A Monthly Column by T. K. Bhaumik, Senior Advisor, Policy, Confederation of Indian Industry (CII)

Ten Years of Consensus Building
WTO completes ten years on 1 January 2005 and even though it may seem like a house of feuding members, WTO is a triumph of multilateralism, says T.K. Bhaumik.

The year 2005 is special for WTO. On 1st January 2005, WTO completes ten eventful years. In the decade beginning 1995, a lot has happened in the life of WTO, which is now almost a household name in every country. The other day, the girl that helps us in our daily household chores wanted to know if she would be able to seek jobs abroad because WTO, she was told, would permit her. Such is the impact of WTO on the minds of ordinary people.

The fact that the membership of WTO has been steadily increasing, since its establishment in 1995, is proof of its growing popularity and relevance. Truly, WTO has emerged as a member-driven organisation, a hallmark of which is growing participation of the Members in the WTO negotiations. Every Member, irrespective of the size of the economy and share in global trade, believes it has a say in the functioning of WTO and whatever is negotiated in its platform. Often, WTO is perceived as a house of feuding Members, but the fact is that it is an institution that enjoys a sense of ownership by all its Members.

It is this sense of ownership that has rescued it from the Ministerial failures in Seattle and Cancun. Even as regionalism is spreading, and practically all WTO Members (with the exception of Hong Kong SAR and Macau) are members of some regional block or the other, nobody would like to betray the cause of multilateralism. Similarly, even as WTO is widely perceived as a slow vehicle for trade liberalisation, not a single country would like to get off for the simple reason that ultimately it is multilaterally agreed principles that prevail. Every Member's objective is to improve the conditions from within. This often gives one the impression of a quarrelling house. In reality, this is strengthening of the WTO process of trade liberalisation.

However, in the ten years that have gone by, some issues, relating to the functioning and effectiveness of WTO, have figured prominently. Notable among these, is the issue of transparency in the functioning of WTO. Decision-making through consensus is one of the key features of WTO, that makes it a unique organisation. WTO is the only multilateral institution that works on a 'consensus' approach. As the membership has grown, this approach has, however, posed a serious challenge of achieving consensus on a transparent and fair basis. Transparency was very much at stake during both Seattle and Cancun Ministerials. Though there is no case against the approach, this is an issue that remains to be addressed. Linked to this, is the issue of reform in WTO, an issue that has been raised by many observers. What is not clear, however, is what 'reforming WTO' exactly means for us.

Fortunately, the issue has not yet come to the fore but it is talked about in a hush-hush manner. In my view, it indicates simmering dissatisfaction and may explode some day as a big issue. It may go a long way in strengthening the credibility of WTO, if the issue is sought to be addressed at this stage. A group of eminent persons may be engaged to look into functioning of WTO in the last decade and identify the areas for improvement, so that potentially impending threats can be avoided. It is important to know the future challenges, especially since WTO has grown into a more complex institution.

The scope of trade liberalisation under WTO is being expanded but at the same time economic uncertainties are also growing. This, by itself, is a major obstacle to progress of multilateralism. A pertinent question in this context is: how is WTO going to address the issue of equity and equal opportunity for its Members? And this it has to address without creating any further divisions within the membership. One way of addressing this issue is meaningful focus on Article 36 of GATT (Trade and Development), which has been an area of primary concern for most developing economies. Another imperative is to focus on meaningful market access for all, but especially the developing economies. It is being felt by many in WTO that trade liberalisation does not necessarily translate into market access benefits. In order to ensure that it does, future agenda must be heavily focused on the real barriers to market access. On this front, a lot is expected from the outcome of the Doha round of negotiations. The immediate task at hand for WTO is to ensure successful conclusion of the Doha round.  The course of WTO in the coming decade will be greatly influenced by what happens to the Doha round.

[5 January 2005]