Info Service on WTO and Trade Issues (Jul15/15)
21 July 2015
Third World Network
Azevedo striving to show progress in DSU talks, conclude ITA-2
Published in SUNS #8064 dated 16 July 2015
Geneva, 15 Jul (D. Ravi Kanth) -- The WTO Director-General, Mr. Roberto
Azevedo, is making a concerted effort to show progress in negotiations
at the WTO on improvements and clarifications to the Dispute Settlement
Understanding (DSU) and on a deal on ITA-2, to expand the coverage
of products of the existing Information Technology Agreement (ITA),
in order to complete and conclude them in time for the Nairobi Ministerial
Conference, according to several trade envoys.
Mr. Azevedo is engaged in some frantic efforts on this front to show
success by the end of this month, despite the glaring failure to finalize
the post-Bali work program with precise benchmarks to conclude the
Doha Development Round (DDR) talks, several trade envoys told the
The mandate for the DSU talks is in para 30 of the Doha Ministerial
Declaration, whose para 47 makes clear that the DSU negotiations are
not part of the Doha Single Undertaking.
The ITA-2 exercise does not figure in the DDR Declaration at all.
[The 1994 Ministerial Conference at Marrakesh, that concluded the
Uruguay Round Negotiations, with members adopting the WTO Treaty and
its annexes, in a Ministerial Decision, mandated the Ministerial Conference
of the WTO, when it came into being, to take up and "complete
a full review of the dispute settlement rules and procedures of the
WTO within four years of entry into force" of the WTO Treaty,
and "to take a decision on the occasion of its first meeting
after the completion of the review, whether to continue, modify or
terminate such rules and procedures." (Legal texts, p 465).
[This subject was on the agenda of the 1999 Seattle Ministerial Conference
that collapsed in shambles, and in para 30 of the Doha Ministerial
Declaration, the Ministers agreed to take up for negotiations the
DSU review, but separating it from the Single Undertaking. This DSU
review negotiation has been going on since then, but is confined mainly
to a few technical procedural questions, and not much progress. SUNS]
Since the WTO's General Council meeting in December 2014, Azevedo
has repeatedly claimed that a post-Bali work program will be finalized
by end-July 2015, for concluding the DDA negotiations at the tenth
ministerial conference in Nairobi, Kenya, in December this year.
In this post-Bali work program process, the Director-General has also
coined more recently new terms such as "doability" and "re-calibration"
to persuade countries to move away from their positions based on the
previous Doha ministerial mandates.
He said, for example, the 2008 revised draft modalities is not cast
in stone and has gone on tweaking all the benchmarks.
Azevedo secured solid support from major developed countries, particularly
the United States and the European Union, and some developing countries
for a mid-course correction of the level of ambition so as to ensure
that the Doha Round is concluded without much effort.
But a large majority of developing and the poorest countries have
refused to accept the proposed changes suggested by the Director-General.
The developing countries have repeatedly demanded that the work program
be based on the 2004 July Framework Agreement, the 2005 Hong Kong
Ministerial Declaration, and the 2008 revised draft modalities in
agriculture and industrial goods.
Consequently, the Director-General has more or less given up on the
work program by the end of the month.
However, he is now trying desperately to show that there is progress
in two areas such as the improvements in the Dispute Settlement Understanding
and the ITA-II negotiations.
Although the DSU negotiations are outside the Doha Single Undertaking,
an attempt is now being made to issue a statement that there is progress
in the DSU negotiations.
The chair for the negotiations for improving provisions in the DSU,
former Ambassador Ronald Saborio Soto of Costa Rica, has suggested
that certain minor issues are sufficiently mature to be part of the
These ‘minor issues' include modalities for third party participation
in consultations, the time-frame for expressing third party interests
at the panel stage, enhanced "passive" third party rights
in panel proceedings, panellist expertise, improved notification of
mutually agreed solutions, and notification of retaliatory measures.
In a restricted document issued to members on July 13, the chair has
acknowledged that there is little progress in outstanding issues like
the third party rights, transparency, sequencing and post-retaliation,
effective compliance, and flexibility and member control.
The chair said "my assessment on certain outstanding areas in
(i) In respect of third party rights, there is willingness to consider
the possibility of allowing third parties to be joined on appeal,
provided that reassurance can be found about how this would be managed;
(ii) In respect of transparency, both in terms of open hearings and
publicity of submissions, my sense is that there is some margin to
continue exploring solutions that would provide a meaningful improvement
on current practices while not exceeding the comfort level of those
who require some flexibility. We may need a little more "creative
thinking" in order to find the right balance;
(iii) In respect of post-adoption procedures, my sense is that there
is recognition of the potential usefulness of clarifying procedural
issues such as sequencing and post-retaliation, in the context of
an overall package. In respect of post-retaliation, I think it would
be very important that remaining questions about the elements that
would be part of a solution be ironed out, including the questions
of initiation of the proceedings and burden of proof;
(iv) I think significant questions remain about some aspects of "effective
compliance", which is very important for a number of Members.
It seems to me that there is interest in reinforcing the surveillance
mechanisms of the DSB, which could take various forms, including some
form of administrative measures. I think the level of potential convergence
beyond this is still unclear. So we need to continue to work on this
Similarly, in respect of flexibility and Member-control, my sense
remains that the level of potential convergence varies significantly:
there is willingness to consider favourably the suspension of panel
or even Appellate Body proceedings in the interest of assisting the
parties in finding a mutually agreed solution; and
There could also be willingness to explore the possibility of a DSB
decision that would clarify or confirm certain practices, provided
that this is not seen as an intrusion on the adjudicator's ability
to address the claims before it with the required independence;
(v) I think there is still much more difficulty with other aspects
of the flexibility and Member control proposals, insofar as they are
seen as directly affecting the adjudicator's exercise of its adjudication
(vi) In respect of developing country interests, we have seen positive
engagement in respect of capacity building and support to the ACWL
(Advisory Centre on WTO Law), in the context of an overall package.
I think on other aspects, the level of comfort still varies somewhat
and needs to be confirmed, so this is an area that I think also requires
some further work.
At our last meeting, continued interest was also expressed in introducing
a remand procedure. I think an important requirement here too is that
there would need to be a high level of clarity on the type of procedure
that is envisaged, including convergence on the key elements of initiation
of the remand proceedings and adoption of the original and remand
recommendations and rulings."
There is "some" progress at the conceptual level, but there
is need to think creatively about alternative solutions on "systemic"
issues, Ambassador Soto has argued.
The chair held meetings with the United States, the European Union,
China, India, Brazil, Japan, Singapore, and Russia among others last
month to discuss the state of play in the DSU negotiations.
The chair sought to know whether he could issue a report on progress
made on minor issues at this juncture, while continuing to work on
major "systemic" issues.
The United States, for example, had proposed "flexibility and
Member-control" during the ongoing DSU negotiations.
The US wants suspension of the panel and Appellate Body (AB) proceedings
for finding agreed solution by the parties, partial deletion of findings
in the panel and AB reports, and an interim review of the AB reports
before issuing the final report, according to participants familiar
with the DSU negotiations.
The chair has acknowledged that "there is willingness to consider
favourably the suspension of panel or even Appellate Body proceedings
in the interest of assisting the parties in finding a mutually agreed
Members, he said, are "ready to explore the possibility of a
DSB decision that would clarify or confirm certain practices, provided
that this is not seen as an intrusion on the adjudicator's ability
to address the claims before it with the required independence."
But on other aspects of flexibility and Member control proposals,
the chair notes, there is still much more difficulty as "they
are seen as directly affecting the adjudicator's exercise of its adjudication
A group of developing countries led by India have demanded binding
outcomes involving capacity building and "effective compliance."
In response, the chair stated that "it seems to me that there
is still interest in reinforcing the surveillance mechanisms of the
DSB, which could take various forms, including some form of administrative
measures... I think the level of potential convergence beyond this
is still unclear."
But developing countries conveyed to the chair that he should not
issue a report suggesting that there is progress in the negotiations,
when there is little convergence on all outstanding issues, including
the demands made by the poorest countries for special and differential
treatment flexibilities in the DSU provisions.
The chair is however under pressure to issue a favourable report,
said a trade official familiar with the negotiations.
On a separate track, the European Union is being persuaded to host
the stalled negotiations to expand the coverage of products in the
Information Technology Agreement (ITA) which was concluded in 1996.
The DG made a strong pitch for concluding the second generation Information
Technology Agreement (ITA-II) by the end of the week.
The ITA-II remains stalled since December 2014, due to continued differences
between China on one side, and Korea on the other, over the inclusion
of around a dozen products, particularly the liquid crystal display
panels and several hardware items used in mobile phones.
In an attempt to announce a breakthrough in the stalled ITA-II talks
before the end of the month, Azevedo urged the ITA-II participants
to conclude the negotiations by the end of the week.
Azevedo said the ITA-II participants must not miss this opportunity
to conclude the agreement by showing flexibility on the limited number
of outstanding issues, said a participant familiar with the meeting.
Azevedo yesterday made a strong pitch for concluding (ITA-II) by the
end of the week.
In short, the DG who promised to hold round-the-clock meetings for
finalizing the post-Bali Doha work program, now wants to demonstrate
that he is a successful achiever on issues of interest to the major
industrialized countries as in his successful conclusion of the Trade
Azevedo, the former Brazilian trade envoy, is not unduly worried about
the stalled Doha Development Agenda negotiations as it is not of interest
to major developed countries, said an African trade envoy. +