The Outcome Of The Ministerial Meeting Of The WTO At Singapore In 1996

Singapore Ministerial Meeting. At the time of deciding on the estabIishment of WTO, it was decided to hold a biennial conference of trade and commerce ministers of WTO member-countries to help resolve issues on which officials could not take a decision.

The first ministerial meeting of WTO was held at Singapore during December 9-13, 1996. With this meeting, the transition from GATT to the WTO was virtually completed and the new world trading order under the WTO got firmly established. The issues discussed in the meeting were textiles, agriculture, core labour standards, investment, competition policies and government procurement. The last four were new issues.

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Textiles. On reviewing the implementation of the Agreement on Textiles and Clothing (ATC ), the developing countries felt that the implementation has been only in letter and not in spirit. They accused US of indiscriminately using the traditional safeguard measures meant to protect domestic industry from sudden damage due to sudden and large increase of imports. In 1996.

The US applied safeguards 24 times against exports from 14 developing countries which were withdrawn when the Textiles Monitoring. Body of the WTO asked US to give satisfactory explanation. At the end of the meeting, the ministerial declaration stressed the need to implement the ATC.

Agriculture. Agriculture was discussed along with all other agreements reached during the Uruguay Round that will come up for review/renegotiation in 1999/ 2000.

Labour standards. Industrial countries wanted all members of WTO to adhere to certain minimum commitments on workers’ right like the right to labor association, right to collective bargaining, non-discrimination, end to forced abolition of child labour. The developing countries see this interest in labor standards as an indirect method of undermining the competitive advantage that low wages give to their exports.

The ministerial declaration states that the International Labour Organisation is the competent body to deal with these standards, that labour standards should not be used for protectionist purposes and the comparative advantage of low-wage developing countries should not be questioned.

Investment. Canada and European Union wanted a global agreement on foreign investment which will have uniform rules on foreign investment and set up a dispute mechanism where these companies and countries will have to settle their issues. It is felt that the rules that each country draws up create uncertainty and come in the way of globalisation.

The developing countries oppose the move and say that investment has more than a trade dimension, that it is intricately linked with development. While they welcome foreign investment, they want to retain autonomy over investment policy and not give foreign companies blanket rights to investment in whichever sector they want. In the meeting it was decided to set up a working group to study the links between investment and trade. The study will be reviewed after two years.

Competition policy. Competition in the domestic markets is hampered by certain restrictive business practices like price cartels. A number of countries already have laws in this area. For instance, India has Monopolies and Restrictive Trade Practices Act and the USA the anti-trust laws. The European Union wants common rules.

In the meeting it was decided to establish a working group to study the interaction between trade and competition policies and review its work after two years.

Government procurement. In a number of countries the value of government procurement in the form of contracts for supply of goods and services, civil works etc., adds up to 10% to 15% of the economy. Most countries either keep out foreign companies or give a price preference to domestic suppliers. The developed countries are asking for greater transparency as to how governments take decisions in the awarding of contracts. It was decided in the meeting to establish a working group to study transparency in government procurement policies and use results of this study for inclusion in a possible WTO agreement in future.

Summing up the results of the Singapore meeting. Mr. Machkund Dubey, Former Foreign Secretary of India, writes “In the Singapore meeting, developed countries were able to set the agenda for the WTO for the next four or five years. The relationship between trade and investment and that between trade and competition policy was firmly inscribed on the WTO agenda. The WTO will also pursue its concern in the field of labour standards even while putting this subject on its agenda.

Developed countries succeeded in getting the review under the TRIMs agreement advanced by three years. As a byproduct, they managed to conclude an agreement, roping in almost all member-countries of the WTO, for the elimination of tariffs on trade in information technology products, which are mainly exported by them.

On services, they were able to obtain agreement for achieving a successful conclusion of the negotiations on basic telecommunications in February, 1997, for resuming financial services negotiations in April 1977, and for successfully concluding negotiations on maritime transport services in the next round of negotiations on service liberalisation. Negotiations on both financial services and basic telecommunications were held recently, but not allowed to be concluded because the outcome did not come up the expectations of the US.”

“On the other hand, most of the issues of interest to developing countries either did not receive any attention or were disposed of through platitudinous expressions of intent. For example, there was no mention of resuming negotiations on the movement of natural persons in spite of the very meagre results achieved in the last round of negotiations.”

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