South stress on S&DT, development, SSM, public stockholding

A 12 May meeting of the WTO’s governing General Council saw member states outline their priorities for the WTO negotiating agenda.

by Kanaga Raja

GENEVA: A number of developing countries, speaking at the meeting of the General Council of the World Trade Organization (WTO) on 12 May, highlighted the importance of special and differential treatment (S&DT), the development dimension and the need to implement all the Bali and Nairobi decisions.

Highlighting their priorities for the work going forward following the tenth WTO Ministerial Conference (MC10, held in Nairobi in December 2015) and the potential deliverables for MC11 (to be held in 2017), the developing countries also laid stress on the Special Safeguard Mechanism (SSM) and public stockholding for food security purposes, and for these two issues to be delivered at MC11.

The least developed countries (LDCs) called for tangible progress on cotton by MC11.

Several developing countries also said that there is a need to focus on the Doha issues first, before looking at the new issues.

The developing countries put forward these views during the discussion on the first agenda item of the meeting, the report by WTO Director-General (DG) Roberto Azevedo in his capacity as Chairman of the Trade Negotiations Committee (TNC).

Speaking as the TNC Chair, Azevedo said that the chairs of the negotiating groups will be continuing their work, and some will be holding open-ended meetings and further consultations in the coming days and weeks.

“I encourage you to remain engaged in these activities – and to keep talking to each other ... I think it is important now that we step up our interactions, across the full range of formats. In all cases it is important that we move from reflection to action. I look forward to these conversations evolving in the coming weeks,” he said.

The DG had made a full report at an informal meeting of heads of delegation (HOD) on 9 May, and at the General Council meeting, he asked for his statement at that HOD meeting to be added to the record of the General Council meeting.

The chairs of the various negotiating groups had also reported on their recent discussions at that HOD meeting. Their reports, in particular on agriculture, non-agricultural market access (NAMA) and services, revealed continued differences among the membership on the key issues (see following two articles).

A number of delegations which had also spoken at that HOD meeting highlighted the importance of agriculture and in particular the issue of domestic support, the development dimension and S&DT, as among their priorities for the work going forward. These statements too were added to the record of the General Council meeting.

Several other delegations that had not spoken at the informal HOD meeting spoke at the General Council.

Unclear way forward

According to trade officials, Saudi Arabia, on behalf of the Arab Group, noted that there had been no concrete progress on agriculture and NAMA, and the way forward seemed unclear. The last two Ministerial Conferences were successes, and it was very important for the WTO to keep showing stakeholders that it was capable of delivering.

There was a need to start working on what could be done for MC11, and the way to do this was to be guided by the ministerial declarations and decisions of previous Ministerial Conferences; time was running out, and members needed to start moving.

Bolivia said it was important to find balance. The multilateral trading system was important to developing countries and it needed to give greater benefit to these countries, particularly the smallest of them. It referred to paragraph 30 of the Nairobi Ministerial Declaration (NMD) which talks about the Doha issues.

It believed that the Doha Round was the only framework that was still valid, and members should not open up other issues until the Doha issues had been resolved. There was no agreement on the new issues. It was important that the multilateral nature of the WTO be reinforced. It was a concern when the organization was beginning to take on plurilateral discussions.

Benin, on behalf of the LDCs, said there was a need to see reforms to the Agriculture Agreement as the LDCs were dependent on agriculture. The effective implementation of the NMD would be important for the LDCs.

Thirty-six of the LDCs were cotton producers, and there was some progress on cotton in Nairobi. It was very important to have transparency with respect to support for cotton through notifications, Benin said. Between now and MC11, it was very important to have more progress on the cotton issue.

Benin added that S&DT was extremely important, as well as an agreement on fisheries subsidies, which must take into account the special concerns of the LDCs and traditional fishing practices.

Cameroon said that there was a need to support the Sustainable Development Goals (SDGs) and to build on the outcomes of the Nairobi Ministerial Conference. There was a further need to make sure that S&DT and trade-distorting subsidies (in agriculture) were addressed.

Uganda, supporting Benin’s statement, said it was problematic that there was still no agreement on trade-distorting support. The Doha modalities must not be reduced. On new issues, Uganda said the WTO must not become a two-tiered organization, and new issues must be explicitly mandated by ministers and agreed to by consensus.

Nigeria said that the period of reflection should not keep going for too long. There was a need to build on the successes of MC9 (held in Bali in 2013) and MC10. Members should be guided by the NMD decisions, particularly in areas where agreement had not been reached.

There was also a need to look at export competition, public stockholding, the SSM, the LDC issues and the Trade Facilitation Agreement (TFA). Nigeria said the development dimension should remain the priority, and highlighted the importance of agriculture, which had long been a distorted sector. There was a need to level the playing field. It stressed on a transparent, inclusive and bottom-up approach.

Centrality of development

Rwanda said that the outcome of MC11 should be viewed as a way of supporting the SDGs. Development must be central to the outcome of MC11. It was very important that the Doha issues, including the three pillars of agriculture, NAMA and services, development, TRIPS issues and rules were addressed. It also highlighted the importance of public stockholding, the SSM and fisheries subsidies. On NAMA, it said that policy space was very important.

Venezuela supported the developing-country G33 grouping on the SSM and public stockholding. It was concerned that little room had been given to policy space for developing countries in the NAMA negotiations.

Ecuador highlighted the importance of S&DT, development, the SSM and public stockholding.

Kenya said that there was no clear path as yet for the post-Nairobi work programme. Members needed to pivot from reflection to action. Agriculture, fisheries subsidies, S&DT, and less than full reciprocity (LTFR) were important. It expressed support for the G33 on the SSM and public stockholding.

Cuba said that it did not want to see a two-tiered negotiation. It supported Bolivia and Venezuela.

Mali, on behalf of the Cotton-4 countries, recognized that real progress had been made in Nairobi. It was tangible progress – it may not have been everything it wanted, but it was a step in the right direction. It renewed its call for addressing trade-distorting domestic support. It was also important to have adequate notification in terms of this discussion.

Qatar said that the organization was in a bit of a predicament with respect to sequencing. It understood the importance of moving forward in those areas where progress could be identified, but said this should not be a standalone process that leaves aside other issues.

Nepal supported the LDCs.

Turkey said that the implementation of the Bali and Nairobi decisions was very important, but new issues should not be ignored. Plurilateral issues like the Environmental Goods Agreement (EGA) were important to support the credibility of the negotiating arm of the WTO. It said agriculture had so far only delivered on export competition and to a certain extent on cotton. But the questions of the SSM and public stockholding were also important. There should be delivery on these issues at MC11. There should also be an outcome on reduction of tariffs on industrial goods by MC11.

Pakistan said that there had been two Ministerial Conference outcomes which had given real momentum. Every effort should be made to ensure that this continued. There was a need to begin to look at issues such as cotton and trade-distorting domestic support.

Tunisia said that less than full reciprocity was key. It was worried about preference erosion.

Chile said that there was a need to work hard on the implementation of the decisions taken in Nairobi and to make sure that negotiations start on issues that had not been agreed, including agriculture, NAMA, services and fisheries subsidies.

Morocco, on behalf of the African Group, said that the outcomes from the Nairobi Ministerial Conference, particularly for LDCs, were good and must be implemented. Before looking at new issues, there was a need to focus on the Doha issues. In this respect, S&DT and agriculture were very important. These issues needed to be addressed before new issues could be taken on, Morocco said, adding that priority should be given to cotton. Fisheries subsidies were also important.

Australia, on behalf of itself and New Zealand, said that agriculture, NAMA, services and fisheries subsidies were important. It was important to step up the pace of work. The period of reflection needed to be shifted to action, and the importance of continuing to deliver should not be underestimated. The post-Nairobi period needed to be used for making deliverables before MC11, at MC11 and after MC11, it said.

Sierra Leone agreed with the LDCs and the African Group. The SDGs should be central.

Both Tanzania and Lesotho agreed with Rwanda, Benin and Morocco.

Several delegations spoke under the second agenda item on implementation of the Bali and Nairobi outcomes.

Brazil mentioned the importance of reinvigorating the work of the WTO committees to make them more efficient. It also highlighted the critical importance of transparency and the issue of notification. These issues of transparency would  be critically important and valuable to the implementation of the Nairobi decisions.

Montenegro said that it had notified the WTO secretariat about its ratification of the TFA, while Moldova said its government had approved the TFA and expected its parliament to do so soon.

Transparency

The US mentioned notification as a very important transparency obligation of all members. It was very important for all members to hurry up on these transparency obligations.

On the SSM and public stockholding, the US said that it was committed but that it was important to make a distinction between the two. On public stockholding, there was a commitment for members to try and find a solution by MC11. But the SSM was a broader discussion and linked to market access in agriculture.

On export competition, the US said that it was open to scheduling export subsidies. But it would expect that all members who had the right to use export subsidies would also schedule and this should be done jointly in concert.

[In a comment, Chakravarthi Raghavan, Editor Emeritus of the South-North Development Monitor (SUNS), said that while WTO members can implement the Nairobi decisions on export subsidies voluntarily, ongoing research work at the South Centre shows that this cannot become a binding enforceable commitment as there apparently is no provision in GATT 1994 and in the Agreement on Agriculture for members to change their export subsidy commitments which were scheduled, after multilateral scrutiny, under the WTO treaty in 1994. While GATT procedures enable a member to revise its tariff schedule, there is no such provision in respect of the Agreement on Agriculture in terms of export subsidy commitments.

[For any modification of export subsidy schedules to become effective and enforceable, members have to adopt a protocol and, since it has some implications vis-a-vis the WTO’s most-favoured-nation (MFN) provisions, such a protocol needs to be accepted by all members before it can be made part of Annex 1A of the WTO treaty to become effective. – SUNS]

Benin said that it was very important to implement all the Bali and Nairobi decisions pertaining to the LDCs.

New Zealand supported the Brazilian statement on reinvigorating the committees to make them more effective, and a very good step up on this front would be for all members to notify.

Canada also supported Brazil with regard to reinvigorating the committees. It highlighted the importance of all members notifying.

Japan supported Brazil on the importance of the regular committees. There was a need to understand the current situation and where the actual problems lie, and the only way to do that was for members to notify, it said.

The EU said that implementation of the Bali and Nairobi outcomes was of the highest priority. The scheduling of export subsidies was also a high priority. Notification was critically important. Many members were far behind in all their notifications and this was a serious concern,    it     said. (SUNS8241)                  

Third World Economics, Issue No. 616/617, 1-31 May 2016, pp2-4