WTO pays heed to private sector

Date: 18/04/1996

By Elizabeth Wise

WORLD trade rules are no longer a matter for governments alone - a fact now acknowledged by the body charged with policing global commerce.

Following the growing trend of consulting the private sector before setting official policy, World Trade Organisation (WTO) leaders will lend an ear to heads of industry during a meeting next week in Singapore.

The meeting will follow the pattern set by EU-US negotiations, where governments of both sides incorporated the recommendations of business leaders into their action plan for future collaboration. The Transatlantic Business Dialogue, as it was called, provided the impetus for much of the breadth and speed of the transatlantic treaty which was signed last December in Madrid.

“It is less and less unusual for governments to consult industry,” said an aide to Trade Commissioner Sir Leon Brittan, who will attend the 24 April meeting. “As trade policy starts taking the long view, more and more consultation is needed.”

Both Brittan and Industry Commissioner Martin Bangemann have regularly used the private sector to help forge EU policy. Both have taken business leaders to Japan, and Brittan has also supervised meetings of European and Chinese businessmen.

Earlier this month, a WTO-sponsored investment conference in Geneva brought together European and Asian executives in the manufacturing, telecommunications and automotive sectors to explain to governments and Commission officials why European investment in Asia was still flagging.

American officials have been using the same tactic, hosting sectoral meetings such as the recent gathering on the automotive sector in Washington to find out what industry wants from government.

Deputy US Trade Representative Jeffrey Lang will represent the Clinton administration in Singapore next week. US officials say they want an opportunity to hear the views of business and the academic world on issues still troubling WTO member governments.

These include the so-called “unfinished business” of the Uruguay Round concluded in December 1993 (financial services, telecommunications and maritime transport), as well as new areas that might be brought into the commercial arena, such as establishing common ground rules for investment and setting environmental or social conditions for trade. A third subject continually under discussion is the effect on global commerce of the growing trend for regional blocs to create their own trading zones.

Private sector input could also help Brussels and Washington to mend their differences over plans to liberalise the telecoms trade. With the 30 April deadline looming for a WTO-sponsored global deal, each side needs to find concessions to satisfy the other. Private operators - and above all customers of telecoms services - are almost unanimously in favour of opening markets.

But the question of whether to attach labour conditions to trade deals remains highly contentious. “A large number of countries are opposing it and even the EU is internally divided,” said a senior WTO official in Geneva.

This divisive issue pits the US, which has advocated attaching labour conditions to trade policy, against the governments of developing nations who view that as a smokescreen for protecting higher-salaried workers in developed countries.

“Discussions are still only informal,” said the WTO official, adding that it was “too early to tell” whether an official debate on the subject would take place at the ministerial meeting.

The European employers' federation UNICE, which will send an officer to the April meeting, favours pressure that would improve social conditions for workers, but says it should not come from the WTO. “Trade sanctions are not the appropriate way to oblige people to alter their laws,” said a UNICE official. “The revenues gained by increased trade should help raise living conditions.”

Another open question is whether ministers will discuss placing environmental conditions on exports and imports. WTO officials are considering proposals ranging from eco-labels to multilateral agreements. Officials say work on this is progressing well, but the committee will need more time to complete the research it has been asked to pursue. A first résumé of its findings is likely to be aired in May, followed by at least six months of political discussions.

The first-ever meeting of government ministers of WTO nations, which is scheduled to take place in Singapore in December and is expected to set the world trade agenda for the coming years, should reveal whether a consensus can be found in this area.

The Foreign Trade Association (FTA), which represents the importing retail trade, has criticised the WTO for being secretive in its ponderings on environmental issues, and has asked to participate in discussions on the subject. Its member companies say that protection would be most effective if it came from multilateral agreements.

The association says the WTO should have jurisdiction over disputes arising over environmental conditions, but should not try to harmonise 'green' standards.

As for the trade blocs burgeoning in Asia, Latin America and elsewhere around the globe, the WTO has established a committee to analyse regional moves, but also wants private sector input.

Governments are not, however, seeking industry's opinions on whether to admit new members to the 116-nation organisation. WTO officials say that although they are considering candidates such as China and Russia, decisions are unlikely to be made this year. As one Geneva official said about the pending applications: “I wouldn't hold my breath.”