Decision making from consensus in the WTO

DECISION-MAKING BY CONSENSUS IN THE WTO Thanh Nguyen Quynh Nguyen Phong Pham International Law Faculty, Diplomatic Academy of Vietnam Electronic Electroniccopy copyavailable availableat: at:https://ssrn.com/abstract=2122948 http://ssrn.com/abstract=2122948 TABLE OF CONTENT INTRODUCTION I ORIGIN OF “CONSENSUS” IN THE WTO II CONSENSUS AS PROVIDED IN WTO AGREEMENT NORMAL PROCEDURE: SPECIAL PROCEDURE: 2.1 Adoption of an interpretation of provisions of the WTO Agreement or the multilateral trade agreements 2.2 Decisions to waive an obligation imposed on a Member 2.3 Decisions on accession 2.4 Decisions on amendments 2.5 Decisions on the budget and on financial regulations III IMPACTS OF THE DECISION MAKING BY CONSENSUS IN THE WTO ADVANTAGES PRACTICE OF DECISION-MAKING BY CONSENSUS AND ITS DISADVANTAGES 11 2.1 General Comments 11 2.2 Practices of decision-making by consensus in the WTO 12 2.2.1 “Green room” meeting: Purposes and operating mechanism 12 2.2.2 Other informal consultations 13 2.3 Disadvantages of consensus-based decision-making process in the WTO 14 2.3.1 General disadvantages 14 2.3.1.1 No formal rules of procedures 14 Electronic Electroniccopy copyavailable availableat: at:https://ssrn.com/abstract=2122948 http://ssrn.com/abstract=2122948 2.3.1.2 2.3.2 Problems with records of meetings and non-transparency 14 Disadvantages for developing countries 14 2.3.2.1 The practice of informal consultations excludes developing countries from the consensus decision-making process 14 2.3.2.2 Open discussions prevent developing countries from objecting publicly 15 2.3.2.3 The overloaded agenda and too many meetings held simultaneously have put resource deficient developing countries at a great disadvantage 16 2.3.2.4 The inadequate assistance from Secretariat causes disadvantage for developing countries 17 IV RECOMMENDATIONS AND WTO REFORM 17 REFORMING CONSENSUS SYSTEM 17 TRANSFORMING THE ‘PASSIVE CONSENSUS’ INTO AN ‘ACTIVE’ ONE 18 EVOLVING A HIERARCHY OF ISSUES WITH DIFFERENT METHODS OF DECISION-MAKING APPLYING TO EACH LEVEL 18 OTHER RECOMMENDATIONS 19 4.1 Taking the model of the IFIs and the UNSC 19 4.2 Departing from the single undertaking principle in order to enhance efficiency 22 4.3 Reinforcing the involvement of high-ranking political leaders to give greater impulse to the process 22 4.4 Adopting realistic agenda and work schedule 23 4.5 Developing countries should not be subjected to economic and political pressure relating to negotiations 23 4.6 Decisions should not be made until all members are technically ready 23 CONCLUSION 24 Electronic Electroniccopy copyavailable availableat: at:https://ssrn.com/abstract=2122948 http://ssrn.com/abstract=2122948 INTRODUCTION Decision-making processes are among the most important methods of functioning against which the legitimacy of one institution may be rated It is because they show how the organization treats its members and thereby fulfils the first and minimal level of accountability Moreover, in the recent trend of international fora, especially the WTO, decision-making by consensus has become popular This characteristic of the WTO makes it considerably and significantly different from other international institutions such as the International Monetary Fund (IMF) and the World Bank (WB), where decisions are based on weighted voting In the WTO, consensus based decision-making is popular, while voting is possible and/or mandatory only in some special cases In voting process, each member state has one vote and therefore allowing equal status to all members irrespective of trade shares or general economic size The principle of equality of voting status of member states is clearly seen in the formal structures of the WTO The top body of the WTO is the Ministerial Conference, which meets every two years The day-to-day workings of the WTO are carried out by the General Council The General Council also meets in the guise of the Trade Policy Review Body and the Dispute Settlement Body (DSB) Below the General Council are the Councils for Goods, Services and Trade Related Aspects of Intellectual Property Rights (TRIPS), along with Committees that report directly to the General Council Representation at all three levels is open to all members of the WTO The provisions stipulate the use of consensus and voting in the WTO covered Agreements will be examined in the first section The advantages and disadvantages of consensus are the core discussion in section On the one hand, consensus in decision-making offers developing countries with equal voice with their developed partners irrespective of trade shares and economic sizes On the other hand, from the viewpoint of developing countries, they have to face a lot of disadvantages deriving from the consensus based decision-making Finally, in order to help WTO become the most democratic, efficient, transparent and legitimate organization in promoting international trade, some recommendations about the reform of the WTO in the field of decision-making are raised Electronic copy available at: https://ssrn.com/abstract=2122948 I Origin of “consensus” in the WTO The origins of the consensus method of decision-making can be traced to the General Agreement on Tariffs and Trade (GATT) Even in situations where the GATT rules provided for a formal vote, e.g granting of waivers, a consensus text would first be reached through negotiation and consultations before the formal vote was held.1 Any use of voting in whichever stage of the negotiation process was highly unusual One example is that in the pre-launch phase of the Uruguay Round, the US requested a rare postal ballot in 1985 The ballot showed that two-thirds of the contracting parties supported the convening of a special session on services.2 However, even this decisive vote was not used for the actual decisionmaking process to bring services into the scope of the GATT Instead, consultations and negotiations continued, and finally a consensus draft was produced to provide for the Punta del Este declaration that inaugurated the Uruguay Round with its two-track negotiating strategy on services.3 Consensus was facilitated by another GATT tradition, namely, “not to allow progress to be frustrated by one party’s obstinacy, unless it happened to be one of the major trading powers.”4 II Consensus as provided in WTO Agreement I Normal procedure: The normal decision-making procedure for WTO bodies is set out in Article IX:1 of the WTO Agreement, which states: The WTO shall continue the practice of decision-making by consensus followed under GATT 1947 Except as otherwise provided, where a decision cannot be arrived at by consensus, the matter at issue shall be decided by voting At meetings of the Ministerial Conference and the General Council, each John Jackson, The World Trading System: Law and Policy in International Economic Relations, Cambridge MA: MIT Press, 1997 Michael Hart, The GATT Uruguay Round, 1986-93: the Setting and the Players, in Fen Osler Hampson, with Hart, Multilateral Negotiations: Lessons from Arms Control, Trade and the Environment, Baltimore, John Hopkins University Press, 1995 Amrita Narlikar, Bargaining Together in Trade: Developing Countries in Coalitions, 1982-98, Oxford University Press, 2000 Hoekman, Bernard M and M M Kostecki, The Political Economy of the World Trading System: the WTO and Beyond, Oxford University Press, 2nd edn., 2001 Electronic copy available at: https://ssrn.com/abstract=2122948 Member of the WTO shall have one vote […] Decisions of the Ministerial Conference and the General Council shall be taken by a majority of the votes cast, unless otherwise provided in this Agreement or in the relevant Multilateral Trade Agreement A WTO body is deemed to have decided by consensus on a matter submitted for its consideration, if no Member present at the meeting when the decision is taken, formally objects to the proposed decision5 In other words, unless a Member explicitly objects to the proposed decision, that decision is taken If consensus cannot be achieved, Article IX:1 of the WTO Agreement provides for voting on a one-country/one-vote basis Under the normal procedure, decisions are then taken by a majority of the votes cast As under the old GATT, however, it is very exceptional for WTO bodies to vote Special consensus in the WTO - Reverse consensus Article 2.4 of the Dispute Settlement Understanding stipulates that where the DSB provides for the DSB to take a decision, such a decision is always taken by consensus It is important to note, however, that for most key decisions, such as the decision on the establishment of a panel, the adoption of panel and Appellate Body reports and the authorization of suspension of concessions and other obligations, the consensus requirement is in fact a “reverse” or “negative” consensus requirement The “reverse” consensus requirement means that the DSB is deemed to take a decision unless there is a consensus among WTO Members not to take the decision Since there will usually be at least one Member with a strong interest in that the DSB takes the decision to establish a panel, to adopt the panel and/or the Appellate Body reports or to authorize the suspension of concessions, it is very unlikely that there will be a consensus not to adopt these decisions As a result, decision-making by the DSB on these matters is, for all practical purposes, automatic II Special procedure: Although consensus inevitably prevails in the decision-making process of the WTO system, voting sometimes applies Article IX:1, in its relevant part, provides that: Footnote to Article IX of the WTO Agreement Electronic copy available at: https://ssrn.com/abstract=2122948 The WTO shall continue the practice of decision-making by consensus followed under GATT 1947 Except as otherwise provided, where a decision cannot be arrived at by consensus, the matter at issue shall be decided by voting Specifically, some procedures require voting They are: 2.1 Adoption of an interpretation of provisions of the WTO Agreement or the multilateral trade agreements The adoption of an interpretation of provisions of the WTO Agreement or the multilateral trade agreements is provided in Article IX:2 WTO Agreement, which reads: In the case of an interpretation of a Multilateral Trade Agreement in Annex 1, they shall exercise their authority on the basis of a recommendation by the Council overseeing the functioning of that Agreement The decision to adopt an interpretation shall be taken by a three-fourths majority of the Members Although the legal effect of an authoritative interpretation is not spelt out in Article IX:2 of the WTO Agreement, it is relatively clear that such an interpretation would bind all Members.6 2.2 Decisions to waive an obligation imposed on a Member Decisions to waive an obligation imposed on a Member are provided in Article IX:3 WTO Agreement, which provides: In exceptional circumstances, the Ministerial Conference may decide to waive an obligation imposed on a Member by this Agreement or any of the Multilateral Trade Agreements, provided that any such decision shall be taken by three WTO Decision-Making Procedures, “Member-Driven” Rule-Making and WTO Consensus-Practices: Are They Adequate? Are WTO Decision-Making Procedures Adequate for Making, Revising and Implementing Worldwide and ‘Plurilateral’ Rules?, by Von Dr h.c Claus-Dieter Ehlermann, http://www.wilmerhale.com/de/publications/whPubsDetail.aspx?publication=83 Electronic copy available at: https://ssrn.com/abstract=2122948 fourths of the Members unless otherwise provided for in this paragraph Article XXI of the GATS provides for a similar, but slightly stricter procedure for a Member that wishes to modify a commitment it has made in its services schedule They must be temporary (although they can be extended) and reviewed annually 2.3 Decisions on accession Decisions on accession are provided in Article XXII:2 It reads: The Ministerial Conference shall approve the agreement on the terms of accession by a two-thirds majority of the Members of the WTO Yet, when a new Member accedes, Article XIII permits Members to exclude the application of the WTO Agreement in relation to the new Member by so notifying the Ministerial Conference 2.4 Decisions on amendments Decisions on amendments require in most cases also a two-thirds majority of the Members, if Members not succeed in reaching a consensus within a time period, which will normally be 90 days (Article X WTO Agreement) Amendments to the DSU require consensus, which is less burdensome than the normal amendment procedure in that no ratification is needed Modifications of Articles IX and X of the WTO Agreement, of the most-favoured-nation treatment rules and of Article II of GATT 1994 (on bindings) require every Member’s consent 2.5 Decisions on the budget and on financial regulations Decisions on the budget and on financial regulations are provided in ArticleVII:3 WTO Agreement: The General Council shall adopt the financial regulations and the annual budget estimate by a two-thirds majority comprising more than half of the Members of the WTO III Impacts of the decision making by consensus in the WTO Advantages Electronic copy available at: https://ssrn.com/abstract=2122948 We have to admit that decisions taken by consensus have many advantages It is stressed that th the consensus rule reflects the national sovereignty principle, a principle based on the 18 century structure of states and on the assumption that countries are equal, disregarding their size or actual economic or political power.7 The issue of state sovereignty in the WTO seems to be resolved through the consensual mode of WTO decision-making according to which, each state that gives powers to the WTO has consented to so First, decisions-making by consensus, as confirmed by WTO Director-General Mike Moore stated shortly after the dismal failure of the 1999 Seattle Session of the Ministerial Conference, is a “fundamental democratic guarantee”.8 Inevitably, taken by consensus have greater “democratic legitimacy”9 than those adopted by voting The recourse to the alleged democratic legitimacy of consensus, stressing sovereign equality, therefore is merely formal and does not offer a true and transparent account of power relations.10 It is possible that WTO Members often have different benefits That is why they are interested in gathering into groups with common goals and try to put forward their own benefits and make them laws and policies The decisions adopted, therefore, may not reflect mutual benefits but only for those who support them But decision-making by consensus does not carry such risk It does seem that decision-making by consensus ensures the most acceptable laws and policies since every Member can get involved in the decision-making by using their consensus to conclude such laws and policies Consensus amounts to giving each member a right of veto and this is consistent with the principle of equal sovereignty of states, therefore enhancing the legitimacy of decisions.11 Second, decisions taken by consensus give small and poor WTO Members degree of influence in the decision making process Since even the weakest and least developed WTO Members can prevent the adoption of decisions, other powerful Members must try to persuade them of the substantive aspects of the decisions It is clear that consensus decisionmaking gives many WTO Members “sharp weapon” that they cannot have otherwise The P van den Bossche and Iveta Alexovi ová, Effective Global Economic Governance by the World Trade Organization, Journal of International Economic Law, Oxford University Press 2005 T Buck, EU may rethink multilateral trade role, Financial Times, 16 September 2003 Agata Fijalkowski, International Institutional reform, Hague joint conference on contemporary Issues of International law, T.M.C Asser Press, 2005 10 Thomas Cottier, A Two-Tier Approach to WTO Decision-Making, the International Centre for Development Research, 2001 11 Peter Van den Bossche, The Law and Policy of the World Trade Organization, Cambridge University Press, 2005 Electronic copy available at: https://ssrn.com/abstract=2122948 outcome will in this way also reflect the stake that various Members have in what is at issue, and their influence.12 Hence, it is understandable that many WTO Members not seem to want to change the current decision-making process Third, decision-making by consensus is necessary to ensure that only decisions that have good chance of implementation are adopted If decisions are unpopular, it is likely that they will face major opposition within Members However, in case they are taken by voting, coupled with great support of powerful WTO Members and the economic or political pressure being put on other Members, the unpopular decisions may become laws Furthermore, implementation is always a big problem It is clear that decisions which a Member considers to be inappropriate with its economic interests would hardly be implemented This in turn undermines the goal of ensuring the mutual benefit between WTO Members as being set forth in WTO Agreement It is obvious that the non-application of decisions on Members that were opposed to their adoption is likely to result in a fragmentation of the WTO system, undermining its efficacy Consensus is built on a broader and often stronger basis This is likely to affect the substance because the search for consensus regularly involves the search for a compromise solution that is somehow acceptable to all.13 Fourth, consensus decision-making ensures that laws and policies adopted by the WTO not go beyond economic and political reality It seems that developing WTO Members prevail on any issue submitted to a vote since they account for 70% of the membership of the WTO However, we should bear in mind that only 30% of world trade is accounted for by developing countries The remaining 70% is accounted for by developed world Therefore, if decision-making by majority voting on a one-country/one-vote basis is employed, it may drive developed Members out of the WTO system as they are not satisfied with the balance of power, thereby making the system ineffective as a forum for liberalizing world trade Many may argue that decision-making by weighted vote not face such risk However, it is hard to figure out which criteria should be taken into account in determining the weight of the vote (i.e share of world trade, population, degree of market openness, etc) And even if such 12 T Cottier and T Satoko, The Balance of Power in WTO Decision-Making: Towards Weighted Voting in Legislative Response, Aussen wirtschaft Publisher, 2003 13 WTO Decision-Making Procedures, “Member-Driven” Rule-Making and WTO Consensus-Practices: Are They Adequate? Are WTO Decision-Making Procedures Adequate for Making, Revising and Implementing Worldwide and ‘Plurilateral’ Rules?, by Von Dr h.c Claus-Dieter Ehlermann, available at http://www.wilmerhale.com/de/publications/whPubsDetail.aspx?publication=83 10 Electronic copy available at: https://ssrn.com/abstract=2122948 The goal of consensus has often been used by some developed countries to practice smallgroup consultations that exclude many developing countries and further exercise bilateral pressures on them outside the WTO forum in the name of reaching the multilateral consensus in WTO meetings Many developing country delegations claimed that consensus means little more than steamrolling of smaller powers by the dominant interests at the WTO.29 Therefore, developing countries are demanding to be heard because they are being left out of the WTO decision-making According to point of views of developing countries, many problems exist in Green Room process First, many developing countries have not even reached the point of interest identification to use process of self-selection and claim the right to attendance Clearer notification and possibility of self-selection enhance transparency, but to ensure that developing countries are able to make use of these improvements, the problems of meetings overlapping, limited representation and limited capabilities must also be addressed.30 In addition, the lack of rules and the informality of the process, basically means that it is a process of consultation and discussion that takes place behind closed doors In that process, it means that those with the most clout will carry the most weight There are indeed, few countries that would challenge a decision that has been put forward as a done deal31 2.3.2.2 Open discussions prevent developing countries from objecting publicly The problem of the process of consensus decision making is that it takes place through open discussion If a country wants to reject a proposal, it must so openly and clearly in front of other members present Many developing countries point out that they often fear the consequences of express their objection publicly and hence choose the alternative option of remaining silent.32 According to many delegations, often these pressures are used even before the negotiation to ensure that objecting countries exercise restraint Because the absence of objection is considered as consensus, developing countries end up in to decisions that they have actually problems with Therefore, it is doubtful if the system would be classified as a democracy because the countries are too afraid to express their dissidence As mentioned 29 WTO, Internal Transparency and the Effective Participation of all Members, Main Points raised by Delegations, 2000 30 Amrita Narlikar, WTO decision-making and developing countries, Trade-Related Agenda, Development and Equity, South Centre Working Paper No 11, 2001, 25 31 WTO NGO Symposium, Internal Transparency and Decision-making processes at the WTO:Critical Issues and Recommendations, 2002, 18 32 Amrita Narlikar, WTO decision-making and developing countries, Trade-Related Agenda, Development and Equity, South Centre Working Paper No 11, 2001, 30 15 Electronic copy available at: https://ssrn.com/abstract=2122948 above, there are two kinds of consensus, active consensus and passive consensus It is useful to draw the distinction between them Active consensus is when members are able to contribute to a genuine consultations and bargaining process by expressing their support, opposing and doubts regarding various aspects of the negotiation, and consensus emerges from such a discussion; meanwhile, passive emerges simply because members remain silent The sustainability of a passive consensus is also debatable Even if an agreement is adopted on paper because no countries officially objects, the actual implementation of the agreement will be difficult if the members themselves have some fundamental objection with it, they find the agreements have problems.33 2.3.2.3 The overloaded agenda and too many meetings held simultaneously have put resource deficient developing countries at a great disadvantage The third disadvantage for developing countries is that they are seriously lack of delegation One study has pointed out that while 65 developing countries maintain WTO missions in Geneva, 26 continue to be represented by missions or embassies elsewhere in Europe, and more list as their representative people located in their own capitals Based on the year 2000, the study finds that 24 countries have no permanent presence in Geneva These countries cannot object to the so-called consensus that various bodies of the WTO arrive at in their everyday workings.34 Even among the countries that enjoy diplomatic representation in Geneva, the size of their delegations is small The average size of the developed country delegation is 7.38 delegates per country In contrast, the average size of the developing country delegation is 3.51 Even this average masks significant differences among the actual sizes of developing country delegations, i.e for countries like Bangladesh to for India This can be a major problem in an international organization like the WTO where there are about 1200 events throughout the year, often resulting in overlaps of meetings Many developing countries find it difficult to attend the meetings of the WTO, especially if they must also cover all the other international organizations in Geneva with the same small delegation The difference in representation between the developed and developing countries works to disadvantage the latter 33 Amrita Narlikar, WTO decision-making and developing countries, Trade-Related Agenda, Development and Equity, South Centre Working Paper No 11, 2001, 34 Blackhurst and others, Improving African Participation in the WTO, Working Paper commissioned by the World Bank for a Conference at the WTO, 1999, 16 Electronic copy available at: https://ssrn.com/abstract=2122948 2.3.2.4 The inadequate assistance from Secretariat causes disadvantage for developing countries The other disadvantage for the developing countries is that the Secretariat does not provide them with adequate assistance At least some of the problems just described could be less harmful if members received adequate assistance from the WTO Secretariat to allow them the knowledgeable presence that consensus decision-making assumes Knowledge and research might not completely overcome the problems of power political bilateral pressures that threaten developing countries from exercising their voice in the consensus decision-making But they can prove to be a great strength by providing even weak countries a platform from which they can raise objections and alternative proposals However, the member-driven nature of the WTO places the obligation of preparation and research for effective and active participation in the consensus-based decision-making procedures on the members themselves Many developing countries find that they are unable to fulfill this responsibility and thereby find their participation in the WTO inhibited IV Recommendations and WTO reform In response to the problems analyzed above, in the recent years, especially immediately after the Seatle Ministerial in 1999, there has been a rise in the reform proposals These proposals range from ‘fine-tuning’ to radical restructuring of WTO decision-making procedures, address different sets of interests.35 This section examines these reform proposals Reforming consensus system The consensus system should be applied in a manner that fully respects the views of developing-country members.36 However, it is first interesting to know that developing countries are willing to retain the consensus principles despite the aforementioned disadvantages conferred upon them in the previous section This acceptance is based more on the practical consideration that members who find themselves in a minority position would never accept the deep and legally binding obligations of the WTO.37 The shift to majority voting is not impossible The whole WTO will be threatened if members are forced to make decisions by a ‘tyranny of the majority’ Furthermore, developing countries know from their 35 Amrita Narlikar, WTO decision-making and developing countries, Trade-Related Agenda, Development and Equity, South Centre Working Paper No 11, 28 36 Reform the WTO's decision-making processes, http://www.choike.org/nuevo_eng/informes/2092.html 37 Id 17 Electronic copy available at: https://ssrn.com/abstract=2122948 own experience that their opposition to a position supported by the developed ones poses a grave threat to taking their demands to an alternative forum where developing countries plays less or no role, or even effective withdrawal from the GATT/WTO For instance, the US in the Uruguay Round brandished the alternative of regional arrangements to which the Americans would resort if services were not included Clearly, formalizing blocking by allowing majority voting would heighten the frequency and possible implementation of such threats Consensus, however, at least gives chances to the negotiating processes where giveand-take emerges Transforming the ‘passive consensus’ into an ‘active’ one As it is not practical to totally utilize the method of majority voting, the modifications of consensus principle need to be directed towards transforming the ‘passive consensus’ into an ‘active’ one Active consensus (or consensus-building) transforms the decision-making process into a negotiating process that aims at reaching a bargain made of mutual concessions, which are often of a “crossing” character as a consequence of the single undertaking principle.38 This leads to the re-definition of consensus such that it requires an active endorsement of the proposal under discussion, rather than simply the lack of objection This active endorsement requires the active support of members that are present Consequently, all members need to be informed of the timing and agenda of meetings in which consent is assessed In case of members with minimal or no presence in Geneva, it should be considered whether they can express their concern about the issue under discussion via mail or other mechanisms Evolving a hierarchy of issues with different methods of decision-making applying to each level Another possible modification is to evolve a hierarchy of issues with different methods of decision-making applying to each level Issues involving the actual exchange of concessions, for instance, would continue to be decided on the basis of consensus More administrative or house-keeping matters could be decided through procedures of voting Similarly, specific rules of voting could be used in the selection of chairs to reduce some of the ambiguities that surround the process today However, this would not be a fundamental reform in the WTO as 38 Andreas R Ziegler and Yves Bonzon, How to reform WTO decision -making? An Analysis of the Current Functioning of the Organization from the Perspectives of Efficiency and Legitimacy, 2007, 14 18 Electronic copy available at: https://ssrn.com/abstract=2122948 WTO provisions already provide cases in which voting is possible or mandatory Despite these provisions, the actual practice of voting in the WTO is rare Other recommendations 4.1 Taking the model of the IFIs and the UNSC First, the proposals to reform the WTO structures take the model of the IFIs and the UN Security Council For example, one proposed a new committee with limited membership, comparable to the UN Security Council in regional representation and rotation of nonpermanent members The EU has proposed a body along the lines of the Consultative Group of Eighteen Mexico has suggested a transformation of the Green Room into a ‘Glass Room’, in which 25% of the WTO’s members (34 at the time of the proposal) would participate A similar proposal has been made by Jeffrey Schott and Jayashree Watal of an informal steering committee of 20 members based on absolute value of foreign trade and geographic representation ensuring representation with at least two members from each region All these proposals stress that the advisory/ executive/ consultative/ steering board or committee would have only consensus-building and no decision-making powers.39 This creation of a WTO Consultative Body takes the experience from the IMF This experience could be valuable in two ways: First, it illustrates how the body could function to introduce new dynamics to trade negotiations in order to break deadlocks40 Second, the IMFC’s experience could guide WTO Members in determining the profile of those individuals appointed to the body Concerning the first one, the ability of the IMF Executive Board to go back to the IMFC to assess progress and agree on new instructions for the former has introduced new dynamism to decision-making processes within the Fund, and it has been a valuable process in overcoming deadlock A similar interaction could take place between the WTO Ministerial Conference and a WTO consultative body concerning the negotiation of new trade rounds, but also between the consultative body and the Councils of Trade in Goods and Services, and the 39 Krajewski, Verfassungsperspektiven und Legitimation des Rechts der Welthandelsorganization (WTO) (2000), Werksman (2000), Schott and Watal (2000), proposals by various delegations and summary proceedings of informal meetings of the General Council 40 Alberto Alvarez-Jiménez, Improvements to the WTO decision-making Process: Lessons from the International Monetary Fund and the World Bank, 19 Electronic copy available at: https://ssrn.com/abstract=2122948 Council for TRIPS.41 In effect, WTO councils or committees could also advance issues for further negotiations before the consultative body regarding topics for which consensus is elusive within the councils or committees However, it is worth recalling that the WTO has already had one experience with a similar consultative body in its predecessor, the GATT, i.e through the Consultative Group of Eighteen, cg-18 It was suspended in 1989, due to some reasons that one scholar has noted: “Very soon after its establishment, the member countries found that the deliberations in the Group only resulted in repetition of the points made and the issues raised in other GATT bodies; the forum was often used by developed country members to bring in new issues for rule making and to reiterate their well known positions The expectations that the discussions in the Group would lead to a dialogue and better understanding of view points and positions of different countries were far from being realized The result was that there was reluctance on the part of senior officials from capitals to come to these meetings and the meetings came to be attended by officials from Geneva based delegations”.42 Moreover, there are four more reasons for the uncertainty of the establishment of an advisory executive boy First, the nature of WTO legislation, i.e its binding character and its intrusive potential, means that few countries would be willing to accept recommendations of a consensus of an advisory inter-state body, especially if the issue under discussion is one in which substantial differences exist Second, a permanent/ semi-permanent body may have worked partially when the mandate of the GATT was restricted to goods, but today interests of countries differ significantly across issue-areas that are covered by the WTO Executive bodies, if they are to meet the participatory requirements of all or most WTO members, would need to be re-constituted according to the councils and committees, and further with negotiations in each sub-sector as interests of countries are realigned Third, even members that gain a place in such a board might not have the resources or the will to negotiate in all the different areas that a permanent body would demand As such, it is doubtful if they would be sufficiently representative of the region/ sub-group Lastly, as one group of developing countries has noted, “Creation of an advisory board would formalize the exclusion of a large 41 WTO Ministerial Conference, ‘Implementation-Related Issues and Concerns’, WT/MIN (01)/17 (20 November 2001) See in this regard, Pieter-Jan Kuijper, ‘WTO Institutional Aspects’, in Daniel Bethlemen, Donald McRae, Rodney Neufeld, and Isabella Van Damme (eds), The Oxford Handbook of International Trade Law, Oxford University Press, 2009), 79 42 Vinod Rege, WTO Procedures for Decision Making: Experience of Their Operation and Suggestions for Improvement, Background Paper, Commonwealth Secretariat, 21 January 2000 20 Electronic copy available at: https://ssrn.com/abstract=2122948 number of Members from process of consultations.”43 Another developing country member notes, “The proposals for establishment of advisory board or any other exclusionary group, or use of regional groupings would result in rigidity and inefficiency in decision-making processes.”44 Second, for developing countries, they propose to enhance their own participation by emphasizing greater transparency of proposals However, according to the Like-MindedGroup, this increased transparency would increase the number of meetings the already overtaxed delegations will have to attend To deal with these problems, developing countries suggest two sets of proposals First, a less ambitious work program would a great deal towards helping develop a fairer decision-making system.45 Second, developing countries stressed the importance of addressing implementation issues before the new round This proposal is called capacity-building, which becomes crucial to deal with the overload of meetings and the possible increase if some of the proposals for greater transparency are met Third, the reform in the Ministerial Conferences should be taken into account As the Sutherland Report states, “new levels of political engagement and high-level consultative machinery that would serve to give direction and drive to negotiation processes” 46 To this end, the Sutherland Report suggests that the Ministerial Conference meet annually (instead of bi-annually) and that senior trade-policy makers in state capitals should meet in Geneva more frequently, such as every three to six months in the context of General Council meetings.47 Some proposals emphasize the substantial preparatory work needs to be completed before a ministerial More efforts need to be made to resolve most of the contentious issues in Geneva before the Ministerial Many proposals suggest that at least a work program should be drafted before the ministerial so that no surprises are sprung up at the Ministerial Better planning, in terms of selecting Chairs, ensuring transparency, avoiding overlaps, is essential to avoid a recurrence of Seattle There is also the option of having the Vice-Chairs assist the Chair (host country) in chairing and other substantive work The alternative would be to have the 43 Pakistan on behalf of Cuba, Egypt, Uganda and Zimbabwe, General Council Informal Meeting 28 March 2000, Job (00)/2331, 14 April 2000 44 Uruguay, id 45 Amrita Narlikar, WTO decision-making and developing countries, Trade-Related Agenda, Development and Equity, South Centre Working Paper No 11, 2001, 32 46 Sutherland Report, The future of the WTO: Addressing institutional challenges In the New Millennium, 2005, 69 http://www.wto.org/english/thewto_e/10anniv_e/10anniv_e.htm 47 Id., 69-70 21 Electronic copy available at: https://ssrn.com/abstract=2122948 ministerials scheduled only in developing countries so that they can acquire a sense of greater ownership of WTO processes 4.2 Departing from the single undertaking principle in order to enhance efficiency Some authors have suggested departing from the single undertaking principle in order to enhance efficiency48 while others have also argued that the way powers are distributed within the hierarchical structure of the organization bodies can have an impact on efficiency.49 4.3 Reinforcing the involvement of high-ranking political leaders to give greater impulse to the process Another proposal is to reinforce the involvement of high-ranking political leaders to give greater impulse to the process.50 To some, greater involvement of political leaders would also enhance the democratic legitimacy of decision-making.51 Regarding democratic legitimacy, proposals have been made to involve to a greater extent national parliaments and non-state actors at the WTO level.52 We argue that the participation of non-state actors should be regulated and that mechanisms should be established to increase its transparency.53 Several panelists and many participants in the discussion referred to the recommendation in the Sutherland Report to require a Member considering blocking a measure which has broad support among other Members, to declare that the matter at hand is of vital national interest to it.54 In other words, Members should justify the use of their ‘veto power’ Such a 48 Howser, How to Begin to Think About the ‘Democratic Deficit’ at the WTO, in : Griller Stefan (ed.), International Governance and Non-Economic Concerns, Springer Verlag – Wien publisher, 2003 49 SCHERMERS H G./ BLOKKER N M , International Institutional Law, Martinus Nijhoff Publishers, 2003, 472 50 Sutherland Report, (2005), The future of the WTO: Addressing institutional challenges I the New Millennium, http://www.wto.org/english/thewto_e/10anniv_e/10anniv_e.htm chapter 51 The proposal of candidate for French presidency Sarkozy, in “Nicolas Sarkozy veut changer les règles de l'OMC”, in: Le Monde, 9.03.2007 52 On the involvement of national parliaments, see the series of articles in: PETERSMANN E.-U (ed.), Reforming the World Trading System: Legitimacy, Efficiency, and Global Governance On the participation of non-state actors: CHARNOWITZ S (2000), “Opening the WTO to non-governmental interests”, 24 Fordham International Law Journal 173, and ESTY D C (1998), “Non-Governmental Organizations at the World Trade Organization: Cooperation, Competition, or Exclusion”, Journal of International Economic Law 1, 123-147 53 On rules for the participation of non-state actors in the WTO, issues of external transparency and derestriction of official WTO documents, P van den Bossche and Iveta Alexovi ová, Effective Global Economic Governance by the World Trade Organization, Journal of International Economic Law, Oxford University Press 2005 54 Sutherland Report (2005), The future of the WTO: Addressing institutional challenges I the New Millennium, http://www.wto.org/english/thewto_e/10anniv_e/10anniv_e.htm , 64 22 Electronic copy available at: https://ssrn.com/abstract=2122948 ‘consensus blocking declaration’ would need to be given in writing and would have to include reasons Some participants supported this proposal, stating that such a mechanism would increase the political ‘cost’ of blocking consensus and discipline the substance of the objection by forcing the opposing Member to state substantive reasons Other participants feared that this suggestion is politically not acceptable to most WTO Members.4.4 The views of every member must be respected in a decision involving consensus and explicit consensus, especially in the case of important issues where it has been specified by Members that a consensus or an explicit consensus is required for a decision to be adopted, the views of each Member must be recognized and respected, including the right not to agree to a proposed decision 4.4 Adopting realistic agenda and work schedule The WTO should adopt a realistic agenda and work schedule that is fair especially for smaller delegations The WTO should not take on a too heavy workload for small developing countries to handle Negotiations should not be scheduled for too rapid a pace There should not be more than two meetings going on at the same time, to enable small delegations to participate.55 4.5 Developing countries should not be subjected to economic and political pressure relating to negotiations Developing countries should not be subjected to economic and political pressure relating to negotiations They should not be subjected to pressure by developed ones which can amount to bullying and blackmail to side with their positions Nor should they be help dependent on trade preferences, bilateral aid, military aid from international financial institutions, as points of leverage that get them to agree 4.6 Decisions should not be made until all members are technically ready Decisions should not be made until all members are technically ready More specifically, decisions and agreements should not be made until and unless all Members, especially the developing countries, are able to understand the technicalities of the issues and the implications for their economies and societies 55 Memorandum on the need to improve internal transparency and participation in the WTO, 2003 23 Electronic copy available at: https://ssrn.com/abstract=2122948 CONCLUSION Decision-making by consensus dominates the decision-making process in the WTO system It is likely that consensus-based decision remains in force in the future since it has had longlasting period of existence Inevitably, they have many advantages theoretically They also expose to some risks and disadvantages, however In order for the WTO system to effectively function, some reforms should be needed An international organization like the WTO is seen as little more than a forum, which provides an opportunity to all member-states to interact on a multilateral basis Members need to review the relationship between substance and institution, and consider reform options Appropriate structures are a means to successfully 24 Electronic copy available at: https://ssrn.com/abstract=2122948 achieve the goals of the organization, stipulated in the preambles of the various agreements Reform will at least go some way towards improving the participation of developing countries in both the process and substance of decision-making They are of significant importance for overall sustainability as well Currently, the multilateral trading system regulated by the WTO is in danger of losing reliability and confidence among its membership unless reasonable proposals by developing Members to participate in the WTO decisionmaking are taken seriously It would of course not be easy to make such an entity acceptable to all Members by establishing a balance between flexibility and efficiency Nevertheless, it would seem specifically valuable if a system can be found that ensures sufficient representation of the various regions and interests in a system of rotation that gives even small Members a chance to be part of that group at some point in time It may also be worth another effort if the decision-making mechanism could be reinforced so as to reduce the gap in effectiveness between the WTO’s political bodies and its dispute settlement mechanism LIST OF REFERENCES I CONVENTIONS AND TREATIES Marrakesh Agreement Establishing the World Trade Organization (opened for signature 15 April 1994, entered into force January 1995) 1867 UNTS 3, Annex 1A (General Agreement on Tariffs and Trade) 1867 UNTS 190 II BOOKS 25 Electronic copy available at: https://ssrn.com/abstract=2122948 Agata Fijalkowski, International Institutional reform, Hague joint conference on contemporary Issues of International law, T.M.C Asser Press, 2005 Amrita Narlikar, Bargaining Together in Trade: Developing Countries in Coalitions, 1982-98, Oxford University Press, 2000 Footer, An institutional and Normative Analysis of the WTO, Martinus Nijjhoff Publishers, 2005 Hoekman, Bernard M and M M Kostecki, The Political Economy of the World Trading System: the WTO and Beyond, Oxford University Press, 2nd edn., 2001 Howser, How to Begin to Think About the ‘Democratic Deficit’ at the WTO, in: Griller Stefan (ed.), International Governance and Non-Economic Concerns, Springer Verlag – Wien Publisher, 2003 John Jackson, The World Trading System: Law and Policy in International Economic Relations, Cambridge MA: MIT Press, 1997 Margaret Liang, Evolution of the WTO decision process, Singapore Year Book of International Law contributors, 2005 Michael Hart, The GATT Uruguay Round, 1986-93: the Setting and the Players, in Fen Osler Hampson, with Hart, Multilateral Negotiations: Lessons from Arms Control, Trade and the Environment, Baltimore, John Hopkins University Press, 1995 Peter Van den Bossche, The Law and Policy of the World Trade Organization: Text, Cases and Materials, Cambridge University Press, 2005 10 SCHERMERS H G./ BLOKKER N M , International Institutional Law, Martinus Nijhoff Publishers, 2003 11 T Cottier and T Satoko, The Balance of Power in WTO Decision-Making: Towards Weighted Voting in Legislative Response, Aussenwirtschaft Publisher, 2003 III ARTICLES IN JOURNALS 26 Electronic copy available at: https://ssrn.com/abstract=2122948 Bryan Christopher Mercurio, The WTO and Its Institutional Impediments, Melbourne Journal of International Law, Vol 8, 2007 Debra P Steger, Mini-Symposium on Transparency in the WTO’, 11 Journal of International Economic Law 705, 2008 John H Jackson, Sovereignty-Modern: A New Approach to an Outdated Concept, 97 American Journal International Law John H Jackson, The Role and Effectiveness of the WTO Dispute Settlement Mechanism, Brookings Trade Forum, Brookings Institution Press 2000 P van den Bossche and Iveta Alexovi ová, Effective Global Economic Governance by the World Trade Organization, Journal of International Economic Law Vol No 3, Oxford University Press 2005 Peter Norgaard Pederson, The WTO Decision-Making Process and Internal Transparency, World Trade Review 103, 2006 Peter Sutherland, The World Trade Organization at Ten Years, World Trade Review 341, 2005 Stephan Zamora, Voting in International Economic Organizations, 74 American Journal of International Law 566, 1980 T Buck, EU may rethink multilateral trade role, Financial Times, 16 September 2003 IV RESEARCH PAPERS AND DRAFT RESEARCH PAPERS Amrita Narlikar, WTO decision-making and developing countries, Trade-Related Agenda, Development and Equity, South Centre Working Paper No 11, 2001 Andreas R Ziegler and Yves Bonzon working paper, How to reform WTO decision making? An Analysis of the Current Functioning of the Organization from the Perspectives of Efficiency and Legitimacy, 2007 Blackhurst and others, Improving African Participation in the WTO, Working Paper commissioned by the World Bank for a Conference at the WTO, 1999 27 Electronic copy available at: https://ssrn.com/abstract=2122948 Briggs working paper, Introduction to Consensus, International Institute for Facilitation and Consensus, 2000 http://www.iifac.org Dr Claudieter Eherman, WTO Decision-Making Procedures, “Member-Driven” RuleMaking and WTO Consensus-Practices: Are They Adequate? Are WTO DecisionMaking Procedures Adequate for Making, Revising and Implementing Worldwideand ‘Plurilateral’ Rules? http://www.wilmerhale.com/de/publications/whPubsDetail.aspx?publication=83 Krajewski, Verfassungsperspektiven and Legitimation des Rechts der Welthandelsorganization (WTO) (2000), Werksman (2000), Schott and Watal (2000), proposals by various delegations and summary proceedings of informal meetings of the General Council Manfred Elsig working paper, WTO Decision-Making: Can We Get a Little Help from the Secretariat and the Critical Mass?, 2001 Mayur Patel working paper, New Faces in the Green Room: Developing Country Coalitions and Decision-Making in the WTO, 2007 Memorandum on the need to improve internal transparency and participation in the WTO, 2003 10 P van den Bossche working paper, Radical Overhaul or Pragmatic Change? The Need and Scope for Reform of Decision-Making in the World Trade Organization, 2006 11 Peter Van de Bosche, Effective Global Economic Governance by the World Trade Organization, working papers in the Maastricht Faculty of Law Working Paper Series 12 Richard H Steinberg working paper, Consensus Decision-Making at the GATT and WTO: Linkage and Law in a Neorealist Model of Institutions, 1995 13 Thomas Cottier, A Two-Tier Approach to WTO Decision-Making, the International Centre for Development Research, 2001 28 Electronic copy available at: https://ssrn.com/abstract=2122948 14 Vinod Rege, WTO Procedures for Decision Making: Experience of Their Operation and Suggestions for Improvement, Background Paper, Commonwealth Secretariat, 21 January 2000 15 WTO NGO Symposium, Internal Transparency and Decision-making processes at the WTO: Critical Issues and Recommendations, 2002 16 WTO, Internal Transparency and the Effective Participation of all Members, Main Points raised by Delegations, 2000 V OTHER DOCUMENTS http://www.ictsd.org/ministerial/cancun/docs/Doha-2.pdf http://www.nccr-trade.org/nccr-publications/10.html http://www.vcci.com.vn/ Reform the WTO's decision-making processes, http://www.choike.org/nuevo_eng/informes/2092.html Sutherland Report (2005), The future of the WTO: Addressing institutional challenges In the New Millennium, http://www.wto.org/english/thewto_e/10anniv_e/10anniv_e.htm 29 Electronic copy available at: https://ssrn.com/abstract=2122948 ... about the reform of the WTO in the field of decision- making are raised Electronic copy available at: https://ssrn.com/abstract=2122948 I Origin of ? ?consensus? ?? in the WTO The origins of the consensus. .. smaller powers by the dominant interests at the WTO. 29 Therefore, developing countries are demanding to be heard because they are being left out of the WTO decision- making According to point of views... 4.1 Taking the model of the IFIs and the UNSC 19 4.2 Departing from the single undertaking principle in order to enhance efficiency 22 4.3 Reinforcing the involvement of high-ranking political