The Singapore issues

At the WTO Ministerial Conference held in Singapore in 1996, the decision was taken to set up three new working groups to consider the following topics: trade and investment, trade and competition policy, and transparency in government procurement. In addition, it was decided that the Council for Trade in Goods should take a closer look at how customs procedures could be simplified (so-called “trade facilitation”). These four areas are jointly referred to as the “Singapore issues”.

The Singapore issues were originally part of the Doha Round. The negotiation mandate contained in the declaration of the 2001 Doha Ministerial Conference stated that negotiations should begin after the Cancun Ministerial Conference in 2003, at which a consensus was to be reached on the form of the negotiations.

The WTO members did not, however, achieve consensus in Cancun. After the setback this caused to the Doha Round, agreement was reached in July 2004 on the basis on which the negotiations could be continued. This was recorded in a decision (known as the “July package”) adopted by the WTO General Council on 1 August 2004. Although one of the elements of this package was that negotiations would begin on trade facilitation, the other three Singapore issues were put to one side, and are no longer part of the Doha Round.

1. Trade and investment

In accordance with the Doha mandate, the working group considered the following topics before the work was set aside in 2003:

1. the scope of any framework agreement
2. definitions
3. transparency
4. non-discrimination/protection of investments
5. obligations when establishing new investments
6. conditions that protect the needs of developing countries
7. exceptions to the agreement and measures to address balance of payments problems
8. dispute resolution.

Intra-industrial trade, i.e. cross-border trade within the same company, makes up around one-third of all goods and services trade. One of the intentions in setting up the working group in 1996 was to shed light on this relationship between trade and investment.

In order to safeguard the development perspective, the United Nations Conference on Trade and Development (UNCTAD) was included in the process. However, many developing countries were opposed to starting negotiations on a multilateral investment agreement, as they feared that an international set of rules would hinder them in implementing national business and development policies.

The WTO has become increasingly involved in trade-related investment issues in recent years. Investment issues are covered both in the agreement on Trade-Related Investment Measures (TRIMs) and the General Agreement on Trade in Services (GATS), which covers the case where a service provider establishes a commercial presence (i.e. invests) in the country in which the service will be delivered. (This is known as the “mode 3” method of delivery – see definitions in GATS.)

The implementation of a multilateral set of rules is important to Norwegian businesses. Norway has few bilateral investment protection agreements. A set of rules for investments must protect both the host country’s right to regulate activities and, at the same time, the need of foreign businesses for predictable and non-discriminatory framework conditions. Further, such rules must respect the needs of developing countries.

2. Trade and competition policy

Most industrial countries have competition rules that are intended to prevent price collusion and abuse of dominant market positions. In addition, many developing countries have gradually introduced their own competition rules. International cooperation to combat illegal practices is vital, as restrictions of competition often have effects in multiple countries and, moreover, international businesses move their competition-restricting practices around, to countries that do not have effective competition legislation. Such international cooperation is being hindered by a lack of suitable legislation in certain countries, including in relation to the voluntary exchange of relevant information.

Many developing countries have opposed starting negotiations on a multilateral set of competition laws, partly (again) because of fears regarding the limitations an international set of rules might impose on their ability to implement national business and development policies.

Before the 1999 Seattle Ministerial Conference, Norway had already put forward a proposal that negotiations should take place on a framework competition agreement. In Norway’s view, a WTO competition agreement would create more consistent framework conditions for the business sector in various countries, which would result in increased predictability for international trade and stimulate foreign investment, especially in developing countries. A multilateral set of competition rules would also boost cooperation between national competition authorities and prevent monopolistic or cartel activities from undermining efforts to dismantle trade barriers. Moreover, particular attention must be given to the needs and interests of developing countries.

3. Transparency in government procurement

Government procurement is a very large market in many countries, and has long been a subject of discussion in the GATT and WTO contexts. The Agreement on Government Procurement (GPA), to which Norway is a signatory, is contained in Annex 4(b) of the WTO agreement. Only a small minority of WTO members have acceded to the GPA, and none of these (apart from Singapore and South Korea) are developing countries. It is therefore referred to as a plurilateral agreement.

During the Ministerial Conferences, including in Singapore and Doha, efforts have been made to involve more member countries in the discussion of government procurement issues. Accordingly, all of the WTO member countries participated in the working group on transparency in government procurement that was set up after the Singapore meeting. Since the 2003 Cancun meeting, however, the work of this working group has been set to one side. Work continues on the development of the GPA, in the meantime. The GPA negotiations are being conducted parallel to the Doha Round, but are not part of the total Doha package. More information on government procurement and the status of the GPA negotiations can be found here.

4. Simplification of trade procedures

The simplification and harmonisation of international trade procedures (trade facilitation) is the only one of the original Singapore issues that is still part of the Doha Round. Negotiations began in the autumn of 2004, pursuant to a decision of the WTO General Council of 1 August 2004, in a negotiation group established for this purpose. Further information on trade facilitation, the status of the negotiations and the Norwegian position can be found here.