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BRIDGES DAILY UPDATE December 2



This report may be anticlimactic after all the street activity: but things
still keep going on, and Mr. Greed still need watching

MichaelP
=================
ICTSD BRIDGES DAILY UPDATE is a daily news service covering trade and
sustainable development on the occasion of the Third World Trade
Organization Ministerial Conference in Seattle.  The publication focuses
on news, activities and negotiations around the Ministerial from 30
November to 3 December 1999 as they relate to sustainable development
issue-areas. Copies in English, French and Spanish can be found on the
ICTSD website at http://www.ictsd.org/wto_daily/index.htm

2 December 1999

PIECEMEAL PROGRESS MADE IN WTO NEGOTIATING GROUPS

WTO Members met for their first full day of formal Ministerial discussions
on 1 December.  Four out of the five mandated working groups came
together, and aside from the release of some pared down and heavily
bracketed texts in the areas of Agriculture, Implementation and Market
Access, there were few advances made in reaching substantive agreement on
most issues.

A preliminary Committee of the Whole comprised of representatives from all
135 Members and chaired by U.S. Trade Representative Charlene Barshefsky
met in the morning on 1 December to begin the day's talks.  Barshefsky
urged delegates to send senior officials with decision-making authority to
the working groups.  Though she notified Members that she reserved the
right to hold 'Green Room' meetings (usually consisting of major WTO
Members as well as others who have substantial interest in certain
negotiating areas), the USTR preferred an inclusive approach such as that
afforded by the working group structure, which is now open to all Members.
Despite this, Members did meet in a number of informal country and
bilateral sessions, as well as in what one WTO official has termed "mini
Green Rooms", though none were led by Barshefsky.

In the Agriculture working group, an earlier draft submitted by the Cairns
Group of agriculture-exporting countries and the U.S. emerged with added
text that reflected traditional EU and developing country demands.  These
included listing the multifunctional role of agriculture under non-trade
concerns and a text bracket outlining reduction -- as opposed to
elimination -- of all forms of assistance to exports under the section on
Export Subsidies.  The section on special and differential treatment for
developing countries also contained a large amount of bracketed text,
apparently distilled from India's submission to the 19 October draft
Ministerial Declaration.  Though these development issues -- including
food security, rural development, poverty eradication, and technical
assistance -- were not discussed on 1 December, they are on the agenda for
2 December, along with biosafety.  For further info, see related story
this issue.

The Implementation working group released its own bracketed text, though
it represented little drastic change on the proposed language in the last
(19 October) version of the draft Ministerial Declaration.  The text did
reflect a possibility that many of the implementation demands from
developing countries would be contained in one or two annexes, though the
areas outlined continued to cover the 'traditional' range of
Implementation demands (including anti-dumping, subsidies, safeguards,
SPS, TBT, TRIMs and TRIPs).  Among the issues discussed were the prospects
for longer transition periods, more exceptions for developing countries,
and renegotiation of certain agreements (notably subsidies, textiles and
anti-dumping).  Japan and Korea expressed their desire to have a review of
the anti-dumping agreement worked into the next round, while Iceland,
backed by the U.S., proposed negotiations to remove fisheries subsidies, a
suggestion which met with little enthusiasm from the EU.

Market Access discussions were somewhat less polarised than Agriculture
and Implementation, and many observers were confident that a consensus
could be reached by week's end.  The text released on 1 December reflected
U.S. demands in areas such as forestry and fisheries liberalisation and
expanding market access to cover all goods, rather than only
non-agricultural products.  The EU, U.S., India and South Africa are all
pushing for a short text, and Bangladesh is calling for all LDCs to
receive bound duty-free access.

On Singapore Issues, Members discussed Investment and Competition, and
while some Members (such as the EU) argued for inclusion of these areas in
a Declaration, Members remained far apart on agreement, such that one WTO
official noted that there was 'substantial opposition to going forward
with this issue.'

On 2 December, WTO Members will meet in their fifth working group, on
Systemic Issues, which include WTO rules and procedures and WTO-civil
society relations. U.S. Trade Representative Charlene Barshefsky expressed
optimism on 1 December that there will be progress on transparency.  "The
key [for pushing transparency forward] is acceptance of the principle that
openness and transparency aren't antithetical to an open trade system,"
she said.

EU COMMISSION GRILLED ON BIOTECHNOLOGY WORKING GROUP

European officials were visibly ill at ease answering questions about the
EU's unexpected change of heart regarding the establishment of a
biotechnology working group within the WTO.  Journalists and
non-governmental organisations even questioned the Commission's authority
to make the proposal, which seems to have come as a considerable surprise
not only to NGOs, but to several EU members as well. At issue is a
paragraph in the EU's draft Ministerial Declaration, circulated to WTO
Members on 30 November, according to which ministers would 'agree to
establish a working party with a fact-finding mandate on the relationship
between trade, development, health, consumer and environmental issues in
the area of modern biotechnology'.

The environment ministers of France, the UK, Italy, Denmark and Belgium
immediately issued a statement saying that the Biosafety Protocol
negotiations - the only 'proper forum for deciding a multilateral approach
to biotechnology issues' - would be undermined by the establishment of the
WTO working group, which could potentially subordinate the Biosafety
Protocol negotiations to discussions of the [Seattle] Round, thereby
setting a precedent for the WTO's relationship with other MEAs'. UK
Environment Minister Michael Meacher said on 1 December that the working
party proposal was both unexpected and contrary to the agreed policy of EU
members, who had made a considerable effort to finalise the Biosafety
Protocol.

Speculation was rife as to what the EU might have received in exchange for
the concession on the biotechnology working group, which had until then
essentially been sought by the US and Canada. The latter two are vocal
members of the Miami Group of biotechnology exporters, which wants to keep
any potential trade restrictions out of the Biotechnology Protocol. Some
conjectured that there was an understanding that the EU would find less
resistance to the inclusion of the precautionary principle in WTO rules if
it agreed to the working group proposal.

Clearly embarrassed by the insistent questioning of the EU's motives and
the Commission's authority, Agriculture Commissioner Fischler stressed
that the proposal did take into account the concerns of civil society
(health, environment, development and consumer issues). A draft press
release entitled Commission Thinking on Biotechnology - not yet officially
issued - seemed designed to appease angry governments and civil society
through a series of further details on the group's purpose. For instance,
it specifies that the EU is not a demandeur for a WTO biotechnology
working group, and that work should only proceed if, inter alia, 'all
concerned, but notably the US and the Miami Group countries, commit
themselves to working hard and constructively for very early conclusions
to the biosafety talks'. The paper adds that the work of the group should
be 'set up as a part of a comprehensive package of environmental elements
for the WTO negotiating programme'.

Biotechnology and the precautionary principle also formed a major focus of
several NGO events on Wednesday, 1 December.  At a meeting sponsored by
the Royal Institute of International Affairs and the International
Institute for Sustainable Development, panelists focused on both the
practical and theoretical challenges faced in instituting the
precautionary principle in international agreements, domestic policy and
in trade policy. A meeting sponsored by the Consumers Choice Council on
GMOs also discussed the precautionary principle and labelling issues.  But
the meeting often looked outside the trade system and challenged many
fundamental issues related to GMOs, including poverty and food security,
public health, science and development, and cultural concerns.

A Greenpeace discussion on 1 December with UNEP Executive Director Klaus
Topfer revealed that Sweden, Norway and the Netherlands will have an
important role in the negotiations on the precautionary principle as they
seem the most likely countries to fully adopt it. They will be in a
position to influence other delegations regarding this complex issue.

THE EU DRAFT'S ENVIRONMENT AND DEVELOPMENT PROVISIONS

The 17-page draft Ministerial Declaration released on 30 November by the
European Commission, Hungary, Japan, Korea, Switzerland and Turkey,
contains substantial provisions in the areas of development, environment,
agriculture and biotechnology (see related story above).

The General Objectives of the draft include sustainable development; 'the
maximisation of positive synergies between trade liberalisation,
environmental protection and economic development; and 'avoiding potential
conflicts arising between continued trade liberalisation and sustainable
development objectives'.   Paragraph 36 contains three additional
environmental provisions: the consideration of the multilateral trading
system and trade-related provisions of multilateral environmental
agreements, as well as WTO rules such as article 5.7 of the SPS agreement;
and 'measures taken for precautionary reasons in case of lack of
sufficient scientific evidence as to the risk to health or the
environment.'  The specific reference to the environment in this context
would provide a much more secure base for both the precautionary principle
and the environment in the WTO. Finally, the draft calls for the WTO to
examine the relationship between the TRIPs Agreement and the U.N.
Convention on Biodiversity.

The draft mentions development issues and the challenges of developing
countries throughout the text in both general and specific references.
Paragraph 3 bis sets the tone of the following provisions by stating:
'Trade liberalisation and further rule making should be pursued in line
with the objectives of promoting development and poverty alleviation.'
Additional provisions include the extension of compliance periods for
three years with parts of the SPS and customs valuation agreements; and
for a shorter period in the TRIMs agreement.  The establishment of a
committee to review implementation difficulties is foreseen, as well as a
review of special and differential treatment provisions.

The section on agriculture mentions the 'reduction of all forms of
assistance to exports' and 'further reductions in trade-distorting
domestic support'.  Non-trade concerns including the concept of
multifunctionality are also included.  The draft's investment and
competition policy provisions are not substantially different from the
EU's earlier proposals.

FUTURE WTO HEAD ON TRADE AND LABOUR, IMPLEMENTATION

In his speech at the Ministerial Conference plenary session on 1 December,
Thailand's Deputy Prime Minister Supachai Panitchapakdi, who will succeed
Mike Moore when the latter's term as  WTO's Director-General expires in
2002, pleaded for 'flexibility, compassion and courage' that would lead to
the 'launch of a successful Development Round', where 'early concrete
results should be weighted more in favour of the developing countries'.
While the round should be broad-based enough to contain benefits for all
WTO Members, it should not stray too far from its original intent, Dr
Supachai said.

He also said that the WTO should not shy away from addressing labour
issues, although this should not be done through a working group or any
other standing body. Instead, he felt confident that developing countries
would welcome a high-level 'soul-searching' dialogue, convened by a
neutral institution such as UNCTAD or the UN Economic and Social Council.
This should be a non-politicised meeting on the relationship between
labour standards and the trading system, including the question of social
safety nets and other issues. Political leaders should be involved, as
well as officials from international organisations such as the ILO and the
WTO. In a press conference, he confirmed that any talk on labour norms in
the WTO - and in particular the use of trade sanctions against those who
violate core labour standards - would confirm developing countries' worst
suspicions, and would probably make them withdraw their support for the
new negotiations altogether.

On implementation concerns, Dr Supachai urged Ministers to be
'magnanimous' in Seattle with regard to granting extensions to the TRIPs
and TRIMs implementation deadlines for developing countries that are
experiencing real difficulties in meeting them. While more detailed
negotiations on the revision of existing Agreements should take place in
Geneva, 'a certain review of specific portions of anti-dumping regulations
might help resolve the prevailing suspicion on the conspicuous
proliferation of anti-dumping measures'.

THE ELUSIVE ATL INITIATIVE

The US and EU delegations gave conflicting versions on the EU's rumoured
acceptance of the ATL initiative, i.e. 'early harvest' results on
accelerated tariff liberalisation on eight sectors of non-agricultural
goods, including forestry and fisheries products. The United States seemed
confident that the European Union was ready to sign off on ATL provided
that another two unspecified sectors were added to it. EU Trade
Commissioner Pascal Lamy, however, said that the EU - as it had announced
early in the preparatory process - would put all of its industrial tariffs
on the negotiating table without prioritising the ATL or any other
particular sector. The EU is also wary of the early harvest approach,
which could take some of the issues out of the negotiations before the
conclusion of the entire Seattle Round. Agriculture Commissioner Franz
Fischler was evasive about the ATL, noting only that fisheries and
forestry negotiations should not be conducted in isolation of other tariff
negotiations (Japan and Korea have proposed the establishment of a
separate working group on these in the context of the agricultural
negotiations).

Environmental organisations oppose rapid elimination of tariffs on
forestry products, because they fear lower prices would increase demand
and thus lead to greater deforestation.

ACPS CONCERNED ABOUT LOME EXPIRY DURING SEATTLE WEEK

The group of 71 African, Caribbean, and Pacific (ACP) former colonies of
the EU are having problems negotiating trade contracts with importers due
to uncertainty over whether the EU will succeed in finalising a waiver
renewal text by the end of the negotiating week.  The EU's waiver at the
WTO allowing a preferential market access scheme for the ACP (known as the
Lome IV agreement) runs out on Friday 3 December.  It is not clear at this
point what is going to happen to the waiver, particularly since there is
no consensus on what a successor to Lome might look like.  The EU has been
considering replacing its preferential agreement with a series of regional
trade groupings.  The matter is further complicated on the one hand by the
fact that the EU is currently preoccupied with its own negotiating stance
at the Ministerial and on the other that the ACP is concerned that
proposals from some developed countries for zero tariffs for LDC exports
will split its members and make it more difficult for them to speak with
one voice.

NO PATENTS ON LIFE: WORKSHOP ON THE TRIPS AGREEMENT

The Third World Network, The Council for Responsible Genetics, The
Washington Biotechnology Action Group and the Institute for Agriculture
and Trade Policy presented their case against the WTO on 1 December in a
workshop on TRIPs. A grouping of African developing countries have
submitted a paper to the WTO illustrating their disagreement on TRIPs, in
particular with respect to article 27.3(b). Currently, the TRIPs Agreement
could extend patents to allow multinational companies to own individual
seed types, plants, and crops currently used by farmers and indigenous
groups. The group wishes to protect farmers' and communities' rights,
especially in developing countries.

The like-minded group has joined the African countries in demanding that
amendments to Article 27.3(b) make clear distinctions between life and
non-life forms. In addition, better mechanisms must be in place to protect
developing countries against such issues.

VANDANA SHIVA (from the Research Foundation for Science, Technology and
Ecology, India) labelled the TRIPs Agreement as "biopiracy".  She stresses
the views of most NGOs dealing with patents and TRIPs that no one owns or
can own life forms; and that they belong to everyone, not to multinational
corporations or organisations.  Shiva argued that plants, seeds, organisms
and other life forms cannot be sold or bought.

ICTSD has produced this Daily Update with the collaboration of Fundacisn
Futuro Latinoamericano (FFLA) and ENDA-Tiers Monde.  Spanish and French
versions are available upon request from ICTSD or can be accessed,
together with the English version, at http://www.ictsd.org/
wto_daily/index.htm

For further information contact ICTSD at 13, ch. des Anemones, 1219
Geneva,
Switzerland;  tel: (41-22) 917-8492; fax: 917-8093; e-mail:
ictsd@ictsd.ch,
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