TWN Info Service on WTO and Trade Issues (Mar18/03)
8 March 2018
Third World Network

US slammed over unilateral trade measures and AB blockage
Published in SUNS #8636 dated 7 March 2018

Geneva, 6 Mar (D. Ravi Kanth) - A large majority of developing and developed countries slammed the United States at the World Trade Organization for initiating unilateral trade measures to undermine the multilateral trading system as well as for jeopardizing the dispute settlement mechanism by constantly blocking the selection process for filling vacancies at the Appellate Body, trade envoys told SUNS.

At an informal Heads of Delegations meeting of the Trade Negotiations Committee (TNC) on Monday, many members called for intensifying the negotiations to eliminate illegal, unreported, and unregulated subsidies that are contributing to the depletion of global fish stocks.

Several developing and least developed countries (LDCs) also called for appropriate special and differential treatment flexibilities.

A large majority of developing and least-developed countries, including South Africa, India, and China among others, insisted that the unresolved Doha issues must be addressed during the next two years, particularly by focusing on the "developmental" issues in agriculture, industrial goods, and services sectors.

Members of the African Group barring Nigeria, the Africa, Caribbean, and Pacific (ACP) group, and India among others emphasized the centrality of securing multilateral outcomes at the WTO, and insisted that multilateral consensus as set out in paragraph 34 of the Nairobi ministerial declaration is a prerequisite for considering the new plurilateral initiatives on electronic commerce, investment facilitation, disciplines for micro, small, and medium enterprises (MSMEs), and trade and gender.

"On new issues for negotiations, guidance was provided in the Nairobi Declaration in paragraph 34 on how these are to be treated," said Guyana, on behalf of the ACP group.

"On new issues, our consistent view has been that these can only be negotiated after consensus has been reached among the membership," said Ambassador J. S. Deepak, the Indian trade envoy.

China, Pakistan, and Nigeria among the developing countries openly spoke in favour of discussing the plurilateral initiatives on investment facilitation, electronic commerce, and disciplines for MSMEs.

But, in a member-driven organization, the WTO director-general Roberto Azevedo has stepped up his campaign for the new issues along with the sponsors of the specific plurilateral initiatives.

The European Union, New Zealand, Uruguay, Switzerland, Colombia, Mexico, and the United States among others pitched hard for open-ended plurilateral initiatives at the WTO knowing full well there is no multilateral consensus yet on any of the initiatives.

The unilateral pronouncements of the US President Donald Trump for levying safeguard duties of 25% on steel and 10% on aluminum, claiming national security considerations, as well as its continued blocking of the selection process for filling three Appellate Body (AB) vacancies at the WTO dominated the TNC proceedings.

Without naming the United States in their interventions, many developed and developing countries spoke about the specific safeguard duties on steel and aluminum being considered by the US as well as the repeated blocking of the selection process for filling three vacancies at the AB.

"We share the concerns that some Members have expressed on recent developments that could lead to new tariff barriers and even a trade war," said Ambassador Deepak of India, arguing that "application of tariffs, we believe, should respect the ceiling of bound rates agreed to at the WTO."

Without naming the US for blocking the AB selection process, India asked: "what is it to invest effort in the negotiation of rules if they cannot be effectively implemented and impartially enforced?"

"In this context," said the Indian envoy, India remains concerned along with "many other members" over the delay in selection and appointments of members to fill vacancies in the Appellate Body.

"This impasse," India said, "not only threatens the functioning of the Appellate Body, which is a key pillar of the dispute settlement system of this organization, but also poses a serious threat to the credibility of the WTO itself."

South Africa's trade envoy Ambassador Xavier Carim warned that "the unresolved matter of the Appellate Body and the emerging systemic questions on the WTO enforcement mechanism", if not addressed soon, "will cast a shadow - and soon overwhelm - all the other work of the organisation."

Aside from these two issues arising from the threats posed by the US to the multilateral trading system in general and the WTO in particular, the developing and least-developed countries demanded urgent negotiating outcomes on the unresolved Doha work program issues, including the centrality of development in the multilateral trade outcomes.

Rwanda, on behalf of the African Group, said it stood "ready to engage constructively on all issues in accordance with their respective mandates, notably under the DDA."

Guyana, on behalf of the ACP group, said "the call to review, repair and reform the global trading framework is not new", maintaining that "it was, indeed, the basis for the Doha Development Agenda (DDA)." "We are, however, at another important juncture where dissatisfaction with the process of arriving at convergence and the mode of agenda setting needs careful attention while preserving the principle of consensus."

"The discussion on the development issue and priorities of the multilateral trading system which trade ministers started in Buenos Aires must continue as a core aspect of the post-MC11 agenda," Guyana said.

"Moreover, our members have raised concerns that no attention has been given to finding ways to agree on the DDA agreement-specific special and differential treatment proposals," the ACP group said, emphasizing that "these are core unfinished work under the DDA."

South Africa's trade envoy Ambassador Xavier Carim said members lost an opportunity to discuss the burning issues in the global trading system at Buenos Aires. Instead of discussing on "trade policy priorities and considering the scope for common efforts to address the backlash against globalisation and trade, and the growing challenges of inequality, job insecurity and development," members lost an "opportunity to consider a more positive approach to foster an inclusive, developmental multilateralism."

Ambassador Carim said that despite "divergences on the DDA mandate and on which specific issues to take forward", members agree on the issues to take forward, but "disagree on how." "We also disagree on whether to even consider non-Doha issues," South Africa said.

The G33 developing country coalition led by Indonesia, India, South Africa, the African Group, and the ACP group all called for accelerating work on the permanent solution for public stockholding programs for food security.

"It is important to have trade rules that enhance food security and support the fight against hunger," said India's trade envoy Ambassador Deepak, arguing that "this would also facilitate the achievement of a number of sustainable development goals, relating to the elimination of poverty, malnourishment and hunger to which we are all committed."

"The work on obtaining a permanent solution on public stockholding for food security for all developing countries and LDCs, should, therefore, remain an integral part of our agriculture work program," India said.

Insisting that global trade-distorting farm subsidies should be reformed on a war-footing as "many developed countries are not exporting their competitiveness in agriculture but rather are exporting subsidies," India called for "negotiations on disciplining the most trade-distorting form of domestic support, namely, the AMS beyond de minimis, and flexibility to apply it without limit on specific products, must be a priority."

Ambassador Carim of South Africa said that "work on fishery subsidies can proceed relatively quickly but we should not underestimate the challenges."

While there is "some sense that we will need a period of reflection on how best to re-engage the other Doha issues," said South Africa, "it is clear that trade distorting domestic support, cotton, food security, industrialisation, and development will continue to command the interest of most Members."

"The DDA and previous ministerial decisions already offer guidance for this work," added South Africa.

On services, particularly on domestic regulation in services, India called for " holistic approach" to address the numerous difficulties which services suppliers, particularly those of developing countries, face in the form of complex regulatory regimes of developed countries.

India also asked that the WTO must "take up work to make mandatory, disclosure requirements for genetic resources and traditional knowledge in patent applications along with prior informed consent and benefit sharing." "This is also one of the outstanding implementation issues from the Doha work program," India said.

The African Group and South Africa said the continent's primary economic objectives are set in "Agenda 2063: The Africa We Want" as they relate to integration, industrialization and structural transformation.

"We need a WTO that enables these objectives - but at a minimum, we need a WTO that does not impede them," said Ambassador Carim of South Africa.

In sum, the informal Trade Negotiations Committee meeting revealed that the next two years are going to be an intense struggle between those developing and poorest countries seeking "developmental multilateralism" based on the Doha Development Agenda, and those industrialized countries and their allies wanting plurilateral outcomes in electronic commerce, investment facilitation, and disciplines for MSMEs so as to partition the multilateral trading system in the 21st century.