South denounce efforts to hijack Doha talks on e-commerce, agriculture

The positions of WTO member states on such issues as electronic commerce, agriculture and WTO reform are still far apart, as reflected in a recent meeting of delegation heads.

by D. Ravi Kanth

GENEVA: Trade envoys from a large majority of developing and least-developed countries on 3 May denounced efforts by the United States and other developed countries to hijack the multilateral talks on electronic commerce and agriculture of the Doha Work Programme at the WTO.

The sharp reactions and warnings came at an informal heads-of-delegation (HOD)-level meeting of the WTO’s Trade Negotiations Committee (TNC).

The large majority of developing countries, including India and China, also warned against the proposed “reforms” of the WTO mooted by the US, the EU and other developed countries to introduce “differentiation” among developing countries in availing of special and differential flexibilities.

Venezuela and Cuba severely criticized the US for its unilateral actions, including trade sanctions and the proposed enactment of the condemned Helms-Burton Act. Both Cuba and Venezuela also expressed their frustration over the WTO’s failure to address their existential concerns.

A large majority of developing and developed countries charged the US with refusing to engage in resolving the crisis at the WTO’s Appellate Body (AB) and continuing to block the selection process for filling four vacancies at the AB.

The US, in its remarks at the HOD meet, however, remained silent on the AB crisis, while demanding immediate notifications of subsidies and countervailing measures by 30 June, particularly on fisheries subsidies.

The European Union came out for the first time to caution about the dangers posed by the proposed US-China agreement to the multilateral trade order at the WTO. It argued that “any arrangement between these members [the US and China] might further undermine the WTO, if implemented in a discriminatory manner, setting harmful precedent that undermines the basic tenets of the rule-based order.”

While countries expressed support for accelerating the negotiations on fisheries subsidies, many developing countries expressed alarm over attempts to dilute special and differential treatment (S&DT) for developing countries.

E-commerce concerns

At the informal HOD meeting, India, the Africa, Caribbean and Pacific (ACP) Group of countries, Benin on behalf of the African Group, the least-developed countries, Bolivia, Cuba and Venezuela, among others, derided attempts to pursue the plurilateral negotiations on e-commerce and domestic regulation for trade in services.

On e-commerce, India reminded the sponsors of the plurilateral negotiations that there was a multilateral programme on e-commerce agreed to by ministers at the WTO’s eleventh Ministerial Conference in Buenos Aires in 2017.

“In our view,” said India, “going against this exploratory mandate [established in 1998] and starting negotiations on e-commerce [at the plurilateral level] strikes at the very roots of the multilateral system.”

Most developing countries, according to India, were not ready for binding rules on e-commerce.

India said it was finalizing a national e-commerce policy that “seeks to use India’s data for its own development rather than allow its value to be appropriated by others.”

New Delhi will preserve “flexibility of imposing customs duty on electronic transmissions to protect domestic industry and leverage technology for creating jobs and wealth, by ensuring competition and a level playing field,” India said.

It asked members at the WTO to “assess the extent of sacrifice of revenue involved [in imposing a moratorium on customs duties on electronic transmissions], and the distribution of this loss among Members, when new technologies like additive manufacturing will result in electronic transmissions cascading and many dutiable goods being manufactured by digital printing.”

Attacking the so-called plurila-teral Joint Initiative on e-commerce launched by Japan, Australia and Singapore among others, India said some of the proposed plurilateral rules would have a serious impact on “existing trade rules, particularly the GATT [General Agreement on Tariffs and Trade] tariffs, which protect our industry, and GATS [General Agreement on Trade in Services] schedules that provide us useful flexibilities.”

“Both the GATT and GATS could wither away due to the onslaught of the so-called ‘high standard’ e-commerce elements” as proposed in the Joint Initiative proposals,” India warned.

The ACP Group said it was now “more than ever convinced that the work under the current mandate of the 1998 Work Programme on Electronic Commerce has not been exhausted and that there is much more that needs to be done under the development dimension.”

The ACP Group, which consists of more than 90 countries, said that the current moratorium on customs duties on e-commerce would have revenue implications.

Members of the Group were concerned about “the loss of policy space” because of the plurilateral negotiations on e-commerce.

Benin, on behalf of the African Group, expressed sharp concern over the ongoing efforts to undermine the 1998 multilateral work programme on e-commerce.

Several other developing and least-developed countries warned about the implications of the plurilateral negotiations on e-commerce.

Agriculture imbalance

Commenting on agriculture, the ACP Group reminded the big subsidizers that “the current imbalance in entitlement to the use of domestic support provisions is having a serious negative impact on ACP countries’ productive capacity and international competitiveness.”

As agriculture “remains one of, if not, the most difficult areas of the Doha Work Programme”, the ACP Group urged WTO members to “accord due priority to advancing the negotiations.”

Any outcome in agriculture, said the Group, “must be in line with the mandate of Paragraph 13 of the Doha Declaration and subsequent mandate issued by Ministers, especially as it relates to the special circumstances of developing countries and LDCs as well as NFIDCs [net food-importing developing countries].”

India demanded an outcome on mandated issues like finding a permanent solution for public stockholding for food security. It cautioned against attempts to raise extraneous demands “for additional information and endless debates, with the objective of wriggling out of past commitments.” Such a strategy by the US and the Cairns Group of countries, India warned, “is clearly a recipe for failure.”

As regards WTO reforms, India called for “a balance in the reform agenda by addressing some of the longstanding demands of developing countries.” It said that it was ready to work with other like-minded members to make specific proposals to facilitate work on WTO reforms. Members must pursue a reform agenda that is balanced and inclusive so as to solve the problems being faced at the WTO rather than imposing “additional burdensome obligations,” India argued.

India called for paying “urgent and undivided attention” to “getting the Appellate Body on its feet and preserving the independent dispute settlement system of the WTO”.

Trade envoys from many developing countries expressed alarm on several WTO reform proposals that have been tabled.

The ACP Group, for example, pointed out that the paramount importance of WTO reforms must be to preserve “an independent, impartial and well-functioning dispute settlement system”, which is a sine qua non for “preserving the legitimacy and credibility of the multilateral trading system.”

“The continuing impasse in the appointment of the Appellate Body members,” said the ACP Group, “poses the real threat of eroding the effectiveness of the WTO as a rule-making institution and undermines the adjudicating function of this House.”

Commenting on the transparency and notification proposals of the US, the EU and Norway on behalf of the so-called Ottawa Group, the ACP Group maintained that developing countries face significant capacity constraints in complying with the notification requirements.

On attempts to truncate special and differential flexibilities and differentiate among developing countries in availing of S&DT, the ACP Group expressed sharp concern about discussing the S&DT issue at the General Council instead of the Doha negotiating body on trade and development. The S&DT discussion was not being conducted under paragraph 44 of the Doha Work Programme, the Group maintained.

Moreover, “arbitrary classification of WTO Members and the suggestion that some developing members are not entitled to S&DT or are excluded from claiming flexibilities, deviate from the S&DT provisions enshrined in the Marrakesh Agreement [which established the WTO],” the ACP Group argued.

The choice of self-declaration for availing of S&DT flexibilities must be left to the developing countries to decide, the ACP Group said.

“The basic principles of inclusivity, transparency, development and particularly S&DT for developing countries and LDCs must be fully adhered to,” it demanded.

China cautioned that the paralysis over the selection process for filling the AB vacancies posed “the most severe crisis” at the WTO.

It also said most members did not support any punitive approach for complying with notification provisions.

Without naming the US proposal on differentiation in availing of S&DT flexibilities, China said “we don’t agree to continue the unproductive and polarized discussions on differentiation or graduation of developing members.”

“Nor we will accept the explicit or implicit case-by-case approach to erode the unconditional special and differential treatment for developing members,” China said.

The only pragmatic way out, according to China, was “to encourage developing members to contribute according to their capacity to do so, instead of requiring them to prove the case upfront by themselves”.

In short, the HOD meeting exposed the deep divide between the developing countries on the one side, and the developed countries on the other over the plurilateral negotiations on e-commerce, the proposals on S&DT and WTO reforms, trade envoys told the South-North Development Monitor (SUNS). (SUNS8901)                        

Third World Economics, Issue No. 680/681, 1-31 January 2019, pp11-13