Marcia Pereira – Consultation with stakeholders is a key element not only in the formulation, but also in the enforcement of trade policies. The importance of formal procedures for consultations has gained emphasis in recent years, in particular, because some developing countries have requested or are considering requesting authorization from the Dispute Settlement Body (DSB) to retaliate or cross-retaliate under the WTO Agreements against developed countries.

In a recent article commissioned by the International Centre for Sustainable Development Arthur Appleton analyses the technical, legal and economic obstacles that developing countries may face to cross-retaliate under the General Agreement on Trade and Services (GATS) against developed countries. He found that cross-retaliation under the GATS may have an adverse effect for a range of stakeholders in developing countries. Cross-retaliation under the GATS may, for instance, affect employment rate, consumer interests, the investment climate, and may also disrupt the supply chain of various businesses.

My conclusion from his analysis is that stakeholder consultations are fundamental and should take place prior to the enforcement of international and regional trade agreements. Consultations provide stakeholders with the right to express their views on the measure to be implemented, and help States to assure that they do not jeopardize the economic and social interests of their business communities and citizens.

In spite of its importance, many developing countries have not put in place a formal mechanism for consultations. They usually rely on ad hoc public consultations and informal private meetings with key stakeholders. The lack of formal procedures may generate an imbalance in the participation of some stakeholders that will be affected by the enforcement of trade agreements, and may damage the interests of important actors. Formal consultation at the national level should be institutionalized, in particular, in democratic developing countries where the voices of different actors have weight. Academics, labour unions, consumers’ group, industries and individuals are actors that should not be left out of the consultation process.

The Need for Institutional Structures

Lessons can be learned from many countries in the North. The United States and the European Union have institutionalized formal procedures for consultations on trade policies, including on enforcement. Consultations in the United States take place prior to the suspension of concessions by the US government against a WTO Member. Pursuant to Section 306, the US Trade Representative (USTR) consults with representatives of the domestic industry that can be affected, and provides an opportunity for interested parties to express their views. The USTR invites interested persons to comment on the suspension of concessions and to present written submissions. Interested parties can also request the opportunity to provide oral testimony, and submit rebuttal briefs to demonstrate errors and facts not highlighted in the written submission and in the oral testimony. The US procedure is very transparent; documents are put in a file and, with the exception of confidential documents, are open for public inspection. Similar procedures exist in the EU, which also invites interested parties to present written comments on retaliatory measures.

Organisational models

If developing countries are interested in implementing mechanisms for consultation, they should consider looking at the different mechanisms put in place by other countries. Comparative Trade Policies – Organizational Models and Performance, a book coordinated by ICONE, FIPE and DFID and published in 2007 is a good source of information. This book analyzes the different consultation procedures adopted by the EU, the US and Argentina, as well as the informal channels used by Brazil, Mexico and Chile. The participation of civil society in trade policy formulation is one of the many issues addressed in the book that may be of interest to developing countries.