WTO : Azevedo the Conciliator

Umberto Mazzei

26/12/2013

Opinión

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The WTO Ministerial Conference in Bali ended with an agreement, something regarded as impossible only six months before. The Ministerial Agreement is a monument to the diplomatic skills and strategic creativity of its new Director General, Roberto de Azevedo. It is an agreement that endorses the foresight of those that voted in favour of a diplomat at the rudder of WTO, instead of a bureaucrat. The agreement confirms the universal preference for the multilateral way instead of the implicit segregation of preferential trade agreements.

Mr. Pascal Lamy, Azevedo’ s predecessor, was trained in the French School, which, since Henry IV, has a very centralized and hierarchical view of politics; a tradition transmitted to the European Union (EU). Lamy’s career in those bureaucracies, where he reached the posts of Head of Cabinet of EU President Jacques Delors and EU Commissioner for Trade, did not help him to develop dialogue as a method. His prolonged stay at WTO was marked by frequent authoritarian gestures. The EU wanted to repeat that tendency with the candidacy of Mr. Herminio Blanco, a Mexican bureaucrat of quite a similar tradition.

Azevedo was elected instead of Blanco with the support of many developing countries, some developed ones and of Civil Society, which have proved right. It is now obvious that training and experience in diplomacy should be the norm for representation and dialogue in a multilateral environment, such as Geneva’s international organizations. To conduct one of them successfully it is necessary to have skills as conciliator and perhaps even a psychiatrist, because there are psychotherapy cases. It is well known that in diplomacy Brazil has one of the best schools and teams, where conciliation is an art. It is not the product of chance; it happens that Brazil is the sum of several Brazils, developed in different historic stages, which have to be governed together, listening, understanding and reconciling.

The issues that reached Bali

In Geneva, during the preparatory work for the WTO Ministerial Conference in Bali, it looked as if in some development issues, such as the Monitory Mechanism for Special and Differential Treatment or the package for Least Developed Countries –LDCs, there was, with some flexibility and “creative ambiguity”, the possibility of a consensus. The tough ones were Agriculture and Trade Facilitation, where disagreements on the proposed text were many and distant.

The main problem in Agriculture was India’s decision to keep a vital political space in matters of food sovereignty. It is an issue that has been dragged from the Uruguay Round, because of the US and EU subsidies to agricultural exports, whose elimination was the base for the Doha Round. The Agreement in Agriculture allows flexibility to protect national production, under the label “de minimis”, which is 10%, but in the case of India it was around 40%. Exporting countries wanted to reduce it. The discussion was about permitting and for how long, the apparent violation of an agreement, whose calculus is based on 1986 obsolete data. India – with thousands of peasants immolating their lives- was firm in keeping its policy.

Trade Facilitation is about harmonizing customs procedures and techniques. It is an initiative that can be useful in the fight against customs corruption that parasites trade in many countries. The problem is that the proposal is in fact, one to harmonize the world with the U.S. system . At the Singapore Ministerial (1996 ), developed countries proposed 4 issues for negotiation, that were rejected. One was Trade Facilitation , which in 2004 , was finally accepted for negociation. The negotiations were conducted under the jurisdiction of the Council for Trade in Goods. The proposed negotiation text still had about 600 disagreements (brackets) at the failed Ministerial of 2011. In 2012, two more energetic ambassadors were appointed to help the Chair and disagreements were reduced to about 60. Under the intervention of the DG those were reduced to a dozen, but very difficult ones.

In this state of things, the dilemma was to delegate the negotiation in Bali to the ministers or close the negociation. Azevedo chose the latter. That left all out of balance, as when pulling a rope that is released. Then Australia , New Zealand , Chile, Mexico and other countries supposedly neutral requested the Director General to resume negotiations up to Bali.

The ministerial Cuban suspense

At the end, an agreement on the Ministerial Conference depended on Cuba. During the debates in Geneva, Cuba wanted a phrase on the text about discrimination - obliquely referred to the U.S. blockade on Cuban trade- which had been deleted in the Bali text. It is odd that on this issue Cuba gets at the United Nations Cuba an almost universal support- but for Israel - but at the WTO , support on the same subject is reduced to a few.

At the end, when Cuba was given the floor, there was a tense silence. "Cuba is willing to negotiate," said the Cuban Vice - Minister. Applause, because it seemed that Cuba agreed to the text. She really should have said "Cuba does not accept the text, but is willing to negotiate, here in Bali." There is a rule at international organizations, that an absence of explicit rejection is considered acceptance. Cuba had to speak again to correct the misunderstanding. Finally, in an early morning, after a direct pulse the US, Cuba managed to get her mention at the introduction of the Ministerial Declaration. Then, in a joint political paper , the ALBA countries accepted the Ministerial text.

Uncertainties

According to Inside U.S. Trade, a specialized American publication, Mr. Michael Punke , Deputy Trade Representative of the United States, said he would not be required to submit to Congress the Trade Facilitation Agreement for ratification. That leaves a serious doubt on its legality in the United States and the possibility of appeal to the U.S. authorities in the event of non-compliance by US customs or Border Protection. It is possible that Mr. Punke believes that ratification is not necessary because Trade Facilitation commitments are a copy of the system that is already operating in the US.

The problem is that the U.S. Constitution requires that international agreements, or any modifications to such agreements, must be ratified by Congress, to be applicable in the US. Thus, it may be that other countries change their laws and remain bound by them, but without being able to recourse violations of the agreement committed by US Customs or Border Protection in U.S. courts . In smaller scale, the case of the League of Nations can be repeated, when the US proposed its creation and then remained outside the deal.

Another issue is the possibility that some members remain de facto or legally outside the trade facilitation agreement. What was agreed is a reform of an existing WTO agreement and the General Council must first pass a "reform protocol" for it to be a part of the WTO agreement. Is not known what changes the Bali text may undergo in this second process, intended to reduce it to the appropriate legal language and it is advisable to be very alert. Some members may even be unrelated to the reform, because member countries have the right to refuse any subsequent amendments to the original WTO agreement.

Conclusions

It was a successful Ministerial Conference because it showed that a multilateral approach is the most fair, balanced and convenient route. India won an indefinite Peace Clause for the protection of its peasants. The Trade Facilitation text has now enough elasticity to accommodate everyone. In particular, developing countries are not required to change their customs systems if they are not given funds to change their legislation and apply the changes. There was also agreement on a mechanism for monitoring Special and Differential Treatment. ALBA, that at the 2011 Ministerial, blocked an arbitrary and thoughtless text, again had a high profile and managed a creative accommodation. After Bali, even those who voted against Azevedo for Director General, are now happy with him. The triumph was for the Multilateral Trading System, which this time worked, under the leadership of its new Director General.

https://www.alainet.org/de/node/82000