Irregularities at HK Ministerial criticized at General Council meeting

Irregularities in the decision-making process at the WTO's Hong Kong Ministerial Conference were criticized by Venezuela and Cuba at the WTO's General Council meeting held here Wednesday 8 February.

A joint statement by the two countries was presented towards the end of the Council meeting by the Venezuelan Ambassador, Oscar Carvallo.

The two countries identified several 'irregularities' during the preparatory process in Geneva as well as the negotiating process in Hong Kong, which they said severely undermined the credibility of the WTO's agreements and jeopardized the organization itself.

They added that the irregularities were against the realization of the development dimension of the Doha work programme. They called for an open discussion at the General Council to make a decision to prevent these types of actions from being repeated in future decision-making processes.

The statement said that the decision-making process at the WTO, particularly during the Ministerial Conferences, has become increasingly complex as Members, ten years after the implementation of the Agreements resulting from the Uruguay Round, have had to face the good and bad decisions of the commitments made in the WTO, which have had a direct impact on the implementation or disarticulation of economic, trade and social policies due to their binding nature. This impact has been greater in developing countries.

It should be noted, they said, that there is a gap of almost two years between one ministerial conference and the next, in which no progress or substantive agreements are made with regard to the negotiations and their texts.

However, it is expected that in a few weeks or days prior to or during the ministerial conference, an agreement will be reached concerning documents which are tens of pages long. This is particularly difficult and puts countries with small delegations at a negotiating disadvantage, as they lack sufficient capacity to react to the large amount of documents circulated and meetings convened.

The statement said that Article IX of the Marrakesh Agreement governs the formal decision-making in the organization. The Regulation of Meetings of WTO Bodies (1997), including the ministerial conferences, also refers to this Article as well as the other provisions concerning decision-making in this agreement.

However, nowhere in its five paragraphs or in any other WTO provision is it established how the process for final adoption of decisions or the exchange of information and communication between Members and the Secretariat shall be carried out, said the statement. Nor is there any information regarding the limits of the action of the latter.

There are, however, agreed principles such as transparency, non-exclusive participation of all Members, as well as the need to guarantee respect, which cannot be ignored.

The statement recalled that in 2000 and 2002, issues relating to internal transparency and effective participation of Members in the WTO decision-making were the focus of the General Council's discussion for months. Therefore, this is not the first time that legitimate concerns have emerged or have been addressed, in particular after a Ministerial conference. But in spite of this work done, we have not been able to prevent some of these irregularities from being practised again and even some new ones recurring.

During the Hong Kong Ministerial Conference and even during the preparatory process that began in November in Geneva, a number of procedures were implemented to seek consensus, which did not have the support of all Members, and in many cases received the manifest disagreement of a majority of developing countries. However, the two countries said, with the support of some Members, they were imposed by decision of the Secretariat, which thus exceeded its functions.

These actions which involve the taking of important decisions are extremely worrying, and thus it is necessary that the General Council realize that they are undermining the WTO's own credibility, Cuba and Venezuela said.

Account must be taken of the fact that any decision adopted during Ministerial Conferences, including procedures to arrive at consensus among Members will eventually have an impact on the development policies of the countries, hence its extreme sensitivity and the need to avoid in future the repetition of processes or procedures that did not have due consensus because they were not generally accepted by the members.

"On this basis, the process of adoption of the Ministerial Declaration in Hong Kong can be considered to have been an unfavourable exercise to maintain confidence in the WTO at any cost and to enable the assertion that this organization can guarantee conditions that translate into tangible and sustainable economic results for developing countries," the statement said.

The two countries stated that during the preparatory process in Geneva, in particular, during the last phase, the following irregularities were
identified:

• The delayed submission of the first draft Ministerial Declaration (26
  November) leaving little time before the beginning of the conference. This brought about other negative actions that are listed below.
• The imposition of a non-consensus negotiating text (Annex C on services) that was prepared by the Chair of the negotiating body, with the sustained rejection of a significant amount of Members. This took shape with the delay in the introduction of brackets and the subsequent removal of them, without having the positive consensus of all Members.
• The sudden removal, without consultation, of the cover note that was part of the draft Ministerial Declaration which made clear, upon insistence of many delegations, that the annexes did not have consensus among the Members.
• The introduction, for the first time, of reports by Chairs of the negotiating bodies as an integral part of the text of the Ministerial Declaration which, in fact, should contain texts agreed on by the Members.
• Cuba and Venezuela said that during the negotiating process in Hong Kong, the following irregularities were identified:
• The holding of only two formal meetings (opening and closing sessions) in the entire Conference to formally adopt the decisions, whose format was designed to prevent delegations from taking the floor and speaking extensively on the matters subject to approval, due to the fact that the seating in the halls were not arranged with delegations in mind and no microphones were available. The other meetings were informal and therefore there is no record of the discussions that took place therein, which is something that has had a crucial impact on the outcome of the Ministerial Conference.
• The reccurance of 'Green Rooms' which were given the name of 'Chairman's Consultative Groups', and which were mechanisms that helped to present positions agreed by a few countries and which generally attempted to impose themselves on the non-participating majority. The capacity of groups of countries with small delegations to react with alternative proposals was diminished with so little time given. Further, the lack of a record of the discussions in these meetings limited transparency.
• The granting of occasionally unlimited power to the facilitators. There were issues in which a meeting open to all Members was never held, not even to inform of the modifications of the text of the Ministerial Declaration on the basis of their interactions with some delegations. On other occasions the substantive intervention of the countries was restrained during these open informal consultations, with the argument that there was no consensus and it was necessary for delegations to first come to an agreement on the issues of divergence.
• The lack of attention to some proposals by important groups of developing members, which were not considered at all, nor negotiated with them; simply, predetermined texts were imposed.

The two countries said that the WTO is responsible for always guaranteeing a transparent and reliable decision-making process, whatever these decisions may be, but particularly those deriving from a Ministerial Conference whose results have a particular impact on the membership and the future work for a given period of time.

"The situations described above must be avoided at all cost in the future as they severely undermine the credibility of the agreements and thus jeopardize the Organization itself," said the two members.

In addition, they consider that the above-mentioned irregularities attempt against the full realization of the development dimension of the Doha Work Programme, an immensely relevant issue for developing countries which make up the majority of members in the WTO.

"Consequently it is advisable to promote an open discussion on these issues for the General Council to make a decision, in light of the experience of the preparatory process and the very holding of the Sixth Ministerial Conference, as well as the irregularities already analysed from preceding Ministerial Conferences, in order to prevent this type of actions from being taken again during future decision-making processes."

According to diplomatic sources, there was no discussion of the issue at the Council meeting after the statement was presented.