TWN Info Service on WTO and Trade Issues (Apr19/15)
18 April 2019
Third World Network

India mini-ministerial at time of grave crisis at WTO

Published in SUNS #8890 dated 17 April 2019

Geneva, 16 Apr (D. Ravi Kanth) – When developing countries concert at the informal ministerial meeting in New Delhi on 13 May, it remains to be seen whether they can build a robust narrative and coalition for “ensuring development at the heart of the multilateral trading system” and on the agenda and outcomes in any negotiations.

The meeting in India is due to take place in the face of the grave systemic crises stemming from the unilateral actions by the United States at the World Trade Organization, trade envoys told the SUNS.

India has convened the two-day informal ministerial meeting of only developing countries in New Delhi, specifically to address “many problems confronting the WTO.”

These problems, in India’s view, “arise from the institutional architecture of the multilateral trade system and its rules that provide an inherent advantage mainly to the developed countries, inability to pursue development objectives due to WTO rules, lack of transparency and inclusiveness in international trade negotiations and lack of certainty regarding commitment to remain engaged i n multilateral trade negotiations.”

The developing countries are facing numerous barriers for pursuing their developmental goals due to the proliferation of unilateral actions by the U S. Washington, for example, has blocked the selection process for filling vacancies at the Appellate Body (AB) on extraneous grounds.

The US wants to deny special and differential treatment (S&DT) to developing countries that are members of the Group of 20 (G20) or the Paris-based Organization for Economic Cooperation and Development (OECD).

The US along with other developed countries and a few developing countries, wants to impose “naming and shaming” administrative measures, including financial penalties, on countries failing to comply with notification requirements.

[Ironically, the US is the major culprit in terms of non-compliance and implementation of rulings and recommendations of the WTO’s Dispute Settlement Body and its adopted rulings of panels and the Appellate Body that require the US to change its anti-dumping tariffs and its anti-dumping provisions and the regulations under them for mandatory actions in administration of its anti-dumping law and regulations. SUNS]

The US along with other countries seems determined to pursue plurilateral negotiations, on a self-serving basis among others, while undermining the multilateral framework of the WTO.

Under the banner of “reforms” at the WTO, the US and other industrialized countries seem determined to impose new “obligations” on developing countries after stalemating and virtually burying the Doha Development Agenda (DDA) trade negotiations.

The DDA negotiations still remain on paper with the WTO director-general Roberto Azevedo acting as the chair of the Trade Negotiations Committee, constituted under the Doha mandate.

But, in reality, the US, the European Union, and other developed countries have already ensured the demise of the DDA negotiations.

Even the WTO director-general does not even remotely mention or allude to the Doha negotiations. Azevedo, for instance, emphasized the need for agreement on the fisheries subsidies, during his press conference at the WTO on 2 April. But the fisheries subsidies negotiations are part of the Doha mandate on rules.

He underscored the need for more work on the informal joint plurilateral initiatives on electronic commerce, investment facilitation, disciplines for micro, small, and medium enterprises (MSMEs), and disciplines for domestic regulations (under GATS), but not for completing the unfinished Doha negotiations.

Against this backdrop, India wants trade ministers from around 20 developing countries to pursue a common program that would “keep development at its core” by preserving “the fundamental rules [that are also set out in the Marrakesh Agreement], namely, non-discrimination, decision-making by consensus and special and differential treatment for developing countries and LDCs [least-developed countries].”

“The final reform agenda, the likely work plan and the end result must be decided through a process that is open, transparent and inclusive,” India has emphasized in a concept paper issued for the New Delhi meeting.

At a time when the US seems eager to make the Appellate Body dysfunctional by 11 December 2019, India has argued that “a functional and effective DSM [dispute settlement mechanism] is essential for the efficient functioning o f the WTO.”

Without naming the US, which has repeatedly blocked the selection process for filling four vacancies at the AB, India has maintained that the “recent challenges confronting the DSM have created considerable uncertainty regarding the ability of the WTO Members to ensure that all Members adhere to their obligations.”

More important, “the prevailing uncertainty regarding the DSM undermines the credibility of efforts aimed at negotiating new rules at the WTO,” India has said.

To confront the threat posed by the US for the continuation of the AB, “it is in the collective interest of the WTO membership to address the specific issues related to DSM raised by some members,” India has pointed out.

“In the absence of DSB remaining functional for all practical purposes, the WTO would cease to exist and, therefore, resolution of DSB impasse needs to precede other reforms,” the concept paper has suggested.

As the EU, Japan and several other industrialized countries seem prepared to ignore the AB crisis and focus on WTO reforms to placate the US priorities, India has said “a calibrated approach needs to be adopted and only addressing the procedural issues related to the Appellate Body should be the quid pro quo for launching Appellate Body vacancies.”

“However, attempts at addressing these problems must preserve the basic structure of the DSM, including the two-tier structure of the DSM, comprising panel and Appellate Body; automaticity in the dispute settlement process, a s contained in the DSU; and decision-making by the Dispute Settlement Body (DSB) by negative consensus, wherever provided under the DSU,” India has demanded in its concept paper.

In the face of sustained assault on the multilateral trading system, India wants developing countries to join forces to thwart attempts and actions “by some WTO members” to weaken the MTS (multilateral trading system).

The reform process, according to India, must address issues such as amending “laws and regulations” that mandate “unilateral action on trade issues”; ad dressing the informal push for “plurilateral” initiatives after the WTO’s eleventh ministerial meeting in Buenos Aires, in December 2017, that would dilute the “basic and fundamental multilateral architecture of the WTO”; and preserving “the fundamental rules of the WTO, namely, non-discrimination, decision-making by consensus and special and differential treatment for developing countries a nd LDCs.”

According to India, “international trade is not an end in itself but a means of contributing to certain objectives including raising standards of living.”

Data from different sources suggest “that the gap in the standards of living between developing and developed countries has not improved to any significant extent since the establishment of WTO,” India has maintained.

“This necessitates the need for further strengthening the Special and Differential Treatment provisions in current and future WTO agreements,” it has argued.

Moreover, after the launch of the DDA negotiations in 2001 by the US, the EU, and other developed countries ostensibly for addressing the developmental deficit in the multilateral trading system, there is an urgent need for accomplishing the developmental objectives “to enhance the participation of the developing countries in the global trade,” India has said.

“Further, the WTO Members need to exhibit their commitment to progress “Ministerial Decision of 2001 on Implementation-Related Issues and Concerns to address a number of implementation problems faced by Members”, with a view to successfully addressing these issues,” it has emphasized.

Consequently, the reform process must address the “alleged theft of traditional knowledge held, preserved and developed by traditional communities/indigenous people,” India said, arguing that “this issue is no less serious than the alleged theft of intellectual property rights.”

“The process of WTO reform must also address how food security and ensuring access to affordable medicine can be facilitated by the rules of the multilateral trading system,” India has maintained.

Commenting on the demands by the developed countries for “transparency and notifications”, India said the first priority ought to be how to inspire “confidence among the Members” during the biennial ministerial conference, the highest decision-making body of this inter-governmental organization.

Therefore, “it is imperative that these meetings are organized in a transparent and inclusive manner” so as to enhance “the sense of ownership of the outcomes of the Ministerial Conferences,” India said.

“It is necessary that each WTO member is provided adequate opportunity to have a say in the final decisions, and the draft declaration and decisions should be based on consensus,” India pointed out, arguing that “all meetings in the Ministerial Conference, which is the body for decision making, should be in a configuration of all Members without restricting negotiations and decision making to smaller Green Rooms.”

Members must agree on “the basic principles and procedures for this Member-driven organization” so that “both the preparatory process and the conduct of the Ministerial Conference are transparent and inclusive,” India has said.

Although the WTO rules seek to provide “open and non-discriminatory trade regime,” the reality is that “over the years some of the Members have found innovative ways of undermining their commitments,” India has argued.

Therefore, “improved notifications to the WTO would be a useful first step in identifying and addressing some of these problems including those relating to Maximum Residue Limits in Goods and the visa related elements corresponding to the categories of (movement of) natural persons committed under the GATS for effective mode 4 market access in services sectors,” New Delhi has argued.

Even though “some agreements contain crucial specific obligations in respect of which no notification requirements exist” – like in Article 66.2 of the TRIPS agreement that mandates that the developed countries provide incentives to their own enterprises and institutions in their territories for promoting and encouraging technology transfer to LDCs – the developed countries have not notified abo ut how they are complying with this provision.

In a similar vein, many patent applications from developed countries have not properly complied with the disclosure of traditional knowledge and associated genetic resources that are widely recognized as an important contributor to inventions.

Lastly, India wants that the reforms must address removal of the asymmetrical and imbalanced provisions against the interest of developing countries.

“The Agreement on Agriculture (AoA) provides a useful illustration of these asymmetries and imbalances” and “agriculture is critical to livelihood and food security of the developing countries.”

Sadly, “the rules of WTO Agreement on Agriculture do not adequately address the problems faced by the developing countries,” according to the concept paper .

“Developing countries are constrained by the WTO rules owing to the fact that they were bound by commitments at a time when they could not afford to provide support to their farmers and are still not able to do so within their limited means.”

Worse still, these asymmetries, according to India, “are accentuated by the fact that developed countries have huge flexibilities, which include high Aggregate Measure of Support (AMS) entitlements with no product- specific caps, high level of per capita domestic support, etc.”

Little wonder that these asymmetrical provisions “adversely impacts the farmers in developing countries and LDCs, especially in the area of food grains, cotton, etc.”

In short, the developing countries need “adequate policy space” for supporting their farmers and for balanced growth and development. And this is possible only by correcting “the asymmetries and imbalance in the WTO Agreements,” India has emphasized.