Frayed nerves at OECD summit

Was the European trade commissioner always this grouchy? One couldn't help wondering in the final hours of the Organisation for Economic Co-operation and Development's ministerial summit yesterday. Elegantly dressed, the red rosette of the Legion of Honour in his lapel, the bald, wire-rimmed Mr Pascal Lamy droned on in a low monotone and twice irritably refused to speak louder so journalists at the back could hear him.

Perhaps the prospect of an imminent reunion with his US counterpart - nemesis would be a better word - Ms Charlene Barshefsky, put Mr Lamy in a bad mood. The two hadn't met since they were cast as arch-enemies at the disastrous Seattle World Trade Organisation (WTO) meeting last November. Mr Lamy gave the impression that something else gnawed at him: frustration that the fate of world trade should be held hostage to a US presidential election?

Every delegate at the OECD summit was perfectly aware that a new WTO round cannot take place before America elects a new president and he sets up his administration; in other words, not before well into 2001. In the meantime, Mr Lamy warned, "there's a sense of urgency ... a clear conscience here that time is running out, that the dispute settlement mechanism of the WTO is at risk, that we shouldn't allow this".

The problem, Mr Lamy explained, is that WTO rounds are meant to draw up the rules under which nations trade - to promote what he fondly called "rule-based globalisation". When WTO negotiations stop, contentious issues end up in litigation, bogging down the Geneva-based organisation and transforming it into an international tribunal. "The only way out is to add a new layer of legislation through a new round," Mr Lamy said. "Time is not working for us. Things will not be easier next year."

Whether it be hormone-fed beef, genetically modified organisms or banana quotas, the majority of cases handled by the WTO pit the US against Europe. This only increases the perception among developing countries that the WTO serves the interests of the rich.

This week's summit did not narrow the chasm between the WTO's two power blocs - the US, Canada, Australia and New Zealand versus the EU with Japan - over an agenda for the hypothetical next round. The US-led group wants it to address agriculture, liberalisation and services. The Europeans want a broad-based agenda "because we need things to trade off", Mr Lamy said.

Washington has resisted attempts to include core labour standards (a prohibition on forced or child labour, guaranteed rights for trade unions) on the WTO agenda on the grounds it would inevitably lead to messy sanctions. The EU believes labour standards and trade could be linked simply by asking the International Labour Organisation to monitor implementation.

The OECD is meant to enable the developed countries to adopt common positions. But, one participant recounted, "the agriculture discussions were arcane. Everyone is jockeying for position - no one is on the verge of any breakthroughs".

Fortunately for the OECD secretariat, the club of the world's 29 richest countries had rhetorical fig-leafs to mask the paucity of concrete progress at their meeting. They denounced tax havens, issued guidelines for multinational companies and expounded on "sharing the benefits of globalisation", "inclusion" and "consultation with civil society".

Since Seattle, every government wants to give the impression that it cares. Mr Tom Kitt, the Minister of State for Labour, Trade and Consumer Affairs, was no exception yesterday when he told his fellow delegates that "the underlying emphasis of the (next WTO round) should be employment, wealth distribution, development and the environment".

It was ethics - or at least lip service to morality in business - that kept the Mexican delegation up all night from Monday to Tuesday. Mexico tried to scupper the revised Guidelines for Multinational Enterprises (which added references to human rights and combating bribery), but came under what one diplomat called "ferocious pressure" from the US to agree to the document.

It was passed with a few face-saving changes of prepositions.