12 August 2002

DRAFT – Forthcoming in

Introduction

A. The WTO Agreement

B. The WTO, the Organization

a. General features

b. The members

c. Decision-making

d. Relations with non-members

Civil society

IGO relations, and institutional coordination

Joining the WTO

C. The WTO Secretariat

D. The Dispute Settlement Mechanism

E. Three Other Features of the WTO's Work

a. Trade policy reviews

b. The Committee on Trade and Development and ‘implementation’

c. The Committee on Trade and Environment

F. A Tale of Two Cities: From Seattle to Doha

G. After Doha

The World Trade Organization (WTO) is one of the world's most important and influential international organizations. Its role is to administer the multilateral trade agreements adopted during the Uruguay Round of trade negotiations, to review national trade policies and to serve as a framework for further trade negotiations. It also has the power to issue binding legal rulings on disputes that arise between its members, and to enforce these rulings by allowing imposition of trade sanctions. The WTO’s work covers three categories of economic activity: trade in goods, trade in services, and intellectual property. These three categories cover a wide range of sectors with implications for most aspects of daily life such as food production, pharmaceuticals, clothing, energy provision, banking, transport and telecommunications. In July 2002 the WTO system applied to 144 countries, which, according to the WTO website, account for 'more than 97% of world trade.' (1) Another 29 countries have formally applied to join the organization.

Despite its broad coverage, the WTO is only one element of international trade regulation. Over the last few years, regional trading agreements have grown in importance and in number. Some of these – such as the European Union and the North American Free Trade Agreement (NAFTA) – have broader coverage, more far-reaching liberalization objectives or stronger enforcement mechanisms than the WTO. A global analysis of the effects of the interaction of international trade and human rights rules should consider the rules and procedures of regional agreements to be complete. This book will focus on one, important, part of the picture: the WTO.

Like GATT, the WTO Agreement is premised on the two key principles of non-discrimination and transparency. The WTO Agreement gives effect to non-discrimination through the principles of most-favoured nation (MFN) treatment and national treatment. These two principles are reflected in different parts of the WTO Agreement, including GATT 94, the General Agreement on Trade in Services (GATS) and the Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPs).

Transparency remains a key underlying principle of the WTO, set out in a number of its provisions, including GATT 94 Article X and GATS Article III. Governments must publish their trade measures including rates of duties or taxes, restrictions on imports or exports, and agreements affecting international trade policy. The rules also require members to notify changes in their trade policies to the WTO. Much of the work of the organization's committees and councils consists of exchange of information on new or planned domestic trade measures, a procedure which often serves to defuse potential conflicts before they occur. The Trade Policy Review Mechanism (discussed in more detail below) provides a further means of promoting transparency, both at national and international level.

Like GATT, WTO allows for exceptions to its rules. For instance it tolerates more favourable treatment of countries within customs unions. The exceptions set out in Article XX allow derogations from its rules in certain circumstances for a number of reasons including the protection of public morals, the conservation of exhaustible natural resources, or to protect health.

The WTO Agreement was adopted in Marrrakesh in 1994, at the conclusion of the Uruguay Round of multilateral trade negotiations, and came into force on 1 January 1995. The term "WTO Agreement" refers to the package of 29 individual legal texts and 28 declarations, decisions and understandings that spell out the obligations of WTO members. The Agreement was adopted as a ‘single undertaking,’ meaning that all WTO members are bound by the whole of the WTO Agreement. This contrasts to the situation existing previously in GATT, often referred to as ‘GATT à la carte’, where a State could pick and choose which of the GATT's agreements or codes it wanted to be a party to. Two ‘plurilateral’ agreements - the Agreement on Trade in Civil Aircraft and the Agreement on Government Procurement - also exist under WTO auspices. These agreements are only binding on states that have agreed to them – currently about thirty states have ratified each one.

The WTO Agreement took seven years to negotiate and the result is broad and complicated. Given the scope and the length of the negotiations, it will not be surprising to learn that the WTO Agreement is extremely broad and complex – probably only a handful of specialists really understand its full implications. The 128 countries that were GATT members at the end of the Uruguay Round were given two years to ratify the Agreement. Most ratified it during 1994 with little domestic debate. (3)

The WTO Agreement sets out substantive rules relating to trade as well as procedures and an institutional framework to govern the rules. The Agreement Establishing the World Trade Organization (Marrakesh Agreement) is the part of the WTO Agreement that establishes the WTO as an organization and sets out its functions and structure.

When the WTO came into being on 1 January 1995, it replaced the ad hoc organizational arrangement that had existed to service GATT. The Marrakesh Agreement sets out the functions of the WTO, which are to facilitate the implementation, administration and operation of the WTO Agreement and to further its objectives; to serve as a forum for further multilateral trade negotiations; and to administer the Dispute Settlement Mechanism and the Trade Policy Review Mechanism. The Marrakesh Agreement also specifies that, to achieve greater coherence in global economic policy-making, the WTO shall cooperate with the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (World Bank).

The WTO works through councils and committees in which all members can participate. The Ministerial Conference is the WTO’s highest decision-making body, and has power to act on all matters under any of the multilateral trade agreements. The Ministerial Conference meets at least once every two years, setting strategic direction and making all final decisions.

The General Council is responsible for overseeing the WTO's day-to-day business and management and is in practice the key decision-making body of the WTO for most issues. The General Council meets about twelve times a year at WTO headquarters in Geneva and is usually attended by the senior representative (ambassador) of member countries. The WTO works through dozens of committees, councils and other bodies which deal with specific issues, such as agriculture, sanitary and phytosanitary measures, environment or investment, which are usually attended by junior officials or technical specialists. All WTO bodies except for the Ministerial Conference meet at WTO headquarters in Geneva.

Most countries in the world are either WTO members or have applied to join, in contrast to GATT, in which Eastern European and Soviet States did not participate. WTO rules now extend to States formerly outside the Western sphere of influence such as China, Cuba, Estonia, and Kyrgyzstan. Current applicants for membership include Russia, the Ukraine, and Vietnam.

The WTO is a "member-driven" organization – meaning that all policy decisions come from the WTO membership as a whole. Its member-driven nature has three dimensions: all members can participate in the Ministerial Conference, General Council and other Councils and Committees through which the WTO carries out its work. Secondly, unlike other international bodies, it does not delegate power to smaller sub-groups of members such as the Executive Board of the International Monetary Fund (IMF) or the UN Environment Programme's Governing Council. Thirdly, the WTO secretariat (see below) has very little power to propose policy orientation or take any decisions, members keep this power for themselves.

The WTO has been described as a ‘collegiate of delegations serviced by the secretariat’ in contrast to the IMF and the World Bank, where ‘…the best answer to the question, ‘what is the World Bank?’ remains ‘its staff,’ while for the Fund ‘The staff and the executive board’ would be a better approximation.’ (4) Indeed, the member-driven nature of the WTO means that delegates play a much more active role in day-to-day activities than they do in other international organizations: the Geneva-based delegates of WTO members, backed up by colleagues in the capitals, are the main actors in the organization's ongoing activities. This means that the size and composition of a country’s delegation will shape that member’s ability to have its views reflected in the WTO. And this ability varies widely: in 2002, the size of the delegations of the 119 WTO members with representation in Geneva ranged from one part-time professional to twenty-three, with an average of four or five professionals per delegation. Some of the better-resourced members fly in specialists for meetings of WTO technical bodies such as the Council on Trade-related Aspects of Intellectual Property Rights (TRIPs) or the Committee on Trade and Environment.

The inequality in resources means that although on paper all members are entitled to participate in all WTO meetings, many small or developing countries are in fact excluded from key meetings, or are unable to be sufficiently prepared to take part in a meaningful way. The WTO held 400 formal meetings and 500 informal meetings in 2001. Countries with small or non-resident representation in Geneva are not even able to participate in all WTO formal meetings – of which there are usually between five and nine a week, some lasting two or more days – let alone the constant round of ‘informal’ meetings in which members flag proposals, discuss bilateral issues and agree joint positions. With the new negotiations agreed to in Doha, the number of meetings is expected to rise during 2002, further widening the gap between those countries that are able to afford well-resourced representation in Geneva and those that are not.

The WTO Agreement provides that each member has one vote, unlike the IMF and the World Bank, where voting is weighted according to the size of the economy. The WTO – like GATT before it – is therefore nominally democratic and theoretically gives developing countries a majority voice, since they outnumber industrialized countries three to one. Voting very rarely occurred in GATT, given members’ strong preference to operate on the basis of consensus. Continuing this tradition, WTO decisions are reached without a vote.

The WTO’s consensus decision-making contributes to the constant climate of negotiation in the WTO, as all issues on which a decision needs to be made are discussed – often lengthily – in unofficial, informal meetings, and as every decision to be made, however small, can become a bargaining chip in negotiations in other areas.

Combined with the absence of a smaller executive council-type body in the WTO, adherence to the consensus system means that it is becoming ever harder for members to reach agreement. This difficulty is exacerbated as more countries join the WTO and seek common positions amongst the increasing range of interests they represent. In 2001 and 2002 even fairly simple matters, like adding an item to a meeting’s agenda, or the annual nomination of the Chairperson of one of the WTO’s bodies have proved difficult to resolve. Yet most members are reluctant to move away from the consensus system, as recourse to voting, even on small matters, could set a precedent for voting on more significant issues. Developing countries like the consensus system as it gives all members, large or small, potential veto power in the WTO, thus enhancing their negotiating leverage. And industrialized countries are reluctant to resort to voting as they are in the minority, but can still influence developing countries through financial and economic incentives or threats in other areas of international policy.

Informal consultations do take place within smaller groups of WTO members. Groups that regularly meet and agree joint positions or speak with one voice in the WTO are the Cairns Group, the African Group, and the Association of South East Asian Nations (ASEAN). The ‘quad’ – comprising the US, the EC, Japan and Canada – is the group with the most weight in the WTO, even though its members frequently disagree amongst themselves. In recent years, the ‘like-minded group’ – including large developing countries like Egypt, India, Pakistan and Malaysia – has been an active voice in the WTO.

Proposals for the creation of a smaller-sized executive or consultative body to help streamline WTO decision-making resurface periodically. (5) Yet no one realistically expects WTO members to agree to any such body in the near future. For one thing, too many countries would want to be part of it to make it workable. But the strongest resistance is associated with members’ reluctance to institutionalize processes that include only a few of the stronger actors in international trade, often referred to as ‘green room’ processes. This refers to a room in the WTO headquarters, to which the Director-General would convoke key countries to hammer out agreement on difficult issues. The agreement reached would then often be presented to the rest of the membership as a fait accompli. The term 'green room' has become a pejorative term for untransparent and exclusionary trade negotiation processes.

Indeed, most observers cited the lack of internal transparency and the green room process as the main reasons why the Seattle Ministerial Conference collapsed without agreement in 1999 – developing countries, outraged by the exclusionary process, refused to agree to a Ministerial Declaration and walked out of the Conference. Following the virulent condemnation of these processes by developing countries and civil society alike, WTO members and the secretariat vowed after Seattle to increase ‘internal transparency.’ This entails improving information and decision-making processes within the WTO in order to facilitate effective participation of all members in the organization's discussions.

The increasing difficulties on reaching agreement have been ‘resolved’ by default. This is typical of how many matters are resolved in the WTO these days, with members neither agreeing to maintain the status quo nor agreeing to any change, meaning that they continue to limp on using unsatisfactory, unclear or ad hoc processes.

Discussions on internal transparency in the WTO are often linked with discussions on ‘external transparency.’ External transparency refers to efforts to open the WTO up to greater scrutiny by non-members. The demands for a new WTO culture of openness come from developing country officials as much as from civil society and public interest non-governmental organizations. Although it was the developing country officials who caused the debacle of the Seattle Ministerial by walking out, it was the civil society groups protesting in the streets of Seattle who drew the world’s attention to the strength of feeling against corporate-led globalization and the role of the WTO in this process.

In GATT's early days, the secretariat had acknowledged that ‘…it is clearly desirable that the International Trade Organization (ITO) should be able to take full advantage of the knowledge and expertise of the NGOs.’ This never materialized into concrete arrangements for GATT relations with NGOs, mainly because the ITO did not come into being. (7) Besides, until the early 1990s, only a handful of NGOs displayed any interest in international trade. The few that did - such as the International Chamber of Commerce and the International Federation of Inspection Agencies (IFIA) - tended to be concerned with technical aspects of trade issues, such as preshipment inspection in the case of IFIA. Public interest NGOs did not participate, or seek to participate, in GATT’s work.

It was only during the Uruguay Round, as European farmers protested against the GATT agriculture negotiations and people began to fear the effects of trade on the environment, that public attention turned to the international trade system. After the GATT panel ruling on the Tuna-dolphin dispute, and developments in the Uruguay Round suggesting that the framework for international trade would be backed by a strong institutional structure and firm dispute settlement system, criticisms of the legitimacy, strength and effects of the trade organization became even more widespread. As a consequence, since its creation, the WTO has been under growing scrutiny and pressure to increase transparency and open its work to broader participation.

Such openness has been slow in coming and the predominant approach has been to keep NGOs at arm’s length. In other international policy fora governments recognize that NGOs have a role to play in providing information and analysis and in broadening policy debates, but the lack of civil society interest in GATT’s work meant that NGOs are still largely an unknown quantity for trade officials and the WTO secretariat. Moreover, the first time many GATT officials encountered NGOs was when – mostly Northern – environmental groups first expressed their concerns regarding the international trading system, and did so in a confrontational and insensitive way. Many NGOs labelled the multilateral trading system as ‘GATT-zilla the flipper killer’ or a ‘GATT-astrophe,’ and some advocated policies that either fell way outside the multilateral trading system’s mandate or that played into the hands of Northern protectionist or eco-imperialist interests. Even though most NGOs who now engage with the WTO have a more sophisticated and nuanced approach, many share the objective of ensuring that WTO discussions consider wider policy issues – in itself a controversial objective, regardless of who raises it. Given this background, it is less surprising that the WTO’s steps towards NGOs have been timid and progress slow.

The WTO is the only intergovernmental organization that has no formal arrangements with NGOs. WTO members that are reluctant to provide more NGO access cite the inter-governmental, contractual and enforceable nature of the WTO, as well as the organization’s negotiating climate. At a General Council meeting in July 1998, for instance, Argentina said that government positions were the result of a delicate balance between often contradictory domestic interests and that achieving the right balance could become much more difficult if NGOs could intervene at the international level. Several members have expressed the fear that making documents public could provide indications of current or future negotiating positions, reducing governments’ leeway for reaching agreement in the WTO. Other members, as well as the secretariat, have put forward the views that NGOs are not necessarily legitimate or representative, and that there are so many NGOs interested in the WTO’s work that any sort of selection process would be extremely difficult. (8)

Improving external transparency and WTO relations with civil society includes responding to calls for easier access to WTO documents, for more possibility for civil society to take part in WTO meetings, and for greater NGO participation in the dispute settlement mechanism. In the WTO’s seven years of existence, some progress has been made. The WTO secretariat has created an NGO unit within its External Relations Division, which has been responsive to NGO requests for information or briefings on specific issues. Each year, the secretariat organizes a symposium in Geneva for NGOs on WTO-related issues. In addition, it has occasionally put together regional symposia with NGOs. The annual WTO NGO symposium is a useful meeting point for the hundreds of civil society representatives whose work relates to trade, and has an interesting format which grants civil society some role in identifying themes to be discussed and speakers to be invited. Yet few country delegates participate, and the NGO symposia have been criticized for being a public relations tactic of the secretariat rather than a real attempt to discuss the most relevant of WTO-related issues.

Members have been discussing facilitating public access to WTO documents since the organization started work. The basic principle in GATT and in the early days of the WTO was that all official documents were ‘restricted’, i.e. not available to the public. In 1996, members adopted procedures for circulating WTO documents, which officially reversed the basic GATT presumption that documents should be restricted. (9) However, many key documents, including agendas and minutes of WTO meetings, remained inaccessible to the public until they were too old to be of any practical use. The 1996 procedures were due to be reviewed in 1998 and members did start this review, with the EC, the US and Canada generally being the favourable to facilitating access to documents. The review only concluded in May 2002 – another example of the difficulties of reaching agreement in the WTO – when members adopted a decision(10) intended to further facilitate access to WTO documents, although most documents still remain restricted for at least a few weeks after they are issued.

One of the highest-profile NGO demands for participation in the WTO system has focused on the dispute settlement mechanism (DSM). DSM proceedings take place in private and are strongly criticized for being secretive. Critics argue that this makes the mechanism non-democratic, increasing the risk that it be captured by the corporate interests who often have the greatest financial stake in the outcome. The US has been the strongest advocate of allowing public access to the dispute settlement proceedings, and at times has been completely isolated in its views that some panel proceedings should be open to non-governmental groups and that documents relating to disputes should be made fully public. Several other WTO members realize that the secrecy of the process is counterproductive, at least in terms of public relations, and so have supported the view that the DSM should be allowed to receive amicus curiae (friends of the court) briefs from NGOs. However, others have vehemently opposed this, saying that it would give NGOs more rights than WTO members who had not registered their third-party interest in a dispute. This issue has been highly controversial in the WTO and is as yet unresolved. (11)

Although NGOs are not allowed into any of the WTO’s regular meetings, they have been able to attend Ministerial Conferences. Accreditation for Ministerial Conferences and symposia is granted on an ad hoc basis, and at each Ministerial a large number of industry groups have appeared on the same list of ‘NGOs’ as public interest civil society groups. At the WTO’s first Ministerial Conference, roughly half of the 159 registered ‘NGOs’ represented industry groups. Most of the others were Northern NGOs, whose agendas tended to differ significantly from Southern NGOs’ agendas. Over the years, Southern NGOs have become more present in WTO-related work, but corporate interests still figure prominently. Over 130 corporate lobby groups were present at the Doha Ministerial, of a total of approximately 365 NGOs. (12) For instance, the Canada-Korea Business Council, the Danish Beet Growers, and the Pharmaceutical Research and Manufacturers of America (PhRMA) appeared on the NGO list alongside groups like ActionAid Uganda, Development Alternatives with Women for a New Era (DAWN), Greenpeace and Oxfam.(13)

The novelty of the NGO presence within the WTO, and many members’ initial wariness of their motives, combined with the difficulties WTO members have of making decisions on any procedural issue, have all contributed to the WTO’s slowness in formalising its relations with NGOs. This slowness has strengthened public perception of the WTO as not only a secret and non-democratic institution, but also as inaccessible and unresponsive to civil society. This has increased hostility not only towards the WTO but towards the multilateral trading system more broadly. The WTO secretariat at times earned its unresponsive reputation by failing to distinguish between business groups, policy NGOs and hostile, anti-globalization street demonstrators, often treating constructive groups in the same way as hostile ones.(14) Director-General Mike Moore and some of his senior staff riled even those NGOs that interact positively with the WTO by stating publicly that NGOs were unelected, and did not understand trade policy.

The attitude of WTO members towards NGOs thawed somewhat during 2001, when civil society vigorously supported the Brazilian and South African governments in their struggle against the pharmaceutical industry about access to medicines. This permitted trust to be built between a number of developing countries and civil society groups. A Brazilian WTO delegate commented that until then, developing countries had tended to see NGOs as another political instrument of industrialized countries, but now they see that NGOs can be allies in helping developing countries offset the power of industrialized countries.

Nevertheless, the fact remains that instead of establishing a strategy aimed at enhancing openness and transparency in its functioning, the WTO is managing its relationship with NGOs in an ad hoc way. The ad hoc and informal nature of WTO relations with NGOs mean that what can be seen as a trend towards an increasingly open and NGO-friendly WTO is in fact a fragile evolution: its non-entrenched nature makes it reversible at any time.

The long-standing impasse regarding observer status of intergovernmental organizations (IGOs) with the WTO is yet another illustration of the difficulties of reaching decisions in the WTO, as well as of the politicization of the organization. IGOs must apply for observer status in each WTO Council or Committee separately. Only eight IGOs have observer status at the WTO’s General Council. Many organizations’ requests for observer status with the General Council or other WTO bodies are pending. Those who have asked for, but not yet been granted, observer status with the General Council include the European Free Trade Association (EFTA) the UN Development Programme (UNDP) and the World Health Organization (WHO).

Progress on granting international organizations observer status has been held up by the refusal of the US and Israel to grant the 22-member League of Arab States observer status in any WTO body. In retaliation, Egypt and other members that support the League's request have refused to approve any of the other pending requests, thus blocking the whole process.

This counterproductive state of affairs limits the WTO’s scope for interacting with organizations whose mandate intersects with its own. Moreover, it perpetuates the impression that the WTO only cooperates with IGOs that share its objectives of economic liberalization, since the WTO Agreement emphasizes the links between the WTO, the World Bank and the IMF. References to other IGOs are few and far between, and refer mainly to technical or standard-setting bodies such as the Codex Alimentarius Commission, the Customs Cooperation Council or the International Organization for Standardization (ISO). Since its creation, the WTO has concluded agreements in specific areas with other organizations such as UNCTAD, the International Trade Centre (ITC), and the World Intellectual Property Organization (WIPO) - these agreements focus primarily on cooperation for technical assistance and training.

This situation is in sharp contrast to the system of global economic governance that the Havana Charter envisaged, in which the international trade organization was to be part of the UN family and the International Labour Organization (ILO) would have been at the heart of international decision-making on trade. ILO does not have observer status in the WTO.

The fact that the ITO never came into being and that GATT existed by default for so long meant that GATT never became a UN specialized agency. GATT’s relationship with the UN was – in the words of one senior WTO official – ‘unrigid’: it occasionally reported to the UN Economic and Social Council (ECOSOC), but relations were not further formalized. During the Uruguay Round the question of whether the WTO should become part of the UN family was not an issue and so was hardly discussed. The general feeling of GATT members and the secretariat was that more formal links with the UN might have the undesirable results of diluting the WTO’s focus on trade, and introducing political considerations into the work of the multilateral trade system.

During GATT’s existence, coordination between it and the World Bank and IMF was deemed inadequate, and the cause of inconsistent macro-economic policies at the international level. At the end of the Uruguay Round, GATT members set out to remedy this by adopting the 'Declaration on the Contribution of the WTO to Achieving Greater Coherence in Global Economic Policy-Making' as an integral part of the WTO Agreement. The Declaration recognizes that ‘…difficulties the origins of which lie outside the trade field cannot be redressed through measures in the trade field alone[,]’ yet only envisages a role for three organizations: the World Bank, the IMF and the WTO. The WTO has consolidated its relationship with the World Bank and the IMF since the end of the Uruguay Round, for the stated purpose of ensuring coherence in global economic governance. In practice however, it clearly has the effect of restricting the range of economic options for countries, and increases the relative power of the three organizations. (15) Thus, the discussions on ‘coherence’ that do take place within the WTO are limited to the links between it, the World Bank and the IMF and, as one developing country delegate recently lamented, there is no indication that the discussion will be broadened to take wider development concerns – whether of economic or social nature – into account.

Any state or customs territory having full autonomy in the conduct of its trade policies may apply to join (‘accede to’) the WTO. Each accession is negotiated on a case-by-case basis between existing WTO members and the applicant. Applicant countries have observer status in the WTO, meaning that they can attend all meetings of the General Council and other WTO bodies, including negotiating bodies.

The accession process is divided into four stages. First, the government of the country applying for membership prepares a memorandum describing its trade and economic policies in the areas covered by the WTO Agreement. The memorandum is examined by the WTO ‘working party’ dealing with the country’s application. Working parties are open to all WTO members, but only about thirty members participate in each, usually including the applicant’s most active trading partners, and powerful economies like the US, EC, Canada and Japan. Over 60 WTO members sat on China’s accession working party. Russia’s working party has 65 members, 25 members participate in the working party on Nepal’s accession, and only 15 in Cambodia’s.

When a working party has made sufficient progress in determining the terms of entry for the applicant, such as commitments to observe WTO rules and transitional periods necessary to make the required legislative and structural changes, a series of bilateral talks begin between the applicant and individual WTO members, to determine what the applicant can offer in terms of tariff rates, market access commitments, and other trade policies. This stage is bilateral because different countries have different trading interests – but in accordance with the MFN principle, the acceding member’s commitments will apply equally to all WTO members, even though they were negotiated bilaterally. These talks are usually complicated and lengthy: it took China fifteen years to join the multilateral trading system. Russia, which applied for membership in 1993, is still negotiating. At 34 months, Kyrgystan was the quickest to reach agreement on the terms of its accession.

Once the working party has carried out its examination and the parallel bilateral market access negotiations are complete, the working party finalizes the terms of accession. These appear in a report, a draft membership treaty (‘protocol of accession’) and lists (‘schedules’) of the commitments of the member-to-be. The last stage is when the final package, consisting of the report, protocol and lists of commitments, is agreed to by the WTO General Council or the Ministerial Conference.(16) The applicant is then free to sign the protocol of accession and become a WTO member.

Advocates of trade liberalization say that, cumbersome as it is, the accession process is useful as it can encourage domestic economic reforms, in addition to making different ministries talk to each other (which they may not have done previously), and encouraging domestic transparency.

There are many criticisms of the process, including that existing members exploit the imbalance of economic power between themselves and the applicants for membership. Members ask acceding countries to make more far-reaching commitments to join the organization than any countries made to join GATT. A country asking to join the WTO is a demandeur and if it wants to be let in, has to pay the price, by accepting the conditions that existing members insist on. Acceding countries are asked to agree to commitments that go well beyond what WTO law actually requires, and that often even exceed those of existing WTO members. Roman Grynberg and Roy Mickey Joy point out that while it is one of the ‘…enduring convenient clichés of the multilateral trading system that the WTO is a ‘rules-based system’, the actuality is that accession is inherently power based and the very antithesis of the WTO’s credo.’ (17)

Most of the current applicants for membership are small developing countries, accounting for a tiny proportion of world trade, and with little or no bilateral trade with the world’s major economic powers. Yet the majors are members of all accession working parties and they have often refused to grant special and differential treatment to developing countries. Even the special provisions for the least-developed countries (LDCs) that the WTO Agreement itself provides for have been refused, as have requests for a gradual transition to compliance with WTO Agreements. Powerful WTO members have insisted that acceding countries agree to abolish agricultural subsidies, that they make more service sector commitments than any country made in the Uruguay Round, or that they adhere to the WTO’s plurilateral agreements. For instance the US required that Vanuatu – a tiny country that neither produces nor buys aircraft – agree to join the Agreement on Civil Aircraft. US demands of this type stem not from commercial interest but are systemic in nature, aiming to ensure that the WTO system applies in an increasingly stringent way to all members regardless of their development policies or their needs.(18)

Whilst developing countries are encouraged to apply to join the WTO, and then pressured into accepting highly stringent conditions in order to be let in, there is little prior assessment of what the economic or social effects of joining the WTO would be for them. This has increased the existing criticism that the WTO attempts to define developing countries’ economic priorities irrespective of these countries real needs.

Since the Doha Ministerial Conference there appears to have been a change in the climate surrounding developing countries’ accession negotiations. Unexpectedly, Vanuatu’s government rejected the negotiated accession package at the last minute as it was politically unacceptable and economically unrealistic: analysis showed that the reduction of import duties that it contained would dangerously undermine the country’s revenue base. This showed that even the smallest non-WTO economies could stand up for their interests and not accept whatever conditions existing members wanted to foist on them.

Developments in Cambodia and Samoa’s accession working parties in 2002 indicated that WTO members might in future be more responsive to small countries’ requests for technical assistance in drawing up their WTO offers and then in implementing their obligations. Another encouraging sign for groups working for economic justice was Russia's request to the ILO in July 2002, to advise it on 'the social dimension and social implications' of joining the WTO.(19) Many civil society groups still fear, however, that even if the climate in which developing countries’ accession requests are considered does thaw and existing members provide technical and financial assistance to them to join, it is likely that this assistance will be made available to ensure a country’s compliance with WTO rules, rather than to determine what kind of economic policies that country really needs.

The secretariat cannot propose new initiatives or policies or elaborate on existing rules, since the WTO’s member-driven nature means that all WTO policies and decisions come from the members themselves. An illustration of this is that neither the secretariat nor the Director-General can initiate dispute settlement proceedings against a member or even call on it to comply with WTO rules, even if that member is blatantly violating WTO rules. The contractual nature of the WTO Agreement means that only another member can initiate dispute settlement proceedings. The secretariat has relatively little power to undertake research and has no influence over WTO policy or an individual member’s trade policy.

In keeping with its limited mandate, the WTO secretariat is relatively small and all WTO staff are located in Geneva, unlike organizations such as the IMF, the World Bank, UNDP, or the Office of the High Commissioner for Human Rights (OHCHR), which have field offices. The WTO secretariat’s regular budget for 2002 was 143 million Swiss francs (approx. $US 84 million) and it had a staff of 560 (over 400 of whom are from industrialized countries). Compare this with the World Bank's Washington DC staff of 8000, the IMF’s of 2650 and the Geneva OHCHR’s staff of nearly 300. The 2002 budget of the OHCHR was expected to amount to $78 million. The World Bank’s annual operating budget is some $1375 million, and the IMF’s travel budget of approximately $80 million nearly matches the WTO’s total budget.

The WTO secretariat’s limitations do not mean that it is without influence, as its staff are a crucial source of technical information and institutional memory. The secretariat is actively involved in providing legal, economic and policy advice to delegations or to trade officials in capitals, and the staff’s technical skills and familiarity with the issues mean that they do have unofficial influence over policy.(21) As a result, the smaller and less competent a country’s delegation, the stronger the secretariat’s influence is likely to be.

The secretariat has been criticized on a number of grounds, most of which relate to its apparent support of pro-liberalization objectives, which have so far coincided with the objectives of the major trading powers. Before the Doha ministerial, for instance, the WTO website and the WTO Director-General openly supported a new round of trade negotiations – although many members firmly opposed this. Smaller countries were particularly critical of the secretariat’s support for industrialized country’s positions in the months preceding Doha.

The creation of a binding dispute settlement mechanism (DSM) as part of the WTO was one of the major outcomes of the Uruguay Round. The DSM applies to the whole of the WTO Agreement and is binding on all WTO members. The WTO DSM is based on the system that evolved under GATT, but whereas settlement of disputes in GATT often resembled diplomatic consultation, the WTO system is clearly judicial. The rules and procedures are contained in a legal text known as the Dispute Settlement Understanding (DSU), which is an integral part of the WTO Agreement.

A member can bring a dispute to the WTO when it believes that another member is violating rules set out in the WTO Agreement.(22) The disputing members must hold consultations, and if these fail, the complaining member can ask for a panel to be set up. The panel will deliver its ruling on the WTO-consistency of the measure at issue, usually within nine months. Either party can appeal a panel decision to the WTO's Appellate Body, a standing body of seven members, three of which sit on any one case. Importantly, the DSM allows the complaining party to impose trade sanctions (referred to as ‘compensation and suspension of concessions’) against a member who has not complied with a dispute settlement ruling.

The DSU specifies that panels shall be composed of three (or sometimes five) well-qualified individuals with proven in-depth knowledge of international trade and trade rules. The parties to a dispute are supposed to agree on the composition of the panel, but in practice the WTO secretariat increasingly nominates panel members from an indicative list of potential panellists. Most panellists are trade professionals, generally lawyers or economists, government officials or academics. Panellists are not paid (although their expenses and travel costs are covered), so a large burden of writing the panel reports falls on the secretariat. Panellists serve in their individual capacity and may not be subjected to government instructions. But members have been known to manoeuvre to have particular panellists appointed whom they think will be sympathetic to their case, and there are whispers that panellists serving on cases that involve the big trading powers and who hope to be reappointed to future panels may take pains to avoid ruling against these countries, particularly the US.

Appellate Body members have to have recognized standing in the field of law and international trade, and not be affiliated with any government. They serve four-year terms. Each of the seven members of the Appellate Body is selected on the basis of consultations between WTO members, and their nationalities broadly reflect the range of WTO membership. To help guarantee the fairness of the system, no-one knows in advance which three Appellate Body members will sit on a particular case.

Despite some flaws, the DSM is on the whole considered to be fair and efficient. The independent experts who sit as panellists or members of the Appellate Body are generally regarded as competent. Those familiar with the UN Human Rights system should rid themselves of any notion that the level of competence of the independent experts of the two systems is comparable: it is not. Hard-working and committed experts who have expertise in the relevant subject-matter and whose views are truly independent of their government’s are exceptions in the Human Rights system, but are in the majority in the DSM.

Over 250 cases have been brought to the DSM, and most are resolved uncontroversially. The mechanism is easy to trigger – a letter from one Ambassador to another suffices and there is no need for the complaining member to prove any legal or economic interest in the case which it is bringing to the WTO. The broad reach and swift processes of the DSM, as well as its capacity to award economic sanctions, have earned the DSM the reputation of being one of the – if not the – most effective international judicial bodies.

The efficiency and power of the DSM is also one of the main reasons that the WTO is feared. One reason for the fear lies in the very scope of the WTO’s rules. The areas covered by international trade rules today are much broader than the measures - applied essentially at the border - that GATT regulated. WTO rules reach into areas that were traditionally matters of national policy, such as food production, health and safety standards, packaging requirements and environmental protection. As we saw in chapter 2, this is to guard against such standards being used for protectionist purposes, but the extension of WTO rules and the strong DSM to enforce them carry with them the risk that heath, safety or environmental issues will be judged by trade policy standards, rather than by their public interest objectives.

No sooner was the WTO created than fears for the public interest were confirmed: in early 1995, Brazil and Venezuela complained to the DSM about a 1990 amendment to the US Clean Air Act, in what is known as the Reformulated Gasoline case.(23) The 1990 amendment required US refiners to make gasoline that was less toxic, as part of efforts to limit air pollution. How much less toxic the refiners’ gasoline had to be was determined by reference to the level of toxicity of each refiner’s gasoline in 1990. The 1990 US industry average was set as the reference point for foreign refiners importing to the US. Brazil and Venezuela said that this imposed a higher environmental standard on refiners importing to the US than on many domestic refiners and was therefore discriminatory. The panel considered that the imported and domestic gasoline had the same physical characteristics and end-uses, and are perfectly substitutable, and thus were ‘like products.’ The panel found that the US could not turn to the environment-related exceptions in GATT Article XX to justify treating a foreign and a domestic like product (gasoline) differently. The US appealed, but Appellate Body (AB) concurred with the panel, saying that the way the Clean Air Act was applied was unjustifiably discriminatory and a disguized restriction on international trade, and so violated WTO rules. This was the AB’s first ruling and it angered environmentalists as it compromized the environmental goal of clean air that was the Act’s stated objective.(24)

Soon after, the DSM again ruled against public interest concerns on trade grounds – in its 1998 Hormones decision.(25) Canada and the US had complained to the WTO that the EU ban on beef produced with growth hormones was contrary to WTO rules. Food safety groups, as well as most ordinary European citizens who did not want to run the risk of ingesting hormones along with their beef, felt that their countries should be free to enact laws that respected consumer concerns. The AB nonetheless ruled against the EU, saying that it could not maintain its hormone ban as the ban was not backed by sufficient scientific evidence, notwithstanding that the ban applied equally to European and to imported beef. The AB indicated that the burden of proof of justifying health regulations that restrict trade rests on those seeking to protect human health, implying that those seeking to liberalize trade would have the benefit of the doubt in such cases. This decision led several groups to charge that WTO panels have power to go over the heads of democratically elected governments to decide what health or environmental rules have a ‘valid’ scientific basis.(26)

All the same, the decisions in the cases, Coming so early in the WTO’s existence, the decisions in Reformulated Gasoline, Hormones and the 1998 Shrimp-Turtle case gave the DSM the image of a process whereby a small number of trade experts could – behind closed doors – use the strong and binding rules of the WTO to override any kind of public interest concerns. Thus they fuelled the suspicions of many public interest groups that the DSM, like the rest of the international trade system, would ride roughshod over environmental, health or other legitimate domestic policy objectives in their haste to prise markets open.

Since then, however, a number of DSM rulings have shown that WTO law can accommodate non-market and public interest criteria. In 2001 the AB issued its decision on the Asbestos case in which Canada had complained to the WTO that a French ban on the use and import of asbestos was WTO-incompatible and should be removed. The AB found that the ban was WTO-consistent, and that France could maintain it. Canada had argued that asbestos and its non-toxic substitutes were like products, and as such, should be subject to the same import rules. The AB disagreed, concurring with the EC that the risk to health of a product should be taken into account when determining whether two products are ‘like.’(27) By this decision, the AB showed that it can apply WTO rules in a way that upholds a country’s measures for the protection of workers’ or public health. It is also worth noting that the AB said in this case that the burden of proof lies on the country challenging the health-motivated trade restriction to show that the product in question does not pose a risk to health. This is a positive development in contrast with the earlier decision in the Hormones case, which lays the burden of proof on those wanting to protect public health. Moreover, in its 2001 decision in the Shrimp-Turtle case, the AB upheld a countries’ right to take trade-related measures to protect the environment.

Since the WTO’s early days, panels dealing with cases where scientific considerations were relevant have consulted experts on the questions at issue, showing that they do consider non-trade factors, and do take into account the views of non-governmental actors. Panels and the AB have also demonstrated that they do not operate in clinical isolation from other parts of international law. The AB came under heavy fire from environmental groups for not having taken the precautionary principle(28) into account in the Hormones case, but later, in its decisions in the Shrimp-Turtle case, it did refer to international environmental law. Moreover, panels and the AB have shown that they are capable of evolutionary interpretation, i.e. that they will interpret legal rules in accordance with today’s law and today’s reality.(29)

Despite these reassuring developments, the public interest-based concerns regarding the DSM remain valid. One concern is that a government can bring a case to the DSM – and is only likely to do so if it believes its interests are jeopardized. Often, a government will only know whether its interests are jeopardized if the affected industry itself draws that fact to its attention. In practice, it is usually industry that contacts law firms to get an opinion on whether they would have a chance of success in a WTO dispute. This means that only larger industries – i.e. those that can afford to seek specialized legal advice, and those which have the economic or political clout to affect a government’s interests – will be likely to have their interests defended by their government, through the WTO DSM.(30)

Smaller countries, or countries without a strong domestic industry may not have the resources to know whether they are being adversely affected by the non-application of WTO rules. Even if they do, bringing a case to the DSM is time-consuming and costly and may be well beyond their means. The mechanism has been criticized for having been used disproportionately by the wealthier WTO members – only a third of the cases it has considered have been initiated by developing countries. An independent advisory centre on WTO law was created in 2001 with the aim of making it easier for developing countries to bring complaints to the DSM. Within the WTO, several members have made proposals that aim to make the DSM more responsive developing countries’ needs. India, for instance, suggested extending the time limits for developing countries to comply with a DSM ruling. It also suggested outlawing cases brought by industrialized countries against developing countries whose trade in the disputed product or service from the complaining country are less than a certain percentage of its total imports of that or like products or services.

These proposals were made in the context of the Review of the DSU, which began in 1998 and was supposed to conclude in 1999. The review has at times been ongoing and at times in limbo since then, in large part because of members’ tendency to leave unresolved issues hanging. One of the major points on which the DSU Review stalled was the – still unresolved - question of whether or not the DSU allows panels and the Appellate Body to receive and consider amicus curiae (friends of the court) briefs from non-governmental actors. In 1998, the Appellate Body in the Shrimp-Turtle case said that they could, and in a few cases, the DSM has referred to information that non-governmental sources spontaneously submitted to it. Some WTO members – including the four complainants in the Shrimp-Turtle case – severely criticized the AB’s acceptance of NGO submissions.

The controversy over amicus briefs is part of the broader discussion regarding non-governmental participation in the WTO. Countries that have most vocally opposed amicus briefs include Egypt, Malaysia and Pakistan. Many developing countries fear that Northern NGOs will be the most frequent to submit amicus briefs and therefore that their views – which might significantly differ from the views of developing countries and of civil society in developing countries – will get a disproportionate hearing. They also fear that Northern NGO views could – intentionally or unwittingly – play into the hands of Northern protectionist lobbies. These fears are understandable when seen in the context of developing countries’ increasingly vocal expression of disquiet over the way the WTO and its DSM ‘have been hijacked to impose new obligations on developing countries.’(31) A practical consideration is that the DSU sets a strict time limit within which a panel must render its decision.  This tight time frame requires the parties and the panel to work intensively to meet the deadlines, and the burden of extra work could fall hardest on the countries that have the least resources to devote to dispute settlement.

In 2000, the AB feared that it would be flooded by amicus briefs from public interest NGOs concerned about the appeal in the Asbestos case, and so issued criteria for the amicus briefs that it would consider. This caused an absolute uproar amongst WTO members, many of which accused the AB of usurping members’ rights. An urgent session of the General Council was convened, at which members told the AB in no uncertain terms that the question of whether non-governmental bodies can participate in the DSM was not a procedural matter but involved a substantive change of DSM rules, which can only be done by a consensus decision of the members.

Indeed, the DSU provides that neither panels nor the Appellate Body may ‘add to or diminish [members’] rights and obligations’ under the WTO Agreement, as the power to do this lies solely with WTO members themselves. The DSM’s role is limited to clarifying the WTO Agreement.

The controversy over amicus briefs is one illustration of how the inability of WTO members to reach agreement on procedural or substantive issues has meant that it has often fallen – by default – on the DSM to fill in gaps in the law. This has heightened criticism on the grounds that the AB has stepped into the political realm supposedly reserved for WTO member governments, as well as criticism for being undemocratic, given that policy decisions are made by a small number of experts in closed DSM session rather than by governments in a more transparent process. Another criticisms is the difficulty for the WTO membership to agree to ‘correct’ what some members may perceive as unexpected or faulty AB rulings.

A key policy concern regarding the WTO DSM is whether it is right that (often medium-level) trade officials make decisions that touch on non-trade policy issues, as has been the case in Hormones, the Shrimp-Turtle and other cases. This question deserves more thought from public interest groups, many of which loudly condemn the WTO and its DSM for being too powerful and for extending its jurisdiction over too broad a range of issues. Paradoxically many of these same groups have called for labour or human rights standards to be enforced through the WTO’s DSM, which would of course further extend the WTO’s reach.

One of the ways the WTO carries out its function of overseeing and implementing the WTO Agreement is by reviewing all aspects of each member’s trade policies on a regular basis, through the Trade Policy Review Mechanism (TPRM). This aims to foster transparency and enhance communication with regard both to WTO obligations and to the general impact of the trade policies on the WTO member being examined, as well as on its trading partners and on the global trading system. TPRs are not supposed to be legalistic, and do not examine the legal compatibility of any particular measure with WTO rules.(32)

The frequency of each country's review varies according to its share of world trade: quad countries' trade policies are reviewed every two years (one in two being an interim review). Other members are reviewed every four, six or more years. Each review is based on two reports, one prepared by the member being reviewed and the other prepared by the WTO secretariat.

The idea of the TPRs – which started informally in the 1980s under GATT – was to enhance transparency, and thereby to promote better policy-making. Transparency limits the risk of elected officials and civil servants being influenced by vested interests at the expense of general public welfare. Ideally, the TPRM can provide the opportunity for a domestic impact statement and improve decision-making by alerting the public at home to the potential costs and benefits of trade policies. It can also signal potentially harmful changes to trading partners. The TPRM potentially shifts the balance of power in the WTO slightly in favour of developing countries by ensuring that the trade policies of the major traders are subject to regular public peer review.(33) Curzon Price has argued that the peer pressure of the TPRM will encourage countries ‘to co-operate for enhanced international welfare.’(34)

The TPR’s mandate, set out in the WTO Agreement, specifies that the mechanism should permit ‘evaluation of the full range of individual members’ trade policies and practices…’ and should take place ‘… against the background of the wider economic and developmental needs, policies and objectives of the member concerned, as well as of its external environment.’

In practice though, TPRs tend to focus on a member’s trade liberalization policies, and focus more on the impacts on other members rather than on nationals, and are rarely used as an opportunity for broadening the debate over trade policy at the national level. Secretariat reports are based mainly on information from the World Bank and the IMF – although the TPRM allows secretariat reports to be based on information from a much broader range of sources, saying these should be based ‘on the information available to it’. Secretariat reports tend to commend countries’ tariff reductions or their creation of an environment conducive to private investment, but not to look at the overall welfare effects of the trade policies or discuss who benefits and who loses from these.

The Committee on Trade and Development (CTD) was created in 1965 to oversee Part IV of GATT. The CTD remains the general focal point in the WTO for development issues and the relationship of these to activities in other multilateral agencies. Still, developing country concerns with respect to a particular part of the WTO Agreement are often dealt with in the relevant WTO body.

A Sub-Committee of the CTD on focuses on ways of integrating Least-Developed Countries (LDCs) into the multilateral trading system, and on technical cooperation. The Doha Ministerial created two related working groups: the Working Group on Trade, Debt and Finance, and the Working Group on Trade and Transfer of Technology. These are mandated to examine issues that arise in their subject-areas, and to report to the Fifth (Cancun) Ministerial Conference in 2003 on progress they have made.

The CTD reviews the application of the WTO Agreement’s special and differential treatment (SDT) provisions in favour of developing country members, works on guidelines for technical cooperation, and discusses the concerns and problems of small economies. The CTD is active as a discussion forum but cannot actually negotiate trade rules. Since the Doha Ministerial, the CTD has also been meeting in special sessions to deal with SDT provisions and other development issues mandated by the Doha Declaration(35) and by the Doha Decision on Implementation-related Issues and Concerns.

The CTD is not one of the WTO’s most important bodies. It is discussed here because of the importance of ‘implementation’ in the WTO. ‘Implementation’ refers to several related concerns dear to developing countries. One concern is that industrialized members of the WTO have not implemented their WTO obligations in favour of developing countries. This is particularly visible in the area of textiles, where the US, the EU and other industrialized countries have been stalling since the end of the Uruguay Round on their commitment to remove obstacles to textile imports into their countries. The obstacles they have removed essentially exclude products of significant export interest to developing countries, while broader liberalization has been ‘backloaded’ – i.e. pushed right back to 2005, the end of the time-frame within which such obstacles must be removed.

A second concern regards the difficulties developing countries have had in implementing their Uruguay Round obligations within the agreed time-frames. Indeed, many developing countries have found it difficult and expensive to enact the domestic legislation required to comply with WTO obligations in a number of areas, including food safety standards and intellectual property. The third concern involves the broader question of whether the substantive provisions of the WTO Agreement are compatible with national development priorities.

Concerns about implementation arise within the broader view that the Uruguay Round resulted in a set of agreements that are inherently skewed against developing countries’ interests and prevent them from adopting economic policies which developed countries used to their advantage, such as investment strategies that promote the use of local resources and skills.

Since the end of the Uruguay Round, discussion of implementation has been taking up more and more space on the WTO’s agenda. The Seattle Ministerial showed that developing countries would not budge on other issues in the WTO until they obtained satisfaction on implementation. Shortly before Doha Murasoli Maran, Indian Minister of Commerce and Industry, said: ‘Implementation constitutes the cornerstone of the demands of the developing countries.’

The texts adopted at Doha do pay more attention to development issues than any previous WTO agreement, and address several of the implementation concerns raised by developing countries. The texts recognize their special needs and interests, clarify some of the development-related provisions in existing WTO agreements and allow extension of the time-frames for developing countries to comply with their WTO obligations. For instance, they prolong the deadline granted to developing countries to phase out certain types of subsidies. The Doha texts provide that the unresolved implementation issues should be addressed under ‘the relevant negotiating mandates of the WTO’s new work programme or in the standing WTO bodies on a priority basis;’ part of this work falls to the CTD. In particular, the Doha texts reaffirm that SDT is an integral part of the WTO Agreement and state that SDT-related provisions should be strengthened and made more ‘precise, effective and operational.’ This work is to be carried out by the CTD meeting in special session.

An important component of the Doha texts is the provision for greater technical assistance and capacity building. Building on this, industrialized members of the WTO have since early 2002 pledged more funds for this purpose than anyone had expected. The amounts still seem minute in comparison to those at the disposal of other multilateral agencies, such as the World Bank. The WTO’s expanded technical assistance plan has been criticized as it aims to secure members’ compliance with WTO rules, and ensure the completion of the ‘new round,’ rather than to help developing countries identify what their development needs are and whether existing or new WTO rules would be the best way to serve their interests.

The Doha Ministerial Declaration placed the environment squarely on the multilateral trade agenda for the first time. It strongly reaffirms members’ ‘commitment to the objective of sustainable development’ and recognizes that under WTO rules no country should be prevented from taking measures for the protection of health, or of the environment, as long as the measures comply with WTO requirements.

The Committee on Trade and Environment (CTE) was created by the Decision on Trade and Environment, adopted at the conclusion of the Uruguay Round as part of the WTO Agreement. The CTE’s original mandate included identifying the relationship between trade measures and environmental measures in order to promote sustainable development, and making recommendations on whether any modifications of the provisions of the multilateral trading system were required.

Since its inception, the CTE has been considering a ten-item agenda which includes the export of domestically prohibited goods, the relationship between trade rules and environmental policies, and the relationship between the WTO’s DSM and those of multilateral environmental agreements. Even keen supporters of the CTE and participants in its work agree that the Committee has been unproductive, and unable to make any recommendations on how the trading system should change to accommodate environmental concerns.

Early work in the CTE kept alive developing countries’ fears that the excuse of environmental protection might be used to mask protectionist intentions, or as a means of further conditionality in international trade. Moreover, as a report of a meeting of African, Caribbean and Pacific (ACP) countries attests, many developing countries were worried that all industrialized countries wanted out of the CTE was to get a package of environmental decisions that would meet the demands of their vociferous domestic lobbies, and once these were satisfied, they would ignore requests for action on issues of interest to developing countries.(36)

Despite the lack of progress in the CTE itself, the WTO has demonstrated a deepening understanding of environmental issues, and these are now integrated throughout the WTO’s ongoing work. Specific issues are routinely discussed in WTO bodies; for instance the harmful effects on the environment and on livelihoods of fisheries subsidies are considered in several other bodies apart from the CTE. The TRIPs Council has discussed the relationship of the TRIPs Agreement with the Convention on Biological Diversity. As mentioned above, the dispute settlement mechanism has also displayed an increasing awareness of the content and role of environmental law.

The Doha Ministerial Declaration explicitly commits members to negotiate in three environment-related areas: (1) the relationship between WTO rules and trade-related rules contained in international environmental agreements (such as the Montreal Protocol on Substances that Deplete the Ozone Layer or the Kyoto Protocol on Climate Change), (2) procedures for regular exchange of information between the secretariats of these environmental agreements and relevant WTO committees, including the granting of observer status, and (3) the reduction or elimination of tariff or non-tariff barriers to environmental goods and services. The Ministerial Declaration also asks the CTE to pay particular attention to three issues already on its agenda; namely, the effects of environmental measures on market access, provisions of the TRIPs Agreement that have environmental implications, and issues related to eco-labelling.

The CTE’s role has been strengthened post-Doha, and future negotiations may result from the CTE work programme after the next WTO ministerial in 2003. Environmentalists and public interest groups criticize the Doha text on several grounds. First, it is formulated in such a way that negotiations could result in WTO members declaring that trade rules have primacy over the rules of international environmental agreements. NGOs have also pointed out that whilst the third issue to be negotiated – liberalization of trade in 'environmental goods and services' – sounds quite benign, it includes areas like water supply, where the impact of deregulation and privatization on the environment and on public health could well be disastrous.(37)

Interviews with a wide range of developing countries in January 2002(38) showed that old fears die hard. Developing countries hesitantly accepted the trade and environment provisions of the Doha Workplan but continue to view these issues with lingering apprehension. The environment is open to be abused as a barrier to trade, and fear of environmental protectionism remains the South’s persistent and most serious fear.(39)

The texts adopted at the end of the Uruguay Round confirmed the role of the WTO as a key player in the promotion of a neo-liberal model of economic relations. However, in the years since then there has been a backlash against and a questioning of this economic model.

Anti-WTO feelings were already clear at the Geneva Ministerial Conference in 1998, when street demonstrations turned into several nights of rioting. Since then, anti-globalization demonstrations have been organized – and often turned violent – at every gathering of international economic leaders, including meetings of the leaders of the G-7 group of industrialized countries, and at the annual meeting of the World Economic Forum of world political and business leaders (usually held in Davos, Switzerland).

The WTO first became a household word when 50 000 anti-WTO demonstrators arrived in Seattle for the Ministerial Conference in late 1999. The size and hostility of the demonstrations earned them the name ‘Battle of Seattle.’ The protesters thus achieved what the public relations departments of the WTO, the IMF, the World Bank and the EU had failed to do: they ‘made economics exciting.’(41) Until the mass demonstrations grabbed headlines worldwide, noone, except from specialists, had been interested in institutions like the WTO.

In addition to making discussions about economic globalization more of an everyday matter, the demonstrations at the Seattle Ministerial probably reinforced the bold stance taken by Southern delegates inside the Conference. In the months prior to Seattle, developing countries had already been flexing their muscles, as evidenced by their refusal to agree to the US’s nomination of Mike Moore as WTO Director-General. This coincided with the five-year deadline for developing countries to implement their WTO obligations, which many developing countries were unable to meet. Others were unwilling to do so: they had not obtained the promised benefits from the Uruguay Round, and were questioning whether the WTO-mandated economic model was appropriate for them. The WTO Agreement provided that several of its provisions be reviewed and these reviews also started in the months before Seattle. These opportunities for stocktaking confirmed developing countries’ sense that ‘the Uruguay Round’s ‘grand bargain’ was looking more like a ‘bum deal,’’(42) and they resolved not to let themselves be shut out of the trade negotiating process again. As a result, developing countries articulated clear demands in the run-up to Seattle.

Disagreements between industrialized countries on issues such as agriculture and genetically-modified organisms threatened the likelihood of agreement at the Seattle Ministerial, although industrialized countries favoured a new round of trade negotiations and assumed that they would get it. Thinking that the new round was a foregone conclusion, industrialized country delegates paid little heed to their developing country counterparts. The many anecdotes of disrespectful treatment of developing country delegates meant that it should not have been a surprise that, for the first time in the WTO’s history, African and Caribbean countries publicly decried the lack of transparency in WTO negotiations. Ultimately, the developing countries’ walk-out from the Seattle Ministerial scuppered the expectations of those who had assumed that the Conference would launch a new round of trade negotiations, and forced them, at last, to take note of developing countries’ claims.

After the WTO’s Seattle debacle, doubts about whether the organization had a future led to an expansion of bilateral and regional trade agreements. These have tended to be worse for developing countries than multilateral trade agreements, whilst also more harmful for the public interest and less transparent and accountable than those agreed to within the WTO.

In the months following Seattle, the WTO embarked on a flurry of ‘confidence-building’ activities, including a process to address implementation concerns. Meanwhile, public interest groups were increasingly focussing their work on WTO-related issues and working with developing countries to elaborate more development- and public interest-friendly trade policy options.

Developing countries thus approached the Doha Ministerial Conference somewhat strengthened, with Brazil, India, Nigeria and Tanzania playing a particularly active and skilful role in the negotiations. They came away from Doha with much of what they had been seeking there, including a Ministerial Declaration that recognizes that public health needs take precedence over TRIPs Agreement patent requirements, a Declaration on implementation-related concerns, and extension of deadlines for some developing countries to comply with WTO obligations.

Months before it took place, it was plain that the Doha Ministerial was a crucial make-or-break opportunity for the credibility and the future of the multilateral trading system. After September 11, Doha was also used as a symbol in the ‘fight against terrorism.’ Three weeks before the Ministerial, US President George W. Bush said ‘The terrorists attacked the World Trade Center, and we will defeat them by expanding and encouraging world trade.’ After the event, many observers mentioned that the ‘September 11 effect’ had increased the willingness of governments to compromise.(43)

The WTO emerged strengthened from Doha, where success reduced the likelihood of seeing the world splinter into regional trading blocks. WTO delegates and observers concur that even if the current rules and processes of the multilateral trade system are not satisfactory, the WTO is better than no system at all, particularly as it insulates the smallest economies from power politics, and provides them with a clear set of rules by which to measure the actions of their trading partners.

Nonetheless, developing countries remain understandably wary of what new WTO negotiations could yield. The WTO has a track record of promises broken to the South.⁽⁴⁵⁾ Moreover, the leading economic powers apply double standards in their international trade relations,(46) as exemplified by numerous examples, such as the fact that the US, one of the loudest advocates of trade liberalization in the WTO, adopted measures blatantly hostile to free trade soon after Doha, including imposing tariffs on imports of steel and stepping up subsidies to its farmers.

The Doha texts do contain more explicit language in favour of development and public interest concerns than previous GATT or WTO agreements. The question is of course how the development and public interest language will be put into operation as the new trade negotiations gather steam. They could provide the opportunity for developing countries to reap benefits from the international trade system: they would, for instance, gain from reduced agricultural subsidies in Europe and the US, or from reduction of high tariffs in industrial countries.

Although these negotiations, like the WTO more generally, are supposedly based on economic considerations, one should not deceive oneself that political considerations play no role. As we saw, the political climate after September 11 contributed to the agreement reached in Doha, not only because of WTO members' willingness to reach compromize there but also because of US support to Pakistan. Pakistan has in the past been one of the most vociferous opponents of any new issues in the WTO, but its delegates were unusually quiet in Doha. It is more than likely that the trade concessions that the US granted Pakistan, particularly on textiles, in order to entice it into the US-led 'war against terror' led Pakistan to step out of its usual role of anti-new issues leader in the WTO.

One of the unquestionable benefits of the Doha Ministerial outcome is that it has built new space into the WTO system, which up to then had been very legalistic and tightly focussed on the rules and the deadlines set out in the WTO Agreement. This breathing space should be welcome, particularly for those wishing to ensure that international economic policy-making proceeds in a measured and well-thought-out way. So far, trade liberalization has been based more on ideology than on any assessments or prior awareness of what the outcome of a particular trade policy might be. Given the constant negotiating climate in the WTO, and the fact that it is not within the secretariat's mandate to provide neutral background policy research, the postponement of deadlines for developing countries to implement WTO rules, combined with the new negotiations, could provide the opportunity to hold the WTO accountable to its objectives of raising standards of living, promoting full employment and achieving sustainable development. This opportunity is brought within closer reach given Doha's acknowledgment of the importance of a variety of public interest concerns. Coming at a time when more civil society groups are joining up with developing countries to analyze the implications of trade liberalization, and to formulate policies that really do serve development and promote sustainable development, this opportunity could prove fruitful. The key will be to hold WTO members accountable to their word – not only as set out in the Doha texts, but also in other areas of international law, including human rights.