TWN Info Service on WTO and Trade Issues (Oct16/17)
19 October 2016
Third World Network

US, partners to bury Doha, focus on new trade agenda at Oslo?
Published in SUNS #8335 dated 18 October 2016

Geneva, 17 Oct (D. Ravi Kanth) -- The United States and its partners from developed and developing countries have crystallized their plans to usher in a new trade agenda based on e-commerce/digital trade, fisheries subsidies, Micro-, Small- and Medium-Sized Enterprises, and domestic regulation in services at an informal mini-ministerial trade meet in Oslo, Norway, on Friday, according to a "Concept Note" obtained by SUNS.

They have also made it amply clear that they are going to junk the Doha Work Program and push issues of the permanent solution for public stockholding programs for food security and special safeguard mechanism for developing countries to the future trade agenda.

The US Trade Representative Ambassador Michael Froman made it emphatically clear during a keynote lecture at the Graduate Institute in Geneva on 17 October, on the future of multilateral trading system and the WTO, that Washington is not going to pursue the Doha Work Program.

Instead, he said, the US will only work on what he called "pragmatic multilateralism" that focuses squarely on new trade issues such as digital trade and digital economy of 21st century at the WTO.

"We have begun a new chapter" that would seek a race to the top instead of seeking lowest common denominator over the past several years in the Doha trade negotiations at the WTO. The USTR said that developing countries cannot be clubbed in one single basket, suggesting that China is providing US$100 billion towards trade- distorting domestic support in agriculture, which is equivalent to the combined gross domestic products of several countries.

The Chinese trade envoy to the WTO, Ambassador Yu, who was present at the meeting, described the USTR's estimate of US$100 billion as "elusive."

While a farmer in China receives a subsidy close to US$100, the farmer in the US receives annually a subsidy of US$20,000, the Chinese envoy maintained.

Nonetheless, in a hard-hitting lecture followed by Q&A, Ambassador Froman laid out a trade agenda that would fundamentally change the WTO's architecture once and for all, if it goes through without resistance in the coming months and years, according to trade officials from developing countries present at the meeting.

[The present WTO architecture is in fact the result of Canada, the EU, Japan and the US agreeing amongst themselves in Nov-Dec 1993, and forced it down on others that the concept of "Single Undertaking" applicable to the GATT's goods multilateral negotiations, in the Punta del Este Declaration launching the Uruguay Round, should apply to the entire outcome of the Uruguay Round negotiations (Goods, TRIPS and GATS), and all participants must sign on to all the annexed agreements to the WTO treaty. Mr. Froman's thesis now is an effort to go back on this, and resile from the inconvenient obligations of the US, such as in agriculture, that the single undertaking has resulted. See, Chakravarthi Raghavan, Third World in the Third Millennium CE, Vol 2, pp41-50, 91 - SUNS]

The US agenda is adequately reflected in a "Concept Note" issued by Norway for an informal mini-ministerial summit starting on 21 October in Oslo. More than 20 trade ministers representing the United States, the European Union, China, India, Brazil, Japan, Australia, Canada, Switzerland, New Zealand, Argentina, Mexico, Chile, Colombia, Costa Rica, Indonesia, Singapore, Korea, Hong Kong, South Africa, Kenya, Rwanda, Morocco, and Benin among others are going to take part in the meeting that will last for one and half days.

The four-page concept note has set the ground for "a brainstorming session" to help the participants to "prepare for the 2017 Ministerial Conference and beyond."

"The gathering in Oslo could help provide political guidance on setting the scope of negotiations on issues already being discussed in Geneva, as well as other themes the membership might be interested in," it argued.

More important, it asked the ministers to provide "indications about what members would like to achieve at MC 11, and what needs to be done to get there."

Although it maintained that "no firm conclusions will be drawn, as this will be up to the membership as a whole," the Concept Note nearly set the ground for fairly definitive conclusions.

To start with, the Oslo meeting which will begin with a discussion on "Safeguarding the multilateral trading system and strengthening the WTO," posed several questions for discussing "the general level of ambition for WTO negotiations in the medium term, i. e. for MC 11 and beyond."

Although it mentioned that "both Doha issues and other relevant topics are being thoroughly discussed," the reality is there is no discussion on Doha issues unlike more than 20 sessions on e-commerce and other new issues.

The questions for the introductory session include:

(i) Building on the successes of Bali and Nairobi, are smaller incremental steps easier to achieve than major leaps?

(ii) Would the locking in of existing policy regimes be more acceptable than results that require changes to domestic laws and regulations?

(iii) Would combining smaller multilateral steps with more ambitious plurilateral solutions with the WTO be a way to bridge the gap between ambitions and what is achievable?

(iv) Can the necessary balance be found within single issues, or is there a need for packages across issues?

(v) How can members seek balanced results in the sense that everyone's interests are taken into account, and avoid the risk of hostage taking?

The second session which focuses on the issue of "advancing economic growth through international trade" and "how the multilateral trading system must respond to the specific needs of developing countries, especially the least-developed countries" for the eleventh ministerial meeting has clearly revealed the game plan for deferring issues such as domestic support, public stockholding for food security purposes, a Special Safeguard Mechanism, and cotton to the WTO's future agenda.

"In Nairobi, we agreed that work on issues and Ministerial Decisions of special interest for developing countries (including the decisions on domestic support, public stockholding for food security purposes, a Special Safeguard Mechanism, and cotton), will remain important elements of the WTO's future agenda," the Concept Note maintained.

In effect, the 2013 Bali ministerial decision on public stockholding programs - "Members agree to put in place an interim mechanism as set out below, and to negotiate on an agreement for a permanent solution, for the issue of public stockholding for food security purposes for adoption by the 11th Ministerial Conference"- and the November 2014 General Council decision to conclude the permanent solution by the end of December 2015, are now put in cold storage. Indeed, cotton and other important developmental issues of the Doha agenda are now buried as part of the future agenda.

The Concept Note, however, claimed that the issues of importance for Buenos Aires are "agriculture, fisheries subsidies, domestic regulation in services, e-commerce and Micro-, Small-, and Medium-sized Enterprises (MSMEs)," on grounds that they are "all of interest to developing members."

But, in the case of "e-commerce and Micro-, Small-, and Medium-sized Enterprises (MSMEs)," the developing countries are not the demandeurs and if anything, a large majority of developing countries remain reluctant to enter into any negotiations on these two issues.

Nevertheless, the Concept Note asked ministers to reflect on the following questions during the post-lunch session on Friday:

(a) In the lead-up to MC11, do these issues like "agriculture, fisheries subsidies, domestic regulation in services, e-commerce and Micro-, Small-, and Medium-sized Enterprises (MSMEs)" fully cover members' realistic expectations for the improvements from a development perspective?

(b) How can the momentum and engagement generated by Nairobi be further built on to deliver results?

(c) How can members find right balance within and between different issues?

(d) Can the Trade Facilitation Agreement with its self-designated, staged implementation and its links to capacity-building needs to provide guidance?

More ominously, the Concept Note seeks to bring the RTAs and bilateral free trade agreements into the WTO through the backdoor.

It urged the participants to address the issue of "regional trade agreements (RTAs)" and whether they are "a source of inspiration for work in the WTO" as many WTO members have already joined "preferential" agreements.

Given the growing number of bilateral and regional trade agreements such as Trans-Pacific Partnership that cover "deeper, broader agreements", including "regulatory" areas, it wants the participants to address the following questions:

(1) Can RTAs function as inspiration for furthering the multilateral agenda? If so, how?

(2) How can members ensure that multilateral negotiations and negotiations among a subset of members, for example in RTAs, are mutually supportive and can happen simultaneously?

(3) How can members harvest as much as possible with the WTO?

(4) How can members ensure that the WTO continues to be the main negotiating forum for trade agreements?

In the final session - "where do we go from here" and "securing success at MC11 and beyond" - on Saturday, the participants will identify the issues for negotiations in the run-up to the eleventh ministerial meeting in Buenos Aires. Each minister will provide their specific response to several questions such as:

(i) Is it realistic to expect major comprehensive results at MC 11?

(ii) Would smaller incremental steps be more likely to be successful?

(iii) When identifying issues for further discussions after Nairobi, what would be an appropriate mix between results to be obtained at MC 11 and beyond?

It will conclude with a luncheon session on Saturday that will squarely focus on how to deal with the current "backlash against trade."

The concept note acknowledged that the growing "public distrust" could "derail new trade agreements currently in the works, and prevent future ones from being initiated."

In short, the mini-ministerial summit in Oslo will seek to advance the issues proposed by the US and its allies while burying the developmental issues of the DWP permanently. +