The Politics of International Organizations

Views from insiders

Patrick Weller, Xu Yi-chong, Patrick Weller, Xu Yi-chong

• Publisher: Routledge
• Year: 2015
• Print ISBN: 9781138793132
• eBook ISBN: 9781317645405
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: International Relations
• Index: Politics & International Relations

International organisations (IOs) often receive a bad press, seen as intrusive, domineering and unresponsive to the needs of the people and countries they are meant to serve. The best way to understand the operation of these international organisations is to bring together those who represent their countries at IOs and those who have been working at IOs at various capacities and then to listen to their experiences.

This book develops an alternative approach to the analysis of IOs that takes account of all those involved, whether state representatives, IO leaders and members of the secretariat. Experts with long experience in the WTO, the World Bank, the IMF, WIPO, the FAO and the WHO at senior level consider the workings of the IOs, and a conclusion that explicitly draws out the comparative lessons and contrasts the insights of practitioners from those of external observers. This book takes an alternative approach to the analysis of IOs that takes account of all those involved, whether state representatives, IO leaders and members of the secretariat.

Providing a well-informed, innovative and consistently structured analysis of IOs this work will be of interest to students and scholars of international relations, international organizations and global governance.

1 The World Trade Organization as an institution

Stuart Harbinson

• Status of the WTO

• Membership of the WTO

• Structure of the WTO

• Structure of the WTO Secretariat

• Secretariat staff

• Selection of the Director-General

• Organizational issues raised by expanding WTO membership

• Appellate Body and secretariat

• History and culture: from GATT to WTO

• The WTO from 1995 to 2013

• Interaction between main groups of players

• Decision making

• What fears/expectations have been raised? Have these materialized?

• Conclusion: an organization that needs rebalancing?

The Marrakesh Agreement Establishing the World Trade Organization (usually referred to as the WTO Agreement) sets out five functions of the World Trade Organization (WTO). These are:

1 to facilitate the implementation, administration and operation, and further the objectives of, the WTO Agreement itself, as well as the other agreements it covers (known as the “covered Agreements”);

2 to provide a forum for negotiations among WTO members concerning their multilateral trade relations;

3 to administer the Dispute Settlement Understanding;

4 to administer the Trade Policy Review Mechanism; and

5 with a view to achieving greater coherence in global economic policy-making, to cooperate as appropriate with the International Monetary Fund (IMF) and World Bank.¹

The WTO came into existence on 1 January 1995. In the years since, it has also expanded into the field of trade-related technical assistance. This has been principally directed, through the means of a trust fund, at building developing countries’ capacity to handle multilateral trade relations.

Based on the above, former WTO Director-General Pascal Lamy referred to the WTO as having four basic functions: trade negotiations; implementation and monitoring; dispute settlement; and building trade capacity.

The Preamble of the WTO Agreement also refers to certain aspirations of the parties to the founding agreement. For example, they recognize that their trade relations should:

• be conducted with a view to raising standards of living, ensuring full employment and expanding trade in goods and services;

• allow for optimal use of the world’s resources in accordance with the objective of sustainable development;

• be consistent with the needs and concerns of different levels of economic development;

• include positive efforts to ensure that developing, and least developed countries in particular, secure a share in the growth of international trade commensurate with the needs of their economic development; and

• be directed towards the substantial reduction of tariffs and other barriers to trade and to the elimination of discriminatory treatment.²

Status of the WTO³

The WTO has legal personality and is accorded by each of its members such legal capacity as is necessary for the exercise of its functions. Officials of the WTO and representatives of members are accorded diplomatic privileges and immunities to enable them to carry out their functions independently. The WTO has concluded a “Headquarters agreement” with the host country, Switzerland. The organization has no regional offices. It should be noted that the WTO is an independent international organization. It is not a part of the United Nations system.

Membership of the WTO

Membership of the WTO has been acquired through two routes.⁴ The contracting parties to the General Agreement on Tariffs and Trade (GATT, 1947), and the European Communities became original members of the WTO on its establishment on 1 January 1995. Other states and separate customs territories were able to join the WTO after its establishment “on terms to be agreed” (i.e. negotiated).

In 2013, membership of the WTO stood at 159. Of these, three are separate customs territories⁵ and the others are states. The WTO is unusual among international organizations in providing for full membership for separate customs territories. No legal distinction is made between the rights and obligations of states and separate customs territories. Both categories of membership are equal.

Structure of the WTO

At the apex of the structure is the Ministerial Conference.⁶ This is composed of the representatives of all members and meets at least once every two years. The Ministerial Conference carries out the functions of the WTO and has the authority to take decisions on all matters related to covered agreements.

In the intervals between Ministerial Conferences, its functions are carried out by a General Council, again composed of the representatives of all members. The General Council normally meets in Geneva five-to-six times per year, but additional meetings may be called if necessary. General Council meetings are normally attended by ambassadors/permanent representatives but, if considered necessary or appropriate by individual members, they may also be attended by senior capital-based officials or even ministers.

The General Council also convenes in two other guises: first, to discharge the functions of the Dispute Settlement Body (DSB); and second, to carry out the functions of the Trade Policy Review Body (TPRB). While ambassadors/permanent representatives may not always attend the DSB and TPRB, this configuration highlights the importance of these two bodies in the WTO’s structure.

There are three sectoral councils reporting to the General Council: the Council for Trade in Goods (the “Goods Council”), the Council for Trade in Services (the “Services Council”), and the Council for the Trade-Related Aspects of Intellectual Property Rights (the “TRIPS Council”). Both the Goods Council and the Services Council have a range of subsidiary Committees dealing with specific aspects of the agreements within their purview.

Chairmanship of the various Bodies, Councils and Committees is held by representatives of their members, rotating on an annual basis. Guidelines are in place to assist with the selection of chairpersons. Overall, a balance is maintained in order to ensure that the selection of chairpersons reflects the diversity of the membership. Chairpersons are supported in the exercise of their functions by divisions in the secretariat.

Following the launch of the Doha Round of negotiations in 2001, a number of negotiating groups were established to oversee the conduct of negotiations. Where negotiations were mandated in areas already covered by existing bodies, the negotiating groups were designated as the special sessions of those bodies—for example, negotiations on trade in services are overseen by the special session of the Council for Trade in Services; negotiations on agriculture are overseen by the special session of the Committee on Agriculture. Where negotiations were mandated in new areas of activity, or where they cut across the responsibilities of two or more bodies, specific bodies were created: for example, the Negotiating Group on Market Access (dealing with market access for trade in non-agricultural goods).

Chairmanship of negotiating groups is also held by representatives of members. However, for reasons of continuity, these do not rotate on an annual basis. Overseeing the conduct of the negotiations as a whole is the Trade Negotiations Committee (TNC). Its chairmanship is held by the director-general ex officio. The TNC reports to the General Council.

The establishment of the structure for handling trade negotiations was itself the subject of intensive negotiations among members in early 2002, immediately after the launch of the Doha Round. In particular, the chairmanship of the TNC was a sensitive issue. A significant number of members were reluctant to designate the director-general as chair of the TNC. However, this was eventually agreed on the clear understanding that the TNC was subsidiary to the General Council and that no precedent was thereby being set for the future.

In addition to all the above, over the years the WTO has created a number of ad hoc working groups to handle specific issues. An example is the working group on trade, debt and finance.

Structure of the WTO Secretariat

The secretariat is headed by the director-general. The WTO Agreement is notably terse as to the director-general’s functions and authority.⁷ The director-general appoints members of the secretariat and determines their duties and conditions of service. He or she shall not seek or accept instructions from any government or other authority external to the WTO. Members shall in turn respect the international character of the director-general’s responsibilities and not seek to influence them in the discharge of their responsibilities.

The secretariat is organized into a number of divisions, each headed by a director. The number of divisions has varied slightly but has normally been around 20–25. The size of individual divisions varies considerably. The directors and divisional staff are international civil servants who must carry out their duties impartially while maintaining high standards of conduct.

Directors-general, on acceding to office, have appointed deputy directors-general (DDGs) to assist them in the discharge of their duties. The number of DDGs at any one time has been stable at four.⁸ This means in practice that five major regions of the world can expect to be represented at either DG or DDG level.⁹ The DDGs are normally appointed from outside the secretariat and hold office for the term of office of the director-general. As such, they are seen as political appointments. However, as members of the secretariat, they are expected to maintain the same standards of impartiality and conduct. Each DDG is given the responsibility to oversee a number of divisions.

WTO members have in the past given consideration to reducing the number of DDGs. In 1999 a significant number of members came to the view that a structure including four DDGs was expensive and unnecessary. However, a proposal to reduce the number to two foundered at the last minute when it was realized that this would mean that the five major regions would not have assured representation.

Secretariat staff

There are approximately 640 regular staff members of the secretariat. The term “regular” is used to denote staff whose positions are funded through the regular budget. The WTO secretariat is perhaps unusual compared with that of many international organizations in relying overwhelmingly on regular staff to discharge its functions.

Staff of the secretariat comprise about 70 nationalities. The professional staff are composed mostly of economists, lawyers, and others with a specialization in international trade policy. There are also a substantial number of personnel working in support services, including informatics, finance, human resources, and language services. The total staff complement is composed almost equally of men and women.

Staff are remunerated according to pay scales specifically designed for the WTO. However, these reflect a formula based on pay scales in some other international organizations—notably the United Nations and the “coordinated organizations” (such as the Organisation for Economic Co-operation and Development—OECD). Staff are subject to rules and regulations promulgated by the director-general after consultation.

The secretariat generally has a high reputation among those with whom it interacts and is regarded as both professional and committed to the objectives of the organization.

Selection of the Director-General

In its early years, the WTO suffered from the lack of any agreed procedures for selection of the director-general. A protracted and contentious exercise took place to select the first director-general in 1995, necessitating the extension of the serving director-general of the GATT, Peter Sutherland, for some six months.¹⁰ Eventually Renato Ruggiero was appointed for four years, with his chief rival (Chulsu Kim) accepting appointment as a deputy director-general. Lessons were not learned, and an even messier exercise took place in 1998–99 to select Ruggiero’s successor. This could only be resolved ultimately by agreeing a formula under which the two chief contenders, Mike Moore and Supachai Panitchpakdi, each served successive three-year terms. While this was politically expedient at the time, the institution was not well served by these relatively short terms of office and the resultant lack of continuity.

In light of the lack of agreed procedures, WTO members engaged in intensive consultations organized by the chairman of the General Council in 2002. These resulted in an agreement that was adopted by the General Council on 10 December that year.¹¹ Some of its notable features are described below.

The director-general selection process is guided by the chair of the General Council, with the chairs of the DSB and the TPRB assisting as facilitators. The rationale underlying this arrangement was to avoid over-concentration of influence in one person—the General Council chair.

There is no provision for regional rotation of the director-generalship. Indeed, the procedures state that “In order to ensure that the best possible candidate is selected to head the WTO at any given time, candidates representing the diversity of members across all regions shall be invited in the nomination process.” The criteria for qualification of candidates are broad and simple: they should possess extensive experience in international relations, encompassing economic, trade and/or political experience; a firm commitment to the work and objectives of the WTO; proven leadership and managerial ability; and demonstrated communications skills.

There is no provision for voting, except as a possible last resort to be considered by members. Recourse to voting, if that were ever to be agreed, is to be regarded as an exceptional departure from the customary practice of decision making by consensus.

Successive rounds of confidential informal consultations are undertaken by the chair of the General Council and the facilitators. These consultations may be with individual members or groups of members. The outcome of the consultations is to be reported to the full membership at each stage. It is understood that the candidate(s) least likely to attract consensus shall withdraw. The number of candidates expected to withdraw at each stage shall be determined according to the initial number of candidates, to be made known in advance. The process is repeated in successive stages with the aim of establishing consensus around one candidate.

These procedures worked relatively smoothly in 2005, when consensus was reached to appoint Pascal Lamy. There were some issues in the subsequent exercise to select his successor, Roberto Azevêdo, in 2013, but on the whole the procedures again proved workable. An interesting facet of the procedures is the identification of candidates least likely to attract consensus. There are no guidelines as to how this judgment is to be made. It is assumed to be a mixture of preferences and objections. If one candidate has strong numerical support but is strongly opposed by one or more particularly influential members, how are these competing points of view to be weighted?

Organizational issues raised by expanding WTO membership

There were 128 original members of the WTO on its establishment in 1995. Since then membership has grown to 159, including major economies such as China and the Russian Federation. In addition, with the higher profile of the WTO as compared with its predecessor GATT, many of the original members, particularly those from developing regions, have b...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• List of illustrations
• List of contributors
• Acknowledgments
• List of abbreviations
• Understanding the governance of international organizations
• 1. The World Trade Organization as an institution
• 1.2 Weak organization, strong institution: Comment
• 2. Reform at the World Bank
• 2.1 The World Bank: Comment
• 2.2 The World Bank—plus ça change?: Comment
• 3. Governance at work at the International Monetary Fund
• 3.1 IMF governance and decision-making processes: Comment
• 3.2 The IMF’s governance of economic policy knowledge: Comment
• 4. The World Intellectual Property Organization
• 4.1 The World Intellectual Property Organization: Comment
• 4.2 The problems of over-representation and fragmented subject areas in reaching agreement at WIPO: Comment
• 5. Turbulence and reform at the United Nations Food and Agriculture Organization
• 5.1 The relevance, competence, and prospects of the Food and Agriculture Organization: Comment
• 6. The World Health Organization: Some views from inside
• 6.1 In reform we trust—the challenge before the World Health Organization: Comment
• 7. Afterthoughts
• Index
• Routledge Global Institutions Series