Info Service on WTO and Trade Issues (Jul18/24)
30 July 2018
Third World Network
WTO investment facilitation & technical assistance activities
Published in SUNS #8731 dated 27 July 2018
Geneva, 26 Jul (D. Ravi Kanth) - The WTO General Council Chair Ambassador
Junichi Ihara of Japan on Thursday informed members that all decisions
concerning the activities and technical assistance projects being
pursued by the Secretariat on investment facilitation "are deferred".
This announcement came following the firestorm of opposition from
India, South Africa, and several other countries on violations committed
by the WTO Secretariat in undertaking projects that lack multilateral
approval, trade envoys told SUNS.
In a decision read out at the GC meeting, Ambassador Ihara said several
decisions indicated in "document No. WT/BFA/W/450 and WT/BFA/W/454
[that deal with investment facilitation]" will not be considered
at this meeting and are being deferred to be considered in subsequent
meetings of the General Council," said a trade envoy who asked
not to be quoted.
Earlier on Thursday, the World Trade Organization director-general
Roberto Azevedo denied that the WTO Secretariat had abrogated rules
laid out in the Marrakesh Agreement for pursuing projects on investment
facilitation without multilateral approval.
Azevedo said the organization has accomplished major successes such
as the "Trade Facilitation Agreement," "the export
subsidy programs," and "ITA-II" (expansion of the Information
But he did not even mention once what is going to be the fate of the
Doha Development Agenda (DDA) negotiations under which he continues
to function as the chair for the Trade Negotiations Committee.
The director-general repeatedly said rules need to be updated so as
to adjust to the new realities and expressed confidence in the ongoing
discussions among leaders of major developed countries for modernizing
and reforming the WTO.
He spoke about his discussions with the German Chancellor Angela Merkel,
and French President Emmanuel Macron on major global trade issues
but said he did not meet the US President Donald Trump. Azevedo said
he is in regular dialogue with the US Trade Representative Ambassador
Hours after Azevedo's comments at a meeting convened by the United
Nations Correspondents Association (ACANU) in Geneva, the US President
Donald Trump and the President of the European Commission Jean Claude-Juncker
said they had agreed on reforming the WTO.
At a meeting convened by the Geneva-based United Nations Correspondents
Association on Wednesday, Azevedo was grilled on issues raised at
the WTO's Budget, Finance, and Administration (BFA) Committee meeting
where serious charges of the Secretariat's failure to conduct business
as per the Marrakesh Agreement and financial impropriety were raised.
India and South Africa among others challenged the WTO deputy director-general
Karl Brauner and the chair for the BFA committee, Ambassador Juan
Esteban Aguirre Martinez from Paraguay, to come clean on how the Secretariat
pursued workshops and programs on investment facilitation that was
blocked at the General Council last year.
The WTO Secretariat had informed members that the proposal to undertake
technical assistance programs were "approved on a fast track
basis by DG and has not been procedurally put up to the CBFA, as laid
down in the regulations for reporting and review, though it was approved
in November 2017 and the expenditure on the project was incurred last
year," according to a trade envoy who attended the BFA committee
meeting on Wednesday.
Members asked the chair and WTO deputy director-general to provide
the agreement reached between the DG and China on investment facilitation
for the sake of transparency so as to be able to review all the activities.
But the Secretariat refused to provide information, saying it is a
Members protested that the Secretariat's failure to provide basic
information raises serious issues of transparency and financial impropriety.
They argued that the Secretariat has blatantly violated Article VII
of the Marrakesh Agreement that clearly laid down that the CBFA will
review the annual budget, financial statements as also frame the financial
Article VII of the Marrakesh Agreement states unambiguously that "the
Secretariat shall not seek or accept instructions from any government
or any authority external to the WTO. They shall refrain from any
action which might reflect on their position as international officials."
In a member-driven multilateral organization dealing with multilateral
goods and objectives, it is improper for the Secretariat to generate
resources or decide its own policies in areas of work for which there
is expressly no mandate and consensus, members argued.
India said the proposals drawn up by the Secretariat "go much
beyond justifying approval for projects already undertaken without
reporting to the membership" and "they raise serious systemic
issues, questions regarding the role of the Secretariat, by engaging
in activities in non-mandated areas without review or reporting, the
consensus (decision-making) principle, allowing any member or group
to set policies and objectives for the WTO with contributions even
on non-mandated areas and even calling into question Article VII of
the Marrakesh Agreement".
"Since this [Secretariat's] proposal is also embedded in the
WTO 2017 Financial Performance Report, we would also request the discussion
on this report," India maintained.
Several other members - Korea, Japan, and Turkey among others - pressed
the WTO deputy director-general Karl Brauner to provide all the details
of the agreement reached between the WTO director-general Roberto
Azevedo and China on the trust fund for investment facilitation.
Members also sought to know whether the Secretariat conducted a workshop
in Abuja with the funds provided by China on investment facilitation.
Asked (at the ACANU briefing) whether he or the Secretariat violated
or abrogated rules of the Marrakesh Agreement, Azevedo said "No,
it [the quest ion] was not correct."
He said "there is a discussion now on how to make the process
better and I'm all for that," Azevedo said.
When asked again whether what the Secretariat did on investment facilitation
amounted to violating Article VII, Azevedo said it is not correct
and went on to say "but what I cannot allow in any circumstances
is that one or two countries or groups of countries decide what technical
assistance should be, it is something that they have to decide, and
I can't make determinations on the basis of some groups of countries."
"If there is a request for technical assistance we will provide
and that determination I'm entitled to do," he said.
In short, Azevedo defied critics, by suggesting that he is going to
do what he thinks is right regardless of the rules laid out in the
Marrakesh Agreement .