Decision making from consensus in the WTO

DECISION-MAKING BY
CONSENSUS IN THE WTO

Thanh Nguyen
Quynh Nguyen
Phong Pham
International Law Faculty, Diplomatic Academy of Vietnam

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TABLE OF CONTENT
INTRODUCTION ..................................................................................................................... 4
I.

ORIGIN OF “CONSENSUS” IN THE WTO ................................................................... 5

II.

CONSENSUS AS PROVIDED IN WTO AGREEMENT ................................................ 5
1.

NORMAL PROCEDURE: .................................................................................................... 5

2.

SPECIAL PROCEDURE: ..................................................................................................... 6
2.1

Adoption of an interpretation of provisions of the WTO Agreement or the

multilateral trade agreements ............................................................................................. 7
2.2

Decisions to waive an obligation imposed on a Member ...................................... 7

2.3

Decisions on accession .......................................................................................... 8

2.4

Decisions on amendments...................................................................................... 8

2.5

Decisions on the budget and on financial regulations ........................................... 8

III. IMPACTS OF THE DECISION MAKING BY CONSENSUS IN THE WTO ............... 8
1.

ADVANTAGES ................................................................................................................. 8

2.

PRACTICE OF DECISION-MAKING BY CONSENSUS AND ITS DISADVANTAGES .................. 11

2.1

General Comments............................................................................................... 11

2.2

Practices of decision-making by consensus in the WTO ..................................... 12

2.2.1

“Green room” meeting: Purposes and operating mechanism .......................... 12

2.2.2

Other informal consultations............................................................................ 13

2.3

Disadvantages of consensus-based decision-making process in the WTO ......... 14

2.3.1

General disadvantages ..................................................................................... 14

2.3.1.1

No formal rules of procedures ................................................................. 14
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2.3.1.2
2.3.2

Problems with records of meetings and non-transparency ...................... 14

Disadvantages for developing countries .......................................................... 14

2.3.2.1

The practice of informal consultations excludes developing countries

from the consensus decision-making process .......................................................... 14
2.3.2.2

Open discussions prevent developing countries from objecting publicly 15

2.3.2.3

The overloaded agenda and too many meetings held simultaneously have

put resource deficient developing countries at a great disadvantage. ...................... 16
2.3.2.4

The inadequate assistance from Secretariat causes disadvantage for

developing countries ................................................................................................ 17
IV. RECOMMENDATIONS AND WTO REFORM ............................................................ 17
1.

REFORMING

CONSENSUS SYSTEM ................................................................................. 17

2.

TRANSFORMING THE ‘PASSIVE CONSENSUS’ INTO AN ‘ACTIVE’ ONE. ............................ 18

3.

EVOLVING A HIERARCHY OF ISSUES WITH DIFFERENT METHODS OF DECISION-MAKING

APPLYING TO EACH LEVEL ..................................................................................................... 18

4.

OTHER RECOMMENDATIONS ......................................................................................... 19
4.1

Taking the model of the IFIs and the UNSC ....................................................... 19

4.2

Departing from the single undertaking principle in order to enhance efficiency 22

4.3

Reinforcing the involvement of high-ranking political leaders to give greater

impulse to the process ...................................................................................................... 22
4.4

Adopting realistic agenda and work schedule ..................................................... 23

4.5

Developing countries should not be subjected to economic and political pressure

relating to negotiations ..................................................................................................... 23
4.6

Decisions should not be made until all members are technically ready .............. 23

CONCLUSION ........................................................................................................................ 24
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INTRODUCTION
Decision-making processes are among the most important methods of functioning against
which the legitimacy of one institution may be rated. It is because they show how the
organization treats its members and thereby fulfils the first and minimal level of

accountability. Moreover, in the recent trend of international fora, especially the WTO,
decision-making by consensus has become popular. This characteristic of the WTO makes it
considerably and significantly different from other international institutions such as the
International Monetary Fund (IMF) and the World Bank (WB), where decisions are based on
weighted voting. In the WTO, consensus based decision-making is popular, while voting is
possible and/or mandatory only in some special cases. In voting process, each member state
has one vote and therefore allowing equal status to all members irrespective of trade shares or
general economic size. The principle of equality of voting status of member states is clearly
seen in the formal structures of the WTO. The top body of the WTO is the Ministerial
Conference, which meets every two years. The day-to-day workings of the WTO are carried
out by the General Council. The General Council also meets in the guise of the Trade Policy
Review Body and the Dispute Settlement Body (DSB). Below the General Council are the
Councils for Goods, Services and Trade Related Aspects of Intellectual Property Rights
(TRIPS), along with Committees that report directly to the General Council. Representation
at all three levels is open to all members of the WTO. The provisions stipulate the use of
consensus and voting in the WTO covered Agreements will be examined in the first section.
The advantages and disadvantages of consensus are the core discussion in section 2. On the
one hand, consensus in decision-making offers developing countries with equal voice with
their developed partners irrespective of trade shares and economic sizes. On the other hand,
from the viewpoint of developing countries, they have to face a lot of disadvantages deriving
from the consensus based decision-making.
Finally, in order to help WTO become the most democratic, efficient, transparent and
legitimate organization in promoting international trade, some recommendations about the
reform of the WTO in the field of decision-making are raised.

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I. Origin of “consensus” in the WTO

The origins of the consensus method of decision-making can be traced to the General
Agreement on Tariffs and Trade (GATT). Even in situations where the GATT rules provided
for a formal vote, e.g. granting of waivers, a consensus text would first be reached through
negotiation and consultations before the formal vote was held.1 Any use of voting in
whichever stage of the negotiation process was highly unusual. One example is that in the
pre-launch phase of the Uruguay Round, the US requested a rare postal ballot in 1985. The
ballot showed that two-thirds of the contracting parties supported the convening of a special
session on services.2 However, even this decisive vote was not used for the actual decisionmaking process to bring services into the scope of the GATT. Instead, consultations and
negotiations continued, and finally a consensus draft was produced to provide for the Punta
del Este declaration that inaugurated the Uruguay Round with its two-track negotiating
strategy on services.3 Consensus was facilitated by another GATT tradition, namely, “not to
allow progress to be frustrated by one party’s obstinacy, unless it happened to be one of the
major trading powers.”4
II. Consensus as provided in WTO Agreement
I. Normal procedure:
The normal decision-making procedure for WTO bodies is set out in Article IX:1 of the
WTO Agreement, which states:
The WTO shall continue the practice of decision-making by
consensus followed under GATT 1947. Except as otherwise
provided, where a decision cannot be arrived at by consensus,
the matter at issue shall be decided by voting. At meetings of
the Ministerial Conference and the General Council, each

1

John Jackson, The World Trading System: Law and Policy in International Economic Relations, Cambridge
MA: MIT Press, 1997
2
Michael Hart, The GATT Uruguay Round, 1986-93: the Setting and the Players, in Fen Osler Hampson, with
Hart, Multilateral Negotiations: Lessons from Arms Control, Trade and the Environment, Baltimore, John

Hopkins University Press, 1995.
3
Amrita Narlikar, Bargaining Together in Trade: Developing Countries in Coalitions, 1982-98, Oxford
University Press, 2000
4
Hoekman, Bernard M. and M. M. Kostecki, The Political Economy of the World Trading System: the WTO
and Beyond, Oxford University Press, 2nd edn., 2001.

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Member of the WTO shall have one vote. […] Decisions of
the Ministerial Conference and the General Council shall be
taken by a majority of the votes cast, unless otherwise
provided in this Agreement or in the relevant Multilateral
Trade Agreement.
A WTO body is deemed to have decided by consensus on a matter submitted for its
consideration, if no Member present at the meeting when the decision is taken, formally
objects to the proposed decision5. In other words, unless a Member explicitly objects to the
proposed decision, that decision is taken. If consensus cannot be achieved, Article IX:1 of the
WTO Agreement provides for voting on a one-country/one-vote basis. Under the normal
procedure, decisions are then taken by a majority of the votes cast. As under the old GATT,
however, it is very exceptional for WTO bodies to vote.
Special consensus in the WTO - Reverse consensus
Article 2.4 of the Dispute Settlement Understanding stipulates that where the DSB provides
for the DSB to take a decision, such a decision is always taken by consensus. It is important
to note, however, that for most key decisions, such as the decision on the establishment of a
panel, the adoption of panel and Appellate Body reports and the authorization of suspension
of concessions and other obligations, the consensus requirement is in fact a “reverse” or

“negative” consensus requirement. The “reverse” consensus requirement means that the DSB
is deemed to take a decision unless there is a consensus among WTO Members not to take
the decision. Since there will usually be at least one Member with a strong interest in that the
DSB takes the decision to establish a panel, to adopt the panel and/or the Appellate Body
reports or to authorize the suspension of concessions, it is very unlikely that there will be a
consensus not to adopt these decisions. As a result, decision-making by the DSB on these
matters is, for all practical purposes, automatic.
II. Special procedure:
Although consensus inevitably prevails in the decision-making process of the WTO system,
voting sometimes applies. Article IX:1, in its relevant part, provides that:

5

Footnote 1 to Article IX of the WTO Agreement.

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The WTO shall continue the practice of decision-making by
consensus followed under GATT 1947. Except as otherwise
provided, where a decision cannot be arrived at by consensus,
the matter at issue shall be decided by voting.
Specifically, some procedures require voting. They are:
2.1

Adoption of an interpretation of provisions of the WTO Agreement or the
multilateral trade agreements

The adoption of an interpretation of provisions of the WTO Agreement or the multilateral

trade agreements is provided in Article IX:2 WTO Agreement, which reads:
In the case of an interpretation of a Multilateral Trade
Agreement in Annex 1, they shall exercise their authority on
the basis of a recommendation by the Council overseeing the
functioning of that Agreement. The decision to adopt an
interpretation shall be taken by a three-fourths majority of the
Members.
Although the legal effect of an authoritative interpretation is not spelt out in Article IX:2 of
the WTO Agreement, it is relatively clear that such an interpretation would bind all
Members.6
2.2

Decisions to waive an obligation imposed on a Member

Decisions to waive an obligation imposed on a Member are provided in Article IX:3 WTO
Agreement, which provides:
In exceptional circumstances, the Ministerial Conference may
decide to waive an obligation imposed on a Member by this
Agreement or any of the Multilateral Trade Agreements,
provided that any such decision shall be taken by three

6

WTO Decision-Making Procedures, “Member-Driven” Rule-Making and WTO Consensus-Practices: Are
They Adequate? Are WTO Decision-Making Procedures Adequate for Making, Revising and Implementing
Worldwide
and
‘Plurilateral’
Rules?,
by

Von
Dr.
h.c.
Claus-Dieter
Ehlermann,
/>
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fourths of the Members unless otherwise provided for in this
paragraph.
Article XXI of the GATS provides for a similar, but slightly stricter procedure for a Member
that wishes to modify a commitment it has made in its services schedule. They must be
temporary (although they can be extended) and reviewed annually.
2.3

Decisions on accession

Decisions on accession are provided in Article XXII:2. It reads:
The Ministerial Conference shall approve the agreement on
the terms of accession by a two-thirds majority of the
Members of the WTO.
Yet, when a new Member accedes, Article XIII permits Members to exclude the application
of the WTO Agreement in relation to the new Member by so notifying the Ministerial
Conference.
2.4

Decisions on amendments

Decisions on amendments require in most cases also a two-thirds majority of the Members,
if Members do not succeed in reaching a consensus within a time period, which will
normally be 90 days (Article X WTO Agreement). Amendments to the DSU require
consensus, which is less burdensome than the normal amendment procedure in that no
ratification is needed. Modifications of Articles IX and X of the WTO Agreement, of the
most-favoured-nation treatment rules and of Article II of GATT 1994 (on bindings) require
every Member’s consent.
2.5

Decisions on the budget and on financial regulations

Decisions on the budget and on financial regulations are provided in ArticleVII:3 WTO
Agreement:
The General Council shall adopt the financial regulations and
the annual budget estimate by a two-thirds majority
comprising more than half of the Members of the WTO.
III. Impacts of the decision making by consensus in the WTO
1.

Advantages

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We have to admit that decisions taken by consensus have many advantages. It is stressed that
th

the consensus rule reflects the national sovereignty principle, a principle based on the 18
century structure of states and on the assumption that countries are equal, disregarding their

size or actual economic or political power.7 The issue of state sovereignty in the WTO seems
to be resolved through the consensual mode of WTO decision-making according to which,
each state that gives powers to the WTO has consented to do so.
First, decisions-making by consensus, as confirmed by WTO Director-General Mike Moore
stated shortly after the dismal failure of the 1999 Seattle Session of the Ministerial
Conference, is a “fundamental democratic guarantee”.8 Inevitably, taken by consensus have
greater “democratic legitimacy”9 than those adopted by voting. The recourse to the alleged
democratic legitimacy of consensus, stressing sovereign equality, therefore is merely formal
and does not offer a true and transparent account of power relations.10 It is possible that WTO
Members often have different benefits. That is why they are interested in gathering into
groups with common goals and try to put forward their own benefits and make them laws and
policies. The decisions adopted, therefore, may not reflect mutual benefits but only for those
who support them. But decision-making by consensus does not carry such risk. It does seem
that decision-making by consensus ensures the most acceptable laws and policies since every
Member can get involved in the decision-making by using their consensus to conclude such
laws and policies. Consensus amounts to giving each member a right of veto and this is
consistent with the principle of equal sovereignty of states, therefore enhancing the
legitimacy of decisions.11
Second, decisions taken by consensus give small and poor WTO Members degree of
influence in the decision making process. Since even the weakest and least developed WTO
Members can prevent the adoption of decisions, other powerful Members must try to
persuade them of the substantive aspects of the decisions. It is clear that consensus decisionmaking gives many WTO Members “sharp weapon” that they cannot have otherwise. The

7

P. van den Bossche and Iveta Alexovi ová, Effective Global Economic Governance by the World Trade
Organization, Journal of International Economic Law, Oxford University Press 2005.
8
T. Buck, EU may rethink multilateral trade role, Financial Times, 16 September 2003.
9

Agata Fijalkowski, International Institutional reform, Hague joint conference on contemporary Issues of
International law, T.M.C Asser Press, 2005.
10
Thomas Cottier, A Two-Tier Approach to WTO Decision-Making, the International Centre for Development
Research, 2001.
11
Peter Van den Bossche, The Law and Policy of the World Trade Organization, Cambridge University Press,
2005.

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outcome will in this way also reflect the stake that various Members have in what is at issue,
and their influence.12 Hence, it is understandable that many WTO Members do not seem to
want to change the current decision-making process.
Third, decision-making by consensus is necessary to ensure that only decisions that have
good chance of implementation are adopted. If decisions are unpopular, it is likely that they
will face major opposition within Members. However, in case they are taken by voting,
coupled with great support of powerful WTO Members and the economic or political
pressure being put on other Members, the unpopular decisions may become laws.
Furthermore, implementation is always a big problem. It is clear that decisions which a
Member considers to be inappropriate with its economic interests would hardly be
implemented. This in turn undermines the goal of ensuring the mutual benefit between WTO
Members as being set forth in WTO Agreement. It is obvious that the non-application of
decisions on Members that were opposed to their adoption is likely to result in a
fragmentation of the WTO system, undermining its efficacy. Consensus is built on a broader
and often stronger basis. This is likely to affect the substance because the search for
consensus regularly involves the search for a compromise solution that is somehow
acceptable to all.13

Fourth, consensus decision-making ensures that laws and policies adopted by the WTO do
not go beyond economic and political reality. It seems that developing WTO Members
prevail on any issue submitted to a vote since they account for 70% of the membership of the
WTO. However, we should bear in mind that only 30% of world trade is accounted for by
developing countries. The remaining 70% is accounted for by developed world. Therefore, if
decision-making by majority voting on a one-country/one-vote basis is employed, it may
drive developed Members out of the WTO system as they are not satisfied with the balance of
power, thereby making the system ineffective as a forum for liberalizing world trade. Many
may argue that decision-making by weighted vote do not face such risk. However, it is hard
to figure out which criteria should be taken into account in determining the weight of the vote
(i.e. share of world trade, population, degree of market openness, etc). And even if such
12

T. Cottier and T. Satoko, The Balance of Power in WTO Decision-Making: Towards Weighted Voting in
Legislative Response, Aussen wirtschaft Publisher, 2003
13

WTO Decision-Making Procedures, “Member-Driven” Rule-Making and WTO Consensus-Practices: Are
They Adequate? Are WTO Decision-Making Procedures Adequate for Making, Revising and Implementing
Worldwide and ‘Plurilateral’ Rules?, by Von Dr. h.c. Claus-Dieter Ehlermann, available at
/>
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criteria can be widely recognized, reaching agreement on the weight of the vote of Members
can arguably lead to a never-ending debate.14 Hence, weighted voting still is generally
considered ‘outside the box’ thinking.15 Decision-making by consensus, on the other hand, do
not expose to such risks. Actually, most of the WTO Members favor consensus.
2.

Practice of decision-making by consensus and its disadvantages

2.1

General Comments

Decision making rules in WTO is unlike some other international institutions such as the
United Nations, the IMF and the WB. With respect to the United Nations, five great powers
have a veto action taken by the Security Council16, or the IMF and the WB operate on
weighted voting power according to cash contributions and committed reserves made by each
member17. Meanwhile the GATT 1994 provides each contracting party with one vote and no
nation or class of nation is given superior voting power. Therefore, in theory, consensusbased decision-making provides equality because any single Member can block any
decision.18 Only one single Member opposing decision is sufficient for blocking a
decision. Hence, consensus also operates as a way to avoid dealing with the respective
weights of different Members’ votes.19 However, it is wrong to assume that any Member is
equally able to sustain a veto.20 This equality between states is only formal, in practice, it is
different. If a Member, especially developing Members, is alone in opposing a decision, it
can find itself in quite isolation and exposed to quite some pressure, big Members (developed
countries) can sustain for an extended period. In other words, consensus by decision-making
in the WTO is mostly affected by economic powers. Goal of consensus has often been used
by some developed countries to practice small-group consultations that exclude many
developing countries and further exercise bilateral pressures on. Therefore, developing
countries often keep silent instead of opposing; in this case, it is referred to as “passive
consensus”. In contrast, “active consensus” transforms the decision making process into a

14

T. Cottier and T. Satoko, The Balance of Power in WTO Decision-Making: Towards Weighted Voting in
Legislative Response, Aussen wirtschaft publisher, 2003

15
Peter Norgaard Pederson, The WTO Decision-Making Process and Internal Transparency, World Trade
Review 103, 2006.
16
UN charter
17
Articles of Agreement of the IMF, July 22, 1994.
18
Bryan Christopher Mercurio, The WTO and Its Institutional Impediments, Melbourne Journal of
International Law, 2007, 13.
19
John H. Jackson, Sovereignty-Modern: A New Approach to an Outdated Concept, 97 American Journal
International Law 7.
20
T. Cottier and T. Satoko, The Balance of Power in WTO Decision-Making: Towards Weighted Voting in
Legislative Response, Aussen wirtschaft publisher, 2003

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negotiation process that aims at reaching a bargain made of mutual concession which often a
crossing character as consequence of the single undertaking principle.21
In addition, the process of consensus building takes places outside formal meeting of WTO
organs such as “informal consultations” in various forms. One of the well-known models is
“Green Room Meetings” which allow countries to increase their bargaining power and get
specific items onto the Agenda22. The uses of “Green Room” process and coalition informal
groups according to common interests were key feature in the mechanics negotiation in the
GATT that has been carried over to WTO. The informal process raises the question related to
the lack of transparency and exclusivity in the negotiating process.

Moreover, the process of consensus decision-making process has other problems, which
cause disadvantages for developing countries. Consensus-based decision-making not only
deprives developing countries of making full use of the equal status they shared with their
counterparts as a result of the Agreement; in fact, at time, it may be found to actively work to
detriment of developing countries.23 First, consensus-based decision making simply means
that no decision is formally objected to by any member present at the meeting. However, the
key assumption here is presence in the meeting. The consensus-decision making procedure
“ascribes consider important to having permanent presence or perhaps more accurately, an
active knowledge presence”.24 However, developing countries fail to take part in the WTO
decision-making process because they are lack of delegations to attend the meetings of WTO.
The difference in representation between the developed and developing countries works to
greatly disadvantage the latter.
2.2

Practices of decision-making by consensus in the WTO

2.2.1 “Green room” meeting: Purposes and operating mechanism
The original purpose of the Green Room process is to enhance efficiency and effectiveness of
negotiation by limiting the numbers of negotiators to those key and active players who could
help to move the negotiating process. Because with a wide range of members (153 countries),
it is impossible to conduct effective negotiation in an open-ended plenary section involving

21

Footer, An institutional and Normative Analysis of the WTO, Martinus Nijjhoff Publishers, 2005, 14
Andreas R. Ziegler and Yves Bonzon, How to reform WTO decision -making? An Analysis of the Current
Functioning of the Organization from the Perspectives of Efficiency and Legitimacy, 2007, 15.
23
Amrita Narlikar, WTO decision-making and developing countries, Trade-Related Agenda, Development and
Equity, South Centre Working Paper No 11, 2001, 20.

24
Blackhurst and others, Improving African Participation in the WTO, Paper commissioned by the World Bank
for a Conference at the WTO, 1999, 6.
22

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the total membership.25 The Green-Room process got it name because the room (next to the
Director General’s office) where the meeting took place had green walls. Although the room
is now no longer green, the name remains popular usage. The Green Room process was
managed by the GATT Director General who determined who would be invited and the list
of invitees was confidential.26 Most of information was not public, causing internal
transparency in decision-making process. After the Seattle Ministerial, some attempts have
been made to address problems of internal transparency of the decision making process. First,
list of invitees is informed. Members are normally invited based on their active participation,
intellectual contribution and their strong interest. While the Chairman selects the potential
invitees, members which are not included in the list but believe that they have strong interest
in the discussion can also participate. In addition, minutes of at least some of the informal
meetings are circulated among whole membership. Usually, the most powerful countries
including United Stated, European Community, Canada, Japan, Australia, New Zealand, etc
participate. Other countries will be invited on issue-in-issue basic. Green Room consultations
take place both at the official’s level in the Geneva process and at the Ministerial Meetings.
The Green Room process had worked well during Uruguay Round; however, the presence
members in the WTO, with more active participants representing more diverse interests and
objectives has complicated the WTO decision making process.
2.2.2

Other informal consultations

As mentioned above, on paper, consensus appears to be a democratic and transparent form of
decision-making, in practice it opens the door for non-transparency and informal procedures.
Besides famous informal consultation meeting, namely Green Room, other kinds of informal
consultation in the form of corridor bullying, threats and enticements happen frequently.
Obviously it provides considerable flexibility, but mainly for those who are in a position turn
the bargaining or negotiations in their favour which usually means a more economically
powerful country. In addition, consensus in the WTO is a passive form of decision making
whereby silence is taken to mean agreement. Furthermore, it does not require that all
Members should be present. This alone excludes 20 or so non-resident developing countries
from being active decision makers in the WTO. Therefore lack of presence is no excuse for
not accepting a decision. Also, there is no scope for a Member to enter the decision making
25

Margaret Liang, Evolution of the WTO decision process, Singapore Year Book of International Law
contributors, 2005, 5.
26
Peter Sutherland, The World Trade Organization at Ten Years, 4 World Trade Review 341, 2005, 353.

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process in the later stages. Accordingly, consensus in the WTO plays on the asymmetrical
relationship between developed and developing countries27.
Due to the above characteristics, the WTO is essentially run along informal practices, such as
informal meetings and consultations, together with “corridor diplomacy” in the form of
enticements and threats which the previous speaker outlined. This poses as a serious problem
for developing countries who are vulnerable to the asymmetrical relationship they have with
more powerful countries28.

2.3

Disadvantages of consensus-based decision-making process in the WTO

2.3.1 General disadvantages
2.3.1.1 No formal rules of procedures
The problem with decision-making in the WTO is that there are no formal rules of
procedures. For example, no clear rules for selection of Chairpersons - which is done on a
regular basis. Therefore Members are constantly faced with a mode of operation that is based
on uncertainty and unpredictability, with the rules changing to fit the circumstances at the
time.
2.3.1.2 Problems with records of meetings and non-transparency
Some of the most important meetings take place in informal mode which are not recorded.
This is problematic since it means that decisions can be made in them or texts emerge from
them with no paper trail at all. Therefore there can be a major discrepancy between the most
recent formal meeting and the next formal meeting which takes place after the informal
meeting where decisions have been made. However, for delegations who are unable to attend
these meetings, they will not be able to follow the evolution of discussions, nor question
them, having to accept things as a fait au compli. It means that they accept things as they has
already done and cannot change.
2.3.2 Disadvantages for developing countries
2.3.2.1 The practice of informal consultations excludes developing
countries from the consensus decision-making process
27

P. van den Bossche, Radical Overhaul or Pragmatic Change? The Need and Scope for Reform of DecisionMaking in the World Trade Organization, 2006, 12.
28
WTO NGO Symposium, Internal Transparency and Decision-making processes at the WTO: Critical Issues
and Recommendations, 2002, 25

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The goal of consensus has often been used by some developed countries to practice smallgroup consultations that exclude many developing countries and further exercise bilateral
pressures on them outside the WTO forum in the name of reaching the multilateral consensus
in WTO meetings. Many developing country delegations claimed that consensus means little
more than steamrolling of smaller powers by the dominant interests at the WTO.29 Therefore,
developing countries are demanding to be heard because they are being left out of the WTO
decision-making. According to point of views of developing countries, many problems exist
in Green Room process. First, many developing countries have not even reached the point of
interest identification to use process of self-selection and claim the right to attendance.
Clearer notification and possibility of self-selection enhance transparency, but to ensure that
developing countries are able to make use of these improvements, the problems of meetings
overlapping, limited representation and limited capabilities must also be addressed.30
In addition, the lack of rules and the informality of the process, basically means that it is a
process of consultation and discussion that takes place behind closed doors. In that process, it
means that those with the most clout will carry the most weight. There are indeed, few
countries that would challenge a decision that has been put forward as a done deal31.
2.3.2.2 Open discussions prevent developing countries from objecting
publicly
The problem of the process of consensus decision making is that it takes place through open
discussion. If a country wants to reject a proposal, it must do so openly and clearly in front of
other members present. Many developing countries point out that they often fear the
consequences of express their objection publicly and hence choose the alternative option of
remaining silent.32 According to many delegations, often these pressures are used even before
the negotiation to ensure that objecting countries exercise restraint. Because the absence of
objection is considered as consensus, developing countries end up in to decisions that they
have actually problems with. Therefore, it is doubtful if the system would be classified as a
democracy because the countries are too afraid to express their dissidence. As mentioned

29

WTO, Internal Transparency and the Effective Participation of all Members, Main Points raised by
Delegations, 2000.
30
Amrita Narlikar, WTO decision-making and developing countries, Trade-Related Agenda, Development and
Equity, South Centre Working Paper No 11, 2001, 25.
31
WTO NGO Symposium, Internal Transparency and Decision-making processes at the WTO:Critical Issues
and Recommendations, 2002, 18.
32
Amrita Narlikar, WTO decision-making and developing countries, Trade-Related Agenda, Development and
Equity, South Centre Working Paper No 11, 2001, 30

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above, there are two kinds of consensus, active consensus and passive consensus. It is useful
to draw the distinction between them. Active consensus is when members are able to
contribute to a genuine consultations and bargaining process by expressing their support,
opposing and doubts regarding various aspects of the negotiation, and consensus emerges
from such a discussion; meanwhile, passive emerges simply because members remain silent.
The sustainability of a passive consensus is also debatable. Even if an agreement is adopted
on paper because no countries officially objects, the actual implementation of the agreement
will be difficult if the members themselves have some fundamental objection with it, they
find the agreements have problems.33
2.3.2.3 The

overloaded

agenda

and

too

many

meetings

held

simultaneously have put resource deficient developing countries at
a great disadvantage.
The third disadvantage for developing countries is that they are seriously lack of delegation.
One study has pointed out that while 65 developing countries maintain WTO missions in
Geneva, 26 continue to be represented by missions or embassies elsewhere in Europe, and 7
more list as their representative people located in their own capitals. Based on the year 2000,
the study finds that 24 countries have no permanent presence in Geneva. These countries
cannot object to the so-called consensus that various bodies of the WTO arrive at in their
everyday workings.34 Even among the countries that enjoy diplomatic representation in
Geneva, the size of their delegations is small. The average size of the developed country
delegation is 7.38 delegates per country. In contrast, the average size of the developing
country delegation is 3.51. Even this average masks significant differences among the actual
sizes of developing country delegations, i.e. 1 for countries like Bangladesh to 6 for India.
This can be a major problem in an international organization like the WTO where there are
about 1200 events throughout the year, often resulting in overlaps of meetings. Many
developing countries find it difficult to attend the meetings of the WTO, especially if they
must also cover all the other international organizations in Geneva with the same small

delegation. The difference in representation between the developed and developing countries
works to disadvantage the latter.

33

Amrita Narlikar, WTO decision-making and developing countries, Trade-Related Agenda, Development and
Equity, South Centre Working Paper No 11, 2001, 7
34
Blackhurst and others, Improving African Participation in the WTO, Working Paper commissioned by the
World Bank for a Conference at the WTO, 1999, 9.

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2.3.2.4 The inadequate assistance from Secretariat causes disadvantage
for developing countries
The other disadvantage for the developing countries is that the Secretariat does not provide
them with adequate assistance. At least some of the problems just described could be less
harmful if members received adequate assistance from the WTO Secretariat to allow them the
knowledgeable presence that consensus decision-making assumes. Knowledge and research
might not completely overcome the problems of power political bilateral pressures that
threaten developing countries from exercising their voice in the consensus decision-making.
But they can prove to be a great strength by providing even weak countries a platform from
which they can raise objections and alternative proposals. However, the member-driven
nature of the WTO places the obligation of preparation and research for effective and active
participation in the consensus-based decision-making procedures on the members themselves.
Many developing countries find that they are unable to fulfill this responsibility and thereby
find their participation in the WTO inhibited.
IV.

Recommendations and WTO reform

In response to the problems analyzed above, in the recent years, especially immediately after
the Seatle Ministerial in 1999, there has been a rise in the reform proposals. These proposals
range from ‘fine-tuning’ to radical restructuring of WTO decision-making procedures,
address different sets of interests.35 This section examines these reform proposals.
1.

Reforming consensus system

The consensus system should be applied in a manner that fully respects the views of
developing-country members.36 However, it is first interesting to know that developing
countries are willing to retain the consensus principles despite the aforementioned
disadvantages conferred upon them in the previous section. This acceptance is based more on
the practical consideration that members who find themselves in a minority position would
never accept the deep and legally binding obligations of the WTO.37 The shift to majority
voting is not impossible. The whole WTO will be threatened if members are forced to make
decisions by a ‘tyranny of the majority’. Furthermore, developing countries know from their
35

Amrita Narlikar, WTO decision-making and developing countries, Trade-Related Agenda, Development and
Equity, South Centre Working Paper No 11, 28
36
Reform the WTO's decision-making processes, />37
Id.

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own experience that their opposition to a position supported by the developed ones poses a
grave threat to taking their demands to an alternative forum where developing countries plays
less or no role, or even effective withdrawal from the GATT/WTO. For instance, the US in
the Uruguay Round brandished the alternative of regional arrangements to which the
Americans would resort if services were not included. Clearly, formalizing blocking by
allowing majority voting would heighten the frequency and possible implementation of such
threats. Consensus, however, at least gives chances to the negotiating processes where giveand-take emerges.
2.

Transforming the ‘passive consensus’ into an ‘active’ one.

As it is not practical to totally utilize the method of majority voting, the modifications of
consensus principle need to be directed towards transforming the ‘passive consensus’ into an
‘active’ one. Active consensus (or consensus-building) transforms the decision-making
process into a negotiating process that aims at reaching a bargain made of mutual
concessions, which are often of a “crossing” character as a consequence of the single
undertaking principle.38 This leads to the re-definition of consensus such that it requires an
active endorsement of the proposal under discussion, rather than simply the lack of objection.
This active endorsement requires the active support of members that are present.
Consequently, all members need to be informed of the timing and agenda of meetings in
which consent is assessed. In case of members with minimal or no presence in Geneva, it
should be considered whether they can express their concern about the issue under discussion
via mail or other mechanisms.
3.

Evolving a hierarchy of issues with different methods of decision-making
applying to each level

Another possible modification is to evolve a hierarchy of issues with different methods of

decision-making applying to each level. Issues involving the actual exchange of concessions,
for instance, would continue to be decided on the basis of consensus. More administrative or
house-keeping matters could be decided through procedures of voting. Similarly, specific
rules of voting could be used in the selection of chairs to reduce some of the ambiguities that
surround the process today. However, this would not be a fundamental reform in the WTO as

38

Andreas R. Ziegler and Yves Bonzon, How to reform WTO decision -making? An Analysis of the Current
Functioning of the Organization from the Perspectives of Efficiency and Legitimacy, 2007, 14

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WTO provisions already provide cases in which voting is possible or mandatory. Despite
these provisions, the actual practice of voting in the WTO is rare.
4.

Other recommendations

4.1 Taking the model of the IFIs and the UNSC
First, the proposals to reform the WTO structures take the model of the IFIs and the UN
Security Council. For example, one proposed a new committee with limited membership,
comparable to the UN Security Council in regional representation and rotation of nonpermanent members. The EU has proposed a body along the lines of the Consultative Group
of Eighteen. Mexico has suggested a transformation of the Green Room into a ‘Glass Room’,
in which 25% of the WTO’s members (34 at the time of the proposal) would participate. A
similar proposal has been made by Jeffrey Schott and Jayashree Watal of an informal steering
committee of 20 members based on absolute value of foreign trade and geographic
representation ensuring representation with at least two members from each region. All these

proposals stress that the advisory/ executive/ consultative/ steering board or committee would
have only consensus-building and no decision-making powers.39
This creation of a WTO Consultative Body takes the experience from the IMF. This
experience could be valuable in two ways: First, it illustrates how the body could function to
introduce new dynamics to trade negotiations in order to break deadlocks40. Second, the
IMFC’s experience could guide WTO Members in determining the profile of those
individuals appointed to the body.
Concerning the first one, the ability of the IMF Executive Board to go back to the IMFC to
assess progress and agree on new instructions for the former has introduced new dynamism to
decision-making processes within the Fund, and it has been a valuable process in overcoming
deadlock. A similar interaction could take place between the WTO Ministerial Conference
and a WTO consultative body concerning the negotiation of new trade rounds, but also
between the consultative body and the Councils of Trade in Goods and Services, and the

39

Krajewski, Verfassungsperspektiven und Legitimation des Rechts der Welthandelsorganization (WTO)
(2000), Werksman (2000), Schott and Watal (2000), proposals by various delegations and summary proceedings
of informal meetings of the General Council.
40
Alberto Alvarez-Jiménez, Improvements to the WTO decision-making Process: Lessons from the
International Monetary Fund and the World Bank,

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Council for TRIPS.41 In effect, WTO councils or committees could also advance issues for
further negotiations before the consultative body regarding topics for which consensus is
elusive within the councils or committees. However, it is worth recalling that the WTO has

already had one experience with a similar consultative body in its predecessor, the GATT, i.e.
through the Consultative Group of Eighteen, cg-18. It was suspended in 1989, due to some
reasons that one scholar has noted: “Very soon after its establishment, the member countries
found that the deliberations in the Group only resulted in repetition of the points made and
the issues raised in other GATT bodies; the forum was often used by developed country
members to bring in new issues for rule making and to reiterate their well known positions.
The expectations that the discussions in the Group would lead to a dialogue and better
understanding of view points and positions of different countries were far from being
realized. The result was that there was reluctance on the part of senior officials from capitals
to come to these meetings and the meetings came to be attended by officials from Geneva
based delegations”.42
Moreover, there are four more reasons for the uncertainty of the establishment of an advisory
executive boy. First, the nature of WTO legislation, i.e. its binding character and its intrusive
potential, means that few countries would be willing to accept recommendations of a
consensus of an advisory inter-state body, especially if the issue under discussion is one in
which substantial differences exist. Second, a permanent/ semi-permanent body may have
worked partially when the mandate of the GATT was restricted to goods, but today interests
of countries differ significantly across issue-areas that are covered by the WTO. Executive
bodies, if they are to meet the participatory requirements of all or most WTO members,
would need to be re-constituted according to the councils and committees, and further with
negotiations in each sub-sector as interests of countries are realigned. Third, even members
that gain a place in such a board might not have the resources or the will to negotiate in all
the different areas that a permanent body would demand. As such, it is doubtful if they would
be sufficiently representative of the region/ sub-group. Lastly, as one group of developing
countries has noted, “Creation of an advisory board would formalize the exclusion of a large

41

WTO Ministerial Conference, ‘Implementation-Related Issues and Concerns’, WT/MIN (01)/17 (20
November 2001). See in this regard, Pieter-Jan Kuijper, ‘WTO Institutional Aspects’, in Daniel Bethlemen,

Donald McRae, Rodney Neufeld, and Isabella Van Damme (eds), The Oxford Handbook of International Trade
Law, Oxford University Press, 2009), 79
42
Vinod Rege, WTO Procedures for Decision Making: Experience of Their Operation and Suggestions for
Improvement, Background Paper, Commonwealth Secretariat, 21 January 2000

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number of Members from process of consultations.”43 Another developing country member
notes, “The proposals for establishment of advisory board or any other exclusionary group, or
use of regional groupings would result in rigidity and inefficiency in decision-making
processes.”44
Second, for developing countries, they propose to enhance their own participation by
emphasizing greater transparency of proposals. However, according to the Like-MindedGroup, this increased transparency would increase the number of meetings the already overtaxed delegations will have to attend. To deal with these problems, developing countries
suggest two sets of proposals. First, a less ambitious work program would do a great deal
towards helping develop a fairer decision-making system.45 Second, developing countries
stressed the importance of addressing implementation issues before the new round. This
proposal is called capacity-building, which becomes crucial to deal with the overload of
meetings and the possible increase if some of the proposals for greater transparency are met.
Third, the reform in the Ministerial Conferences should be taken into account. As the
Sutherland Report states, “new levels of political engagement and high-level consultative
machinery that would serve to give direction and drive to negotiation processes”. 46 To this
end, the Sutherland Report suggests that the Ministerial Conference meet annually (instead of
bi-annually) and that senior trade-policy makers in state capitals should meet in Geneva more
frequently, such as every three to six months in the context of General Council meetings.47
Some proposals emphasize the substantial preparatory work needs to be completed before a
ministerial. More efforts need to be made to resolve most of the contentious issues in Geneva
before the Ministerial. Many proposals suggest that at least a work program should be drafted

before the ministerial so that no surprises are sprung up at the Ministerial. Better planning, in
terms of selecting Chairs, ensuring transparency, avoiding overlaps, is essential to avoid a
recurrence of Seattle. There is also the option of having the Vice-Chairs assist the Chair (host
country) in chairing and other substantive work. The alternative would be to have the

43

Pakistan on behalf of Cuba, Egypt, Uganda and Zimbabwe, General Council Informal Meeting 28 March
2000, Job (00)/2331, 14 April 2000
44
Uruguay, id.
45
Amrita Narlikar, WTO decision-making and developing countries, Trade-Related Agenda, Development and
Equity, South Centre Working Paper No 11, 2001, 32
46
Sutherland Report, The future of the WTO: Addressing institutional challenges In the New Millennium, 2005,
69 />47
Id., 69-70.

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ministerials scheduled only in developing countries so that they can acquire a sense of greater
ownership of WTO processes.
4.2 Departing from the single undertaking principle in order to enhance
efficiency
Some authors have suggested departing from the single undertaking principle in order to
enhance efficiency48 while others have also argued that the way powers are distributed within
the hierarchical structure of the organization bodies can have an impact on efficiency.49

4.3 Reinforcing the involvement of high-ranking political leaders to give greater
impulse to the process
Another proposal is to reinforce the involvement of high-ranking political leaders to give
greater impulse to the process.50 To some, greater involvement of political leaders would also
enhance the democratic legitimacy of decision-making.51 Regarding democratic legitimacy,
proposals have been made to involve to a greater extent national parliaments and non-state
actors at the WTO level.52 We argue that the participation of non-state actors should be
regulated and that mechanisms should be established to increase its transparency.53
Several panelists and many participants in the discussion referred to the recommendation in
the Sutherland Report to require a Member considering blocking a measure which has broad
support among other Members, to declare that the matter at hand is of vital national interest
to it.54 In other words, Members should justify the use of their ‘veto power’. Such a

48

Howser, How to Begin to Think About the ‘Democratic Deficit’ at the WTO, in : Griller Stefan (ed.),
International Governance and Non-Economic Concerns, Springer Verlag – Wien publisher, 2003
49
SCHERMERS H. G./ BLOKKER N. M. , International Institutional Law, Martinus Nijhoff Publishers, 2003,
472
50
Sutherland Report, (2005), The future of the WTO: Addressing institutional challenges I the New Millennium,
chapter 8.
51
The proposal of candidate for French presidency Sarkozy, in “Nicolas Sarkozy veut changer les règles de
l'OMC”, in: Le Monde, 9.03.2007.
52
On the involvement of national parliaments, see the series of articles in: PETERSMANN E.-U. (ed.),
Reforming the World Trading System: Legitimacy, Efficiency, and Global Governance. On the participation of
non-state actors: CHARNOWITZ S. (2000), “Opening the WTO to non-governmental interests”, 24 Fordham

International Law Journal 173, and ESTY D. C. (1998), “Non-Governmental Organizations at the World Trade
Organization: Cooperation, Competition, or Exclusion”, Journal of International Economic Law 1, 123-147.
53
On rules for the participation of non-state actors in the WTO, issues of external transparency and derestriction of official WTO documents, P. van den Bossche and Iveta Alexovi ová, Effective Global Economic
Governance by the World Trade Organization, Journal of International Economic Law, Oxford University Press
2005
54
Sutherland Report (2005), The future of the WTO: Addressing institutional challenges I the New Millennium,
, 64

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‘consensus blocking declaration’ would need to be given in writing and would have to
include reasons. Some participants supported this proposal, stating that such a mechanism
would increase the political ‘cost’ of blocking consensus and discipline the substance of the
objection by forcing the opposing Member to state substantive reasons. Other participants
feared that this suggestion is politically not acceptable to most WTO Members.4.4 The views
of every member must be respected in a decision involving consensus and explicit consensus,
especially in the case of important issues where it has been specified by Members that a
consensus or an explicit consensus is required for a decision to be adopted, the views of each
Member must be recognized and respected, including the right not to agree to a proposed
decision.
4.4 Adopting realistic agenda and work schedule
The WTO should adopt a realistic agenda and work schedule that is fair especially for smaller
delegations. The WTO should not take on a too heavy workload for small developing
countries to handle. Negotiations should not be scheduled for too rapid a pace. There should
not be more than two meetings going on at the same time, to enable small delegations to
participate.55

4.5 Developing countries should not be subjected to economic and political
pressure relating to negotiations
Developing countries should not be subjected to economic and political pressure relating to
negotiations. They should not be subjected to pressure by developed ones which can amount
to bullying and blackmail to side with their positions. Nor should they be help dependent on
trade preferences, bilateral aid, military aid from international financial institutions, as points
of leverage that get them to agree.
4.6 Decisions should not be made until all members are technically ready
Decisions should not be made until all members are technically ready. More specifically,
decisions and agreements should not be made until and unless all Members, especially the
developing countries, are able to understand the technicalities of the issues and the
implications for their economies and societies.

55

Memorandum on the need to improve internal transparency and participation in the WTO, 2003

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CONCLUSION
Decision-making by consensus dominates the decision-making process in the WTO system. It
is likely that consensus-based decision remains in force in the future since it has had longlasting period of existence. Inevitably, they do have many advantages theoretically. They also
expose to some risks and disadvantages, however. In order for the WTO system to effectively
function, some reforms should be needed. An international organization like the WTO is seen
as little more than a forum, which provides an opportunity to all member-states to interact on
a multilateral basis. Members need to review the relationship between substance and
institution, and consider reform options. Appropriate structures are a means to successfully
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achieve the goals of the organization, stipulated in the preambles of the various agreements.
Reform will at least go some way towards improving the participation of developing
countries in both the process and substance of decision-making. They are of significant
importance for overall sustainability as well. Currently, the multilateral trading system
regulated by the WTO is in danger of losing reliability and confidence among its membership
unless reasonable proposals by developing Members to participate in the WTO decisionmaking are taken seriously. It would of course not be easy to make such an entity acceptable
to all Members by establishing a balance between flexibility and efficiency. Nevertheless, it
would seem specifically valuable if a system can be found that ensures sufficient
representation of the various regions and interests in a system of rotation that gives even
small Members a chance to be part of that group at some point in time. It may also be worth
another effort if the decision-making mechanism could be reinforced so as to reduce the gap
in effectiveness between the WTO’s political bodies and its dispute settlement mechanism.

LIST OF REFERENCES
I. CONVENTIONS AND TREATIES
1. Marrakesh Agreement Establishing the World Trade Organization (opened for
signature 15 April 1994, entered into force 1 January 1995) 1867 UNTS 3, Annex 1A
(General Agreement on Tariffs and Trade) 1867 UNTS 190.
II. BOOKS

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