Info Service on WTO and Trade Issues (Mar18/13)
20 March 2018
Third World Network
DG, defying mandates, deputes his officials to attend pluri-meetings
Published in SUNS #8644 dated 19 March 2018
Geneva, 16 Mar (D. Ravi Kanth) - Despite failure to secure multilateral
approval at the eleventh Ministerial Conference (MC11) at Buenos Aires
for various plurilateral initiatives, the WTO Director-General Roberto
Azevedo appears to have deputed his officials to attend the various
meetings on plurilateral initiatives being held at the WTO, according
to some trade envoys.
[The 2004 July Framework Agreement of the General Council (re-launching
the Doha Work Programme (DWP) negotiations, after the collapse of
the Cancun Ministerial in 2003), while enabling negotiations on trade
facilitation, expressly stipulated that none of the other Singapore
issues will be taken up for negotiations or figure on the WTO agenda
until the DWP negotiations have been concluded (Para 1.g of the July
framework agreement). Also, besides the DWP negotiations, "high
priority" was to be given by the WTO to other issues in the DWP
that did not involve negotiations, but were of particular importance
to developing countries (para 1h). - SUNS]
The Nairobi Ministerial Declaration, in its paragraph 34, has mandated
that WTO members can only launch negotiations that are multilaterally
agreed by all members.
That paragraph says that "any decision to launch negotiations
multilaterally on such issues [electronic commerce, disciplines for
MSMEs, investment facilitation] would need to be agreed by all members."
At MC11 there was no multilateral consensus on any plurilateral negotiations
(on e-commerce, disciplines on micro-, small- and medium enterprises
(MSMEs), investment facilitation or gender issues). Nor are of these
issues, as those not involving negotiations but covered by the DWP,
stipulated as high priority items on the WTO agenda in the July Framework
The first three of the current plurilateral initiatives (e-commerce,
disciplines on MSMEs and investment facilitation) were rejected at
the heads of delegations meeting at Buenos Aires on 12 December.
However, on 13 December, groups of countries issued joint statements
on the three issues on the margins of the eleventh ministerial meeting.
As a follow-up to the joint statements, the sponsors of the three
initiatives held separate meetings during the past fortnight at the
At these meetings, WTO officials had been deputed to be present by
During the meeting on electronic commerce on Wednesday (14 March),
Azevedo had deputed his deputy director-general, Yi Xiaozhun, to assure
the participants that the WTO Secretariat will provide the requisite
assistance, including technical assistance to developing countries,
according to participants familiar with the meeting.
At the two other plurilateral meetings, WTO officials were present
but did not speak or intervene.
It is not clear whether the DG had cleared the holding of the meetings
at the WTO and the use of secretariat resources (with attendant services,
like interpretation etc, and the "expenditure") with the
The plurilateral sessions on electronic commerce led by Japan, Singapore,
and Australia were held on 14 March in Room W at the WTO.
The joint statement on electronic commerce was signed by around 60
countries in Buenos Aires but, in the meeting at the WTO, 82 countries
took part, said a participant who asked not to be quoted.
For facilitating the negotiations, the secretariat is preparing a
paper mapping out the main issues, including the legal aspects concerning
those issues, said another participant who asked not to be quoted.
The three main sponsors of the joint statement on electronic commerce
- Japan, Singapore, and Australia - offered process-related information
as to how they intend to proceed ahead of the next meeting in April.
Japan's trade envoy Ambassador Junichi Ihara said: "transparency,"
"inclusiveness," and "openness" will propel the
proceedings during the regular sessions that will start next month.
He said the meetings will be open for any member wishing to join for
hammering out rules in e-commerce.
Australia's trade envoy Ms Frances Lisson and Singapore's trade envoy
Ms Tan Yee Woan also presented their respective assessments on how
to go forward with proposals and other process-related issues.
China and Pakistan, which did not sign the joint statement on e-commerce
in Buenos Aires, also took part in the brief meeting.
China's trade envoy Ambassador Xiangchen Zhang urged the participants
to strive towards an outcome that can be multilateralised, said a
participant who asked not to be quoted.
The US deputy ambassador Mr Chris Wilson said that Washington remains
committed to achieving a "comprehensive, high-standard, ambitious
agreement", according to a participant familiar with the proceedings.
Mr Wilson said the US wants a "commercially viable" outcome
on digital trade, suggesting the broad markers such as cross-border
information flow, localization requirements, and privacy protection.
In an electronic commerce work program circulated on 4 July 2016,
the US has said "governments should not prevent service suppliers
of other countries, or customers of those suppliers, from electronically
transferring information internally or across borders, accessing publicly
available information, or accessing their own information stored in
Washington also demanded that "governments should not require
ICT service suppliers to use local infrastructure, or establish a
local presence, as a condition of supplying services. In addition,
governments should not give priority or preferential treatment to
national suppliers of ICT services in the use of local infrastructure,
national spectrum, or orbital resources."
The US intends to bring up around 20 issues during the plurilateral
negotiations on electronic commerce that were the core elements of
the failed Trans-Pacific Partnership (TPP) agreement into the WTO,
said a trade envoy who asked not to be quoted.
In its non-paper on the work program on electronic commerce, the US
had suggested what ought to be the "positive contributions to
a flourishing digital economy."
It prescribed the following markers for arriving at a global digital
1.1. PROHIBITING DIGITAL CUSTOMS DUTIES: The complete prohibition
on customs duties for digital products can ensure that customs duties
do not impede the flow of music, video, software, and games so that
creators, artists and entrepreneurs get a fair shake in digital trade.
1.2. SECURING BASIC NON-DISCRIMINATION PRINCIPLES: Fundamental
non-discrimination principles are at the core of the global trading
system for goods and services. Rules that make clear that the principles
of national treatment and MFN apply to digital products can contribute
directly to stability in the digital economy.
1.3. ENABLING CROSS-BORDER DATA FLOWS: Companies and consumers
must be able to move data as they see fit. Many countries have enacted
rules that put a choke-hold on the free flow of information, which
stifles competition and disadvantages digital entrepreneurs. Appropriately
crafted trade rules can combat such discriminatory barriers by protecting
the movement of data, subject to reasonable safeguards like the protection
of consumer data when exported.
1.4.PROMOTING A FREE AND OPEN INTERNET: A free and open Internet
enables the creation and growth of new, emerging, and game-changing
Internet services that transform the social-networking, information,
entertainment, e-commerce and other services we have today. The Internet
should remain free and open for all legitimate commercial purposes.
1.5. PREVENTING LOCALIZATION BARRIERS: 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 centers 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.
1.6. BARRING FORCED TECHNOLOGY TRANSFERS: Requirements that
make market access contingent on forced transfers of technology inhibit
the development of e-commerce and a flourishing digital economy. Trade
rules may be developed to prohibit requirements on companies to transfer
technology, production processes, or other proprietary information.
1.7. PROTECTING CRITICAL SOURCE CODE: Innovators should not
have to hand over their source code or proprietary algorithms to their
competitors or a regulator that will then pass them along to a State-owned
enterprise. It is important to ensure that companies do not have to
share source code, trade secrets, or substitute local technology into
their products and services in order to access new markets, while
preserving the ability of authorities to obtain access to source code
in order to protect health, safety, or other legitimate regulatory
1.8. ENSURING TECHNOLOGY CHOICE: Innovative companies should
be able to utilize the technology that works best and suits their
needs. For example, mobile phone companies should be able to choose
among wireless transmission standards like Wi-Fi and LTE. Trade rules
may play a role in ensuring technology choice by stipulating that
companies are not required to purchase and utilize local technology,
instead of technology of their own choosing.
1.9. ADVANCING INNOVATIVE AUTHENTICATION METHODS: The availability
of diverse electronic signature and authentication methods protects
users and their transactions through mechanisms such as secure online
payment systems. Trade rules may assist in ensuring that suppliers
can use the methods that they think best for this purpose.
1.10. SAFEGUARDING NETWORK COMPETITION: It is important to
enable digital suppliers to build networks in the markets they serve
or access such facilities and services from incumbents - whether landing
submarine cables or expanding data and voice networks - to better
access consumers and businesses.
1.11. FOSTERING INNOVATIVE ENCRYPTION PRODUCTS: Encryption
is increasingly seen as an important tool to address protections of
privacy and security in the digital ecosystem. Rules may be developed
to protect innovation in encryption products to meet consumer and
business demand for product features that protect security and privacy
while allowing law enforcement access to communications consistent
with applicable law.
1.12. BUILDING AN ADAPTABLE FRAMEWORK FOR DIGITAL TRADE: New
and innovative digital products and services should be protected against
future discrimination. Trade-based protections for services and investment
should continue to apply as markets change and innovative technologies
emerge, unless a specific, negotiated exception applies.
1.13. PRESERVING MARKET-DRIVEN STANDARDIZATION AND GLOBAL INTEROPERABILITY:
Innovators should not have to design products differently for
each market they seek to serve; that is why we have the global standards
process, where industry leads and the best technologies win. Trade
rules can help to ensure that countries cannot arbitrarily demand
that less competitive national standards be forced into innovative
1.14. ENSURING FASTER, MORE TRANSPARENT CUSTOMS PROCEDURES:
The sorts of provisions contained in the WTO Trade Facilitation Agreement
can make very direct contributions to digital trade. Administrative
and at-the-border barriers can often be a bigger problem than tariffs
for exporters of digital equipment.
1.15. PROMOTING TRANSPARENCY AND STAKEHOLDER PARTICIPATION IN THE
DEVELOPMENT OF REGULATIONS AND STANDARDS: The development of new
regulations and standards can pose a significant challenge to suppliers
of information and communications technology, whose product cycles
are short and whose regulatory environment is constantly evolving.
A positive environment for e-commerce/digital trade entails strong
commitments on transparency, stakeholder participation, coordination,
and impact assessment for new regulatory measures, standards, and
conformity assessment procedures.
1.16. RECOGNIZING CONFORMITY ASSESSMENT PROCEDURES: Conformity
assessment procedures verify that products, including information
and communications technology, meet required standards and technical
regulations, but overly burdensome conformity assessment procedures
can hinder such exports. "National treatment" in conformity
assessment, so that testing and certification performed by one qualified
conformity assessment body will be accepted as consistent with another
Party's requirements, can be an important means of facilitating trade
in products relevant to the digital economy.
At the meeting on Wednesday in Room W, the US merely spoke about the
importance of "digital trade" without any barriers.
But, according to a trade envoy from an industrialized country, there
were differences of opinion among the signatories of the joint statement
on electronic commerce.
On Tuesday (13 March), China, Brazil, Nigeria, along with many other
countries held an organization meeting on investment facilitation.
The participants of the investment facilitation group exchanged ideas
and discussed about the roadmap.
A senior WTO official in charge of the services division attended
the meeting but did not speak, according to a participant who asked
not to be quoted.
It remains moot whether the director-general can assign his officials
to participate in these meetings and make statements as was the case
with electronic commerce, knowing full well that there is no ministerial
mandate to approach these issues plurilaterally, said a trade envoy
from a developing country who asked not to be quoted.
The director-general cannot promote the plurilaterals in rule-making
areas without a ministerial or General Council mandate, and by deputing
his officials to suggest that the Secretariat is ready to offer technical
or other assistance, he appears to be violating the Nairobi ministerial
mandate, the envoy said.
In the past, trade ministers, for example, had failed to reach "explicit"
consensus on four Singapore rule-making issues such as trade and investment,
government procurement, competition policy, and trade facilitation.
Subsequently, trade facilitation was brought into the Doha agenda
in 2004 on grounds that the remaining areas in the Doha Development
Agenda will be addressed on the firm footing of special and differential
flexibilities and less-than-full-reciprocity (LTFR) commitments.
Consequently, government procurement remained a closed-door plurilateral
group. There is no legal clarity whether there can be anything like
open-ended plurilaterals for rule-making and binding commitments for
electronic commerce, disciplines for MSMEs, and investment facilitation.