ONLY days away from the World Trade Organisation’s (WTO’s) fifth Ministerial Conference in Cancún, Mexico on September 10-14, member states of the WTO are still divided on a number of issues. A set of issues that are proving to be as, if not more, contentious and politically sensitive than the agriculture negotiations, is the so-called Singapore Issues of investment, competition policy, transparency in government procurement and trade facilitation.

These issues exemplify the persistent stance of developed countries in setting the pace and agenda for negotiations reflecting their own interest, ignoring (or at best side-stepping) the concerns of developing countries.

The Singapore Issues are rooted in the first Ministerial Conference that took place in Singapore December 9-13, 1996. The conference sought, inter alia, to continue the liberalisation of trade within the rule-based system. In light of the extent and scope of the existing rules that were agreed at the end of the Uruguay Round negotiations, which led to the establishment of the WTO, many developing countries were opposed to the introduction of new negotiating issues at the conference.

However, competition policy, investment, government procurement and labour standards were brought into the Singapore conference via the draft declaration and a letter by WTO Secretary-General Ruggiero to the conference chairman.

The final ministerial declaration, however, excluded labour standards, by arguing that the ILO is the competent body to set and deal with these issues, and agreed to discuss (not negotiate) the other four issues. Since then, these issues have been referred to as the ‘Singapore Issues’.

At the infamous Seattle ministerial in 1999, the main objective was to launch negotiations on new issues, including the Singapore Issues. The US trade representative at the time described the agenda as comprising “some of the most profound and important issues and policy decisions imaginable, including issues that previous Rounds could not resolve, and matters that have not come before the trading system in the past…” Plagued by massive numbers of protestors, the agenda was foiled.

Determined to expand the negotiating agenda even against the will of the majority of the member states in the WTO who are developing countries, the issues took an interesting twist at the fourth Ministerial Conference in Doha, Qatar in 2001. The Doha ministerial declaration explicitly states that negotiations on the Singapore Issues will take place “after the Fifth Session of the Ministerial Conference on the basis of a decision to be taken, by explicit consensus, at that session on modalities of negotiations”. “Modalities” refer to the scope and approach used in the negotiations as well as the outcome WTO members agree to pursue. The interpretation of this statement led to much controversy and legal opinions.

Some countries, mainly the United States, European Community (EC) and Japan, interpret the statement as meaning that negotiations have already been agreed to, with only the modalities requiring elaboration by consensus. Opponents of this view, mainly developing countries, argue that the plain text of the declaration states that no negotiations were launched and that any negotiations on the Singapore Issues cannot proceed without explicit consensus to do so at the fifth Ministerial Conference.

The matter became further complicated and contentious when conference chairman Kamal sought to clarify the statement. The clarification merely restated the plain text at issue, without changing the meaning. But India’s claim that the chairman’s statement “reversed” the “presumption” that negotiations on the Singapore Issues were launched at Doha, further complicated the matter. Nearly two years later, the contention persists.

On August 15, heads of delegation met to discuss the Singapore Issues in preparation for Cancún. While the EC maintained its position that the decision to launch negotiations was already made in Doha, the African representatives at the meeting opposed this view.

They maintained that many developing countries have scarce resources and limited capacity to meaningfully negotiate these Singapore Issues, especially as they grapple with implementation of existing WTO rules and the expanded work programme after the Doha Ministerial Conference. They concluded that the situation does not provide a basis for the commencement of negotiations and that further clarification of the issues be continued. This position is shared by many developing countries, including Jamaica and other Caribbean countries.

In a Caribbean declaration on the fifth WTO Ministerial Conference issued on August 6, the trade ministers of 15 Caribbean countries (Antigua and Barbuda, Barbados, Belize, Cuba, Dominica, Dominican Republic, Grenada, Guyana, Haiti, Jamaica, St Kitts and Nevis, St Lucia, St Vincent and the Grenadines, Suriname and Trinidad and Tobago) declared:

The Singapore Issues have far-reaching implications for national economies, including the constriction of policy space, the irreversibility of negotiation outcomes and implementation costs. It is imperative that the process of clarification of these issues should continue before contemplating negotiations on these subjects.

Some of the controversial issues are as follows:

Trade Facilitation: Many developing countries do not agree to binding rules and the use of the WTO Dispute Settlement Mechanism (DSM) to enforce rules on trade facilitation. Some see trade facilitation as a matter of domestic concern and should not be subjected to multilateral rules.

Transparency in Government Procurement: Some developing countries want a guarantee that negotiations narrowly address “transparency” and not broader issues such as market access, review mechanisms and decision-making procedures. Many insist that the DSM should not apply. Also, that only goods procured by the central government, above a certain threshold value, should be applicable, excluding services and government concessions.

Competition Policy: Many countries are concerned about the suitability of the WTO as a venue for a multilateral competition framework. They note the lack of appropriateness of applying the “core WTO principles” of non-discrimination, transparency and due process to competition and insist that “special & differential treatment” should be an additional principle.

Investment: This is likely to be the most politically charged of the Singapore issues. There is wide divergence of views even among developed countries. The EC and Japan, for example, want the coverage to be restricted to foreign direct investment (FDI) whilst the US want portfolio investment covered as well. Among developing countries, there is much concern that an investment agreement will have serious adverse implications for their ability to implement development policies and achieve national goals. While some members are prepared to start negotiations with an agreement simply on procedural modalities, others need clarity and agreement on substantive modalities (such as scope and coverage) before they start.

It will be interesting to see what will be decided on these issues in Cancún. I’ll be there keeping a close eye. I’ll let you know how things turn out!

Dr Rosalea Hamilton is a trade policy consultant and CEO of the Institute of Law & Economicswww.ilejamaica.orgE-mail: rosaleahamilton@hotmail.com