TWN Info Service on WTO and Trade Issues (June12/05)
15 June 2012
Third World Network

Venue of MC9, work programme from MC8 discussed at WTO
Published in SUNS #7386 dated 11 June 2012

Geneva, 8 Jun (Kanaga Raja) -- An informal heads of delegation level meeting at the World Trade Organisation (WTO) discussed the offer made by Indonesia to host the ninth Ministerial Conference (MC9) in Bali in early December 2013, as well as the work currently being undertaken as a follow-up from the eighth Ministerial Conference (MC8) held in Geneva last December.

According to trade officials, two key issues were taken up at the informal General Council meeting on Thursday, namely, the offer made by Indonesia to host the next Ministerial Conference in Bali in early December next year, and to bring Members up to speed on what has been happening in the ongoing work (from MC8).

According to trade officials, there has been a series of issues on which Members have been working on - the question of the accession of the Least Developed Countries (LDCs) vis-a-vis building on the 2002 General Council decision to streamline the accession procedures of the LDCs.

The discussions have been taking place this week, with trade officials highlighting four issues of interest - benchmarks for trade in goods, benchmarks for trade in services, transparency and special and differential treatment (SDT).

The greatest amount of disparity in terms of the positions of Members pertains to the benchmarks for trade in goods, specifically, the percentage of LDC goods' tariff lines that would be bound in the WTO, said trade officials, noting that there has been a demand for flexibility from the LDCs, with many developing countries supporting them on this point.

Another issue that was discussed on Thursday was that of trade facilitation. The issues that are divisive in this area pertain to commitments by donor countries and by multilateral institutions to developing countries which would enable them to effectively implement any decisions taken in this area.

Trade officials said that the objective was to try and reach agreement by July on the LDC accession issue and on the date and venue of MC9.

Speaking at the informal meeting, General Council Chair Ambassador Elin Johansen of Norway said that the purpose of the meeting was to discuss two issues: First, the state of play in the consultations she had been undertaking on the offer by Indonesia to host MC9, with a view to taking a decision at the level of the General Council on its date and venue in the near future; and, second, the work currently taking place in the context of the follow-up to MC8.

On her consultations vis-a-vis Indonesia's offer, the Chair said that most delegations she had spoken to have welcomed the offer by Indonesia and have indicated their support and readiness to work together towards a successful Conference. Some Members have indicated that they need some time in order for capitals to provide a final response.

In light of this, she hoped that the General Council will be able to take a formal decision on this matter as soon as possible, at the latest in July, in order to allow time for the complex preparations that a Ministerial Conference entails.

On the second topic of work taking place as follow-up to MC8, the Chair recalled that Ministers at MC8 set out a broad range of work for Members in quite a large number of areas.

On the work outside of the Doha Round, the Chair took up the accession of the LDCs, which Ministers decided should come to the General Council in July.

She said that much work is currently underway, and is progressing well. The Chair of the LDC Sub-Committee reported that there appears to be conceptual consensus on three-and-a-half of the four pillars set out by Ministers, and hoped to conclude the work by the end of this month.

According to the General Council Chair, work is also on-going on the LDC services waiver, which will be reviewed by the General Council in December of this year.

Similarly, on the other five issues on which Ministers took stand-alone decisions at MC8 - namely, the work programme on small economies, E-commerce, TRIPS non-violation and situation complaints, the LDC transition period under the TRIPS Agreement and the Trade Policy Review Mechanism - work is taking place in the relevant bodies.

In all these areas, said the Chair, reports will be made to MC9, and "I think it is probably too early to tell whether we are on track with this work. I do know, however, that the Chairs of the respective bodies are seized of the issues and that they intend to ensure that Members are mindful of the need to advance them in due time."

In addition, the Chair noted, in their Elements for Political Guidance, Ministers also agreed on work in a number of areas under the three themes of "Importance of MTS (Multilateral Trading System) and the WTO", "Trade and Development" and the "DDA (Doha Development Agenda)".

Without going into details, the Chair said, the work set out under the first two themes includes: strengthening and improving the functioning of WTO regular bodies; strengthening the Dispute Settlement Understanding (DSU); focused work in the Committee on Trade and Development (CTD); small, vulnerable economies; cotton; and Aid for Trade.

On the focused work in the CTD, the Chair said that she can report that the Chair (of the CTD) is conducting informal consultations with a view to starting this work, which is aimed at operationalising the mandate of the CTD as a focal point for development work. Also in the CTD, the Chair reports a strong level of commitment in the area of Aid for Trade, on the basis of the workshop which took place last month, said Ambassador Johansen.

In Part II of the outcome document (of MC8), the Chairman of MC8 identified issues raised in the discussions where further work could be undertaken. Among the possible areas of work mentioned by the Chairman, a number of issues have been the focus of discussions in some bodies.

For example, in the CRTA (Committee on Regional Trade Agreements), the Chair has held consultations on the systemic implications of RTAs and is considering how these might be addressed by his Committee.

"The breadth of work ahead of us as we start looking towards MC9 in December next year is evident," said the General Council Chair, adding that work in already proceeding in a number of these areas.

The Chair also said that she had held informal consultations with a number of Members on the follow-up to MC8.

"The main messages I have heard in these consultations relate to the fundamental value that Members attach to the Multilateral Trading System (MTS); to the need for strong messages with respect to the development aspect in WTO's work; and to the various areas of priorities of individual Members with respect to the work ahead," she concluded.

Also speaking at the informal meeting, Director-General Pascal Lamy said that since the May meeting of the General Council, he had been consulting with Members on various occasions, including around the OECD Ministerial, during recent visits to Thailand and China, where he attended the LDC accessions roundtable and the Global Services Forum, and this week in Kazan, Russia, where he held a number of bilateral consultations on the margins of the APEC (Asia-Pacific Economic Co-operation) Trade Ministers' meetings.

"The central message I have heard is that, given the deterioration of the global economic and trade outlook, 2012 cannot be a wasted year and that it is important that progress is made across the entire spectrum of our activities," said Lamy.

Referring to the recent publication of the monitoring report on trade and investment measures taken in the crisis, Lamy said: "For the first time since the beginning of the crisis in 2008, this report is alarming. The implementation of new measures restricting or potentially restricting trade has remained unabated over the past seven months, which is aggravated by the slow pace of rollback of existing measures."

He added: "The accumulation of these trade restrictions is now a matter of serious concern. Trade coverage of the restrictive measures put in place since October 2008, excluding those that were terminated, is estimated to be almost 3% of world merchandise trade, and almost 4% of G-20 trade. The discrepancy between the commitments taken and the actions on the ground add to credibility concerns. This situation is adding to the downside risks to the global economy and what is now a volatile global context."

In such a situation, the Director-General said, "it is important that we collectively and urgently redouble our efforts to strengthen multilateral co-operation to find global solutions to the current economic difficulties and risks and avoid situations that would cause further trade and investment tensions. This will be part of the message that I will be sharing with Leaders at the upcoming G-20 Summit on 18 June."

"Another message which I will be conveying at the upcoming G-20 Summit is the importance of ensuring availability and affordability of trade finance. The Expert Group on Trade Finance as well as the Aid for Trade and Trade finance workshop which took place on 15 May stressed the importance of keeping multilateral development institutions engaged in trade finance, bearing in mind the development dimension of their programs."

Lamy stressed that the permanent existence of a market gap for poor countries requires long-term public involvement, without which crisis intervention would be meaningless. With respect to regulatory matters, there was consensus that the dialogue with the Basel Committee should be usefully pursued on elements of Basel III regulation. Finally, it would be useful to encourage data collection on trade finance by both public and private sector.

The Director-General also said that the LDC accession roundtable which took place in Beijing last week stressed the importance of completing LDC accession guidelines by July.

"I do believe such a move would bring greater confidence and trust in the ability of Members to address the specific needs of LDCs. It also saw the conclusion of the last outstanding bilateral deal for the accession of Laos to the WTO. Efforts need to redouble now to conclude remaining outstanding steps towards the accession of Yemen to the Organization."

On the DDA front, Lamy briefed on some areas where he said technical work has been on-going since the May meeting of the General Council, including on trade facilitation, on SDT, and DSU review.

On the other DDA-related issues, Lamy said that the level of activity has been lower, to say the least.

"While I believe that focusing on a number of development related areas is in line with the outcome at MC8, I believe it is time for the Members to also devote some attention to the other issues. And I do hope that today's session will bring some clarity on how to do that. Since MC8 I have heard a lot of ‘talk' about new ideas and approaches. Maybe it is time we see a bit of ‘walk'," he added.

A number of delegations spoke at the informal meeting.

According to trade officials, on the issue of the date and venue of MC9 and Indonesia's offer, Indonesia said that on 2 May, its minister had sent an offer to the General Council Chair and it hoped for the support of all WTO Members.

According to trade officials, support came from Cuba, Cambodia, Saudi Arabia, Egypt, China, Kenya, Australia, Switzerland, Japan, Korea, Turkey, Chinese Taipei, Jordan, Oman, Bangladesh, Nepal and Ecuador.

With respect to the work programme from MC8, Australia referred to the meeting that it hosted on the sidelines of the OECD ministerial in Paris, and the APEC ministerial in Kazan, Russia. Referring to the OECD meeting, it said that there was strong support for achieving a decision on the question of LDC accession. It believed that flexibility must be shown on this issue particularly by developed countries.

On trade facilitation, it said that there were good discussions in Paris but different perspectives emerged on how to carry the work forward. There was no question of the importance of this issue, but likewise, it was very important to address the technical assistance issues that many developing countries face. There was also the question of whether trade facilitation could be advanced on its own.

Referring to the APEC ministerial meeting, Australia said that there was a great deal of discussion about the concerns of rising protectionism. There was also discussion about operationalising the guidelines that came out of MC8 including trade facilitation and LDC accession. It would like to see as many issues as possible encompassed in efforts to try and bring about progress or agreement.

The European Union, referring to the meeting it held in Corfu in May, said that this was a brainstorming exercise that looked at many issues including food security, and global value chains. The question of LDC accession is important, and that all the issues be dealt with in a small-step, bottom-up approach. In addition to these issues, there is need to improve peer review, i. e. the surveillance and monitoring mechanism. It also highlighted the SDT monitoring mechanism.

Mauritius, on behalf of the ACP Group, said that it is important that what is delivered here is not simply a continuation of the status quo with respect to LDC accession but is in fact a real improvement, building upon the 2002 General Council decision, and adherence to the letter and spirit of the guidelines from MC8.

On trade facilitation, it said that it is important that developing countries, notably, the small vulnerable economies and the LDCs, are given all the support they need to implement the obligations.

Haiti, on behalf of the LDCs, said that duty-free quota-free market access for LDC products (DFQF) was an important issue. It also mentioned the importance of extending the current LDC exemption from the obligations under the TRIPS Agreement.

Highlighting the services waiver for LDCs, it said that it would like advanced countries to be able to identify those areas in their services markets where they could make offers to LDCs to give them a degree of preferential access for their service providers.

Bangladesh spoke on the importance of LDC accession, the 28 agreement-specific proposals that were part of the Cancun package, a monitoring mechanism and aid for trade. The LDC accession issue should not be used as anything resembling a bargaining chip in any early harvest. There should not be any attempt to balance the LDC issues against other issues.

Pakistan, on behalf of the Asia group of developing countries, mentioned the LDC services waiver, the extension of TRIPS exemption for LDCs, DFQF, LDC accession, and SDT monitoring mechanism. While it recognised the importance of trade facilitation, it said that there are systemic concerns for developing countries and LDCs. There is a deep need for trade-related technical assistance and financing, it added. +