Single Undertaking: A Straightjacket or Variable Geometry?
CUTS-TradeForum
From: Robert Wolfe, Professor, School of Policy Studies, Queen's University
Raymond Saner's paper is a masterful survey of existing plurilaterals, and why they work. The conclusion, however, does not convince me that the conclusion to my older paper is wrong—see Wolfe, Robert, (2009) 'The WTO Single Undertaking as Negotiating Technique and Constitutive Metaphor,' Journal of International Economic Law 12:4 (December 2009), 835-58.
I think the debate on these issues muddles key terms. First,what is the "single undertaking"? Here we must distinguish between the Doha single undertaking (as modified in the July 2004 framework, and again at Hong Kong, and again in July 2008) and the two principles that a) the WTO acquis is a single undertaking, and b) that the results of a negotiation have to be a package. The Doha single undertaking is dead, but I don't think the principles are--indeed the Doha difficulties may have had little to do with the single undertaking principles.
Second, what is a "plurilateral"? I think it usually means both 1) a set of countries smaller than the full WTO membership; and 2) a limited range of issues. Both are problematic because of the principles of the single undertaking: 1) countries tend to have asymmetric interests with respect to any one trading partner; and 2) countries tend to have asymmetric interests on any one issue. It follows that achieving critical mass with a smaller group can be hard, and can be harder still if the issues are also limited.
The logic is clearest with the United States. Just as other countries are unlikely to conclude a major negotiation with the US without some version of fast track, in the end the US needs the outcome of any negotiation to be a de facto single undertaking because they will not want other countries to unravel the deal once it's submitted to Congress. And given the heterogeneity of Congress, any deal has to have lots in it for different constituencies. This logic will tend to favour deals with a critical mass of issues and participants. (A question for another day is whether RTAs meet that test.)
Using plurilateral services negotiations, for one example, to advance understanding of the issues can be helpful, but in the end I think WTO Members may need some form of broader package of issues to close a deal, and some agreement on how the results will be incorporated in the WTO acquis. And that agreement will probably require some as yet unclear bundling of Doha and new issues, a bundling that will be a single undertaking in effect if not in name.
Robert Wolfe
From: Professor Raymond Saner, Director, CSEND- Geneva
Plurilateral solutions should be re-considered as possible solution to break the DDA impasse/from Raymond Saner
Chandrakant Patel, SEATINI Representative in Geneva wrote a very insightful analysis on the emergence of the “Single Undertaking” concept, or rationale, almost 10 years ago. The paper describes how the concept was introduced and became part of trade negotiations and trade discourse spanning the period of the Uruguay Round to the WTO and subsequent DDA. Most of what is discussed in the paper is relevant today. To draw on two sections of the paper:
Since its introduction in the 1986 Punta del Este Declaration, the scope of the single undertaking conceptual approach has been defined and interpreted in a variety of ways. As a political construct, it should come as no surprise that it is subjected to varying interpretations. Hence, it is neither “a new regime principle” nor a binding legal norm in the WTO context (p.27); and referring to the summary section of the paper, the following: (This section) concludes that a virtually non-consensual interpretation of the concept of single undertaking inserted in the draft Final Act of the Uruguay Round in 1999 facilitated the “all or nothing” imposition of the results of the negotiations on developing countries. (p.4
Both quotes bring back important reflections as to the implications that the concept “Single Undertaking” might have for developing countries and his observations remain relevant up to today. I highly recommend to readers of the CUTS forum to re-read this insightful paper.
The Doha Development Agenda (DDA) launched in 2001 was supposed to achieve further trade liberalisation while at the same time taking into account the needs of developing countries. Ten years have passed since its inception and no end of the Round is in sight. In this context, plurilateral agreements might constitute a solution to the impasse of WTO/DDA as well as a basis for future trade agreements within the WTO context.
We at CSEND have suggested to the trade community to reconsider plurilateral solutions since 2010 and have now taken a further step which we would like to share with you. After launching a debate on the CUTS Forum end of last year, we have revisited the literature on plurilaterals and discussed the current status of plurilateral agreements within the WTO. The result of our analysis are available on our website as well as the exchanges on the topic by various colleagues who send comments after my initial input on the CUTS Forum at the end of last year (see below).
In summary, I suggest that plurilateral agreements within the WTO context cold help break the DDA impasse. Plurilateral agreements could be possible if a sufficient number of member countries create a critical mass of countries that provide momentum to conclude plurilaterals within the WTO context.
However, the obstacle to MFN based plurilaterals is the “free-rider” problem which could be an important de-motivation for members to agree to plurilaterals. To create the critical mass for new Plurilaterials would require that adequate commercial benefits become available for those members who sign up to it in the short term. If significant competitors opt for a “free rider” position, the critical mass will not be reached. .
All things considered, I would prefer to get the membership to agree to the start new plurilaterals which have a time limited grace period of non-MFN status. Once beyond the grace period, new plurilaterals would have to be either dissolved or opened to full MFN.
New “WTO plurilateralism” would be a counterweight to the proliferation of FTAs/PTAs which are deepening and moving more and more into the sphere of national regulatory policy levels. Keeping new trade liberalization and market access within the WTO is better than more FTAs/PTAs because of the availability of the WTO DS system but also because the BIT processes which are outside the current DDA are adding fragmentation, insecurity and confusion to the larger world trade context. (BITs and their often inadequate level of transparency was one of the key topics at the World Investment Forum/UNCTAD XIII meeting in Doha).
The two documents are available at:
CSEND Policy Brief Nr 7; ISSN 2235-8048, at: http://www.csend.org/csend-policy-briefs/item/310-csend-policy-briefs
Debate on Plurilaterals, at: http://www.diplomacydialogue.org/publications/trade-diplomacy/114-could-plurilateral-agreements-provide-a-way-forward-out-of-the-current-impasse-of-the-wtodoha-round
Professor Raymond Saner
Single Undertaking: A Straightjacket or Variable Geometry? Chandrakant Patel, SEATINI Representative in Geneva
One of the pillars of the multilateral trade negotiations is “single undertaking”. In this Working Paper (South Centre, Geneva, May 2003), the author states: “The characterization of the single undertaking concept, not surprisingly, varies from the popular “all or nothing”, “take it or leave it”, or “something for everyone” formulations; the WTO Secretariat’s “nothing is agreed until everything is agreed” formulation; to the more academic -- i.e. that single undertaking is a “major structural innovation” or that it is a “new regime principle”.”
This paper analysed several questions in regard to the application of “single undertaking” to the Doha Round of multilateral trade negotiations. It argues: “In particular, any possible Uruguay Round-style application of single undertaking towards the concluding phase of the Doha Round warrants a better understanding of the concept and of the responses needed to deal with it.”
Issues relating to “single undertaking” remain relevant and therefore, it is important to revisit some of these questions.
Read the full paper: http://www.cuts-citee.org/pdf/Single_Undertaking_A_Strait_Jacket_Or_Variable_Geometry.pdf.