Reforming the Multilateral Decision-Making Mechanism of the WTO: What is the Role of Emerging Economies?

The paper focuses on the future of global economic governance in the light of the current state of multilateral trade negotiations. The aim is to analyse identified key historical issues at the heart of the decision-making system of the World Trade Organization (WTO). The current and ongoing Doha Round of trade negotiations and the multilateral system reflect inequalities that still prevail in the global trade architecture. Is there a need for a paradigm shift? The paper will provide recommendations on how reform of the multilateral decision-making structures should focus on promoting the interests of developing countries that have historically been marginalised. Developing countries, like those making up BRICS, stand ready to contribute to the construction of a new international architecture, to bring the voices of the south together on global issues and to deepen their ties in various areas.


Introduction
The multilateral trade system especially that of the World Trade Organisation (WTO), is in a state of flux. 1 This is mainly because of the decade-long Doha Round of trade negotiations, which cannot be concluded. Many of its participants are frustrated 2 and it has been stated that there is an institutional crisis. 3 As a consequence, the WTO is increasingly becoming a bystander as the world's economic powers ignore the global talks and pursue their own bilateral and regional trade pacts. 4 Trying to reach an agreement has been very difficult. 5 The global economic crisis has dampened the appetite of major role players to end the impasse.
The crisis has also eroded the strength of the historical superpowers, the Unites States of America and Europe, who are no longer considered leaders of the multilateral trading system. Instead there is a steady rise to power by emerging economies, especially those of Brazil, Russia, India, China and South Africa. These countries form the now familiar BRICS front and are now considered future economic powerhouses that can contribute to the construction of a new international architecture. 431 / 614 and rules-based multilateral system embodied in the WTO. The BRICS arrangements will for example have to utilise the WTO dispute settlement mechanism in the event of a dispute. Thus, a successful, comprehensive and balanced conclusion of the Doha Development Agenda (the DDA) would be in the best interests of BRICS and other like-minded organisations.

Historical background
The WTO is a treaty-based organisation that is charged with the supervision and liberalisation of international trade. Its main function is to ensure and guarantee that trade flows as smoothly, predictably and freely as possible. 11 The creation of the WTO can be seen as one dimension of the gradual process of global liberalisation of trade. 12 This organisation started off as the General Agreement on Tariffs and Trade (GATT) in 1947 but was transformed into the WTO on January 1, 1995 under the Marrakech Agreement. The GATT started operating in 1948 and, at the time, negotiations primarily involved three parties: the European Community (EC), the USA and Japan. 13 Some have described these parties as a club for the rich only. 14 This may however not have been a true reflection of the world economy at the time since Japan's economy was struggling and today the organisation's membership now stands at 153. It is the mandate of the WTO to deal with the regulation of trade between participating countries, providing a framework for negotiating and formalising trade agreements, and providing a dispute resolution process aimed at enforcing participants' adherence to WTO agreements. These agreements are signed by representatives of member governments after the process of accession by each of the prospective members. The agreements also need to be ratified by these member governments' parliaments. Most of the issues that the WTO focuses on derive from previous trade negotiations, especially from the Uruguay Round (1986)(1987)(1988)(1989)(1990)(1991)(1992)(1993)(1994) of the most protected economies in the Americas. 26 The new Director-General will need to hit the ground running. This will not be easy under the current circumstances of the Doha Round, which has been in progress for more than a decade. The Round remains in limbo and with it, the multilateral system. 27 The current global economic crisis also means that the major economies of the globe are in the process of prioritising the reparation and recovery of their domestic economies. This has also freed some policy space for developing countries to determine the new course the world economy will take.
It is no wonder that developing countries, especially the emerging economies, are pushing for self-reliance through initiatives like the expected launch of the BRICS Hoekman identifies three areas that require reform as a result of the status quo: rulemaking and decision making, the management of day-to-day activities, and the enforcement of negotiated commitments and rules. 29 The likelihood of the much needed reform happening in the middle of negotiating a trade round is very unlikely.
However, this does not discount the strong sentiments calling for reform of the WTO. The hope is that the members of the WTO will be able to finalise the Doha Round and move forward. Reform may then be prioritised to ensure an efficient and more transparent WTO. Henceforth we focus on the priority areas that we perceive to be in need of institutional change.

Consensus decision-making
Consensus is the primary method of decision-making in the WTO. Voting is the secondary method that can be resorted to in the event of the failure of consensus. 30 Voting is technically possible in the WTO but in practice does not occur. 31 Consensus is very important in the multilateral trading system and is the key to WTO decisionmaking. Nothing is decided on unless there is consensus. In the history of the WTO, voting has been resorted to only once -during the accession of Ecuador in 1995. 32 By way of operation, and according to the Marrakesh Agreement a decision is made 'if there is no objection by member/s present at the meeting when such decision is taken'. A presumption of consensus is also created in the absence of 'formal objection when matters come up for decision'. There is a need to ascertain whether 'consensus' in its current form is applicable in the WTO of today and other forums like BRICS. It is naturally going to be easy to establish consensus in BRICS since 28 Anonymous 2012 rt.com. 29 Hoekman 2011 www-wds.worldbank.org 1-28. 30 See Article IX:2 of the World Trade Organisation Agreement (1994). 31 Hoekman 2011 www-wds.worldbank.org 1-28. 32 Hoekman 2011  Furthermore, consensus was more appropriate to GATT than to the WTO, since GATT was characterised as a type of gentleman's club whose main purpose was to settle trade problems rather than to clarify trade law. 35 It has been stated also that the main intention under GATT was never to create a rigid rule book, but to adopt a flexible regime of economic and political realities that would evolve over time. 36

What is consensus as an international norm?
Consensus is generally a decision-making process that involves seeking to consider the views of all parties concerned. 37 It includes a process of reconciling any conflicting arguments. This makes consensus decision-making silent on the eventual voting or decision-making rule. Consensus can be applied by establishing unanimity, which could also be unanimity minus one or two members. It could also be either a This will not be applicable to new agreements or amendments to the WTO treaty, which are classified as primary rule-making. This means that the WTO should be able to conclude a new agreement by "consensus" (as defined above, without automatic vetoes). The Vienna Convention on the Law of Treaties in article 9(2) even refers to a two-thirds majority as the fallback rule for the conclusion of treaties in an international conference.

What is the effect of consensus on the WTO's membership?
The discussion above indicates that consensus was key during the GATT years but These questions are relevant in that they seek important answers. Even though arrangements like BRICS are a creation outside the WTO, the fact that its members are key drivers in multilateral trade is enough to qualify them as creators of a new generation of trade regimes. It is inevitable that the BRICS countries will venture into agreements that will seek to legitimise their trade relations. In the absence of such agreements, these countries will continue to utilise the WTO dispute settlement mechanism when they face conflict. This has already been experienced when Brazil signalled its unhappiness at poultry tariffs imposed by South Africa. 44 Brazil had threatened to take South Africa to the WTO Dispute Settlement Body to contest the anti-dumping duties that have been levied on its poultry exports. 42 Sandrey "South Africa's Way Ahead" 33-37. 43 Sandrey "South Africa's Way Ahead" 33-37.

Special and differential treatment (SDT) for 'developing countries'
Special and differential treatment operates on the basis of lumping all emerging and developing economies together into one supposedly homogenous group of 'developing countries' that need the same kind of treatment because they share characteristics, especially in economic development. This is an unfair practice. 48 The rationale behind the system of SDT is to enable trade-offs through issue linkages and to facilitate leverage in negotiations, where such leverage might otherwise not exist. 49 SDT enables developing countries to apply protectionist trade strategies, such as the use of import substitution to promote industrialisation; export subsidies to promote exports; and trade controls for balance of payment purposes. 50 More than 80% of WTO members are "developing countries". Currently the WTO has agreed to more than 155 SDT provisions, which form the "development" element of the WTO. 51 However, one of the major complaints made by developing countries has been that SDT is ineffective in its current form. 52  The domination of the developed countries has been ameliorated recently, with the developing countries no longer allowing the developed countries to make all key decisions. It is not enough to just provide developing countries with leverage to be able to protect their economies through the special and differential treatment tool. 60 Developing countries were for example at the forefront of the campaign against the inclusion of the Singapore issues in the WTO agenda, successfully arguing that to do so would be to intrude into domestic policy.

9
The WTO as "hard law" subject to compulsory dispute settlement The creation of the WTO under the General Agreement on Tariffs and Trade (GATT 1947) came at the height of the move towards the legalisation of world politics. This was an age that believed that 'hard law' enforced by binding dispute settlement processes was necessarily "better" law. 61 At the time the world had emerged from two very destructive world wars and the need for a rules-based multilateral system was recognised by many. Under GATT, provision was made for rules to ensure that states did not renege on their tariff liberalisation commitments. 62

Conclusion
The challenges being experienced by the Doha Round as well as the current global economic challenges have led to start questioning the relevance of some of the founding principles of the WTO. However, this situation presents an opportunity to strengthen the WTO as a trading body. 65 All of the principles discussed are intrinsically linked to one another. For example "single undertaking" and "consensus" require the bundling of agreements and the participation of all parties. SDT and the understanding that the WTO is a member-driven institution recognise that all members need to make a contribution to the multilateral decision-making process, even if they are poor. However, this note attempted to introduce the magnitude of 446 / 614 this challenge. The realisation of the usefulness of 'soft law' as against hard law' is critical in bringing obligations, legitimacy and certainty to the multilateral trading system. This paper concludes that in as much as these principles were instrumental in shaping the past and present paradigm of the multilateral trade system, new challenges and new environments demand novel ways of dealing with them. This new environment has created a breeding ground conducive to the emergence of new, informal bilateral arrangements in which emerging economies can find common ground in the pursuit of multifaceted cooperation for mutual benefit. As developing countries build momentum, especially those making up the BRICS configuration, and as they become more and more integrated, it is important that the relationship they share should be defined by firm principles. Whether they use the entrenched principles of consensus, single undertaking, SDT, member-driven and a "hard law" or a "soft law" approach is a matter that requires special consideration. However, even though these principles require contextual reform, they are undoubtedly important to the multilateral trading system.