President. – The next item is the debate on the report (A5-0331/2001) by Mr Désir, on behalf of the Committee on Industry, External Trade, Research and Energy, on democracy and opening up international trade (2001/2093(INI)).

  Désir (PSE), rapporteur. – (FR) Mr President, Commissioner, ladies and gentlemen, the transition from the GATT era to that of the WTO changed the dimension as well as the nature of the multilateral trading system. With the advent of the WTO, trade rules were extended to a large number of new areas, including services, intellectual property, investment and rules on non-tariff barriers, that frequently affect non-trade issues. These rules have a binding force, which is backed by a dispute settlement system with the capacity to impose sanctions. Finally, enlargement, which begun under GATT, has resulted in an unprecedented diversity among its members with regard to international trade. The rules of the multilateral trading system now apply not only to the countries that account for most of world trade or only to the one-fifth of world production that is traded across borders. They also apply to goods and services that will never be traded internationally. All countries are concerned and their internal rules affected, whatever their share of international trade.

In recent years, trade agreements have also had a growing impact on other international rules in areas such as the environment, health and social rights. Thus, WTO agreements or decisions have threatened the precautionary principle, environmental protection and access to medicines. The cause of this is partly the ambiguity of some agreements, such as the agreement on intellectual property, in the case of medicines, but with regard to public services, the scope of Article 1 of the General Agreement on Services is also to blame. To this, we can add another reason for the undermining of the multilateral trade system: the democratic legitimacy of the WTO, an intergovernmental organisation, in principle, relies firstly on the equal participation of all members, on the fact that they have an equal say in the organisation. Most of the developing countries, however, feel marginalised by its operation and cut off from the decision making process. At least 24 developing countries that are members of the WTO have no permanent representation in Geneva, and numerous others have only very small delegations that do not allow them to follow all of the proceedings that concern them. Many developing countries lack the necessary competences. In such situations, form and content are real issues for developing countries because the rules and agreements more often reflect the interests of the trading powers that have negotiated them between themselves, sometimes in ‘green rooms’ or in informal meetings, which are far too secretive – than the interests of all members, particularly of the poorest countries. Consequently, since the Uruguay Round, many developing countries have stated that they were not aware, when they signed, of all the legal, administrative and financial consequences of agreements such as the TRIPS agreement on intellectual property, which were drawn up without their involvement.

Generally, where the developing countries are concerned, six years on from the creation of the WTO, the picture before us reveals a limited opening up of markets in the north, considerable difficulties in implementing agreements and persistent marginalisation from the workings of the WTO. This feeling is more acute still for the least developed countries (LDCs), which, twenty years ago, accounted for 0.6% of international trade. Today the figure stands at only 0.4%.

The WTO, therefore, continues to be dominated by the large trading powers, and it is they that benefit overwhelmingly from its policies. And, two years after Seattle, the multilateral trade system is still undergoing a threefold crisis of democratic legitimacy, as a consequence of the uneven distribution of the benefits of world trade, of the marginalisation of many of its members, as a result of the impact of some WTO rules on other basic principles, even at international level, and lastly due to a lack of transparency and the limited involvement of parliaments and civil society in the work of the WTO. Although the WTO has started to acknowledge the need for reform, this recognition has yet to be translated into the necessary changes.

As you know, Commissioner, our committee, therefore, adopted, by a large majority – 48 votes to 5, with 1 abstention – a report which is noteworthy above all for its set of practical proposals, grouped into four main chapters.

First of all, the equal and effective participation of all members is a key factor in any new direction for the multilateral trading system. This will require an increase in the provision of technical assistance. The Commission has already undertaken a number of actions and we urge it to persevere in this direction. We propose going further, however. The Commission should propose the creation, for example, on the basis of a contribution proportional to each member’s share of international trade, of a fund or an increase in the WTO’s budget, which would enable all member countries to have a representation in Geneva. We propose supporting regional representations, which is already being done, specifically for the ACP countries, but we feel that we need to go further; we need to establish internal transparency; until all members have a representation, we must allow non-resident countries to have rapid access to records of meetings and draft agreements; we must establish clear rules on so-called ‘informal’ consultations to allow all countries that wish to take part to do so, by publishing agendas in advance and by ensuring that reports of prior decisions, which are sometimes prepared, are provided to the competent bodies in good time.

We also propose that the dispute settlement system be reformed, because there are still inequalities linked to the market share of the various member countries, to ensure that the small countries, those that account for a small proportion of international trade, can, in certain circumstances, seek financial compensation.

Secondly, there is the issue of opening the WTO up to society and external transparency. We feel that much remains to be done in this area before we reach the level of other organisations, within which observer status has been given to non-governmental organisations. We feel that the dispute settlement procedure itself could, given the judicial nature of the procedures, be held in public, as is the case in court proceedings.

Thirdly, there is the issue of parliamentary control, which was mentioned in the previous debate, at both national and European level and also by means of a consultative parliamentary assembly within the WTO. Where the European Union is concerned, we propose that Article 133 of the EC Treaty be reformed, that the 133 committee be opened up to Parliament's representatives, and that the European Parliament’s assent be required for all trade agreements.

Fourthly, there is the balance between international standards and establishing new relationships between the WTO and other international organisations. We propose that all other multilateral organisations, such as the International Labour Organisation, the World Health Organisation, etc., be given observer status within the WTO and that their opinion be systematically sought by the dispute settlement body when there is a risk of conflict between trade rules and other rules. In our view, the European Union should propose a de facto hierarchy of standards at international level, with which all countries must comply. In other words, it should recognise that business law or trade law cannot supplant the principles of environmental protection, public health and respect for the social rights of workers. It must fall to the ILO, and the ILO alone, to decide whether or not it is appropriate to adopt retaliatory measures and to impose trade sanctions on countries, and not the World Trade Organisation. I feel, however, that the WTO must give a commitment to respect any decisions that the ILO may take on such matters.

To conclude briefly, Mr President, I would say that trade policy, which is one of the oldest of the EU’s policies and its oldest external common policy concerns, of course, economic interests, but it also says a great deal – or, in any event, the European Union says a great deal – by means of this trade policy, about its vision of the world and of north-south relations in particular. It also reveals a belief in a division between that which is the domain of the market and that which societies must do in the name of principles, such as, solidarity. This policy must reflect the Union's fundamental values and objectives. For this reason, the EU’s priorities must be the establishment of fair and equitable trade, a democratic multilateral system, and a reformed WTO.

  Rübig (PPE-DE). – (DE) Mr President, President-in-Office of the Council, Mrs Neyts-Uyttebroeck, Commissioner Lamy, ladies and gentlemen, we need more and not, as has been called for several times, less, international cooperation. For small and medium-sized enterprises, in particular, we need the basic conditions to be legally certain and foreseeable. The aim has to be to use world trade to create more wealth for our people. In so doing, however, we must not overlook the fact that Europe has 18 million small enterprises, which, at the end of the day, employ two-thirds of the workforce. This means that salaries are mainly being paid by small and medium-sized companies. Sixty per cent of GDP and, important for us politicians, 80% of taxes come from small companies.

That is why where the WTO is concerned, we should not only consider involving and integrating the ILO in this process and reflect on how we might better structure it, but should also and especially bring the social dialogue and the social partners to the fore. The Everything But Arms initiative should not contain the clause ‘Everything But Small and Medium-Sized Enterprises’, but instead ‘Everything For Small and Medium-Sized Enterprises’. The economy is at the centre of this discussion, and this is something that we should not forget in the whole WTO debate.

Very briefly on TRIPS: here we should consider, in particular, having compulsory licences and, above all, development aid; we should consider having calls for tender and also giving countries medicines of the necessary quality.

As regards the dispute settlement mechanism, I should like to recall that many companies and individual firms are damaged by WTO rulings, for example because of carousel trade retaliation. Here I should like to ask: how do these companies obtain redress? How do they come to be damaged by an international agreement which is not actually in accordance with the law of the country concerned?

Finally, we need to introduce more transparency into these areas and ensure that decisions are made closer to the people. That is why I welcome the fact that President Neyts will support the European Parliament and parliaments throughout the world in their efforts to bring more transparency and also in the end, I hope, more wealth into this world.

  Kreissl-Dörfler (PSE). – (DE) Mr President, ladies and gentlemen, I should first like to congratulate the rapporteur, Harlem Désir, on his very good, clear and extensive report.

Commissioner, if the decision-making process in the WTO is not made more transparent and democratic then, in the long term, the people of the WTO Member States will not stand for it, because we cannot have nation states increasingly referring crucial issues to the competent supranational organisation, while parliaments and, therefore, also society at large remain prevented from exercising their democratic right to monitor and participate in its work. Events in the Dispute Settlement Body must also be seen in this light. The Dispute Settlement Body needs to be thoroughly overhauled. It needs to be transparent and changes also need to be made to its composition.

In the same way, it is necessary for us, finally, to give the developing countries the tools which will actually allow them to participate in the negotiations on an equal footing and then to assess the decisions which need to be made as they see fit. There is, of course, a difference between a delegation arriving with 150 experts and a developing country having great difficulty sending its ambassador to the places concerned. I should like to point this out once more here. Otherwise, Harlem Désir has already said everything that needed to be said.

  Clegg (ELDR). – Mr President, I would also like to join in the congratulations to Mr Désir, the rapporteur. This report strikes us as an excellent piece of forward-thinking, a blueprint for the WTO of tomorrow. It comprehensively rejects those who claim that the WTO is beyond redemption; that it cannot be reformed; that it is inherently biased against the poor or the dispossessed; and that it is just an agent for the rule of the jungle, rather than the rule of law.

It also rejects the contrary view: the idea that free trade should prevail at all costs; that the WTO should be an agent for the dismantling of outstanding trade barriers, and should do so to the exclusion of all other political and public policy considerations. Instead, it represents almost a synthesis of those two views, because it shows how and when and why the WTO should, and must, be reformed. It shows how the WTO must become more transparent and legitimate.

I should add that all the emphasis that we, as Europeans, place on the need for increased legitimacy and transparency in the WTO will come to nothing if we do not reform the way in which we conduct our own trade policy in the European Union. I was delighted to hear the presidency today say that it has supported in the past, and will support in the future, Parliament's demands for more transparent and legitimate trade policy-making in the European Council and the European Union.

The report also – and this is perhaps its greatest contribution to the debate – shows the way in which the WTO has to be placed increasingly in a context of other public policy priorities and other multilateral organisations and agreements. It cannot rely on a role as primus inter pares on the international scene. Instead it should learn to interact with other priorities and other multilateral agreements. Our role is, therefore, to flank the WTO with other supporting agreements in other fields, notably the environmental field.

  Turmes (Verts/ALE). – (FR) The challenge that the Désir report sets the European Parliament is to make world trade more free but also more equitable and sustainable under a multilateral system and within the auspices of a reformed WTO.

Although it states its support for multilateralism in international trade negotiations, this report has the intellectual honesty to admit that globalisation, in its current state, has some serious shortcomings.

The specific proposals put forward by the rapporteur on reforming the international institutions warrant our attention: greater transparency and reform of the settlement procedure. I also wish to say something about democratic control: my own view is that a parliamentary forum within the WTO would be democratic in name only rather than genuine parliamentary control. Such control can only be guaranteed when national parliaments have real control over their governments in negotiations, and when the European Parliament, Mr Lamy, has real control over the Commission and not only the nominal control that it has today.

If the European Parliament’s position for the forthcoming round is based on the Désir report, it will have to be to reform the WTO, to implement the so-called Uruguay agreements, but without extending them to cover issues that remain controversial. In voting for the Désir report, I also see a very clear advance by the Socialist Group here in the European Parliament, which is finally, after many years, returning to its true values, which are solidarity and the better distribution of wealth, and I am also pleased by the words of Mr Verhofstadt, this morning: he has, at long last, understood that dialogue with the political wing that wishes to see a more equitable form of trade cannot take place if it is consigned to the bin on the pretext that its members are anti-globalists.

  Morgantini (GUE/NGL). – (IT) Mr President, international trade is fundamental in our system and, in the opinion of those who advocate a different type of globalisation, including myself, international trade must be based on fair, equitable trading bringing development and wealth to the greatest number of people possible. Regrettably, the trade negotiations held under the auspices of GATT and the WTO did not serve to create fair international rules: quite the opposite, they left entire communities with no defence against the greed of multinationals. It therefore follows that these institutions are suffering an unprecedented crisis of legitimacy in respect of vast sections of communities, and are in vital need of thorough reform. The Désir report addresses clearly the limitations and dysfunctional areas of international trade, of unequal participation, and the lack of transparency and democracy and the ensuing consequences, and proposes reforms to remedy these shortcomings. We support the report and will vote for the motion, but we feel that this must only be the start of a process of change. The Commission and the Council must refuse to be influenced by pressure from the rest of the world.

  Deva (PPE-DE). – Mr President, justice must be done, but more importantly justice must be seen to be done: the WTO is a very powerful international organisation, dealing with rules and law, and it must be seen to act justly. Accountability and transparency are therefore exceptionally important. Global trade requires global rules and development requires understanding of some of the problems of the developing countries.

If we are discussing transparency and accountability within the WTO process, transparency for its own sake and accountability for its own sake are just not enough. The fundamental purpose of both is to create integrity in the system so that those who have promised to do things, and here I mean the developed countries, are forced to do them because of international public opinion. There are many things that the developed countries promised in the Uruguay round which have not been delivered. Conversely, those in the developing world who now have systems of corruption and bad practice will also be brought to book through the process of accountability and transparency.

In this regard, I would like to support Mr Désir in saying that he has produced an excellent report which I want to support. It is vital to understand the permanent position of the rule of law. Equality before the law and confidence in it is an absolute necessity for developing countries. Without it all the well-meaning words and the great aid-giving we indulge in will come to nothing. Justice must be done and must be seen to be done.

  Karlsson, Hans (PSE). (SV) Mr President, international trade is of central importance if conditions for growth and development are to be created throughout our world. The rules governing this trade determine whether growth and development are to benefit the whole of humanity or are to be confined to the industrialised world.

Mr Désir’s report is an excellent instrument for bringing about something more akin to global justice in world trade. The developing countries must be put on the same footing as the industrialised countries when it comes to participating in the joint work of the WTO. For me, as a Social Democrat, global justice is an end in itself. The acts of terrorism in the United States also point to the need to limit the basis for hatred and fanaticism. Less injustice will increase the safety of us all.

The voluntary organisations must be given scope to express their opinions when world trade is discussed. Democracy can be deepened through the setting up of a parliamentary assembly within the WTO. Social dumping must be prevented and employees’ rights must be provided for. Fundamental human rights must be respected, the fight against environmental devastation intensified and child labour prohibited. We must stop dumping our food surplus in the developing countries and, instead, give farmers in those countries a chance to increase their production and their opportunities to provide for themselves. In that way, we can make our contribution to a more just and more secure world.

  Rod (Verts/ALE). – (FR) Mr President, the new WTO round perfectly illustrates our criticism of the way in which this body is organised. This is supposedly a development round, but the European ministers for cooperation and development are not taking part in the forthcoming meeting. Furthermore, the Committee on Development and Cooperation has not been able to deliver an opinion on the Désir report. Fortunately, the report asks pertinent questions, and it has our support.

This is supposed to be a development round, but the 49 LDCs are opposed to it and rightly so. Liberalisation, which is supposed to lead to development, growth and prosperity, has only made their situation worse. The WTO perpetuates the imbalance in world trade and the establishment of rules that are unfavourable to the developing countries. Furthermore, it has ended the preferential system instituted by the Lomé Convention. Similarly, the Cotonou Agreement urges the ACP countries to abide by the GATS or the agreement on Trips but the UNDP, itself, states that the liberalisation of services will only benefit multinational companies. The GATS is basically the IMA by the back door. It is a tool for dismantling democracy.

Mr Lamy, if negotiations must take place, then they must focus on a root and branch reform of the WTO. It is the development of the least advanced countries that must benefit rather than the development of multinational companies’ profits.

  Auroi (Verts/ALE). – Mr President, Commissioner, ladies and gentlemen, I too wish to thank Harlem Désir for the quality of this report, which, of course, I fully support. The point that you made just now, Commissioner, on developments within the WTO to my mind shows all the more the need for such a report.

I shall use two points to try to illustrate this. The Commission must keep a close eye on the issues of agriculture and intellectual property, so that the current shifts we are seeing within the WTO do not continue indefinitely. The dice have been and remain loaded against the weakest, either the poorest countries or the most endangered social categories in our own countries, because the WTO is a body that is neither transparent nor democratic.

Let us take the example of the Marrakech Agreements on agriculture. They guarantee neither self-sufficiency with regard to food supply nor the right to protect biodiversity for the southern countries. They prevent the specific nature of small-scale farming in Europe from being taken into consideration, with all its quality, social and environmental aspects. There is a danger that, in the near future, they may ban small farmers from sowing the seeds that they have themselves produced. The Commission must exert pressure to change this, to have an in-depth review of the Trips agreement drawn up so that it is fully compatible with the Rio convention on biodiversity and the Cartagena protocol on biosecurity, as the African group within the WTO is calling for.

This will enable us to preserve the biological heritage of the developing countries and the traditional skills in the south as well as the north. Furthermore, the patenting of living organisms must be prohibited, because these are the heritage of all humanity and cannot and must not be hijacked by private interests that want to turn life into a commodity. I hope, Commissioner, that you will convey this message.

  Lamy, Commission. – (FR) Mr President, Mr Désir’s own-initiative report makes a number of recommendations that are quite close to the spirit in which we are approaching the WTO ministerial conference in Doha.

You would like to see the developing countries integrated into world trade, which is an objective that we share. You emphasise the importance of the WTO addressing the public’s concerns, over and above the traditional issues of access to the markets or of customs tariffs. We also share this objective and feel, as you do, that rapid economic change and the effects of globalisation must be managed.

The fact is that progress has already been made on many of your suggestions, specifically with regard to follow-ups with technical assistance or councils for developing countries in WTO negotiations. The European Union, for example, is responsible for establishing the ACP countries’ Centre in Geneva, which will enable these countries to better coordinate their position and consequently exert greater influence within the WTO. It is the European Union that insisted on streamlining meetings in Geneva and on making the participation of members who do not have a representation in the WTO easier.

I am giving these two examples, to which one could add the efforts made to encourage the accession of a number of countries – and in Doha, an LDC, the island of Vanuatu, will sit side by side with China and Taiwan, for example – not to suggest that the situation is perfect or that nothing remains to be done, but in order to ensure that the debate on the proposals for reform is held on the basis of a full and up-to-date knowledge of the current situation. On this subject, I should like to make a small correction to a point of fact that appears in your explanatory statement, Mr Désir, concerning hormone-treated beef. Contrary to what you state, the European Union has not been condemned for banning hormones in cattle breeding. The WTO has explicitly recognised the right in this affair of each member to set its own level of protection. The Union was condemned because, at the time, it did not supply the necessary scientific evidence to justify such a ban.

I have a few other different interpretations, or rather differences of opinion, concerning some of your comments or suggestions. You mention the crisis of democratic legitimacy, which other speakers have taken up. I disagree with the content of this criticism. Admittedly, the system could be improved: it must be made more open and the developing countries must be more fully integrated. The challenge of reconciling our ‘civil society’ agenda with our ‘development’ agenda is indeed formidable and your report, furthermore, attests to some of these difficulties, in that, for some subjects, you propose both external transparency and fundamental social standards. We know very well that, where these two matters are concerned, our sensitivity to the positions of the developing countries forces us to severely limit our ambitions: consequently, our own position is not entirely free from contradiction, as your report highlights.

Nevertheless, calling the current situation a serious crisis of democratic legitimacy strikes me as somewhat excessive. As far as I am aware, the Marrakech Agreement was not only adopted by the Member State governments, but was also ratified both by the national parliaments and by your House. In other words, the Marrakech Agreement has been ratified by the European Parliament.

With regard to your statement that decision making within the WTO is the sole preserve of the richer nations, I would say that, although this may once have been true, it is increasingly less the case in an organisation of more than 140 members and, in which, small discussion groups are inevitable in its day-to-day work. We are trying to ensure that these meetings include both rich and poor countries and that they guarantee a representative mix both in terms of geography and in terms of stages of development. It may be the case that these informal groups make it easier to reach consensus, but they never, as we all know, take decisions.

Many preparatory meetings of this type have taken place over these last few weeks, for example, the ministerial mini-meeting in Mexico at the end of August, the Europe-Asia meeting in Hanoi in mid-September, the Europe-Africa meeting in Nairobi in mid-October and the Asia-Pacific Economic Cooperation (APEC) meeting at the weekend. I would also add that, in terms of the method of preparation, the lesson of Seattle has been learned and that the participating delegations are larger and better informed about the issues you have raised.

With regard to dispute settlement, an issue you have also addressed, I would make three comments. First of all, let us not forget that the main objective of the mechanism for settling disputes is the effective and disciplined implementation of commitments that have been freely negotiated and accepted. This is what a member of the WTO hopes to obtain when it resorts to the dispute settlement procedure.

Like you, we are also opposed to immediate implementation and to trade sanctions. There must be more room for trade compensation. Personally speaking, I have greater reservations about your suggestion to replace sanctions with fines. My fear is that financial penalties would not resolve the imbalance between rich and poor countries, and might, to some extent, even allow the rich countries to buy off their breaches of obligations.

With regard to the transparency of the panels, we are also in favour of opening up the hearings of the appeals body to the public. Let us remember, however, just between ourselves, that the developing countries have very firmly held positions on this point, which we do not share.

Where the relationship with other rules of international law is concerned, we must ensure greater coherence and prevent conflict between trade and non-trade rules. This must apply to the very substance of the commitments in question.

As to the issue of revising the agreement on intellectual property, which you consider to be necessary, I do not think that a thorough revision would be appropriate. If we take the examples of access to medicines or of the patenting of living organisms, the agreement provides sufficient latitude to establish an intellectual property system that responds to the concerns expressed by developing countries. It is the task of the members of the WTO to interpret and clarify this flexibility, and we feel that it is better to do so by means of discussion or negotiation than to leave this task to panels. This is the basis of our position in Geneva, which I mentioned in the previous debate.

Mrs Auroi, the issue of compatibility between the agreement on intellectual property and the convention on biodiversity is one of the points that we wish to see clarified in these negotiations.

With regard to the incentive measures to ensure compliance with basic standards in the field of employment law, we agree with your wish, Mr Désir, to highlight the importance of strengthening the ILO and this is why your suggestion to create a multilateral agreement within the WTO does not fill us with any great enthusiasm. As for the incentive measures to ensure compliance with basic social standards, I would say that we must not undermine the influence of the International Labour Organisation. This is not a weak institution that the WTO must provide with a dynamism that it would not otherwise have. We must instead work on improving the ILO’s profile.

Lastly, with regard to creating a parliamentary forum within the WTO, a proposal that, as I stated in the previous debate, we have always supported, I shall conclude briefly by saying that we shall make use of the guidelines that Parliament has laid down for this set of work, to which we can now add your report, Mr Désir. I would say that, as this afternoon's debate has shown, the Commission’s political line, approved and implemented by the Council, is also coherent with the position of this House.

  President. – Thank you very much, Commissioner.

The debate is closed.

The vote will take place tomorrow at 10.00 a.m.