Info Service on WTO and Trade Issues (Sept16/03)
13 September 2016
Third World Network
G20 affirm DDA on post-Nairobi work, but open door to RTA issues
Published in SUNS #8310 dated 13 September 2016
Geneva, 7 Sep (D. Ravi Kanth) -- Major developing countries led by
China have ensured, in the Hangzhou communique issued by G20 leaders,
strong language on the post-Nairobi work program, "with development
at its center" for addressing the remaining "DDA [Doha Development
Agenda] issues" on a priority basis at the World Trade Organization,
trade envoys told the SUNS.
After their two-day meeting which concluded in Hangzhou, China, on
Monday (5 September), the G20 leaders reiterated their commitment
to address the unresolved DDA issues in "agriculture, including
all three pillars of agriculture (i. e. market access, domestic support
and export competition), non-agricultural market access, services,
development, Agreement on Trade-Related Aspects of Intellectual Property
Rights (TRIPS) and Rules."
Despite their sustained efforts for finalizing the post-Nairobi work
program based on the remaining DDA issues, developing countries have
faced over the past eight months numerous hurdles and roadblocks because
of opposition from the US and other industrialized countries.
The US, for example, has vociferously maintained that it will not
negotiate the DDA issues because of lack of agreement among members
to continue with the Doha Round of negotiations at the WTO's tenth
ministerial conference in Nairobi, Kenya, last year, according to
trade envoys familiar with the negotiations.
The US has also blocked efforts to negotiate on the remaining DDA
issues in the market access for industrial goods, rules, and services
over the past eight months on grounds that members will have to agree
to "new approaches" before commencing negotiations.
The US indicated its plurilateral approaches for issues in Doha rules
dossier, particularly on fisheries subsidies, while setting aside
other issues concerning improvements in anti-dumping provisions, trade
Other major industrialized countries such as the European Union, Australia,
Canada, Switzerland, and Norway among others have signalled their
intention to continue work on the Doha issues without insisting on
any new approaches, trade envoys maintained.
Effectively, work on the post-Nairobi work program with DDA issues
at its center remains nearly paralysed over the last eight months
at the WTO.
Against this backdrop, the leading developing countries in the G20
such as China, India, Turkey, and South Africa among others succeeded
in bringing back development-centered issues in the DDA in the Hangzhou
The fact that the US had to agree to include the "DDA" issues
in the leaders' communique is significant.
Whether the US will actually participate in shaping the post-Nairobi
work program based on these issues, however, remains to be seen, said
a trade envoy who asked not to be quoted.
In paragraph 26 of the Hangzhou communique, the G20 leaders reiterated
their commitment "to shape the post- Nairobi work with development
at its center and commit to advancing negotiations on the remaining
DDA issues as a matter of priority, including all three pillars of
agriculture (i. e. market access, domestic support and export competition),
non-agricultural market access, services, development, Agreement on
Trade-Related Aspects of Intellectual Property Rights (TRIPS) and
For agreeing to inserting language on the DDA issues, the US and other
industrialized countries forced the developing countries at the Hangzhou
summit, to agree to include language such as "we also note that
a range of issues may be of common interest and importance to today's
economy, and thus may be legitimate issues for discussions in the
WTO, including those addressed in regional trade arrangements (RTAs)
and by the B20," according to trade envoys familiar with the
Effectively, it opens the door slightly for bringing the RTA issues
into the WTO even though a large majority of members are not part
of those agreements such as the Trans-Pacific Partnership or other
major regional agreements, said an envoy of a G20 member country.
More important, the Hangzhou communique paves the way for discussing
issues such as the electronic commerce work program when it says,
"we will work together with all WTO members with a sense of urgency
and solidarity and with a view to achieving positive outcomes of the
MC11 and beyond and we will work together to further strengthen the
In short, major industrialized countries led by the US and the EU
along with their developing country partners such as Singapore, Hong
Kong, Costa Rica, Mexico, and Korea among others will make a sustained
effort to either launch or conclude negotiations on e-commerce at
the eleventh ministerial meeting, the envoy maintained.
The language on global trade issues in the communique issued by Group
of 20 leaders from Hangzhou, China on Monday (5 September) is a grand
"compromise" between developing countries led by China,
and the industrialized countries, particularly the United States,
the envoy argued.
The industrialized countries also succeeded in introducing language
on the important role "that bilateral and regional trade agreements
can play in liberalizing trade and in the development of trade rules,
while recognizing the need to ensure they are consistent with WTO
Effectively, this would be tantamount to bringing disciplines agreed
in bilateral and regional agreements such as the rules on e-commerce
in the TPP agreement into the WTO work program, a developing country
trade envoy said.
The US, for example, had suggested 15 concepts in the e-commerce work
program at the WTO which were largely based on what was agreed on
e-commerce in the TPP agreement, the envoy suggested.
The US proposal called for "prohibiting digital customs duties",
"enabling cross-border data flows", "promoting a free
and open Internet", "preventing localization barriers",
"barring forced technology transfers", "protecting
critical source code" and so on.
The concept of "preventing localization barriers" calls
on "companies and digital entrepreneurs relying on cloud computing
and delivering Internet-based products and services should not need
to build physical infrastructure and expensive data centres in every
country they seek to serve. Such localization requirements can add
unnecessary costs and burdens on providers and consumers alike. Trade
rules can help to promote access to networks and efficient data processing".
Leading developing countries such as China, India, and South Africa
among others want foreign companies to build physical infrastructure
as well as data centers for availing their services instead of depending
on cloud computing in which the US maintains a near monopoly, the
Further, the continued differences in the ongoing negotiations on
the plurilateral initiative on environmental goods agreement between
China on one side, and the US and its allies on the other spilled
over into the G20 leaders' communique.
The two sides struck a compromise to include language that "seeks
to eliminate tariffs on a broad range of environmental goods by the
end of 2016," said an EGA trade envoy of the G20 (see SUNS #8305
dated 1 September 2016).
The Hangzhou communique says: "G20 Environmental Goods Agreement
(EGA) participants welcome the landing zone achieved in the WTO EGA
negotiations, and reaffirm their aim to redouble efforts to bridge
remaining gaps and conclude an ambitious, future-oriented EGA that
seeks to eliminate tariffs on a broad range of environmental goods
by the end of 2016, after finding effective ways to address the core
concerns of participants."
China also agreed to language on excess capacity in steel and other
industries as well as subsidies and other types of support from governments.
The communique says: "we recognize that the structural problems,
including excess capacity in some industries, exacerbated by a weak
global economic recovery and depressed market demand, have caused
a negative impact on trade and workers. We recognize that excess capacity
in steel and other industries is a global issue which requires collective
responses. We also recognize that subsidies and other types of support
from government or government-sponsored institutions can cause market
distortions and contribute to global excess capacity and therefore
In short, while the developing countries held their ground on the
DDA issues as reflected in the Hangzhou communique, they conceded
ground on bringing RTA-related issues into the WTO through the backdoor.
"The developing countries must now ensure that negotiations on
DDA issues are conducted on the existing Doha work program before
they agree to discuss the new issues," said a trade envoy from
a G20 country. +