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URUGUAY ROUND - A HISTORICAL PERSPECTIVE

by Someshwar Singh


Geneva, 20 Jan 2000 -- The preface of the newly launched CD-ROM "From GATT to the WTO" presents a snapshot of the secret story of the Uruguay Round - charting out the course the negotiations took and the principal positions of the key players.

In a preface to the CD-ROM written in September last year, Chief Editor of the SUNS, Mr. Chakravarthi Raghavan, notes that the Marrakesh Agreement of 1994, for a World Trade Organization, with its annexed agreements, understandings and decisions, covering the areas of trade in goods, intellectual property rights and services and a dispute settlement system, and a trade policy review mechanism to "review" periodically the range of economic policies of countries, came into force on 1 January 1995.

"Concluded under the guise of international 'trade' negotiations for an agreement to 'liberalise' trade across frontiers, the WTO entered the developing world - like a thief in the night," says Raghavan.

"Since then, under the banner, rather the slogan, of "globalization", the WTO is slowly becoming an 'occupying'" or 'imperial' power, expanding the rights of foreign corporations and reducing that of nationals -- all under the guise of 'multilateralism'.

The WTO is the outcome of a "negotiating" process, the Uruguay Round of Multilateral Trade Negotiations that was launched by Ministers of GATT Member-countries, meeting on the occasion of a Special Session of the GATT Contracting Parties, at Punta del Este, Uruguay, in September 1986; the negotiations and process ended with the signing of the Final Act of the Marrakesh Agreement in April 1994 at Marrakesh, Morocco.

Except for the various Ministerial Decisions and Declarations and some ancillary issues settled at Marrakesh, the negotiations on the vast array of rules were concluded at the official level meeting of the Trade Negotiations Committee (TNC) in Geneva in December 1993.

Even the draft texts of Decisions, Declarations etc were negotiated and settled in Geneva, between December 1993 and March 1994, before the Ministers gathered at Marrakesh and adopted them, and signified it by signing the Final Act. Many participating countries at Marrakesh also appended their signatures definitively to the Marrakesh Agreement, and others subject to ratification by the appropriate authorities in their countries, while a few (India and US among them) signed only the Final Act.

"It was not as if the latter group was keeping open the option of ratifying or not ratifying the Agreement; it was more a tactical ploy to quieten domestic opposition."

Though the Uruguay Round of MTNs was launched in September 1986, it was preceded by four to five years of intense manoeuvres, discussions and pre-negotiations at the General Agreement on Tariffs and Trade (GATT). Set up as a provisional agreement in 1947 (until the Havana Charter and its International Trade Organization could come into being), the GATT remained a provisional treaty and arrangement till end 1995, co-existing in 1995, with the WTO and its GATT 1994.

It was decided that the WTO and its GATT 1994 should legally be separate from GATT 1947, and not a continuous system or be a successor. "Yet, in practice WTO/GATT 1994 is being made to appear a continuing system - to enable the WTO to claim some of the legitimacy of the post-war institutions, and for the industrial world to pick up the advantages of the old GATT for themselves and jettison any of its obligations for themselves and privileges for the developing world.

Most of the old GATT activities, as the actual course of Uruguay Round negotiations, were held behind closed doors, with little notice or public (or media attention). The vast array of rules and accords were hammered out in secret negotiations among a small group of negotiators, and presented to others virtually on a take-it-or-leave-it basis, Raghavan points out.

The Uruguay Round negotiations were to have concluded at a Ministerial Meeting in Brussels in 1990, but that meeting ended in failure; the negotiations were continued on in Geneva at level of Geneva GATT representatives and, at end of 1991, the then GATT Director-General and chairman of the Trade Negotiations Committee, Mr. Arthur Dunkel tabled a Draft Final Act (DFA) text, consisting mostly of agreed texts negotiated in various areas among a small group of negotiators, but with 'text' supplied by Dunkel in a few areas, where there was no agreement.

Wherever there was an understanding or agreement between the US and EC, the Dunkel text followed this; but in a few areas (where the US and EC differed), he made some compromise suggestions.

"And while the Uruguay Round negotiations, like the negotiations and decisions in the GATT itself, were supposed to be by consensus, in the topsy-turvy world of the GATT, the Draft Final Act, which became known as the 'Dunkel text', were presented as a package; and it was announced (at the meeting where Dunkel tabled the text, and most delegates did not have a copy until a few hours later) that any part of the text could be re-opened and changed only by consensus!

"Nevertheless, areas of the accords (not acceptable to the US or the EC) were opened up and negotiated among a few, and presented to others who formally accepted them by consensus, but with no real options to refuse."

But many developing countries continued at home the fiction of the DFA being a package and could not be changed in any part without a consensus which was not available.

When the Marrakesh Agreement and Final Act was signed, few in the developing world, beyond members of a small circle (or coterie) of officials and policy-makers in the arena of trade, were fully aware of its implications, and the range of obligations that was being assumed -and the obstacles to development and restrictions on development and economic policies that countries could pursue.

Only slowly, as governments and parliaments have begun to enact laws and domestic regulations and measures to give effect to the WTO agreement, are the implications sinking in; but domestic opposition and dissent is silenced with the "there-is-no-alternative" argument.

"Very soon, on 1 January 2000, the "transition" period for giving effect to almost all the provisions of the WTO agreements comes to an end for the developing world -- the group of Least Developed Countries (LDCs) will have another five years more -- and the full range of effects will be felt.

"The entire range of obligations coming into play have vastly expanded the "global space" for the world's transnational corporations. Though numbered in the range of several thousand technically, the ones who count and have acquired rights and influence are a couple of hundred and odd, interlocking corporations, headquartered in the US, Europe and Japan. And the available space for millions of domestic enterprises (medium and small), unorganized businesses, small farmers and the self-employed workers in the 'informal' economy (urban and rural) have been constricted.

"And even before the full range of obligations kick in, there are pressures and processes under way to force the developing world to undertake new obligations in new areas, through a new comprehensive round of negotiations -- which may be launched in 1999, perhaps even before this CD-ROM is readied and becomes available -- covering the existing remit of the WTO and new areas.

"The very policies and options that governments of the industrial world exercised for their own development and industrialization in the 19th century, and for much of the 20th century, are now being denied to the developing world, as a result of the Uruguay Round and the WTO.

"And if the new negotiations, and new disciplines and obligations being envisaged come about, the WTO -- with the help of some elites (in the academia who blindly propagate neo-liberalism, in business, finance and industry linked to transnational capital, and within the governments) in the developing world -- would have re-established colonialism over much of the South, with native rulers keeping law and order and making the economic space 'safe' for the TNCs, catering to their greed and their profit maximisation.

"Non-governmental institutions (public interest groups, local businesses and others), and even many parts of governments, parliaments and the public are only now becoming aware of the manipulative processes of the WTO. Nothing has helped the exposure to the public of the anti-democratic, non-transparent secret and manipulative ways of the WTO as the processes for the selection/election of the Director-General of the WTO (that began in July 1998, and ended in July 1999).

"And while the Marrakesh Agreement was signed on 15 April 1994 (and became effective on 1 January 1995), and theoretically governments of countries and parliaments had the option of debating, discussing and accepting or rejecting that agreement, by the time Ministers went to Marrakesh, it was no option at all. But it could have been an option and the outcome could have been blocked in December 1993, if governments of the developing world, certainly the score or more major economies, had been aware of the implications and had instructed their senior officials at the TNC meeting in Geneva to say 'NO'.

"But after the official level TNC concluded its work in Geneva in December 1993, few countries (developed or developing) had this option to stay out.

"In 1992-1993, the World Bank, the Organization for Economic Cooperation and Development, and various other institutions made projections of trade and welfare gains (latter of the order of $250 billion a year); and after Marrakesh, the GATT secretariat put forward an estimation of a minimum gain of $500 billion. All these are now acknowledged to have been huge exaggerations, if not fantasies. And the reality has been one of further marginalisation and impoverishment of the developing world.

"But alas, during the entire range of pre-negotiations and the Uruguay Round negotiations themselves, little or no attention was paid in the developing world and within governments to these issues; and the negotiations were left to be handled by a small circle of trade officials and bureaucracies, who kept even other sections in their governments informed on a 'need-to-know' basis.

"It was not as if there had not been sufficient warnings, and efforts to alert the developing world, and its negotiators and officials in capitals and at international fora. As early as 1985 December, when the agenda for the negotiations were being promoted by the US government and its corporations, with the assistance of the GATT secretariat, the warning about the likely outcome came in an article in the IFDA Dossier (a bi-monthly published by the International Foundation for Development Alternatives) about a "rollback" of the developing world to the colonial era.

"From time to time thereafter, concerned personalities and news analysts and commentators raised these issues in public. There was a continuous and contemporaneous effort to alert negotiators, and developing country officials, missions and others through detailed news analysis and reports in the SUNS, a daily newsletter.

"If the WTO and its outcome proved a surprise to the developing world, it was because not only governments and trade officials ignored the available information and analysis, but NGOs in the North and the South, and business enterprises in the South, paid little attention.

"The NGOs are now stirring themselves. Many of the 'new issues' being brought up are 'old issues under new names', and aimed at completing the process of recolonization that began at Punta del Este. This CD-ROM is an attempt to put together and make available (in an easily accessible way) to those interested some information about the past which could be of some use for the future.

"And, if the past gets repeated in the future, there can be no excuse for ignorance." (SUNS4589)

 


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