Improving the Functioning of the WTO System
EU paper on WTO activities
The European Commission
September 2000
Seven years after the conclusion of the Uruguay Round, it appears appropriate to consider possible improvements in the functioning of the WTO system. The EC is of the view that, in overall terms, the WTO is performing its mandate in a generally satisfactory manner. There are, however, valid reasons to seriously consider institutional improvements. The challenges raised by the process of globalisation make it imperative for all institutions to adapt their functioning to the growing complexity of the issues falling under their mandate. At the same time, as the WTO comes closer to becoming a universal organisation, there is a need to further consider how to ensure both effectiveness and transparency in a manner which fosters participation by all WTO members. Moreover, all these changes are taking place in political context in which trade policy issues are increasingly a matter of public interest.
Following the Seattle Ministerial, particular attention has been given to the issue of how to ensure internal transparency and effective participation of all Members. The Chairman of the General Council has been conducting informal consultations on these issues and a large number of delegations have presented written and oral contributions. Discussions have shown that delegations share the view that there is no need to envisage changes that would alter the basic character of the Organisation and its decision-making process. In particular, decisions should continue to be made by consensus, in accordance with article IX of the WTO agreement. At the same time, there is a clear interest in seeking a number of improvements in WTO functioning, in order to achieve enhanced effectiveness, transparency and participation. Broadly speaking, many of the suggestions made can be classified under three headings:
At the same time, it is worth recalling paragraph 4 of the 1998 Ministerial Declaration which said: « We recognise the importance of enhancing public understanding of the benefits of the multilateral trading system in order to build support for it and agree to work towards this end. In this context, we will consider how to improve the transparency of WTO operations ». So far, however, no action has been taken in the General Council to implement this mandate. The EC presented a communication on the issue of external transparency in July 1998 and has presented additional ideas in informal submissions to the General Council. We consider that further progress on external transparency would reinforce the role of WTO as an institution without, in any way, affecting its intergovernmental nature.
This communication presents a number of ideas on how to improve the functioning of the WTO both as regards internal transparency and effective participation and on external transparency. In our view, there are important synergies between both aspects of WTO functioning and both of them require appropriate consideration in the General Council. We wish to stress, however, that each individual suggestion in this paper should be considered on its own merits. Indeed, we think it is essential that issues relating to the institutional functioning of the WTO be discussed as "systemic questions" which require open consideration by WTO members, outside any possible negotiating context. It is in this spirit that, apart from presenting a number of suggestions and proposals, we have also included in this paper certain ideas which, in our view, deserve further consideration and study by WTO members. We have also tried, as much as possible, to draw on a number of ideas presented by other WTO members in the context of our informal consultations.
1. Measures to improve decision-making including issues relating to the organisation and functioning of informal consultations.
As already noted, the basic procedures for decision-making, as established by art. IX of the WTO agreement, appear to be sound in view of the impact of WTO decisions on the rights and obligations of WTO members. However, there is a need to further reflect on the best consultation procedures to foster consensus in a manner which is transparent and participatory while ensuring effectiveness.
A large number of suggestions have been made on the organisation and functions of informal consultations, which remain an essential instrument for fostering consensus. In this connection, the EC sees merit in the proposal by the African group to develop guidelines for the conduct of such consultations.
Obviously, such guidelines should remain flexible since they would need to be adapted to the specific requirements of any individual consultation process. Drawing upon ideas presented by many WTO members and on the July Statement by the Chairman of the General Council, we would suggest that elements to be considered for such guidelines could include:
Without prejudice to initiatives undertaken by individual WTO members, informal consultations may be initiated by the Chairman of a WTO body and/or the Director General (or one of his deputies). Members should be advised of the intention to initiate such consultations.
Participation in informal meetings should be broadly representative of the WTO membership at different levels of development and reflect the breadth of substantive views on the issue being discussed. The Chairman of the WTO body or the DG (DDG's) has particular responsibility to ensure adequate representation in the meeting.
The results of such informal consultations should be reported on a regular basis to the competent body concerned. Further informal consultations should take into account the views expressed in the open-ended meeting. Before an issue is brought for decision in the competent WTO body, there should be sufficient time for all delegations to undertake consultations with capitals.
Apart from the issue of guidelines for informal consultations - on which we hope a consensus can be rapidly reached - the EC is interested in further analysis of a number of other ideas that have been suggested to improve decision-making. In particular we would suggest further discussions of the following:
The Feasibility of a Consultative Group:
A number of delegations have expressed interest in further discussing the possibility of establishing a consultative group (formal or informal) broadly representative of the WTO membership, but which could advise the Director General and, where appropriate, present recommendations to the General Council. A similar type of body (the CG 18) was in function between 1975 and 1988. A consultative group could contribute towards ensuring greater involvement of senior level capital based officials in the management of the WTO and foster open discussion on broad trends affecting the WTO System. Such a group would not, however, constitute an alternative to informal processes aimed at facilitating consensus on individual subjects, as discussed above.
Decisions on procedural matters:
Without prejudice to the need to maintain the overall principle of decision-making by consensus, consideration could be given to simplified procedures in relation to certain types of decision which do not affect the substantive rights and obligations of WTO members. The Director General could be asked to present a typology of different kinds of WTO decisions with a view to examine the opportunity of developing specific rules in respect to certain decisions.
Role of the Director-General:
The Director General does not have an expressly recognised right of initiative and normally acts on the basis of mandates specifically given by the membership. While maintaining the nature of the WTO as a member-driven organisation, there is a need to review the role of the Director-General with a view to enhance his/her capacity to to provide the members with independent, objective analysis and advice. The EC would be interested in further discussions on this issue.
2. Measures to foster the flow of information and participation by all members.
An important objective of any effort to improve WTO functioning should be to facilitate the flow of information and effective participation by all WTO members and, in particular, those developing countries that do not have resident representatives in Geneva or only maintain small missions. The efforts by such countries to have a greater input in WTO processes deserve the full support of other WTO members and the WTO Secretariat.
We welcome the efforts undertaken by the Director General - and individual WTO members - to involve non-resident representatives more fully in the work of the Organisation while avoiding duplication of initiatives. The establishment of an ACP/liaison office in Geneva should contribute towards this goal. Enhanced transparency in informal consultation processes would contribute towards more effective participation. There is, however, a need for targeted measures to facilitate participation by non-resident representatives and small developing country delegations. The Secretariat should develop particular efforts to facilitate the flow of information towards such countries. Moreover, their needs should be given particular priority in WTO technical assistance.
Effective participation by all members can also be promoted through measures to improve the management of WTO meetings. In this connection, we see much merit in the proposal by the African group to rationalise the scheduling, number and duration of meetings with a view, where appropriate, to having longer and less frequent meetings and to ensure better thematic co-ordination in establishing the calendar of meetings.
While some progress in the short term can be achieved through improved working methods and management of meetings, there is also merit in initiating a reflection on whether the current WTO committee structure could be further streamlined. For instance, consideration could be given to the possibility of merging a number of existing committees along functional lines rather than a situation in which each individual WTO agreement has a separate committee for its administration. It should be noted, however, that such changes would imply amending existing WTO agreements. The Director General could also further study the scope for further streamlining of notification requirements, while maintaining overall transparency.
3. Measures to improve Ministerial meetings and the General Council.
As regards improvements in the preparation and organisation of WTO Ministerials, a number of measures could be taken which, to a large extent, correspond to prior GATT/WTO practice:
A part from the issue of improved preparation of Ministerial meetings, there is merit in considering the periodicity and functions of WTO Ministerials. Most international organisations - such as the Bretton Woods institutions or UN specialised agencies - hold yearly meetings at ministerial level. Political involvement and steering of the organisation could be enhanced if WTO Ministerial Conferences were also held on a yearly basis. Apart from decision making, Ministerial Conferences would also be expected to discuss a report on the activities of the WTO. This report could also highlight significant policy issues affecting the trading system.
Apart from improvements in WTO Ministerials, consideration could be given to means of enhancing the role of the General Council. The General Council should have overall responsibility for the coherent management and to supervise the activity of subsidiary bodies. Periodic meetings with the chairs of the main WTO bodies would contribute towards this goal. Moreover, the capacity of the Council to exercise an oversight role would be enhanced through a streamlining of the WTO Committee structure and improved procedures for decision making, as discussed previously in this paper.
4. Enhanced external transparency.
In 1998, the EC presented proposals on derestriction of WTO documents and called for a review of existing WTO guidelines in order to strengthen procedures for consultation with NGO's. Since then, there has been considerable discussion of such issues in the General Council. The primary responsibility for dialogue with civil society falls at the level of each WTO member. However, enhanced external transparency in WTO operations has an important facilitating role. Building upon the proposals presented so far, the EC supports the following steps to enhance external transparency:
Ensure immediate derestriction of most WTO documents. With a few limited exceptions, it should be possible to provide for the immediate derestriction of working documents, Secretariat background papers, meeting minutes and agendas and panel reports once translated into all 3 official languages. The Secretariat could also be encouraged to increase further the user-friendliness of the WTO web-site on which the derestricted documents are published.
Enhance contacts and exchange of information between the WTO Secretariat and NGO's, along the lines of existing initiatives.
Ensure a more regular organisation of symposia and other forms of informal dialogue with civil society on a broader range of WTO issues.
On a voluntary basis, meetings of the TPRM could be open to parliamentarians and NGO's of the country under review. This would enhance public interest in the TPRM exercise and would provide an opportunity for stakeholders to be better aware of other countries concerns with the trade policies followed by the country under review.
Hold an annual open meeting of the WTO. Such a meeting could be held at either ministerial or senior official level. Apart from the discussion of a report on WTO activities, a symposium could be organised for dialogue with civil society as well as discussion panels including the participation of the heads of other international organisations.
Hold, on a yearly basis and back to back with the annual open WTO meeting, a meeting of parliamentarians of WTO members. Greater involvement of national parliaments in WTO activities would play an important role in fostering greater public understanding and support for the multilateral trading system. The establishment of a WTO Parliamentary Consultative Assembly. would provide a valuable forum for interparliamentary dialogue on the main subjects discussed in the WTO. and should therefore be further pursued.
Apart from the measures above, a review could be initiated of existing WTO guidelines in order to strengthen procedures for consultations with NGO's. In this connection, consideration could be given to the possibility of establishing a formal accreditation system for NGO's. In this connection different systems of accreditation could be discussed, taking into account the experience of other international organisations.