The WTO in suspense: is medieval decision-making part of the problem?

1. The WTO in suspense: is medieval decision-making part of the problem? Robert Wolfe WTO Public Forum September 26, 2006

2. Medieval WTO? • WTO Members • vastly different levels of development • political and legal systems based on divergent premises • unequally penetrated by social and economic forces of globalization • Overlapping regulatory domains • WTO universe plural if not medieval • process for making legitimate decisions inevitably untidy.

3. Negotiation analysis approach • NOT does WTO handle the right issues, or provide good policy advice • NOT political economy of a compromise • Is institutional design appropriate? • does WTO facilitate understanding the issues? • does the process facilitate agreement? • Was this round doomed from start? • In sum, does WTO need reform?

4. Suspension non-issues • Will evolutionary action be displaced to dispute settlement system? No • Are regional negotiations an alternative? No • Is it all down to the EU and the U.S.?No • But power still counts • Is there a democratic deficit? No • But much has changed since Seattle, and institutional design matters

5. WTO decision rules • Consensus • WTO never takes votes • Single Undertaking • Nothing is agreed until everything and everybody is agreed • Bottom up on the rocks? • Members want a bottom-up process with content coming from them: Chairpersons should reflect consensus, or where this is not possible, different positions on issues. • Death by [square brackets]? • Also problems with reciprocity, modalities, meetings

6. 1) Modalities complexity • Negotiating “development” agenda a conceptual minefield • “Rules” inherently multilateral, especially behind the border, but applicability varies widely • Services modalities don’t work • No more Request-Offer for market access • “principal supplier” favours large over small • Formula approach elegant, multilateral, confusing • coefficients remove ambiguity • Equal rates = disparate nominal cuts: “fair”?

7. Past and present N  N (reciprocal) N  S (non-reciprocal demanded) S  N (resisted as illegitimate) S  S (ignored?) Arrows indicate direction of “concessions” Future? N  S (ODA) N  BRICSAM (reciprocal) BRICSAM  BRICSAM (reciprocal) BRICSAM  S (non-reciprocal?) 2) The tangled web of bargains

8. 3) Reaching a consensus, with 149 Members • Ministerial Conferences • Formal (for the record) • General Council • TNC • Negotiating groups • Informal (where the work is done) • Mini-ministerials • Senior officials • Coalitions • Bilaterals • “Friends of…” • Hundreds of meetings in and out of Geneva: groups help manage the chaos…

9. AustriaBelgium     Cyprus Czech R        Denmark Estonia Finland   France Germany Greece Hungary Ireland       Italy      Latvia Lithuania        Luxembourg Malta Netherlands Poland Portugal     Slovakia Slovenia   Spain Sweden  UK Armenia Bulgaria FY Rep Macedonia Romania Albania Croatia Georgia Jordan Moldova Oman G–90 LDCs Bangladesh Cambodia Maldives   Myanmar Nepal ACP ChadBurkina Faso Burundi  Togo Central African Rep Djibouti    DR Congo Mali   Gambia   Guinea   Guinea Bissau    Lesotho    Malawi  Mauritania  Niger Sierra Leone    Rwanda    Recent new Hong Kong, Ch Saudi Arabia El Salvador Macao, Ch Singapore Kyrgyz R Qatar UAE Brunei Kuwait Bahrain Ecuador EU G-25 Solomon Islands Gabon Ghana Namibia Mexico G-20 Haiti Dominica Fiji Papua New Guinea Benin Madagascar Senegal Uganda Zambia India China Venezuela Belize Barbados Antigua/Barbuda Dominican Rep Grenada    Guyana St Vincent/Grenadines Trinidad/Tobago Jamaica   Suriname St Kitts/Nevis      St Lucia Botswana Cameroon Congo Côte d’Ivoire Kenya Mozambique Tanzania Cuba Indonesia Pakistan Philippines G-33 Chile Brazil Bolivia Uruguay  Thailand  Paraguay Argentina     Honduras  Mongolia Nicaragua           Panama     Peru   Sri Lanka   Turkey Nigeria Zimbabwe  Australia Canada  Colombia Costa Rica  Guatemala   Malaysia  N Zealand Mauritius R Korea Angola Swaziland Egypt Iceland  Israel  Japan    Liechtenstein  Norway Switzerland Ch Taipei Tunisia Morocco Cairns Group African Group G-10 S Africa USAG–1 Source: ICTSD and WTO

10. The evolving logic • Diverse issues and Members = Single Undertaking • Single Undertaking = consensus, not voting • Consensus = seeking compromise informally in a bottom-up process • Overlapping interests = multiple small groups for each Member • Many Members = “Green Room” (small informal) • Green Rooms = red flags [G-6 finished?]

11. Does it need fixing? Two approaches: • How interests are aggregated changes outcomes • Deliberation aids learning, which changes outcomes

12. If it’s all about interests • Agenda an institutional design choice: • What must be in the Single Undertaking? • Doha initial agenda too broad • May now have contracted too much for OECD • Are less-than-universal agreements appropriate? • “critical mass” in NAMA, plurilateral in services • differentiation among developing countries: round for free? • But beware of temptation to cherry pick • The package matters

13. If learning also matters • Collective decision engaging all Members requires: • Consensual understanding of problems and “interests” • Deliberation that makes effective bargaining legitimate • Domestic resonance • Learning incomplete at home and in Geneva? • Negotiation by communiqué impedes “mixed” strategy? • Do negotiators understand implications of changing roles of developing countries, both BRICSAM and bottom billion? • Do negotiators (both Delhi and Washington) have the public understanding that provides room to maneuver?

14. Reform needed? • WTO changes through practice • Journey not the destination • Doha about learning to negotiate in a truly multilateral way, with many more, and more disparate, Members • If WTO is medieval, it’s because the world is too