TWN Info Service on WTO and Trade Issues (Feb12/10)
27 February 2012
Third World Network

WTO General Council elects its Chair, approves two waivers
Published in SUNS #7310 dated 16 February 2012

Geneva, 15 Feb (Kanaga Raja) -- The first General Council meeting of the year and the first one since the eighth WTO ministerial conference (MC8) last December, amongst others, elected its new chair for the year as well as approved two waiver requests, one by Cuba and the other by the European Union.

At its meeting on 14 February, the General Council elected Ambassador Elin Johansen of Norway as its Chair for this year, according to trade officials.

Ambassador Johansen, who was the Chair of the Dispute Settlement Body (DSB) last year, replaces Ambassador Yonov Frederick Agah of Nigeria.

The first General Council meeting of the year usually also elects its chairpersons for the various other WTO bodies, but this somewhat routine process however suffered an uncharacteristic hiccup this year with problems emerging with respect to the rest of the slate of chairs.

According to trade officials, and some media reports, the problem was with the Chair of the DSB, with Singapore proposed for that position, but with no consensus on this.

Trade officials said that this was not the only problem, and that some delegations at an earlier informal heads of delegation meeting on Monday had expressed concerns about the process (for the appointment of officers to WTO bodies). These systemic concerns were about balance and process, trade officials added.

According to trade officials, at the level of the General Council, the chairmanship is rotated between developed and developing countries, and among the developing countries themselves, the chairmanship rotates between the Asian, African and Latin American regions.

In accordance with past WTO practice, the Chair of the DSB for a particular year automatically takes over the chairmanship of the General Council the following year.

Some trade observers have noted that next year, the WTO will be choosing a new Director-General, when the present WTO head completes his second term, and the Chair of the General Council in that year could play an important role in that process. Some regard Singapore as being more a developed than a developing country.

According to trade officials, the new General Council Chair Ambassador Johansen will be conducting consultations next week on the slate of chairs of the various WTO bodies, and that the present chairs of these bodies will remain as they are for the moment. Another General Council meeting will likely be called once consensus is reached on this slate, trade officials noted.

In other actions, the General Council approved a request by Cuba for an extension of five years of its waiver under GATT Article XV: 6. The period is from 1 January 2012 to 31 December 2016.

The General Council also approved a request by the European Union regarding a waiver on trade preferences for some 75 products from Pakistan. The duration is from 1 January 2012 to 31 December 2013.

(Both waiver requests had been approved earlier by the Goods Council at its meeting on 1 February 2012, and the Council had agreed to forward the requests to the General Council for adoption.)

Under another agenda item on improving the guidelines for granting observer status to intergovernmental organisations in the WTO (a communication from the Arab Group), according to trade officials, the General Council Chair said that consultations on this matter will continue. The Arab Group said it would participate in the consultations, added trade officials.

The General Council also heard a report from Director-General Pascal Lamy, in his capacity as Chair of the Trade Negotiations Committee (TNC), in which he suggested that the most realistic and practical way forward for the Doha talks in the current political environment is "in small steps, gradually moving forward the parts of the Doha Round which are mature, and re-thinking those where greater differences remain."

In a rather sombre assessment of the state of the Doha negotiations so far, the TNC Chair had said that "The world economic outlook remains rather grim and domestic crisis-related issues are absorbing leaders' political energy, with not much left for international cooperation," adding that in these circumstances, "we should not expect any major breakthrough any time soon, whether on trade, on climate change or on macroeconomic coordination." (See SUNS #7309 dated 15 February 2012.)

A number of delegations spoke following the report by the TNC Chair.

According to trade officials, while everyone said that they are open to any and all discussion, the issue that is most clearly divisive at the moment is the question of approaches that are not strictly multilateral in nature. A number of delegations said that they had concerns over the plurilateral discussions on services (among some 16 members outside the WTO).

Speaking to journalists on the Doha negotiations generally, Ambassador Michael Punke of the United States said: "I think the important thing is to assess where productive work can be done. And the way to do that is not to have abstract debates but rather to sort of wade into some of these issues and where we get a little bit of traction we follow up with more work, and that's the general approach that we are going to take."

According to trade officials, speaking following the TNC Chair's report, Pakistan said that there is need to keep the focus on development, especially on the Least Developed Countries (LDCs). The difficulties in the world economy mean that we have to ask ourselves important questions. When is the right time to push forward? Do we wait for a better time, economically? Can the problems of the world economy be addressed without a multilateral involvement? Inaction will damage everyone and protectionism must be resisted. The is also need for a bottom-up approach that is transparent and inclusive. This will be an important year as what is done this year will help set the agenda for MC9 (ninth ministerial conference, due in 2013), it added.

Mexico said that there is need to build confidence and avoid the kind of confrontations that members have had in the past years. There is need to focus on themes and approaches that are potentially viable, and some of the issues that are more feasible are the LDC-related issues, the Dispute Settlement Understanding (DSU) reform, and trade facilitation.

Indonesia said that the current impasse cannot be allowed to last long. A long delay will jeopardise the interest of all members. MC8 committed members to moving forward, and by consensus it has been agreed that issues of importance to LDCs should be addressed. It is important to have a transparent and inclusive process. Any kind of work programme that emerges should cover primarily areas of interest to developing countries, including agriculture issues which should be a priority.

Australia said that it remains committed to looking for ways to moving forward based on the outcomes from MC8. It said that progress in the LDC area is a priority. There is a deadline of mid-year for agreeing on accession guidelines for LDCs and this would be a real test of members' commitment. In addition to these, areas of agreement could emerge in trade facilitation and development issues. Services are very important to it as well. There is need for vigilance against protectionism.

On behalf of the Cairns Group of agricultural exporters, it said that the credibility of the negotiations hinges on agriculture, which right now faces higher tariffs and more non-tariff barriers than manufactured goods. This is unacceptable at a time of food (in)security. Fresh thinking is needed.

Brazil said that early outcomes are an option that it can work with. It agreed that members should go in small steps. Gradualism is the right way forward, without deadlines or artificial scheduling. Realism is the key. There is need to realise that members cannot be working with the same models that had been used before. We have to be realistic with what can be done. Pragmatism is the key and there are no red lights for Brazil, it added.

It is not dogmatic but there are some key principles. It believes that multilateralism is the way to go. "We cannot pick only the cherries we like and leave others on the tree. We all have issues of importance to us."

One issue that is being talked about is trade facilitation and Brazil said it is ready to work with this. But trade facilitation is not self-balancing. Any contributions in this area must be asymmetric. Maybe progress can be made if progress is made in other areas of the negotiations as well. Development is the cause of the round. There is a difference as well between negotiating and hostage-taking and hostage-taking is designed clearly to create an impasse and Brazil will not negotiate like that.

On behalf of the G20, Brazil said that it noted with concern that progress in trade reform in agriculture is at an impasse. There is need for reform in accordance with the development dimension, and this is very important to developing countries as agriculture is the core of the Doha Round. If members are to reach any kind of provisional deals, some ahead of others, agriculture must be at the centre of this, as well as LDC issues.

Argentina supported the G20 and Cairns Group statements.

Lesotho (on behalf of the African Group) said that for Africa, 2011 had some important achievements, that of MC8, as well as the Aid for Trade Global Review. This year is going to be one in which members are dedicated to finding multilaterally agreed solutions to operationalise the MC8 outcome for the Doha Development Agenda (DDA), and specifically for the LDC issues.

It said that MC8 reaffirmed the Doha mandate, which is development, and members should take steps to deal with the LDC issues, particularly on accession and the services waiver, as soon as possible. There needs to be respect for the existing mandate, and the need to build a fair and balanced outcome that prioritises development. Any approach must be in keeping with MFN (Most Favoured Nation status) and must avoid at all costs an exclusive approach that further segregates Africa from others and hinders its integration into the multilateral trading system. Any early harvest must prioritise the development component. To achieve a balanced early harvest, the African Group will require technical assistance and capacity-building as well as special and differential treatment (S&D). There is also need for a bottom-up approach that is transparent and inclusive.

Bangladesh (on behalf of the LDCs) said that no one wants the Doha Round to fail and that it came as a surprise to some LDCs to hear some people calling for fresh thinking and going back to the drawing board. MC8 reaffirmed the development dimension. Key for the LDCs in terms of going forward is that any early harvest must have an LDC component to it. It is important that the LDCs be involved in all elements of what is happening. There is also need to start making incremental but steady progress. It would expect that the LDC accession guidelines would be ready by June, and that it believes that it is important to preserve and maintain the primacy of the multilateral process. It continues to support the WTO as a vanguard against protectionism.

Canada said that it is important to be calm, cool and pragmatic. Trade issues are not going away and the only way members will be able to deal with these things in this context is to be pragmatic.

Turkey said that the WTO is not only about the Doha Round, and there is need to keep trying. We are clearly not going to get a breakthrough in the round this year, it said, adding that there is need to be incremental and modest but continue to work towards an outcome. There is also a need to focus more on the regular work of the WTO. The credibility of the WTO Doha Development Agenda negotiations will hinge on our ability to follow the MC8 roadmap.

Japan said that the LDC accession question, trade facilitation, non-tariff barriers and the DSU review are areas that could lead to progress. There is need to look at the causes of the stalemate and to avoid the kind of contentious debate that led members there. There is also need to fight against all forms of protectionism.

The European Union said that there is no political will at the moment to conclude a full Doha Round under the single-undertaking, but members must remain engaged and cannot ignore the negotiating arm of the WTO, which needs to be helped and supported. There is need for a balanced discussion on what members can achieve. LDC issues are at the forefront of those issues that can be possibly negotiated.

The EU said that there is need for early deliverables on MC8 decisions, particularly on the LDC issues. Trade facilitation is a win-win agreement. The LDC question is something that can be a benefit to the organisation as a whole. The EU is ready to look as well at the 28 Agreement-specific proposals that are part of the S&D negotiations. It also drew attention to non-tariff barriers. Only through pragmatism can early results be achieved. It is also open to MC8 calls for fresh approaches particularly in some of the areas that are of specific interest but such an approach should have the widest possible participation and be open to all members. Such an approach cannot supplement the multilateral system.

According to trade officials, Cuba spoke strongly against plurilateral approaches. It said that it could not support anything that might lead to the breakdown of the multilateral trading system. It supports the single undertaking.

China said that 2011 was a tough year for WTO members in not being able to conclude the Doha Round. MC8 demonstrated that it is possible to successfully conclude agreements. It agreed with the pragmatic approach. The first priority is to try to implement the seven decisions that came out of MC8. There is need to have the Chairs active and working and for a horizontal process with the TNC at some point. The LDC issues should be given the highest priority.

It supported all efforts to try and move forward, but the development dimension has to be addressed and not undermine members' collective efforts to bridge gaps. The multilateral process, which is transparent and inclusive, is its preference. Some ideas that are around like a services plurilateral is a cause for concern. It would not like to see any services negotiations supplant energy or work that would take place in the DDA or in the multilateral trading system.

Thailand said that members should intensify their efforts and make progress where possible. There is need to avoid linkages that are not constructive. LDC issues are of top priority.

Ecuador said that multilateral negotiations should be open to all members and solutions to multilateral problems can only be found through multilateral approaches.

Chile said that trade facilitation, LDC accession, non-tariff barriers and perhaps DSU are areas where progress can be made.

Barbados said that it was important to analyse very carefully the way forward. There is need for a more balanced global trading environment. One of the problems is that we do not do enough to convince the public in developed countries that a more equitable trading system vis-a-vis developing countries is in the interest of developed countries as well because as these countries develop and income levels rise, they become more attractive markets for products exported from the developed world.

Barbados highlighted trade facilitation, LDC accession and Aid for Trade as areas that are important.

According to trade officials, India said that while members do not have a possibility for a deal this year, they cannot be inactive. In the WTO there are different priorities for members and all have their offensive and defensive interests. Not being dogmatic is important but there is need for balance as well - a balance across issues and within particular issues themselves.

India said it is willing to explore all areas of negotiations and participate in all formats and groupings, but its commitment is to the multilateral trading system and it is unswerving. It cannot support anything that is a danger to the multilateral trading system or to the WTO's future. There are some approaches about which there is very little information but which prima facia seem exclusive in nature. The benefits would not be shared by all members. It sees preferential trade agreements as building blocks for strengthening the multilateral trading system, but we should not in any way damage irretrievably the multilateral trading system.

Peru wanted a step-by-step and bottom-up approach. There is need to look at the development dimension. It would like to have an agreement on an amendment to the TRIPS agreement so that it would be more harmonious with the Convention on Biodiversity.

The United States said that it largely agreed with the Director-General. At MC8, it was very important that we finally acknowledged that the Doha Round was at an impasse. It can be liberating if we follow through and explore different approaches. The test is not what we say but what we do. The easiest thing to do is to profess our love for the Doha Round but we need creativity and a willingness to engage, it said.

LDC accessions has the strong support of the US and it is committed to achieving a good outcome by the deadline. It understands the importance of the multilateral trading system and this is a system in which generations of Americans have sought to strengthen. But the US will work in multiple fora. They have existed for decades in the WTO. We should not pretend that they have suddenly emerged. Many of those professing concern today are the most active in working on trade agreements outside the WTO, the US added.

Switzerland said that Davos (an informal ministerial meeting end January) was an opportunity to verify the outcome of MC8 and there was a confirmation there of the MC8 guidelines. There are two methods we can use - we can either reflect and ponder or we can just get down and get started. It has a very big interest in the interests of the LDCs, and members need to focus on this.

Singapore said that there is need to move the agenda and the Doha Round in as many areas as members can. It supported the Director-General's approach. There is need to deliver first and foremost on the issue of LDC accession. There is also need to be pragmatic and not be dogmatic.

Chinese Taipei said that pragmatism is the key word and multilateralism should be central but we need to keep all avenues open.

Colombia said that MC8 has shown members the way forward and there is need to recall what ministers there asked members to do. +