Lack of progress on key issues for South at WTO

A 25 July meeting of heads of delegation at the WTO heard reports by the chairpersons of the various Doha Work Programme negotiating bodies which indicated that the talks had made scant headway on key issues of interest to developing countries.

by Kanaga Raja

GENEVA: There has been a lack of progress on key issues of crucial importance to developing countries in the WTO negotiating bodies, with positions on public stockholding for food security, the Special Safeguard Mechanism (SSM) and special and differential treatment (SDT) remaining basically unchanged from before or since the WTO’s tenth Ministerial Conference (MC10) held in Nairobi last December.

This came out at an informal heads-of-delegation (HOD) meeting on 25 July at the WTO, when the chairs of the various Doha Work Programme negotiating bodies reported on their recent consultations on key issues.

The meeting was convened by WTO Director-General Roberto Azevedo.

In some remarks after the meeting (posted on the WTO website), the DG said he has been urging members to move from reflection to action, and noted that members have submitted a number of papers, including on the core Doha issues.

Members, he said, have undertaken a wide range of exchanges in different formats in recent weeks, raising a number of other issues, and he had heard “positive reports” on the nature and tone of all these exchanges. “We should welcome the very fact that a range of discussions is taking place – and that other constituencies are becoming more engaged, including the private sector.”

“There is a lot to be positive about. But, if we really do want to deliver again, then members will need to be pragmatic, realistic and creative. We succeeded in Bali and Nairobi because we adhered to these principles,” he added.

According to Azevedo, the most important thing needed now is specificity, in each and every area. “We need to change the pace of our engagement and dive into a real proposal-driven process immediately after the summer. If we want to have outcomes in the near future, then we will need to accelerate our work significantly in the autumn. In all conversations we need to maintain and enhance our focus on development and LDC [least developed country] issues.”

According to trade officials, Azevedo reported at the HOD meeting on the meetings that he had attended recently, including UNCTAD 14 in Nairobi, the APEC trade ministers’ meeting in Peru, the OECD meeting, the ministerial meeting of the landlocked developing countries, and the G20 trade ministers’ meeting in Shanghai. Increasing engagement has been reflected in all of these meetings but “we need to increase the specificity of our discussions here,” Azevedo said.

He also mentioned the meeting he had with the negotiating group chairs on 6 July at which he urged them to prod members to be more specific.

He noted that seven papers on agriculture had been put forward. There has been movement in services but less so in non-agricultural market access (NAMA), while the issue of fisheries subsidies is drawing a lot of attention. There is a need to deepen the discussion in all of these areas if these Doha Development Agenda (DDA) issues are to move forward, he said.

There has been a lot of discussion and interaction among members on the question of micro, small and medium-sized enterprises and on electronic commerce (e-commerce), the DG noted.

“Inflection point”

The HOD meeting also saw the chairpersons of the various negotiating groups present reports on the state of play in the talks.

According to trade officials, the chair of the agriculture negotiations, Ambassador Vangelis Vitalis of New Zealand, said he is encouraged by the level of engagement. Since Nairobi, there has been evidence of movement from reflection to action. “We are now at an important inflection point.”

For the first time since Nairobi, members are engaging on substance. One clear objective that emerged is that agriculture should be part of any outcome from the WTO’s eleventh Ministerial Conference (MC11), and that the process and outcome in agriculture should be driven by ministerial expectation.

There is a desire to see at MC11, which will be held next year, an agriculture programme that is basically shaped by the Doha agriculture issues.

Members, Vitalis said, are prepared to look at other approaches, but it is very important in terms of principles that there be parallelism, no prejudice to any outcomes, no presumption and that there should be a lot of transparency.

The chair of the agriculture talks said that domestic support is seen by the bulk of the membership as a priority, and most members want an outcome on domestic support at MC11. But what should this domestic support outcome be, he asked – should it be broad limits, should it be product-specific and should there be links to exports?

Vitalis said members were reminded that domestic support on cotton was an issue of priority at MC10. Members have stressed that they would like to see this issue resolved by MC11.

The chair said it is very disappointing that out of 163 members, only 29 are up to date with their domestic support notifications through 2014. Only four developed countries – Australia, New Zealand, Norway and Russia – have submitted notifications, and of all the others, only Brazil is a major agricultural exporter.

On agricultural market access, the chair said that tariff peaks, tariff escalation, tropical products and tariff rate quotas have all been topics of discussion. Some members have said they would like to see Special Products taken up as an issue as well.

On export competition, Ambassador Vitalis said that it was the least prioritized area, but there were delegations that have called for implementation of what was agreed in Nairobi.

On the issue of public stockholding for food security purposes, the chair said that there have been dedicated sessions on this issue. Members agree on the mandate and the deadlines, but on little else. The G33 country grouping sees its 2014 proposal as the basis for discussion but positions have not changed since Nairobi. Food security and poverty alleviation are key for the G33 but those who have difficulty with the public stockholding issue are worried of unintended consequences which could have impacts on their agricultural programmes, the chair said, adding that substantial differences remain.

On the SSM, the chair reported that there has been no change since before Nairobi. The G33 would like its 2014 proposal to be the basis, but while the G33 says there should be no link between the SSM and agricultural market access, those that have concerns about the SSM are saying the complete opposite. There has to be a discussion on market access if there is to be any meaningful discussion on the SSM, Vitalis added.

No fresh momentum

The chair of the NAMA negotiations, Ambassador Remigi Winzap of Switzerland, reported that there did not seem to be any convergence or movement on NAMA. There had been no fresh momentum since Nairobi. There could be a broader approach to dealing with this issue in terms of looking at market access or at least reducing policy space in agriculture, services and NAMA at the same time.

Pointing to this being his last HOD meeting as both NAMA chair and Swiss ambassador, Winzap offered some ideas, saying that perhaps for NAMA one thing that members could do is to start to address incomplete bindings (some countries do not have fully bound schedules of commitments) and the “water” in the schedules (difference between bound and applied tariffs).

There is some talk among some members for plurilateral discussions and the area where this is seemingly most prevalent is chemicals, he said.

Ambassador Gabriel Duque of Colombia, the chair of the services negotiations, said that there has been a clear message from members that they are keen to move forward, and that the progress in agriculture at MC10 has given some members the impression that there is less of a need for sequencing, that is, dealing with agriculture first. There is a common acknowledgement that services have lagged behind and equal recognition that services are extremely important to the economies of all WTO members.

The chair referred to a meeting held on 4 July with 25 delegations at which there was discussion about the need for new ideas and initiatives and less a repeating of common positions. There was an in-depth discussion about domestic regulation. There is hope for more progress here and a need for more specific proposals to move those discussions ahead. On the question of market access in services, delegates said there has been little progress because of a lack of leadership.

According to the chair, many members have mentioned e-commerce as an important area of discussion for their economies. The notion of trade facilitation in services has also been mentioned by many delegates, and there is a need to put forward a concrete proposal.

On the objectives, the chair said one of the ideas in market access is that there needs to be some new thinking and that solid proposals are long overdue. One idea put forward would be to eliminate any difference between what a member applies in its market and what it has submitted as its offer in the WTO. Another idea would be to bring a member’s WTO commitments up to the level of its commitments in regional trade agreements, he said. Yet another idea would be that commitments that had been made by recently acceded members (now called Article XII members) could be seen as a basis for the level of ambition for services offers.

Ambassador Wayne McCook of Jamaica, chair of the rules negotiations, reported that a paper had been put forward by some delegates on questions about fisheries subsidy schemes of governments. There were some questions about how to achieve Sustainable Development Goal 14.6. The chair said that there is a strong desire for an outcome by MC11. There is a gap among the proponents on how and where this issue should be taken up, but there is strong support for getting some kind of an outcome.

Others are concerned about imbalance in the negotiations and would like to see a balance between fisheries subsidies, anti-dumping and subsidies.

The chair of the Committee on Trade and Development in Special Session, Ambassador Yee Woan Tan of Singapore, reported that all delegates understand the importance of SDT but members have not moved from the positions that they had when the committee met before Nairobi.

Some have called for picking up where they left off, while others said that to pick up the 25 agreement-specific proposals in the current or the previous format would not lead to a positive outcome. Some delegates said that there is a need to reorient the discussion, while others are opposed. Some wanted to talk about doing away with exemptions and carve-outs and look for better ways to integrate developing and least developed countries into the multilateral trading system, but others rejected this idea.

The chair also reported that the issue of differentiation between developing countries came up, with continuing strong disagreements on this.

While there has been some movement to action, by and large, there has been an absence of new approaches and the work in the committee is not moving well, said the chair.

WTO Deputy Director-General Yi Xiaozhun read out the report of the chair of the TRIPS Council in Special Session, Ambassador Dacio Castillo of Honduras, saying that the issue here concerns those delegations that call for the mandate to not just include the geographical indications register for wines and spirits but be extended to cover other products. There are also calls to ensure coherence between the WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) and the UN Convention on Biological Diversity (CBD).

The chair of the Committee on Trade and Environment in Special Session, Ambassador Syed Tauqir Shah of Pakistan, said that there has been very little progress. Members spoke on the importance of the Paris Agreement on climate change and the Agenda 2030 for Sustainable Development, but most of the discussions that he had in his consultations had been on work that is being done in fora other than the committee.

Deputy Director-General Karl Brauner reported on behalf of the chair of the Dispute Settlement Body in Special Session, saying that very little progress has been made on dispute settlement reform. There was some discussion about whether there can be deliverables at MC11. Some said that a target date should not be put on any outcome, while others said that this could focus the discussion. There were many who said that what is needed is an outcome that would favour an incremental approach to progress, said the chair.

Development outcomes

Following the reports by the negotiating group chairs, a number of delegations spoke at the HOD meeting, with developing countries highlighting the importance of obtaining development outcomes and that priority should be given to the Doha issues. They also underlined that the issues of public stockholding for food security purposes and the SSM must be delivered at MC11.

According to trade officials, Rwanda, speaking on behalf of the African, Caribbean and Pacific (ACP) Group, underlined that development outcomes at MC11 are crucial. There is a need to live up to the Sustainable Development Goals (SDGs) and to begin serious work immediately after the summer break if outcomes are expected by MC11, it said.

Rwanda stressed that paragraph 31 of the Nairobi Ministerial Declaration (NMD) gives priority to the Doha issues and these should be addressed as a priority.

The ACP Group would like to see an outcome on agricultural domestic support at MC11 as well as a permanent solution for public stockholding for food security purposes. It would also like to see the SSM made operational, and an agreement reached on fisheries subsidies. There must be special and differential treatment with respect to fisheries subsidies.

On services, the ACP Group said that the development dimension must be taken up.

On new issues, the ACP Group said it is closely following the discussions on e-commerce. While new issues can be discussed, progress in these areas should be linked to progress on the Doha issues, it stressed.

Peru highlighted fisheries subsidies and the contribution that the WTO can make to the SDGs. It wants to see a transparent and inclusive process moving forward.

Argentina said there was a good outcome at Nairobi especially on agricultural export competition. All those countries that have export subsidies need to eliminate them. Agriculture is a clear priority for the majority of members.

Argentina said it would like to see an agreement on fisheries subsidies as part of the WTO’s contribution to the SDGs. It would also like to see an outcome on services by MC11, both in market access and in domestic regulation. Further, it would like to see discussions enhanced with deliverables on e-commerce by MC11.

Benin, on behalf of the LDCs, said it is impressed by the movement to action from reflection and is very keen to see this continue.

Russia said that it is encouraged by the movement to greater action.

The European Union underlined the need to identify where deliverables can be achieved by MC11. There is a need for clear submissions; while there have been some submissions, more are needed.

The EU welcomed proposals on domestic support in agriculture. It said efforts on this need to be redoubled. There is also a need to increase the discussions on e-commerce and digital trade.

On fisheries subsidies, the EU said that it is ready to engage and to look for multilateral disciplines. On services, the EU said that there is an urgent need to advance on domestic regulation with text-based proposals.

Closing the gaps

South Africa said that all the reports of the negotiating group chairs indicate that, in one way or another, much more needs to be done to close the gaps between members. In its view, until there is some shared understanding on how to address the remaining Doha issues, deemed “the priority” at MC10, it will be difficult to get “buy-in” from all members to even discuss non-DDA issues, lest a new “imbalance” is created in the negotiating process.

Singapore said that the multilateral trading system is essential and needs to be preserved. Members must not fall into ideological debates and push action that should take place in the WTO out of the organization.

Costa Rica said that the issue of agricultural domestic support is crucial, and it also welcomed the discussion on e-commerce. The lack of progress in the WTO must be reversed as it is very bad for developing countries.

Japan noted that there have been many proposals put forward on domestic support. On services, there have been fruitful discussions on domestic regulation. Japan said it is prepared to be flexible and constructive in its approach.

Pakistan said that two successful Ministerial Conferences have put the WTO back on track. A step-by-step approach is needed. E-commerce is also key to development, and development must be central to the discussions here. MC11 can be an opportunity to make progress and achieve an outcome on e-commerce.

Agriculture is a core issue, Pakistan said, stressing the need to look at all three pillars of the agriculture negotiations. It said it is open to discussing the SSM and public stockholding, and it is also ready to work on finding an outcome on fisheries subsidies that is within the mandate of the SDGs.

Indonesia said that paragraph 31 of the NMD says that the Doha issues should have priority. The conversation should be guided by development considerations. On agriculture, the priority is public stockholding and the SSM.

Paraguay said it is open to discussions on a range of issues. Agriculture continues to be of crucial importance. Agriculture trade is still imbalanced and there is a need for more to be done.

Bangladesh said that the WTO must keep delivering. There were two issues in Nairobi that were important – agriculture and SDT. It got what it wanted on agriculture but not on SDT. There is a need to restart the discussions on SDT.

The US said it shares the view that it is important to implement the NMD. There is a need to avoid drifting back to the pre-Nairobi negotiating dynamic. It feels as though things have been fairly favourable so far in the discussions. There is a new spirit of openness in the WTO which is encouraging. It said it is ready to engage in many different formats provided that there are new approaches that are being taken up.

The US said most of the members seem prepared to engage on issues that may be important to the future relevance of the WTO. The G20 major economies have given impetus to discussions on trade and investment.

According to the US, there is some indication that some are still clinging to an old mandate even though there was a lack of consensus on the old mandates in Nairobi. New beginnings can only be achieved if we are prepared to move away from the past and approaches that did not work.

For the US, the WTO and the multilateral trading system are the bedrock. The multilateral framework, it said, is embedded in every bilateral and regional trade agreement that it has negotiated.

Colombia said that an incremental approach should be taken. Areas for short-term agreement should be identified while also plotting a longer-term course. It called for progress in all three pillars of agriculture and on fisheries subsidies and services.

China said that it is committed to giving priority to all DDA issues. While it noted that there have been new proposals put on the table, there are no signs of consensus on these proposals and the prospect for gaining consensus at this point seems unfavourable. The Doha framework and mandates seem the best bet for delivery of the issues by MC11.

On agriculture, China said it sees that many members want agreement on domestic support. The success of MC10 was about levelling the playing field with respect to export competition, and MC11 can go further by eliminating the Aggregate Measurement of Support (AMS or Amber Box), especially as used by developed countries. Only 32 members use the Amber Box and it will be impossible to reach consensus if the AMS is left out to focus on de minimis support, particularly the de minimis programmes used by developing countries, let alone de minimis programmes used by Article XII countries.

China said there is a need to focus as well on agricultural market access, particularly tariff peaks and tariff escalation. These issues are candidates for deliverables by MC11.

The SSM and public stockholding are standalone issues where solutions must be delivered at MC11, it said. It also stressed on the development dimension.

It said it is favourably inclined on the new issues and would like to see a development-friendly outcome at MC11 on e-commerce.

Bolivia said that the NMD gives priority to the Doha issues, particularly SDT. There is a need to level the playing field and for more fair and balanced rules. There is also a need to eliminate domestic support in agriculture as well as the Green Box. Bolivia underlined the need for an SSM for the developing countries.

India said that members are now in an interesting phase of technical consultations which have enabled them to better understand each other’s positions. Only through a member-driven transparent and inclusive process can progress be made.

The public stockholding and SSM provisions are crucial outcomes for India, it said. On services trade, advancing the DDA should be the priority. The development dimension should be central. Members should not be looking at anything which would erode the development dimension through any part of these discussions, India said.

Ecuador stressed the importance of the DDA issues, in particular SDT. It also wants to use the Rev. 4 draft agriculture modalities text of 2008 as the basis for discussion on agriculture. It would like an agreement on market access in agriculture by MC11 as well as on the SSM and public stockholding.

Cuba said that the need for the Doha Round is as potent as ever because the imbalances from the Uruguay Round should be addressed. New issues which could impinge on sovereign rights must not be taken up before the DDA issues are concluded. Cuba said it also favoured the use of the Rev. 4 text and supported the G33 proposals on the SSM and public stockholding.

Brazil said that it is pleased to see engagement at a faster pace. Members appear to be moving in the right direction. Agriculture is central, it said, noting that a great majority of members have identified trade-distorting domestic support as a central issue for progress. (SUNS8291/8292)                                   

Third World Economics, Issue No. 621/622, 16 July – 15 August 2016, pp17-20