Info Service on WTO and Trade Issues (May19/03)
Geneva, 6 May (D. Ravi Kanth) – Trade envoys from a large majority of developing and least-developed countries on Friday (3 May) denounced efforts by the United States and other developed countries to hijack the multilateral negotiations on electronic commerce and agriculture of the Doha Work Program at the World Trade Organization.
The sharp reactions and warnings came at an informal heads of delegations (HOD) level meeting of the Trade Negotiations Committee (TNC) held on Friday.
The large majority of developing countries, including India and China, warned against the proposed “reforms” of the WTO, mooted by the US, the EU and other developed countries at the General Council, to introduce “differentiation” among developing countries for availing special and differential flexibilities.
Venezuela and Cuba severely criticized the US for its unilateral actions, including trade sanctions and the proposed enactment of the condemned Helms-Burton Act. Both Cuba and Venezuela also expressed their frustration over the WTO’s failure to address their existential concerns.
A large majority of developing and developed countries charged the US with refusing to engage in resolving the crisis at the WTO’s Appellate Body (AB) and for continuing to block the selection process for filling four vacancies at the AB.
The US, in its remarks at the HOD meet, however, remained silent on the AB crisis, while demanding immediate notifications of subsidies and countervailing measures by 30 June, particularly on the fisheries subsidies.
The European Union came out for the first time to caution about the dangers posed by the proposed US-China agreement to the multilateral trade order at the WTO.
The EU argued that “any arrangement between these members (the US and China ) might further undermine the WTO, if implemented in a discriminatory manner, setting harmful precedent that undermines the basic tenets of the rule-based order.”
While countries expressed support at the informal TNC for accelerating the negotiations on fisheries subsidies, many developing countries expressed al arm over attempts to dilute special and differential treatment (S&DT) for developing countries.
At the informal heads of delegations (HOD) meeting, India, the ACP (Africa, Caribbean, and Pacific) group of countries, Benin on behalf of the African Group, the least-developed countries, Bolivia, Cuba, and Venezuela among others derided attempts to pursue the plurilateral negotiations in electronic commerce and domestic regulation for trade in services.
On electronic commerce, India reminded the sponsors of the plurilateral negotiations that there is a multilateral programme on e-commerce agreed to by Ministers at MC11 [the eleventh ministerial conference in Buenos Aires in December 2017].”
“In our view,” said India, “going against this exploratory mandate [established in 1998] and starting negotiations on e-commerce [at the plurilateral level], strikes at the very roots of the multilateral system.”
Most developing countries, according to India, are not ready for binding rules in electronic commerce.
India said it is finalizing a national e-commerce policy that “seeks to use India’s data for its own development rather than allow its value to be appropriated by others.”
New Delhi will preserve “flexibility of imposing customs duty on electronic transmissions to protect domestic industry and leverage technology for creating jobs and wealth, by ensuring competition and a level playing field,” India said.
It asked members at the WTO to “assess the extent of sacrifice of revenue involved, and the distribution of this loss among Members, when new technologies like additive manufacturing will result in electronic transmissions cascading and many dutiable goods being manufactured by digital printing.”
Attacking the so-called plurilateral Joint Initiative on e-commerce launched by Japan, Australia, and Singapore among others, India said there will be a serious impact of some of the proposed plurilateral rules “on existing trade rules, particularly the GATT [General Agreement on Tariffs and Trade] tariffs, which protect our industry, and GATS [General Agreement on Trade in Services] schedules that provide us useful flexibilities.”
“Both the GATT & GATS could wither away due to the onslaught of the so-called “high standard” e-commerce elements” as proposed in the Joint Initiative proposals [see SUNS #8897 dated 30 April 2019],” India warned.
The ACP group said it “is now more than ever convinced that the work under the current mandate of the 1998 Work Programme on Electronic Commerce has not been exhausted and that there is much more that needs to be done under the development dimension.”
The ACP group, consisting of more than 90 countries, said that the current moratorium for not levying customs duties on e-commerce will have revenue implications.
Members of the ACP group are concerned about “the loss of policy space” because of the plurilateral negotiations on e-commerce.
Benin, on behalf of the African Group, expressed sharp concern at the ongoing efforts to undermine the 1998 multilateral work program on e-commerce.
Several other developing and least-developed countries warned about the implications of the plurilateral negotiations on e-commerce.
Commenting on agriculture, the ACP group reminded the big subsidizers that “the current imbalance in entitlement to the use of domestic support provisions is having a serious negative impact on ACP countries’ productive capacity and international competitiveness.”
“Agriculture remains one of, if not, the most difficult areas of the Doha Work programme, and for this reason,” the ACP group urged members to “accord due priority to advancing the negotiations.”
Any outcome in agriculture, said the ACP group, “must be in line with the mandate of Paragraph 13 of the Doha Declaration and subsequent mandate issued by Ministers, especially as it relates to the special circumstances of developing countries and LDCs as well as NFIDCs [net food importing developing countries].”
India demanded an outcome on mandated issues like finding a permanent solution for public stockholding for food security.
It cautioned about the attempts to raise extraneous demands “for additional information and endless debates, with the objective of wriggling out of past commitments.”
Such a strategy by the US and the Cairns Group of countries, India warned, “is clearly a recipe for failure.”
As regards WTO reforms, India called for “a balance in the reform agenda by addressing some of the longstanding demands of developing countries.”
India, which is hosting a ministerial meeting in New Delhi on 13 May, said that it is ready to work with other like-minded Members to make specific proposals to facilitate work on WTO reforms.
“Getting the Appellate Body on its feet and preserving the independent dispute settlement system of the WTO needs to receive urgent and undivided attention,” India argued.
Members must pursue a reform agenda that is balanced and inclusive so as to solve the problems being faced at the WTO rather than imposing “additional burdensome obligations,” India argued.
Commenting on the proposed WTO reforms, including the punitive notification provisions and the curtailment of the special and differential flexibilities for several developing countries, trade envoys from many developing countries expressed alarm on several proposals that have been tabled.
The ACP group, for example, pointed out that the paramount importance of the WTO reforms must be to preserve “an independent, impartial and well-functioning dispute settlement system”, which is sine qua non for “pre serving the legitimacy and credibility of the multilateral trading system.”
“The continuing impasse in the appointment of the Appellate Body members,” according to the ACP group, “poses the real threat of eroding the effective ness of the WTO as a rule-making institution and undermines the adjudicating function of this House.”
Commenting on the transparency and notification proposals of the US, the EU, and Norway on behalf of the so-called Ottawa group, the ACP group maintained that developing countries face significant capacity constraints in complying with the notification requirements.
On attempts to truncate special and differential flexibilities and differentiate among developing countries for availing the S&DT flexibilities, the ACP group expressed sharp concern about discussing the S&DT issue at the General Council instead of the Doha negotiating body on trade and development.
The S&DT discussion is not being conducted under paragraph 44 of the Doha work program, the ACP group maintained.
Moreover, “arbitrary classification of WTO Members and the suggestion that some developing members are not entitled to S&DT or are excluded from claiming flexibilities, deviate from the S&DT provisions enshrined in the Marrakesh Agreement,” the ACP group argued.
The choice of self-declaration for availing S&DT flexibilities must be left to the developing countries to decide, the ACP group pointed out.
“The basic principles of inclusivity, transparency, development and particularly S&DT for developing countries and LDCs must be fully adhered to,” the ACP group demanded.
China cautioned that the AB crisis and the paralysis over the selection process for filling the AB vacancies pose “the most severe crisis” at the WTO.
China said most members do not support any punitive approach for complying with notification provisions.
Without naming the US proposal on differentiation for availing S&DT flexibilities, China said “we don’t agree to continue the unproductive and polarized discussions on differentiation or graduation of developing member s.”
“Nor we will accept the explicit or implicit case-by-case approach to erode the unconditional special and differential treatment for developing members,” China argued.
The only pragmatic way out, according to China, “is to encourage developing members to contribute according to their capacity to do so, instead of requiring them to prove the case upfront by themselves”.
In short, the HOD meeting exposed the deep divide between the developing countries on the one side, and the developed countries on the other over the plurilateral negotiations on electronic commerce, the proposals on S&DT and WTO reforms, trade envoys told the SUNS.