The World Trade Organisation (WTO) today agreed to liberalise global trade, reaffirmed its commitment to internationally recognised labour standards but rejected using these for protectionist purposes and hailed a epoch-making zero-tariff pact on information technology.
Wrapping up the five-day inaugural WTO meeting here, Trade Ministers of 128-member nations adopted a declaration vowing to fully implementing various agreements to strengthen the world trade regime and pledged to tackle new issues such as investment and competition for liberalised trade.
In deference to the wishes of the developing world, the eight-page document took note of the concerns of the Third World on linking labour issues with trade and recognised that ILO was the competent forum for setting and dealing with labour standards.
We reject the use of labour standards for protectionist purposes and agree that the comparative advantage of countries, particularly low-wage developing countries, must in no way be put into question, the declaration said.
A landmark agreement to scrap massive tariffs on information technology trade by year 2000 gained support with 28 economies pledging their commitment to the plan. The info-technology pact is regarded as a key achievement of the biennial ministerial conference.
The participants renewed their commitment to a “fair, equitable and more open rule-based trading system” and promised to further free trade in goods and services and rejected all forms of protectionism.
India today said recognition by the WTO of the International Labour Organisation (LO) as the competent body to deal with labour standards issue was a re-assurance for the developing economies.
India has been able to persuade member countries to reject any reference to a multilateral agreement on investment, or to begin an educative process in this regard.
India’s Commerce Minister, B. B. Ramiah, said the fact that the conference’s ministerial declaration has emphasised that the comparative advantage of developing countries should not be put in question in any way only reflects India’s position.
Referring to the all important and contentious issue of investments, Dr Ramiah said in a statement that the conference has made it clear that work to be done by the two proposed working groups shall not prejudge the question whether negotiations would be initiated in the future.
It is to be clearly understood that future negotiations, if any, will take place only after an explicit consensus decision among the WTO members regarding such negotiations.
Dr Ramiah said the Ministers also welcomed the work underway in UNCTAD and have expressly stated that they encourage cooperation between the WTO and UNCTAD and other relevant inter-governmental fora.
Briefing newsmen, Commerce Secretary Tejendra Khanna said there were safeguards in the declaration with regard to the investments issue. If the establishment of the working groups in any way leads to negotiations or acts as step towards a multilateral agreement on investments, India will certainly block it. It will not let it happen, he said before emplaning for Delhi.
Dr Ramiah said before the end of the conference almost all other delegations had agreed that as long as it assured that no automatic negotiations on the subjects of investment and competition policy could be started and fresh decision to do so would be required, they would have no objection to the commencement of studies on these through two working groups.
This being the case, India did not consider it either appropriate or worthwhile to block the general consensus to commence studies on these subjects in accordance with the existing WTO provision, particularly so when it has been explicitly mentioned that the study shall continue for at least two years where after progress will be reported to the general council.
The Commerce Secretary explained that there is a misapprehension back home in India that by agreeing to the working groups, India’s sovereignty or interest had been ‘sold out’.
This is hardly the position. When we came to Singapore there was a general feeling that the OECD approach for a dialogue on investments issue would lead to a multilateral agreement on investments. The final text protects India or other developing countries interests through adequate safeguards, he said.
India’s Ambassador to the WTO in Geneva, Mr Narayanan said this has been “successfully stalled by the developing countries and India was a part of the core group of forty countries that went into the question of how to draft the declaration.”
The declaration also hailed the Information Technology Agreement (ITA) on eliminating tariffs on computer-related products in the fast-expanding information technology market.
The world’s four leading economic powers – Japan, the US, the 15-menber European Union (EU) and Canada – spearheaded a move to forge the accord that aims to cut tariffs on info-tech products to zero by 2000.
The agreement open to non-WTO members, will be joined by at least 28 economies, including Singapore and South Korea.
In the declaration, the Ministers also agreed to launch a working programme to study principles related to transparency of government procurement practices.
The declaration which covered a wide gamut of issues including regional agreements, dispute settlement, textile and clothing, trade and environment, pharmaceuticals and investment, said that negotiations on basic telecommunications would be concluded by February 1997 and resume financial services negotiations in April 1997.
The WTO, which succeeded the General Agreement on Tariffs and Trade (GATT) was launched on January 1, 1995. The next ministerial conference will be held in 1998 in Geneva, where the world trade watchdog is based.
