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Beyond Trade: Broadening the Globalisation Governance Agenda

Pierre Marc Johnson1
with Karel Mayrand

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V. A New Deal for Globalisation: Mapping an Integrated Agenda for Policymakers

In a keynote address at the WTO High-Level Symposium on Trade and Environment in March 1999, UNEP's executive director Klaus Toepfer stressed "that trade and environment policy cannot be isolated from the impact of international debt, the need to alleviate poverty, the equitable imperative to transfer technology, or the need to enhance capacity of developing countries to face the challenges of sustainable development".55 The UNCTAD X report also insisted that there was an "urgent need to rethink the processes, mechanisms and policies that underpin the functioning of the world economy, and in particular those that link developing countries to the forces of globalisation".56 These statements were echoed at UNCTAD X in Bangkok in February 2000 when several delegations called for an international new deal.

Part of this new deal could consist of renewing the Rio North-South agenda. As early as 1996, analysts argued that the basic post-Rio North-South bargains were already dead and needed to be revived to avoid regionalism or protectionism and to promote effective multilateral trade liberalisation.57 A new North-South bargain similar to the Rio one could be struck outside the WTO system (which is perceived as too northern-oriented by many developing countries). This bargain would involve two undertakings. First, developing countries would fully implement their trade liberalisation commitments and also consider environment and labour issues in a new round of trade liberalisation. Second, OECD countries would agree to increase financial and technological transfers significantly to developing countries and to support capacity-building activities, and would open their markets to the South faster than currently planned. Only the most important stakeholders of foreign policy and international trade can craft such a bargain.

The deal would be accompanied by the following policies. Efforts would be made to harmonise the trade and non-trade agendas through a systematic reform of the WTO regime in an integrative, transparent, and participatory manner to make it consistent with the objectives of human and sustainable development. Co-operation programs would be intensified — including through a significant increase and better co-ordination in ODA deployment — to support developing countries in implementing trade and environmental agreements, as well as implementing action plans from the major UN conferences of the 1990s. This intensification of co-operation and implementation activities would be supported by a definite improvement of the interface between agendas and actors through reinforced inter-institutional co-operation. Furthermore, global governance would be broadened by the creation of new structures and practices (fora, formal and informal networks, organisations) that would allow for the full participation of developing countries and for a comprehensive consideration of globalisation agendas. Institutional intergovernmental practices would also be made more transparent and open to allow for the participation of civil society and the private sector.

Harmonising the Trade and Non-Trade Agendas in the WTO Regime
Conducting a Comprehensive Environmental Review

A comprehensive environmental review of the WTO system should be conducted to clarify the relationship between MEAs and the multilateral trade regime. This review should produce recommendations for ministerial approval and be followed by significant reforms. As a starting point, Canada tabled a paper in Seattle that called for each negotiation group to "take environmental issues into consideration to make certain that liberalised trade is consistent with, and supportive of, the achievement of sustainable development".58

Such a review would be mutually beneficial to trade and environment regimes. By supporting the establishment of multilateral environmental standards regimes under MEAs, the WTO could avoid the pitfalls of unilateralism and protectionism in the field of environmental regulation. Harmonisation of provisions of the multilateral trade system with trade measures adopted for environmental purposes, both at the national and international level, would support the implementation of both regimes. This would also be true in the area of subsidies. A reduction in energy subsidies, for instance, would certainly be an effective tool to support commitments to reduce carbon dioxide emissions adopted under the Kyoto Protocol. The consequences on the global environment of certain practices related to trade could be influential in the establishment of WTO priorities.

Developing Inter-Institutional Co-operation with MEAs

The WTO and MEA secretariats could establish permanent co-ordination structures to make their regimes consistent and to develop mutually supportive policies. They could work on voluntary codes for minimal process and production methods standards, a range of common interpretations about the precautionary principle, and the operationalisation of the polluter-pays principle (Principle 16 of the Rio Declaration). They could also conduct an environmental review of the TRIPs agreement and elaborate a comprehensive plan to phase out trade-distorting and environmentally damaging subsidies. Attention could be given to full-cost pricing of natural resources to avoid market failures in their allocation.

Improving Transparency and Participation

Regarding transparency and participation issues, many share the view that "the WTO should adopt thoroughgoing procedural reforms to improve the transparency of its decision-making processes to both the public and non-governmental organisations".59 Significant reforms should be implemented to support the participation of civil society and developing countries in WTO activities, including in dispute resolution panels and negotiation groups. The inevitability of so-called "green room" bartering behind closed doors and its obvious benefits should not distract from the necessity to ensure solid real-time information and communication with civil society representatives where this is feasible and useful.60

Implementing the 1990s Action Plans and Programs
Intensifying International Co-operation Activities

International environmental instruments still have untapped potential that could be exploited through the intensification of bilateral and multilateral co-operation and joint implementation activities. A systematic process to implement these instruments in an integrated manner is needed. This process could culminate with a conference of the heads of UN organisations, MEAs, the World Bank, and the IMF, as well as country representatives. It should also involve TNCs and civil society representatives. This conference would aim at integrating agendas and design permanent co-ordination mechanisms that would ensure consistency in the implementation of major UN and MEA action plans and programs. Bilateral co-operation activities can also be made consistent with multilateral activities by closely following these action plans and programs and by working through the focal-point mechanisms.61 Strong action is needed from OECD countries to implement their commitments at this level. Resorting to Sahel-Club–like activities in a more engaging way can be a practical approach.

An Integrated Approach to Financing

The rise of FDI, the fall of ODA, the role of trade in financing development, and a series of other factors of globalisation make an integrated approach to financial transfers more necessary than ever. The Financing for Development initiative should be strongly supported as the key to a comprehensive review of financing sources and channels, and to develop innovative sources and solutions to the financing challenges.

The OECD's Development Assistance Committee also has a key role to play by renewing its member countries' commitment to allocate 0.7% of their GDP to ODA, with 0.2% targeted to LDCs. The OECD countries and Bretton Woods institutions also need to co-ordinate and integrate their approaches more closely. There is also a need to better target public and private resource flows to countries that have sound economic policies.62 This good governance environment is more likely to lead to an efficient use of aid and private resources, and to have structuring impacts on development and poverty alleviation. In addition to better targeting, a common pool approach should be adopted, when appropriate, to aggregate donors' resources for development priorities that would be regionally or domestically defined.63 Using the "chef de file" approach is likely to achieve better efficiencies in co-ordination efforts in the national settings of recipient countries.

Supporting Inter-Institutional Activities

An effort should be made to systematically identify and support inter-institutional activities and mechanisms that can be gradually developed over the next few years. The UNEP/MEA secretariats meetings should be made into a permanent structure that meets annually and includes other UN organisations, multilateral financing institutions, and key representatives from civil society such as the World Conservation Union. Such meetings could produce a comprehensive framework for the joint implementation of major MEAs, as well as a permanent and systematic framework for collaboration between secretariats and UN institutions that would allow for synergies and a better allocation of scarce financial and human resources. Better funding for MEA secretariats and UNEP would support such initiatives. In the trade and environment area, the creation of the Standing Conference on Trade and Environment should be supported as a key mechanism for the co-ordination of environmental policy as it relates to trade.

Broadening Global Governance
New Fora for Developing Countries Representation: A Role for the G20

At their December 1999 meeting, members of the G20 reaffirmed the importance of the WTO's trade liberalisation process. By addressing some of the issues discussed above, the G20 could play a significant role in elaborating a new North-South bargain that would serve as a basis for resuming talks on a new round of trade liberalisation. The G20 could become a driving engine for the type of policy agenda outlined above in restoring the basic North-South bargain. This would require expanding the mandate of the group to trade, environment, and development issues in the same way that the G7/8 has gradually expanded its mandate to international security matters. The G20 could serve as a forum to design and foster the establishment of a new global governance for the multiple and necessarily interrelated agendas of globalisation. It could thus be instrumental in seizing the actual window of opportunity for new global governance and breaking the Seattle impasse.

Integrating Civil Society and the Private Sector

NGOs and TNCs have become fundamental actors in the globalisation process whose contributions to the evolving global governance models should be facilitated. Inconsistency — almost whimsicality — affects the decisions and orientations of international institutions when it comes to effective participation of civil society in the definition and implementation of agendas. This could be addressed more systematically through a high-level conference on the role and means of civil society in a better-integrated global governance system.

NGOs can play a major role in capacity-building and implementation activities at the local level. They can also identify and articulate new issues to be addressed by international governance structures. NGOs have a strong capacity to synthesise and disseminate information, and to mobilise civil society. Governance structures are gradually opening to allow NGOs and civil society to play their roles fully. As argued by Mark Halle, "It is time to recognise that there is an emerging global standard for transparency, participation and access to judicial processes, which cannot be ignored. It is the basis of the new global governance".64 Parliamentarians, who have many transnational co-operative institutions and forums (the Commonwealth, la Francophonie, and regional/sub-regional organisations) can contribute to bridging the gap between governance structures and civil society.

TNCs have a major, but largely unexplored, potential to contribute to sustainable development. Channelling investment toward sustainable development is a very complex issue that requires some innovative approaches. To tap the TNCs potential, the international community needs to bring them into the new framework of world governance. Transparency and accountability, formal obligations and informal habits, must be reinforced, especially in the environmental sector. Appropriate international policies must also be put into place to guide and influence TNCs behaviour. The careful use of regulations, standards, economic incentives, and disincentives must be promoted to reach this objective. Voluntary codes of conduct or OECD guidelines approaches can also generate useful dynamics.

Seizing Upcoming Opportunities

The next few years will offer many international opportunities to bring about the new approaches and strategies needed in the current post-Seattle context. Annual G7/8 meetings will continue to expand and deepen their focus on governance from economic and financial governance to security and social and environmental concerns, thereby opening new opportunities for broadened governance. They could benefit from a wider North-South perspective on these issues that could be developed at the G20's next meetings in the fall 2000.

In the coming months, the WTO will experience a phase of introspection and analysis that will give it time for systematic analyses and reforms. The Summit of the Americas (April 2001) could help resolve some environmental and social issues that plague North-South relations and imperil further multilateral trade liberalisation. The two processes should feed into one another and contribute to resolving some of the harmonisation issues still to be addressed.

Also in the spring of 2001, the Financing for Development Conference will be a unique opportunity to assess the world aid system and to develop an integrated approach to financial transfers that could boost development and contribute to restoring North-South confidence. The outcome of this conference could have a major impact on financial issues that will be addressed at the Rio + 10 Conference scheduled for 2002. Multilateral work at the UN Commission on Sustainable Development will be of central importance. Meanwhile, UNEP's efforts to strengthen the institutional framework supporting the global environmental regime hold the potential for new synergies that could feed into these processes and lead to new efficiency standards. The G7/8 and G20 should systematically prepare these events so they become meaningful stepping stones toward new governance.

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