South stress on outcomes on public stockholding, SSM, LDC issues

Trade diplomats heard reports on the state of play in the WTO negotiations at a 1 December meeting and also conveyed their countries’ respective positions on the talks.

by Kanaga Raja

GENEVA: A number of developing countries have stressed the need for outcomes at the next WTO Ministerial Conference on the issues of public stockholding for food security purposes as well as on a Special Safeguard Mechanism (SSM) for developing countries.

The least developed countries (LDCs) in particular also wanted to see the issues of special and differential treatment (SDT) and the LDC issues addressed.

The positions of the developing countries were put forward at an informal meeting of heads of delegation (HOD) on 1 December at the WTO, where Director-General Roberto Azevedo and the chairpersons of the various Doha Work Programme (DWP) negotiating bodies reported on their recent consultations on the key issues.

A number of countries at the informal meeting also indicated that they want to see outcomes on agriculture, especially on trade-distorting domestic support including on cotton; on fisheries subsidies; as well as on domestic regulation in services at the eleventh WTO Ministerial Conference, which will take place in Buenos Aires next December.

At the beginning of the meeting, Bolivia, on behalf of the ALBA (Bolivarian Alliance for the Peoples of Our America) countries, asked for a moment of silence for former Cuban President Fidel Castro, who passed away on 25 November. Cuba also took the floor and thanked everyone for their support.

Reports by DG and negotiating group chairs

DG Azevedo reported on his recent consultations including meetings with the negotiating group chairs in the previous week as well as with the coordinators of various country groupings.

He mentioned the mini-ministerial meeting hosted by Norway in Oslo in October, the APEC ministerial meeting in Lima, meetings of the OECD, the IMF and the World Bank, as well as the Cotton-4 ministerial meeting in Bamako, Mali that he had attended in October.

The Cotton-4 grouping had highlighted to him the importance of making progress on the parts of the cotton dossier that had not been addressed in the last Ministerial Conference, which was held in Nairobi in 2015.

They were pleased with what happened in Nairobi on market access and export competition and now they want to see movement in implementing the decisions taken in Bali (at the 2013 Ministerial Conference) and Nairobi. They also want domestic support in cotton to be tackled.

In his remarks at the informal HOD meeting (posted on the WTO website), Azevedo said: “A number of common points have emerged from my recent discussions and consultations. First, there seems to be a shared desire among members to deliver concrete results at the 11th Ministerial Conference (MC11).”

Second, he said, members see the importance of sustained ministerial engagement throughout the preparatory process for MC11.

Third, outcomes are more likely to be achieved through incremental progress rather than major leaps.

And fourth, everyone agrees on the importance of advancing the development and LDC components of any of the issues that are being discussed.

“I think that these elements – and others – would provide useful guidance for our work here,” he said.

“We can look back on a very constructive year of discussion and debate. As I have said before, I can’t easily recall when we last saw this kind of dynamism and engagement at the WTO. Longstanding issues are being discussed in new ways. Other issues are also being debated. We can be pleased with the progress made and positive about the way forward. But, in order to make further progress, and with MC11 in mind, we will clearly need to intensify our work in the New Year.”

The D-G said that as discussions evolve, he is hearing divergent views in many areas. “I am also hearing convergent views in many areas, but with different approaches. Therefore, when we resume in 2017, I intend to start facilitating exchanges among proponents as well as delegations that have shown particular interest in specific issues. The idea would be to share views and see how we might be able to move forward.

“I will do everything I can to help members and to facilitate this work. It’s important to stress, however, that any progress will need to be driven by members. It is up to proponents to get traction and convergence behind their priority issues. Deliverables for MC11 will be defined by how much traction and progress is achieved by proponents. So I urge members to continue talking to each other. Remain pragmatic. Remain open-minded. And be ready to intensify work in the New Year.”

According to trade officials, in his report, the chair of the agriculture negotiations pointed to 69 bilaterals that he had held since the last meeting (in July) and more than 200 bilaterals since January 2016. What he has been able to detect from these is that agriculture must be part of any outcome at MC11.

It is very important that the ministerial expectations be addressed, including the Nairobi Ministerial Declaration. It is difficult to envisage an agriculture outcome without progress across all the Doha issues, specifically the non-agriculture issues.

He also said that there is a desire on the part of members to avoid seeking out any polarizing issues and having a polarizing debate on these.

On the substance, the chair said that the key issue around which most of the members were coalescing is the question of domestic support. He pointed out that there is no consensus so far but the intensification of the discussions is encouraging. He also highlighted the issue of domestic support notifications.

On agriculture market access, he said that there has been some shift in gears and some intensification. The issues that members are talking about include tariff peaks, tariff escalation and tariff simplification. These things are important but whether or not there is progress on this is not known.

On public stockholding for food security purposes, the chair said that well-known positions have been repeated and there is nothing new to report there. The same goes for the SSM. Those who are proponents of the SSM say they see this as something that is very important to address import surges, address food security needs and offset trade-distorting subsidies elsewhere. But many countries also say that they do not see any prospect for an SSM without an agreement on agriculture market access, said the chair.

The chair of the negotiations on non-agricultural market access (NAMA) pointed to four categories of members – those that are not open to engaging on tariff cuts; those who can envisage getting engaged provided that certain other conditions are met in other areas (largely pertaining to agriculture); those who are willing to negotiate but are skeptical of a multilateral process and would prefer plurilateral or sectoral negotiations; and those who believe that tariff cuts are not feasible and that emphasis in the NAMA group should focus on increasing bindings and looking at the question of policy space.

There were opposing views to all of these perspectives, the chair said, adding that many other delegations did refer to SDT and the principle of “less than full reciprocity”. Some others referred to the Rev. 3 text (draft NAMA modalities text of 2008).

The chair said that there has been a slightly more encouraging picture on the issue of non-tariff barriers (NTBs), with members focusing on good regulatory practices and transparency particularly in areas like sanitary and phytosanitary measures and technical barriers to trade.

The chair said that there is a need for new ideas if there is to be an outcome at MC11.

The chair of the services negotiations said that the focus has been on three areas – domestic regulation, market access and e-commerce.

On domestic regulation, he noted the two proposals from India on trade facilitation in services. Some delegations also spoke about technical standards, transparency and the development of measures. The chair was of the view that the talks on domestic regulation were going well.

On market access, the chair said that there is a large and longstanding discussion about the difference between what governments commit to here and what their applied circumstances are with respect to various regulations involving specific sectors.

The chair said that there is a need for proposals on e-commerce. There have been some proposals but this has to be driven by the members.

Without concrete proposals, both market access and e-commerce cannot move forward, said the chair.

The chair of the Rules Negotiating Group highlighted the issue of fisheries subsidies which many members have discussed. Many proponents want fisheries subsidies to be a standalone issue. Some say that this should be done plurilaterally, but what the membership say is that plurilaterals should complement, rather than compete with, any multilateral approach.

According to the chair, some delegations would like to see movement on the issue of trade remedies.

Some delegations stress the need for balance across all the rules pillars, while some others say that the time is not ripe to talk about anti-dumping and subsidies.

The chair of the Committee on Trade and Development in Special Session said that there has been no movement in the committee. The proponents are in the process of putting forward proposals, and members are fully aware that without these proposals, there cannot be any prospect of agreement by MC11.

The chair of the Committee on Trade and Environment in Special Session reported no change in positions.

The chair of the Dispute Settlement Body in Special Session said that mutually agreed solutions are the area on which members are focusing. The next focus will be on third-party rights.

The chair of the TRIPS Council in Special Session reported that there is no appetite to engage on the geographical indications (GI) register for wines and spirits.

Countdown to MC11

According to trade officials, Norway recounted the mini-ministerial meeting held in Oslo in October.

Chad, on behalf of the LDCs, said that the countdown for the Buenos Aires ministerial meeting has started. It would like to see substantial cuts in trade-distorting domestic support, public stockholding for food security purposes, a multilateral outcome on fisheries subsidies along the lines of the SDG (Sustainable Development Goal) Target 14.6, and the elimination of subsidies for illegal, undeclared and unregulated fishing.

It also wants to see the issue of SDT and LDC issues addressed, as well as duty-free, quota-free market access for LDC products (DFQF) and implementation of the decision on the services waiver for the LDCs.

It said that the LDCs note the dynamism on the issue of e-commerce. It however pointed out that the LDCs lack basic infrastructure. The International Telecommunication Union has said that there are 940 million people living in the LDCs, but only 89 million of them use the Internet – slightly more than 9%.

Laos, on behalf of the Association of South-East Asian Nations (ASEAN), said that it would like to see domestic support, agricultural market access and domestic regulation in services, including a trade facilitation in services agreement, as deliverables for MC11.

It also took note of the discussions on e-commerce and micro, small and medium-sized enterprises. It is committed to discussing these issues, but it wants to make sure that they emerge in a way that takes into account the development dimension.

Argentina (which will be hosting the next Ministerial Conference) said that after the agreements reached in Bali and Nairobi, it is very important to continue to deliver something important in Buenos Aires.

It wants to see the implementation of the decision on export competition reached in Nairobi. It also wants to see a specific decision on domestic support including on cotton, as well as an outcome on fisheries subsidies. It would like to see progress on domestic regulation and market access in services. E-commerce should be part and parcel of any outcome.

Egypt said that the multilateral system holds many advantages over plurilateral and regional accords. Bali and Nairobi have offered proof that the WTO can deliver.

It said that it is the largest net food-importing country, so agriculture must be part of any outcome in Buenos Aires. Public stockholding and the SSM are very important. It was disappointed that there has not been more progress made on these issues.

Japan said that to remain relevant, the WTO must continue to deliver outcomes that address current policy concerns. Trade has been unfairly blamed for job loss. There must be courage to send the message that free and open trade is a good thing. But attention needs to be paid because the impact of trade on the environment can be problematic, it said.

Fisheries subsidies must be appropriately addressed, it said. It also said the Trade Facilitation Agreement (TFA) must be fully ratified and it is encouraging that the ratification is just around the corner.

It expressed interest in talking about trade facilitation in services and added that e-commerce can facilitate the entrance of small entrepreneurs in the global market. But it is evident that there needs to be capacity building and institution building in some countries to enable them to reap the benefits from this, it said.

Chile called for ratification of the TFA. There is also a need to implement the decision on export competition and to make progress in services.

New Zealand said that we are now entering an era of uncertainty, with the risk of unravelling the existing order. All members have benefited from the WTO. The importance of multilateralism is something that everyone must take on board.

On the negotiations, it highlighted three elements – intensify the engagement, adopt a pragmatic approach, and leadership.

Rwanda, on behalf of the African, Caribbean and Pacific (ACP) countries, said that trade-distorting domestic support and fisheries subsidies are critically important.

In agriculture, it is looking at a way to limit product-specific domestic support for certain products so that there will not be a concentration of support for any one product, particularly ones that will be exported. It is also important that the issue of fisheries subsidies be addressed as well, it said.

Phase of convergence

According to trade officials, India pointed to this being an important phase of convergence. Although it is important to say that there has not been any consensus anywhere in any of the issues, there is a tendency on the part of some members to say that consensus is arising on e-commerce, domestic regulation and domestic support. But in order to get traction here, there must be much deeper involvement of the membership, it said.

The Bali and Nairobi ministerial declarations must be implemented, it stressed, adding that this must be the priority. It gets the impression that there has been some “cherry-picking”; some members choose to focus on some areas while not on others. The credibility of the WTO will not be enhanced if the ministerial declarations are not implemented, it said.

India said that the development dimension must be addressed. It is a vocal advocate for public stockholding for food security purposes and the SSM. This is extremely important for many developing countries, it said, adding that some delegations seem to be avoiding engagement.

South Korea said 2016 has been a tough year. While there is anti-trade sentiment out there, this needs to be addressed in a way that is supportive of the system. For South Korea, agriculture, services, fisheries subsidies and e-commerce are very important.

There is a need to recognize that a great deal of movement is not being seen. There is opposition, and very often policy space and special and differential treatment are raised as reasons not to move the agenda forward. The question of special and differential treatment is a vexing one because no one can agree on exactly what this means, it said.

Uruguay said that agriculture is the core issue, but the issue of fisheries subsidies is important as well.

Australia said that this has been a difficult year and the year ahead will no doubt be difficult as well. The way to respond to the anti-trade climate is not to stand still at the WTO but to deliver results as was done in Bali and Nairobi.

It said there are areas where there is a chance for success, including things that might be plurilateral. Fisheries subsidies, e-commerce and domestic regulation in services are among these.

The European Union said that the WTO members have now begun to move from reflection to action, but it is clear that they are not moving along at a satisfactory pace. There is not enough action as yet.

For the EU, the issues that are possible deliverables include trade-distorting domestic support. The question of fisheries subsidies is something that is important along the lines of SDG Target 14.6. It also highlighted the issues of small and medium-sized enterprises and e-commerce.

Indonesia, on behalf of the G33 grouping, said that it is extremely important that the issues of public stockholding and SSM are addressed. There are mandates for these issues. It is ready to engage in a solution-oriented approach but there is a need to get moving on this, it added.

On behalf of itself, Indonesia said that e-commerce is important. It is prepared to look at things in this regard but said the Nairobi mandate with respect to this issue should not be deviated from.

Pragmatic multilateralism

According to trade officials, the United States said in terms of the current environment, it has been encouraged by the pragmatic approach that many delegations have taken.

It noted that when US Trade Representative Michael Froman was in Geneva in October, he underlined the need to have pragmatic multilateralism. The US said there should be multiple sources of inspiration, including plurilateral approaches. There should also be regional approaches that can buttress the global trading system.

Referring to the negotiations on the Environmental Goods Agreement (EGA), it said that this will be a chance for the WTO to deliver another negotiating success. Members should not miss such an opportunity which does not come along that often. This can help to address both economic and environmental objectives. It will benefit all WTO members because it is MFN in nature.

The US said it is encouraged by the energy in the discussion on fisheries subsidies. The development dimensions of this are clear. The US and its partners are pursuing a plurilateral on this issue but they are prepared to engage with proponents multilaterally as well.

The US said that e-commerce is something that is of great importance to all members. It is important though to set a realistic pace rather than forcing a pace that may result in an outcome that is less than satisfactory.

It underlined that President Barack Obama and his trade team are still deeply engaged and will continue to be engaged up until 20 January (when president-elect Donald Trump takes office).

China said that agriculture is extremely important and is a priority. Out of the 1.3 billion people in China, 700 million are small, poor farmers who have 0.1 hectare of arable land each and they shoulder the responsibility of food security for the entire country.

For China, public stockholding and the SSM are vital and should be deliverables for MC11. It expressed unhappiness over the level of progress to date on these issues.

There is a need, it said, to level the playing field in agriculture, as was done with export competition. Now there is a need to deal with Aggregate Measurement of Support (AMS), which it said continues to be a problem which must be addressed. It would never agree to any shift off the 8.5% de minimis level that it has, unless the AMS was completely removed.

On market access in agriculture, it said there must be a move towards addressing tariff simplification, tariff peaks and tariff escalation.

On NAMA, developed countries need to address their tariff peaks and tariff escalation. On services, the development dimension must be at the heart of any discussion, it said.

On fisheries subsidies, China said that there is a need for a multilateral agreement that is acceptable to all members and which takes into account the development dimension and special and differential treatment.

If there is to be an agreement on fisheries subsidies, there must also be an agreement on anti-dumping and countervailing duties, it said. Trade remedies should be a deliverable by MC11.

On e-commerce, it said it is important that the digital divide be tackled through trade-related capacity building and that there should be no agreement to move ahead on any market access in e-commerce, the red lines on which must be respected. There can be no mandate change without consensus, it said.

Pakistan highlighted the importance of agriculture and e-commerce. E-commerce and development are inextricably linked, it said.

South Africa said that the differences between governments remain. The divergent positions reflect divergent views; the Oslo meeting showed this to be the case. There are wide divergences of opinion on agriculture.

It noted the support on fisheries subsidies but said that this must take into account the linkages to other areas including trade remedies as well as special and differential treatment that is needed for developing countries.

Pointing out that it had just attended an African Union meeting, South Africa said that the issues raised there included trade-distorting domestic support, cotton, public stockholding, SSM, fisheries subsidies, SDT and the LDC issues.

The Dominican Republic said that it wants to see an outcome on agriculture, especially on domestic support, at MC11. Nairobi delivered on export competition and there is a need to move forward now to address other trade distortions.

Russia said that MC11 should be results-oriented. It would like to see trade-distorting domestic support, domestic regulation in services, anti-dumping and subsidies dealt with. It also wanted greater transparency in regional trade agreements and something on e-commerce. The Nairobi decision on export competition must also be implemented, it said.

According to trade officials, the informal HOD meeting was scheduled to resume on 5 December to continue hearing the statements of several other delegations which were yet to speak. (SUNS8369)                                          p