Conferences & Lecture Series

2003 G8 Pre-Summit Conference

Governing Globalization:
G8, Public and Corporate Governance

Tuesday, May 27, 2003
INSEAD, Fontainebleau, France

Hosted by the Research Group on Global Financial Governance, the Guido Carli Association, the G8 Research Group, the EnviReform Project, INSEAD, the Club of Athens-Global Governance Group, le Comité pour un Parlement Mondial, Futuribles and the Académie de la Paix

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Toward Accountable Leadership?
The G8, WTO and Public Governance in the Doha Round
[Abstract]
Heidi Ullrich, London School of Economics and Political Science

As members of civil society increasingly demand to be involved in shaping the world in which they live, the leaders they have elected must be ever more accountable to those they ultimately serve. Given the importance of trade in the daily life of all citizens, accountable leadership is particularly necessary within the forums that influence the world economy, such as the Group of Seven/Eight (G7/8), consisting of the heads of state from the largest democratic market economies, and the World Trade Organization (WTO).

Since the first Western Economic Summit took place in Rambouillet, France in 1975, the leaders of the G7/8 have voiced their support for an open trading system. In words that still hold true 25 years after they were first written in the 1975 Rambouillet Declaration, the G7 stated:

Growth and price stability will be fostered by maintenance of an open trading system. In a period where pressures are developing for a return to protectionism, it is essential ... to avoid resorting to measures by which they could try to solve their problems at the expense of others, with damaging consequences in the economic, social, and political fields (Rambouillet Declaration. Pt. 8. 1975).

A noted analyst of the G7/8 points out that: "All histories of the G7 concur that trade has been one of its issue-areas of greatest impact, perhaps the greatest of all the topics it has addressed over the years." (Bergsten; 2001: 18). The impact of the G7/8 on multilateral trade negotiations has been so significant as to merit the term ‘Rambouillet effect’ describing its ability to bring about incremental progress during negotiations by having the leaders make the critical political decisions (Bayne; 2000: 21). However, this effect has not been visible at every summit. The G7/8 has received much criticism due to its inability to show consistently effective or accountable leadership in the area of multilateral trade.

For nearly 50 years, the multilateral trading system within the framework of the General Agreement on Tariffs and Trade (GATT) operated in relative obscurity. Trade negotiations over the reduction of tariffs on manufactured goods were discussed among a small group of government and industry representatives. There was little direct interaction between the GATT and civil society. However, the multilateral trading system and manner in which trade policy was developed changed dramatically with the establishment of the WTO on 1 January 1995. Incorporating the elements of the 1947 GATT, the WTO also covers several newer issue areas including trade in services and intellectual property rights as well as an enforceable Dispute Settlement Procedure (DSP) that directly affect the lives of citizens. The issues currently being discussed in the Doha Round, including further liberalization of industrial goods, agriculture and services as well as the new issues such as competition and investment will increasingly influence local economies. However, despite the ever closer interrelationship between multilateral and local trade, the WTO’s system of governance has been criticized by civil society for its limited transparency, restricted participation of non-governmental stakeholders and lack of accountability.

This paper argues that in order to ensure good public governance and increase the effectiveness of these forums in providing leadership for the multilateral trading system, the G7/8 and membership of the WTO must increase the accountability of their leadership. Given the faltering political and economic global environment, the G8 Summit that will take place in Evian, France 1-3 June provides a last critical opportunity for the assembled heads of state to enhance their accountability and ensure the success of the Doha Round prior to the WTO’s 5th Ministerial meeting scheduled for 10-14 September in Cancun, Mexico that will serve as the round’s mid-term review.

Jacques Chirac, President of France and Chair of the G8 during 2003, outlined four themes for the Evian Summit: responsibility, democracy, solidarity and security. This paper applies each of these themes to the G8 and the WTO Doha Round to examine the challenges and opportunities they present. The first section provides an overview of each of the four themes and their role in good public governance. This is followed in section two by a discussion of the varying types of governance and the necessity of responsibility. Section three explores the degree of democracy exhibited by the G8 and the WTO, specifically in terms of participation and transparency. The need for solidarity and its interrelationship with security is examined in section four. The paper concludes by offering a series of recommendations for how the G8 can achieve greater accountability in their leadership on trade issues and the challenges of the 2003 Evian Summit.

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