agendas of the US and the EU: the US approach being selective on the scope of a new round, whereas the EU favoured an all-embracing approach in order to find sufficient trade-offs in exchange for furthering the reform process in agriculture.

10. The differing approach of the US and the EU is also reflected in their attitude to the "outcome" of the "frozen" negotiations and the way forward. The US take the view that all papers being considered, in particular the so-called "3/12-05.45" draft Ministerial Text, are still on the table, whereas the EU seems more of the view that it will be necessary to restart the Ministerial from scratch. Though not a consensual document it is likely that the draft declaration of "3/12-05.45" will be the basis when the process is reinitiated, despite the EU rejecting it as a "dead" document. Given that there is no agreement, it is clearly inappropriate to attempt detailed comment. However, on the basis of it being the last document some selective observations from a developing country point of view are in order:

• In the preamble, there is commitment to "making all area of special and differential treatment effective and operational". It is important that in due course this is translated into legally enforceable measures built into specific agreements, but this, of course, would be for the substantive negotiations.

• On the implementation of existing agreements and decisions there is a comprehensive list of the "areas of concern" (with the establishment of a Special Mechanism under the General Council to address them) "as far as possible within one year". There is also a series of draft decisions at the Annex to "3/12-05.45", but at this stage there is little evidence of other than general exhortations, e.g. "examine with particular care any application for the initiation of an anti-dumping investigation" within 365 days of a previously failed application.

• On the new round, the principles and organisational points are unsurprising (e.g. single undertaking) but it is relevant that special and differential treatment is to be "embodied in effective and operational provisions", with no reference to legally binding provisions.

• The provisions for technical cooperation are hedged with such observations as "within available resources, both financial and human" though there is specific mention of countries without representation in Geneva. The effectiveness of technical cooperation requires a real commitment to providing funds and human resources. However, the more basic consideration is the need for fundamental reassessment of the content and delivery of technical cooperation.

• There is no reference to special market access provisions for least-developed countries. This is because of certain product sensitivities (e.g. textiles) in developed countries. Also, there is no reference to the accelerated tariff liberalisation initiative (ATL), because of differences within the developed Members over its coverage.

• Although weak, the inclusion of an environmental element is contemplated in the text by the provision that the Committee for Trade and Environment and the Committee on Trade and Development will "provide a forum to identify and debate" the environmental and developmental aspects of the negotiations.

• Surprisingly, the relation between core labour standards and trade does not feature at all in the draft text.

11. The next stage is to determine the modalities of moving forward, including whether the conference will be reconvened. Before this, the Director General will examine the systemic issues, in particular the involvement of all Members in the negotiating process and the arrangements for a more participatory decision-making process. It will then be for Geneva-based delegates through the WTO General Council to take stock of the situation and to prepare the necessary decisions. The timing of the resumption of the process will be dictated by an assessment of the political will to complete the negotiations; the November 2000 US Presidential elections may well feature as a consideration.

12. Meanwhile, work on the built-in agenda will start in January 2000. Specifically there will be negotiations on the Agriculture Agreement, the General Agreement on Trade in Services and the TRIPS Agreement. However, given that no accord was reached in Seattle and therefore no guidelines for the direction these negotiations should take, there must be concern at the effectiveness of these prescribed negotiations.

13. In sum, the failure of the Ministerial meeting indicated that WTO Members were not yet ready to launch a new comprehensive round. The WTO came out weakened. It is now up to all the Members of the WTO to safeguard a system that is still in the interest of the international community in general and of the developing countries in particular. In this task, the Secretariat and the Director General of the WTO should be able to count on the full support of all Members.