Consensus eludes trade ministers at Marrakesh

Amid persistent divisions on key issues, trade ministers from a select group of countries meeting at Marrakesh in October had failed to reach agreement on what the upcoming WTO Ministerial Conference in Buenos Aires is to deliver.

by D. Ravi Kanth

GENEVA: The informal trade ministerial meeting in Marrakesh on 9-10 October brought into sharp focus the linkages between fisheries subsidies and improvements in the Doha trade remedy rules, and between the permanent solution for public stockholding programmes and domestic support.

These issues are being targeted for outcomes at the WTO’s eleventh Ministerial Conference in Buenos Aires in December.

China and Russia conveyed that they would need an outcome on improvements such as transparency and due process in anti-dumping and countervailing measures, along with a possible outcome on fisheries subsidies, especially on illegal, unreported and unregulated (IUU) fishing.

The European Union insisted on a linkage between the permanent solution for public stockholding (PSH) programmes for food security and an outcome on domestic support in agriculture.

However, India, China, South Africa and Indonesia (on behalf of the G-33 group of countries) flatly rejected any such linkage, several participants at the Marrakesh meeting told the South-North Development Monitor (SUNS).

The two-day meeting, attended by more than 35 countries, failed to bring any consensus due to continued entrenched positions on agriculture, fisheries subsidies, rules, electronic commerce, domestic services regulation and investment facilitation, among others.

The United States ploughed its own unilateral course by asking the participants at Marrakesh to settle for a programme of action for “reinvigorating” the WTO by addressing five issues:

(i) Members must address issues concerning improvements in notifications and transparency provisions in various agreements at the WTO.

(ii) Members must commence work on the interaction between trade and development.

(iii) Members must begin work to improve the structure of WTO bodies for addressing issues such as overcapacity and market access in various sectors.

(iv) The US called for reforming the functioning of the WTO’s Dispute Settlement Body, particularly on issues concerning what it called the overreach of the Appellate Body.

(v) Members must address issues concerning state trading enterprises, including medium enterprises.

The US also insisted that the Doha negotiations had ended at the tenth Ministerial Conference in Nairobi in 2015. It urged the participants to come to terms with the fracture of the Doha negotiations once and for all.

The US also remained opposed to finalizing a ministerial declaration at Buenos Aires.

But trade ministers from India, China, South Africa and the coordinators of the African Group, the ACP Group and the Cotton-Four countries, among others, said the Doha Work Programme will continue until all outstanding issues are resolved.

As regards tweaking the mandate for electronic commerce at Buenos Aires, the trade ministers from South Africa, India and several other developing countries stood their ground, insisting that they will not accept any departure from the existing e-commerce work programme of 1998.

At a ministers-only dinner on 9 October, South Africa’s Trade Minister Rob Davies issued a hard-hitting statement against e-commerce, according to a minister who asked not to be quoted.

South Africa and the coordinator of the African Group as well as India called for credible results for improving special and differential flexibilities for developing countries.

For its part, the US suggested that members must grapple with the interaction between trade and development. The US statement was clearly aimed at introducing “differentiation”/”graduation” among developing countries in availing of the special and differential flexibilities.

Director-General’s summary

At the end of the meeting, WTO Director-General Roberto Azevedo issued a summary based on the deliberations, making the following points:

(i)     The permanent solution for public stockholding programmes for food security remains the top priority. But there are still issues concerning transparency, safeguards and legal permanency to be addressed.

(ii)    An outcome on fisheries subsidies, especially on prohibiting IUU fishing. Azevedo said there are still some issues like transparency that have to be addressed.

(iii)  He ruled out any outcome at Buenos Aires on the improvements relating to transparency and due process in anti-dumping and subsidy investigations sought by China and Russia.

(iv)   On domestic support in agriculture, he said there are many proposals on the table but an outcome is difficult. He said an incremental outcome is possible at Buenos Aires.

(v)    Azevedo said the Cotton-Four countries – Benin, Burkina Faso, Chad and Mali – will issue a proposal setting out the reduction commitments in domestic support. But he did not say whether the issue will be clinched at Buenos Aires.

(vi)   As regards the special safeguard mechanism for developing countries, Azevedo said there is no chance of any outcome because it needs more engagement and long hours of work which ambassadors and negotiators cannot undertake.

(vii)   He said no outcomes are possible on market access and other outstanding issues in the export competition pillar of agriculture.

(viii) On electronic commerce, Azevedo said there are too many wide gaps which are difficult to bridge at this juncture.

(ix)    Commenting on investment facilitation, which is an extremely divisive issue, the Director-General said the level of engagement is picking up, but the subject is very far from any outcome at Buenos Aires.

(x)     On the improvements in domestic regulation of trade in services as demanded by the European Union, Australia and other members, he said while there are sharp differences, there is considerable engagement and a lot of support.

(xi)    On the improvements sought by the African Group of countries in special and differential flexibilities, Azevedo ruled out any outcomes at Buenos Aires because many of the issues would require political engagement.

(xii) He remained “deafeningly” silent on the paralysis created by the US in the Dispute Settlement Body even though many trade ministers highlighted the issue in their statements.

In short, the Director-General issued an ambiguous report that did not either adequately or fairly reflect the level of opposition against disciplines on domestic services regulation, investment facilitation and other issues. (SUNS8553)    

Third World Economics, Issue No. 648, 1-15 September 2017, pp8-9, 15