New Issues at Trade Negotiations

Many of the new issues currently being discussed by trade experts as likely candidates for the multilateral negotiations 1 are actually not so new. Discussions on them began in the mid-1990s.

At the ministerial conference in Singapore in December 1996, four new issues—trade and investment, trade and competition policy, transparency in government procurement, and trade facilitation were introduced to the WTO agenda. They came to be known as the Singapore issues.

While three of the four Singapore issues were dropped in the 2004 July package, the fourth issue was sealed with the trade facilitation agreement at the Bali Ministerial Meeting in 2013.

New Issues

Some of the new issues that are currently being discussed may have the origins in the Singapore issues. Investment issues, competition policy, a transparency in government procurement are some of the new issues in currency. They are already in place in different trade agreements, especially some of the Economic Partnership Agreements (EPAS), mega Free Trade Agreements (FTAS) like Trans-Pacific Partnership Agreement (TPPA) and Transatlantic Trade and Investment Partnership (TTIP), Regional Comprehensive Economic Partnership (RCEP), plurilateral agreements like Government Procurement Agreements (GPA), and regional agreements like ASEAN Comprehensive Investment Agreement (ACIA).

Trade & Investment

A contentious “new issue” which may enter the multilateral negotiations is trade and investment. While the multilateral negotiations of 2004 rejected this issue, an investment chapter has appeared in many trade agreements and exclusive investment treaties have been signed bilaterally as well as regionally.

Trade agreements which give cover investment issues extensively include the 2012 US Model Bilateral Investment Treaty (US Model Treaty), ACIA 2009, TPPA and TTIP.

Government Procurement

Governments are one of the largest buyers in the domestic market and procure around 30%-40% of GDP in developing countries. Government procurement has been traditionally used as a development policy tool by the developed as well as developing countries, especially to encourage small and medium enterprises (SMES).

• Incentives provided to outfits who supply to the government are amongst the ways through which domestic investments are channelised in specific directions and certain targeted industries given a boost.
• However, in many countries lack of transparency in government procurement has been identified as a major cause of corruption.

Government procurement has been used as a policy tool for:

1. National security, especially in case of defence-related procurement;
2. Re­distributive goals, for example, higher public procurement from domestic enti­ties through local content requirements
3. Industrial and regional development which could mean encouraging procure­ment from backward regions
4. Pro­moting SMEs
5. Supporting SOES

State-owned Enterprises

It is important to note that many countries have some form of competition policy in place. But competition laws in most of the countries exclude State owned Enterprises (SOES), because such enterprises have been set up in many strategic industries to fulfill social social objectives as well as to generate income for governments. In many countries these industries/services include banking, insurance, telecom, transportation, infrastructure, and oil and gas utilities.

• Almost all FTAs have kept SoES out of their ambit, except for a few such as TPPA.
• In TPPA, provisions around SoES apply with respect to large commercially focussed SoES which are profit-oriented with direct government ownership of more than 50% of share capital.
• Doubts have been raised on the functions of SOES in some countries.
• In Many countries, especially developing countries and LDCs, a SOE has a hybrid of commercial and social or public good functions, for example in sectors such as railways and postal services.
• It may become extremely difficult for countries in such areas to demarcate whether an SoE is undertaking commercial activity or not.

Labour Standards

Labour standards in international trade are increasingly becoming a contentious issue. At the 1996 Singapore Ministerial Conference of the WTO, the Internation­al Labour Organization (ILO)was recog­nised as the competent body to negoti­ate labour standards and it was suggest­ed that the WTOSecretariat will work together with it on technical issues for “coherence” in global economic policy­making. Currently, none of the wtocouncils and committees work on labour standards.

• Labour standards include a wide range of practices including child labour, forced labour, trade unions and strikes, minimum wages, working conditions and working hours.
• While all WTO mem­bers agree on the internationally recog­nised “core” labour standards—that is, no forced labour, no child labour and no discrimination at work (including gen­der)—there is a raging debate on other issues.
• In general, it is perceived that while advanced countries emphasise the importance of greater international coherence in policies with regard to la­bour and propagate that trade provides a powerful tool for improving work­place conditions, the developing coun­tries consider any further steps in this direction as enhancing protectionism and depleting comparative advantages of developing countries which have low wage labour.
• While the US and EU have been in­cluding some provisions of labour stand­ards in their bilateral and regional FTAs, degrees of enforcement vary.