The recent WTO Ministerial Meeting in Doha, Qatar, marks an important turning-point in the "stalled" process of trade liberalisation, which followed the Seattle debacle two years ago. Very early in this series, the far reaching and profound transformations that the WTO symbolized in the new global trading environment, were presented and discussed at some length. Several points made then are worth repeating, as we seek to examine the Doha meeting over the coming weeks, from the perspective of the Caribbean. Our first task today will be to attempt to locate the WTO in its historical antecedents.

Establishment

The WTO was formally established in January 1995, at the conclusion of the Uruguay Round of Multilateral Trade Negotiations. The various agreements that gave rise to it both set out the legal framework and the rules to govern international trade, henceforth. The Uruguay Round of Multilateral Trade Negotiations had commenced as far back as 1986, under the auspicies of the General Agreement on Trade and Tariffs (GATT). That old GATT is now subsumed within the new WTO, along with all the various "Understandings" arrived at during the Ministerial Conference held in Marrakesh at the end of the Uruguay Round of Multilateral Negotiations, immediately preceding the announcement of the establishment of the WTO.

The new rules-based international trade system is intended to be the umbrella, or canopy, under which all present and future trade relations must fall. In effect therefore, this means that recent trade agreements like the Cotonou Agreement between the European Union (EU) and the African, Caribbean and Pacific (ACP) Group of Countries, as well as future agreements like the proposed Free Trade Area of the Americas (FTAA) will have to be compatible with the rules of the WTO. We might add for that matter, so too must the CARICOM Agreement and that of the Association of Caribbean States (ACS) to which we belong.

Coverage

The WTO/Uruguay Round Agreement covers eight major areas of trade. These include an agreement on tariff schedules for trade; and, 12 separate agreements covering areas such as sanitary and phytosanitary measures; textiles and clothing; technical barriers to trade; trade-related investment measures (TRIMS); anti- dumping; customs valuation and pre-shipment inspection; rules of origin; import licensing; subsidies; and safeguard provisions in event of severe trade disruption.

The agreement also includes a separate General Agreement on Trade in Services (GATS), as well as Agreement on Trade Related Intellectual Property Rights System (TRIPS). Further, the Agreement provides for a Trade Policy Review Mechanism and a Dispute Settlement Mechanism. The former provides for periodic reviews of trade policy in member countries, and the latter, puts in place a mechanism for settling disputes arising from the operation of the WTO rules.

Finally, the agreement also covers "understandings" in six trade-related areas, and contains plurilateral agreements in four other areas. The six trade-related areas are: intellectual property, copyright, patents, trademarks, industrial design, lay-out designs of integrated circuits, geographical indication, and undisclosed information. The plurilateral areas do not embrace all member countries and the existing four refer to civil aircraft, government procurement, dairy, and bovine meat.

Built-in agenda items

I refer to all this detail in order to impress upon readers the tremendous scope and coverage of the WTO agreement. It does not, however, end there! At the time of the agreement to form the WTO a long list of issues was placed on the agenda of the WTO for future discussion and later agreement. This is called the "built-in agenda items".

The list of "built-in agenda" items includes such diverse matters as: further liberalisation of trade in services and agriculture; and, the review of subsidies. There was also an expressed commitment to the specific review of several other listed items in the agreement, including the TRIPS, TRIMS, Rules-of-Origin, and Technical Barriers to Trade.

"New" Agenda Items

To go further, on top of all this, since 1995 "new agenda items" have been added to the list of matters to be taken up under the WTO agreement. These new items include some very explosive and contentious issues. Among these are "social clauses" attached to trade; trade and environmental conditionalities; electronic commerce; competition policy; the extension of Special and Differential Treatment to small states; and, the admission of new members to the WTO.

Rationale

At this stage we should remind ourselves of the foundational rationale of the WTO. This is necessary, since the WTO is truly a radical departure from all previous global trade arrangements. As I had put it earlier in the series, the WTO aims to achieve what was hitherto thought to be impossible to attain. That is, as an integral part of the processes of globalisation and liberalisation, to achieve three things. First, "symmetry" in the treatment of all countries, irrespective of size, level of development, and so on. Second, to ensure the "comprehensive" coverage of trade in goods and services, as well as all significant trade-related matters in a single global agreement. And, thirdly, to attain "credibility and predictability" for its contractual obligations, through ensuring that there is an enforcement mechanism to secure the fall compliance of all participating members.

Next week we shall explore the fundamental trade principles also embodied in the WTO agreement. This will be followed with a brief highlight of certain key dimensions to the agreement. Together these will provide the prelude or background, from which we shall examine what is at stake in the current round of global trade negotiations, and the options available to the Caribbean.

Globalisation and the new WTO principles

Introduction

Last week, on the occasion of the WTO Ministerial Meeting in Doha, Qatar, we began a discussion of the WTO, focusing on its historical antecedents. Established in 1995 at the end of the Uruguay Round of Trade Negotiations, the WTO became the successor to the General Agreement on Tariffs and Trade (GATT), which until then, had been responsible for the regulation of global trade.

In that article stress was laid on the tremendous coverage of the WTO, both in terms of the original agreement itself and the 'built-in' and 'new' agenda items that have subsequently emerged and are now within its purview. In presenting this we sought to stress forcefully, the unprecedented scope and coverage of the WTO in the regulation of international trade and trade-related matters.

We concluded last week's presentation by indicating that there are new fundamental trade and economic principles embodied in the WTO. This week we shall start with a discussion of these.

Fundamental principles

One of the most important principles in the new architecture of international trade is that exports are free to enter into a country. There is no presumption in favour of the right of a government to offer protection to domestic producers, or to restrict another country's exports from entering its domestic market. Exports are free to enter the markets of member countries, subject only to tariffs and their meeting technical and other standards. The tariffs that are levied are themselves subject to WTO agreement. And, the technical standards have to be scientifically established and accepted by the WTO to be lawful.

A second principle is that there is no recognised general permission for governments to impose non-tariff barriers to trade. All such barriers will be treated as exceptions, and will have to be justified on a case by case basis. In the past, such barriers were freely imposed, as governments presumed that they had the right to protect their domestic market in whatever way they saw fit.

Third, the principle has also been embraced that there should be unqualified non-discriminatory treatment between imports of goods and services and the domestic production of these. In other words domestic production cannot be 'preferred' or 'encouraged' at the expense of imports. In similar vein a country does not have the right to discriminate between members of the WTO. All are to be treated equally.

Fourth, as part of their obligations, governments are expected to pursue trade policies that are 'neutral' and 'non-trade distorting'. Trade should be executed on a reciprocal multilateral basis. There is also a binding commitment by all members to remove all tariff and non-tariff barriers to trade. This obligation extends to trade agreements like CARICOM and the OECS, which are outside the WTO, but still fall under the umbrella of its rules. CARICOM and the OECS cannot therefore become a shield behind which member countries favour each other's goods and services and discriminate against those of third countries.

Finally, because of the fundamental character of these principles, the further principle has been adapted that member countries shall be protected from all 'unfair' trade practices, whether these are practised openly or not. Because the WTO has a compliance mechanism to ensure that its rules are obeyed, this principle has considerable weight in the international community.

Trade and Development

There is a misconception abroad that the WTO is failing to promote the development of the developing countries. However, the remit of the WTO is not to promote their development. The WTO is not intended to be another version of UNCTAD, the United Nations agency, which is dedicated to promote trade and development for developing countries. If the developing regions prosper, this will occur despite the WTO, not because of it. As it has been already described, the focus of the organisation is to provide rules-based mechanisms and an enforcement capability, to ensure that member countries honour their contractual obligations under the WTO.

The key issue here is the nature of these contractual obligations. The history of the negotiations leading up to the WTO show that, unlike their counterparts in the South, the developed countries of the North have shown remarkable preparation, coordination, and consistency in pursuing the creation of an organisation compatible with their interests. It is true that there have been disagreements among them, for example, the banana controversy and the application of the Helms Burton Act to Cuba. By and large, however, these have been resolved in ways that do not threaten to seriously injure the solidarity of the developed countries.