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Background Note

May 1998

WTO Ministerial Conference Second Session - Geneva, 18 to 20 May 1998

General Setting

The Invisible Committee, the Quad and Developing Countries

Built-in Agenda

Other issues


I. General Setting

1. Given the differing views on whether to focus attention on the built-in agenda or on preparations for a new round, preliminary discussions on the forthcoming ministerial conference have sought an open-ended agenda and to not explicitly exclude any subject. Different options are at hand which would provide enough flexibility to support (or to limit) future WTO multilateral negotiations (the "Millenium Round") which several WTO Members would like to kick off in the year 2000.

2. Several WTO Members are of the idea that the most important objective for this year's ministerial should be to "exclude nothing" and to decide on different alternatives at the time of the 1999 Ministerial, which should then decide on the contents and structure for the next round of negotiations. Within this general context, several Members are inclined to push for a new global round; others, including several developing countries, would rather concentrate on the review and implementation of the Uruguay Round Agreements (particularly agriculture and textiles) before engaging in discussing the possibility of new negotiations on additional subjects. Opinions seem to prevail that the next ministerial should take place in late 1999, when time-tables, structure and scope of negotiations should have been defined.

3. The course of the debate in preparation for the Ministerial meeting has swung between whether new negotiations should be limited to the built-in agenda (agriculture, services, intellectual property, and government procurement, etc., see below) or whether this programme should be complemented by the inclusion of new subjects like investment and competition, on which WTO working groups have already been established in the WTO or, furthermore, on totally new subjects like electronic commerce or genetically modified organisms (GMOs).

4. The inclusions of new subjects in the future negotiating agenda have not been widely welcome. Several developing countries (notably India, Egypt and Pakistan) are resisting this and are not in agreement regarding the inclusion of investment, competition or government procurement, arguing that working groups have already been established and thus they should remain separate from any new negotiations.

5. It is implicit in the Draft Ministerial Declaration (20 April 1998) that an important result from the second session would be to direct the General Council to prepare the third session sufficiently early, i.e. in early 1999. However, some Members feel this is not sufficient and are pressing for starting discussions in September 1998.

In principle, discussions on future work in 1999 is likely to focus on the following points:


(i) the agenda for the third session;

(ii) implementation and topics of the built-in agenda;


(iii) issues which emerged in Marrakech and Singapore (investment and competition);

(iv) additional subjects of interest such as tariffs and other barriers to trade in industrial products;

(v) the US proposal (finally supported by the Quad and others) on electronic commerce;

(vi) high level meeting on trade and environment.

II. The Invisible Committee, the Quad and Developing Countries

6. Discussions on subjects related to the second session have occurred in different informal groups. Some have taken place within the so-called "Invisible Committee" (formed by the representatives from capitals of the following WTO Members: the Quad, Argentina, Australia, Brazil, India, Korea, Luxembourg, Morocco, New Zealand, Norway, Poland, Singapore, and Switzerland). One of the important points discussed within this group particularly on the eve of the Singapore Ministerial was to try to push for global negotiations on further tariff reductions on industrial products, particularly since there had been progress on lowering tariffs on pharmaceuticals and information technology products.

7. Other issues of interest which some Members (the US and Japan) would like to start work on are GMOs, electronic commerce, investment and government procurement.

8. During the Quad's last meeting (April, 30, 1998), its Members decided to reach an agreement on focussing the forthcoming Ministerial with a common approach. However, from press reports it seems that they could not reach agreement on the next round: while the US, the EU and Japan would support a global round, Canada would fear this would drag on negotiations for as long as the previous Uruguay Round (seven years) while a less ambitious approach would allow for reaching specific sectoral agreements.

9. Several Members of the WTO have regarded increasing transparency of the WTO work and activities as an important issue to strengthen public confidence on the multilateral system. The Quad, the US in particular (note 1), and several developing country Members have called on the Director General of the WTO to explore means to increase consultations with Members of civil society. This call for transparency is reflected in the second paragraph of the Draft Ministerial Declaration.

10. On the trade and environment front, an important development likely to emerge from the ministerial the decision (supported mainly by the Quad) to hold a high level meeting on trade and environment that could contribute to overcome the hurdles that have rendered sluggish the work of the Committee on Trade and Environment. It is expected that this meeting will take place prior to the third ministerial session of 1999. It is hoped that this meeting would produce concrete results on how to reconcile trade rules with environmental protection. The pressure, particularly in the US, from business and environmental groups on the "greening of trade" (particularly in the wake of the WTO shrimp-turtle dispute settlement panel decision against a US law designed to protect sea turtles) is placing this issue as a new priority on the trade agenda.

11. Several Members of the WTO, the European Union and several developing countries have insisted on mentioning the contribution of regional integration in achieving global trade liberalisation.

12. The predominant view of developing countries is that prior to talking about a new round attention should be focused on implementation of the Uruguay Round agreements. Several developing countries would also support a specific mention in the ministerial statement of the asymmetric distribution of the benefits of trade liberalisation, from which industrial countries have drawn considerably more advantages than developing countries. Developing countries would want the ministerial declaration to refer to the need to strengthen the provisions of Special and Differential Treatment, which some consider has been eroded in practice. Industrial countries have stressed that reopening of the agreements should be avoided at all costs.

III. Built-in Agenda

13. It is likely that the ministerial declaration will not refer to particular subjects specifically, as each Member would insist in including their special concerns and, if one is mentioned, the list would become interminable. However, there have been preliminary discussions on some of the issues of the built-in agenda. Talks on agriculture and services are scheduled for after December 31, 1999. It also includes reviews of, and other work on numerous separate agreements such as: reviews and other work on Anti-Dumping, Customs Valuation, Dispute Settlement Understanding, Import Licensing, Pre-shipment Inspection, Rules of Origin, Sanitary and Phyto-Sanitary Measures, Safeguards, Subsidies and Countervailing Measures, Technical Barriers to Trade, Textiles and Clothing, Trade Policy Review Mechanism, Trade-Related Aspects of Intellectual Property Rights and Trade-Related Investment Measures.

IV. Other Issues

14. Follow up of the High Level Meeting on LDCs. Several Members have insisted that the ministerial declaration should make reference to the fact that LDCs have not fully benefited from trade liberalisation and that their needs merit special attention. The European Union has suggested the Plan of Action on LDCs should not only mention technical assistance but should include a specific reference to better market access for LDCs.

15. Electronic Commerce. A fundamental issue with the greatest potential for trade expansion, but which is a complex issue to tackle. The subject has been studied from several perspectives and organisations (OECD, UNCTAD, WTO), the need to reach a global agreement on electronic commerce has been stressed by most industrial country Members of the WTO. The Quad, for instance, was in agreement to issue a declaration on trade-related aspects of electronic commerce in time for the celebration of the 50th anniversary of the multilateral trading system. It is expected that decision to establish a global programme in the WTO covering trade aspects, including market access and cross-border trade will be taken. Similarly, several Members would agree with the US proposal for a standstill on duty free electronic transmissions.

16. Information Technology Agreement II. On the occasion of the first Ministerial Meeting several Members agreed on a Declaration on Trade in Information Technology Products, agreeing on elimination tariffs for trade on these products on an MFN basis. It is expected that by the deadline of 30 June 1998 work on finalising product coverage will be completed, together with overcoming difficulties on tariff classification and elimination on non-tariff measures on agreed products.


Note 1 : Senate letter to President Clinton on WTO transparency (30 April 1998): "When the WTO convenes May 18-19, 1998 in Geneva for its second ministerial meeting, we urge you to press the global trade body to open its closed-door activities to the public. […] The United States does not accept closed markets overseas, and should not accept closed doors in Geneva." (return to text)


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