Info Service on WTO and Trade Issues (Jul18/23)
30 July 2018
Third World Network
Concerns voiced over US unilateral actions, AB deadlock
Published in SUNS #8730 dated 26 July 2018
Geneva, 25 Jul (Kanaga Raja) - A number of developing and developed
countries have voiced concerns at an informal meeting of Heads of
Delegation(HOD)/Trade Negotiations Committee (TNC) on Tuesday over
the recent US unilateral trade measures under Section 232 of US trade
law (national security), as well as the continued blockage of appointments
to the WTO's Appellate Body (AB).
The informal meeting also heard remarks by WTO Director-General Roberto
Azevedo as well as reports by the Chairs of the various Doha negotiating
According to trade officials, concerns were raised by many members
on the use by the US of Section 232 national security provisions of
its trade law in imposing additional tariffs on imports of steel and
aluminium products as well as investigations initiated on imports
of automobiles and auto parts.
Delegations, both developed and developing, also voiced serious concerns
over the situation in the Appellate Body, where the US has repeatedly
blocked consensus over efforts to launch the selections processes
to fill three current vacancies on the seven-member body.
Many developing countries made clear at the meeting that special and
differential treatment (S&DT) should be extended to all developing
countries and LDCs. They rejected a case-by-case approach to this
issue mooted by the US, and now the EU in its non-paper.
Many developing countries also stressed the importance of gaining
outcomes in agriculture supports, on the aggregate measurement of
support, mainly accorded to some developed countries; on public stockholding
for food security purposes (PSH); the Special Safeguard Mechanism
(SSM); and cotton.
The meeting also saw disagreements among the members over the so-called
informal joint plurilateral initiatives on e-commerce, investment
facilitation for development, disciplines for micro, small and medium
enterprises (MSMEs), domestic regulation in services, and the economic
empowerment of women.
Those opposed to these plurilateral initiatives said that they undermine
the multilateral nature of the WTO work. They also pointed out that
there is already a multilateral track ongoing in the areas of e-commerce
and domestic regulation in services.
Others such as Korea, Panama, Canada, Hong Kong-China, Chile, Russia
and the European Union expressed support for some/or all of the plurilateral
REMARKS BY DG AT INFORMAL MEETING
According to trade officials, DG Azevedo said while there had been
some important progress made at Buenos Aires last December, MC11 (eleventh
ministerial conference) had exposed fundamental differences and divisions
over both substance and process. There is need to come up with new
ideas that can lead to convergence.
He said that there is a temptation that the trade tensions will lead
people to ignore the regular work, and this temptation should be resisted.
Azevedo said that "Members are well aware of the growing crisis
in global trade. Tensions are growing. New measures are being announced
with increasing frequency. There is real and justified concern about
the escalation we are seeing."
"Whether or not you call it a trade war, certainly the first
shots have been fired. Continued escalation would risk a major economic
impact, which would pose a serious threat to jobs, growth and recovery
in all countries."
He warned that there is also a potential systemic impact, posing a
greater threat in the longer term, particularly if countries begin
to accept this tit-for-tat dynamic as the new normal.
"The situation requires an urgent response. We have a duty to
help resolve these issues, and to alert people to the potential risks
and consequences. That is what I have been working to do. I have been
consulting with members on these issues, and I have been meeting with
leaders and ministers - urging dialogue and exploring steps to resolve
the current situation."
"But I have also been talking to a wider range of contacts -
such as parliaments, business, think tanks and the media - in order
to increase awareness and understanding of what is at stake. Trade
touches all of our lives. So I am calling on everyone who believes
in trade as a force for good to speak up. Now is the time."
Azevedo further said: "In some ways I actually think we may be
seeing some progress. Leaders are increasingly aware and engaged in
WTO issues - in a way that I haven't seen before. There is renewed
engagement from many members on systemic issues, bringing more focus
on the WTO and how it can be improved. I think that this could be
positive - and could potentially help us to find a path out of the
The DG maintained that it is not his role to put forward solutions,
and that it is not his role to point fingers at specific members or
specific policies. He said that he has never done this and will not
start doing this now. He has to preserve the role of the Director-General
as an impartial facilitator, and that this is something that he is
trying to do.
With respect to WTO reforms, Azevedo noted that people have been discussing
a number of issues. It is very important that any process be member-driven
and be inclusive. Members need to sit and talk to each other.
On the situation in the Appellate Body, Azevedo said that we are not
moving forward and that he has had nothing that would indicate the
prospect of a breakthrough. This is something that could compromise
the entire multilateral trading system, he added.
VIEWS OF MEMBERS
According to trade officials, South Africa, on behalf of the African
Group, highlighted the retreat of the African Group that took place
on 8-9 July.
The African Group reaffirmed the development objectives in the Doha
mandate of transparency, bottom-up approach, inclusiveness and member-driven
It highlighted the importance of agriculture. The issue of trade-distorting
domestic support and PSH are key. On fisheries subsidies, it highlighted
the importance of S&DT for developing countries.
On the G90 proposals on S&DT, it said that the question of S&DT
is ingrained in the WTO rules, just as the consensus decision-making
The African Group is concerned that the MFN principle may in some
way be undermined by the discussions on the joint plurilateral initiatives.
It is also very concerned about the Appellate Body being undermined
Korea said that it is happy with what is happening with respect to
the joint plurilateral initiatives. These are open, transparent and
inclusive processes, it maintained.
It endorsed the G33 statement. It is also worried about the WTO becoming
dysfunctional. It said the WTO is an indispensable public good and
we need to do what we can to try and strengthen it. It is also very
concerned about the situation in the Appellate Body.
Korea urged members to refrain from any new measures. Escalation by
the major members will affect other members as well, particularly
those who are involved in global supply chains.
Panama, on behalf of the Article 12 countries (formerly the recently
acceded members), said that the average commitments of the recently
acceded members (RAMs) exceed those of the original members.
There is a situation now in which the average tariff in agriculture
for an original member is 60%, and 16% for the Article 12 member.
The average tariff for industrial goods among the original members
is 34%, and 13% for the Article 12 members.
On behalf of itself, Panama said it supported the plurilateral initiatives
on e-commerce, investment facilitation, empowerment of women and MSMEs.
Canada said that these are very challenging times. It is profoundly
disappointed that the US has invoked S.232 of its trade law on imports
of steel and aluminium, and is engaged in an investigation on automobiles.
Canada pointed out that there is no link to national security, and
that it is an abuse of the national security exemption (in Art. XXI
of the GATT 1994).
It is pleased with the progress being made on the joint initiatives
on e-commerce, domestic regulation, MSMEs and women's economic empowerment.
Canada also said that it is very concerned about the US continuing
to block AB appointments. It urged the US to step up efforts to find
a solution to this problem.
Malawi, on behalf of the ACP group of countries, said that it is important
that development needs and capacity constraints of developing countries
are taken into account. It is because of these needs and constraints
that S&DT must be part of any discussions going forward.
ACP countries would like a better chance to integrate into the global
value chains. They want to enhance their export diversification and
It supported the G90 proposals. It also wants to see something on
fisheries subsidies that must be transparent, inclusive and consensus-driven
and with S&DT.
It expressed concern over the situation at the DSB. It said that because
of the situation in the AB, the dispute settlement system could be
The European Union said that the failure of MC11 was a strong statement
of the degree of division and of the strong challenges in front of
the multilateral trading system and the WTO.
The trade tensions have taken us a step further, it said, adding that
there is now a situation in which rule-making, dispute settlement
and monitoring are facing big problems.
It said with respect to the question of transparency and trade monitoring,
the problem here is that governments are not notifying the WTO of
their subsidy commitments or of changes to their trade regimes. This
is hampering efforts everywhere.
The EU said that a trade war is in no one's interest and it will lead
to a very difficult situation in the WTO. The public good that is
the WTO has been serving us well for a very long time. It is time
that we make sure that we bring new issues into the mix, it said.
It claimed that there are fundamental gaps in the rule-book. In this
context, it referred to what non-market polices and economies are
doing to distort the situation in the trading system. We need to modernise
the WTO before the system collapses, it added.
It said that on 28 June, EU leaders called for a modernisation of
the WTO agreements. They want to unblock the Appellate Body selection
process. They called for a more comprehensive proposal to make the
dispute settlement system more efficient.
The EU said it was pleased with the joint plurilateral initiatives
and looked forward to more detailed discussions.
China expressed support for the Article 12 statement made by Panama.
It said that the multilateral trading system is facing grave challenges,
and that the principles and core values are being challenged. The
AB is stalled.
It said that it is unhappy with the use (by the US) of the S. 232
and S. 301 provisions and the unilateral measures that have come through
China pointed out that the aggregate measurement of support is the
most trade-distorting type of subsidy in agriculture. Some say it
is impossible to totally eliminate AMS. It should not be a question
of what is possible but a question of what is right or wrong, it said.
It noted that developing countries have difficulties and challenges
and S&DT is necessary to help to address the capacity divide.
S&DT is a decision that should be taken by developing countries.
Graduation and differentiation are explosive issues and there is no
possibility to reach consensus on this, so it is a waste of time even
having a discussion about it, it said.
Chad, for the LDCs, said the multilateral trading system is facing
fundamental challenges. It said that the LDC decisions taken at Hong
Kong, Bali and Nairobi need to be implemented, specifically the duty-free,
quota-free market access for LDC products (DFQF).
It also called for full implementation of the rules of origin, the
services waiver for LDCs, and action on Article 66.2 of the TRIPS
Agreement pertaining to technology transfer. It called for an agreement
on PSH and SSM before MC12.
The US said that the specific areas of interest to the US relate to
the long term credibility of the WTO. It said that the negotiation
on fisheries subsidies were very high-stakes and that there was good
energy in the negotiations. There must be an ambitious way to address
the more than $20 billion in subsidies for illegal, unreported and
unregulated (IUU) fishing, and for overcapacity in fishing.
On the question of development, the US said that it thinks that the
system will suffer if we have a set of rules that apply only to some
members while we give a pass to self-described developing countries
or so-called newly acceded members.
On S&DT, the US said that this is something that should be looked
at on a case-by-case approach. It is a difficult situation when five
of the six wealthiest nations on earth choose to determine themselves
as developing countries, it maintained.
It is important that transparency is improved in the WTO. The failure
of some to notify is causing damage to the system, it said.
According to the US, the challenge for the WTO and the multilateral
trading system is to find a way to deal with non-market economies.
The WTO rules do not address these non-market economies. This is the
biggest challenge facing the WTO today and the WTO cannot be used
as a shield by some countries to allow them to take on non-market
policy approaches, it said.
Australia, Brazil, New Zealand, Chile, Egypt, Norway, Peru, Turkey
and Singapore also expressed concern over the impasse in the Appellate