US, EU begin their campaign for new issues at WTO

Amid continued uncertainty over the future of the Doha Round talks, some WTO member states are pushing for “new issues” and “new approaches” to be taken up in the world trade body.

by D. Ravi Kanth

GENEVA: With the ink hardly dry on the month-old Nairobi Ministerial Declaration (NMD), the United States, China, the European Union, Australia, Canada and other major developed countries have begun at Davos their campaign for pursuing “new issues” at the World Trade Organization (WTO), several participants told the South-North Development Monitor (SUNS).

(The NMD, in its operative paragraph 34, has said without ambiguity: “While we concur that officials should prioritize work where results have not yet been achieved, some wish to identify and discuss other issues for negotiation; others do not. Any decision to launch negotiations multilaterally on such issues would need to be agreed by all Members.” – SUNS)

The new issues proposed by China, the EU, Canada, Korea and Thailand, among others, include digital trade, investment, small and medium enterprises (SMEs), and domestic farm subsidies. Brazil is reported to have said it is ready to “examine any new issue” that is mature for multilateral commitments.

Without mentioning the Doha issues, the US maintained that there is a fair degree of consensus for adopting “new approaches” to address the “outstanding” issues.

The US stance to do away with the Doha Development Agenda (DDA) architecture based on special and differential treatment flexibilities and less-than-full-reciprocity (LTFR) commitments in market access for agriculture and industrial goods to address the remaining “Doha” issues is also shared by the EU and other major developed countries.

China proposed a “solidarity work programme” in which it called for examining new issues such as electronic commerce and investment while simultaneously carrying out work on market access for agricultural products, industrial goods and services based on the Doha framework.

The EU called for pursuing new issues such as digital trade, investment and domestic farm subsidies.

Several other countries such as Korea and Thailand called for including small and medium enterprises in the new issues.

Paving the way for new issues

During a 23 January closed-door informal ministerial meeting convened by Switzerland on the margins of the annual World Economic Forum event in Davos, the major industrialized countries, especially the US and the EU, began preparing the ground for “new issues” and “new approaches” on the presumption that the DDA negotiations are dead, said a trade minister from a developing country.

The informal meeting was convened by Switzerland to chalk out the immediate priorities and what needs to be done for the WTO’s eleventh Ministerial Conference in 2017. Participants at the meeting included the US, the EU, Hong Kong-China, Indonesia, Japan, South Africa, Kenya, Argentina, Australia, Canada, Lesotho, Mexico, Norway, Pakistan, Russia and Thailand. India was not present at the meeting.

During the half-day meeting, the WTO’s Director-General Roberto Azevedo claimed that the December 2015 Nairobi Ministerial Conference was a “big success”, arguing that it built on the outcomes reached at the Bali ministerial meeting in December 2013.

Azevedo said members must pursue the remaining DDA issues but must be open to talking about new issues without prejudice to the outcome.

Azevedo said members must start with a conversation and remain open to ideas of flexibility and inclusiveness.

The Director-General called for greater private sector engagement in the conversations on new issues at the WTO, according to participants present at the meeting.

Also speaking at the Davos meeting, Kenya’s Cabinet Secretary for Foreign Affairs Amina Mohamed, who had chaired the Nairobi conference, said “success begets success.” She said members must now broaden the conversation to include the private sector. She said she was “tired of alarmist rhetoric of trade vs. GDP,” but did not mention how to address the remaining issues of the DDA during the meeting, according to a participant who asked not to be quoted.

The EU’s Trade Commissioner Cecilia Malmstrom said the Nairobi ministerial meeting provided “happiness” as it was an “important” development. She said members must now move forward and focus on “issues of value added to WTO such as trade facilitation and export competition.”

She called for “new approaches in a flexible and inclusive way” as well as “new issues” such as “electronic commerce, digital trade, investment and subsidies.”

Mexico’s Economy Secretary Ildefonso Guajardo Villareal called for a review of the single undertaking on which the DDA negotiations are based. “The reality is that in past three ministerials, the single undertaking has been put aside,” he said. “Consensus has been the leading factor and single undertaking should be reviewed.”

The WTO must discuss Internet services and manufacturing if it is to remain relevant to current developments, Guajardo Villareal maintained. “New ideas should come with proposals and framework,” he argued.

Russia sought to know whether members should continue with the Doha Round or adopt new approaches.

Indonesia said “heads of state must be involved as much as possible.” Indonesian Trade Minister Thomas Lembong said the “Bali success was due to Obama who spoke to Indian PM Manmohan Singh.”

Thailand called for “new issues such as e-commerce, SMEs, competition, investment.”

Turkey said it will closely follow the progress on a special safeguard mechanism for developing countries. Ankara urged progress in all Doha areas.

South Africa’s Trade Minister Rob Davies reminded his counterparts that there are still significant divergences among members on the continuation of the DDA and new issues. Davies said the majority of members “wanted reaffirmation of the DDA while others did not.”

“Some wanted new issues and some members opposed,” Davies said. New issues, he said, are not yet ripe for negotiations. However, South Africa would not shy away from conversation.

Korea called for discussing new issues such as e-commerce, SMEs, global value chains and regulatory coherence on an exploratory basis.

Lesotho, which is the coordinator for the African Group of countries in the WTO, said members must discuss the concerns of those who seek to depart from the Doha mandate. Lesotho pressed for “flexibilities of least developed countries and developing countries based on the architecture of WTO Agreements.”

China said WTO members must pursue a “solidarity work programme” to overcome divergences. Chinese Vice-Minister for Trade Shouwen Wang said the programme would include two sets of issues.

The first set would cover agriculture, market access for industrial goods, and services, as well as the remaining issues based on the multilateral approaches in line with the Doha framework.

The second set of issues, said Wang, would cover “issues that are very relevant,” particularly new issues such as e-commerce and investment, with a multilateral approach. The solidarity work programme will have a definite timeframe, he said.

The US Trade Representative Michael Froman cautioned against rushing prematurely into “work plans and deadlines.” The USTR said issues must develop organically and members must focus on revitalizing the WTO. He said members must not pursue rhetorical initiatives but instead focus on “pragmatic initiatives” based on consultations with diverse groups of the private sector.

Canada’s new International Trade Minister Chrystia Freeland, however, said that for all the successes of Nairobi, members didn’t live up to the full hopes of the Doha Round. She said it is time to do something on the Doha Round with fresh approaches.

In short, the US, the EU and other developed countries along with their developing-country allies are now preparing the ground for new issues and issue-based outcomes in market access.

The stage is set for making a rupture with the DDA negotiations once and for all, said a developing-country participant after the meeting. (SUNS8166)    

Third World Economics, Issue No. 607, 16-31 December 2015, pp12-13