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TWN Info
Service on WTO and Trade Issues (Sept20/19) Washington DC, 22 Sep (D. Ravi Kanth) – Several developing countries have fiercely pushed back against attempts to create new foundational principles in the Riyadh initiative for reforming the World Trade Organization, ensuring that the core principles of the Marrakesh Agreement and special and differential treatment (S&DT) remain unchanged, trade negotiators told the SUNS. This came at a virtual meeting of the trade ministers of the G20 in Riyadh, Saudi Arabia on 22 September. More importantly, due to intense opposition from China to any language on market-oriented reforms as proposed by the United States and other developed countries of the G20, there was no mention in the Riyadh Initiative on this vexing issue. As part of the “Riyadh Initiative on the future of the WTO”, the US and other developed countries attempted to bring about fundamental changes, including the issue of differentiation among developing countries in availing special and differential treatment, and elimination of the consensus principle for arriving at decisions at the WTO. Due to intense opposition to any fundamental changes in the core architecture of the WTO based on the Marrakesh Agreement, the G20 trade ministers agreed to watered-down language in “the Riyadh Initiative for reforming the WTO.” Consequently, the ministers merely agreed that “the Riyadh Initiative on the Future of the WTO” aims to provide “an additional opportunity to discuss and reaffirm the objectives and foundational principles of the multilateral trading system and to demonstrate ongoing political support for WTO reform discussions.” The Saudi chair of the G20 trade ministers’ meeting has issued the summary of the exchange of views under the Riyadh Initiative which affirms “our commitment to the objectives and principles enshrined in the Marrakesh Agreement Establishing the WTO.” The G20 trade ministers said they “recognize that the effectiveness of the multilateral trading system depends on the implementation of WTO rules by all Members, as well as their respective enforcement, in order to maintain the balance of Members’ rights and obligations.” The trade ministers said that they remain “committed to working actively and constructively with other WTO Members to undertake the necessary reform of the WTO.” The ministers highlighted the importance of “transparency as an important condition for enhancing trade predictability and fostering trust between WTO members with regards to the compliance with their WTO obligations.” Without mentioning the punitive transparency and notification provisions as advanced by the United States and other developed countries, the G20 trade ministers merely reaffirmed “our commitment to fulfill our WTO transparency obligations and to lead by example and we call on all other WTO Members to do so.” They acknowledged “the need for assistance to WTO Members that face capacity constraints in meeting their notification obligations.” The trade ministers merely said they “acknowledge ongoing discussions to enhance transparency and bolster compliance with notification obligations at the WTO.” The G20 trade ministers, according to the summary, underscored “the significance of ongoing WTO negotiations and reiterate our support to achieve an agreement by 2020 on comprehensive and effective disciplines on fisheries subsidies, as WTO Ministers decided at the 11th Ministerial Conference.” Significantly, the G20 trade ministers did not mention the unresolved Doha Development Agenda (DDA) issues, including the permanent solution on public stockholding programs for food security in developing countries, that were supposed to be concluded at the WTO’s 11th ministerial conference. Due to sharp differences between China on one side and the US and other developed countries on the other, the G20 trade ministers merely agreed on ambiguous language on industrial subsidies. According to the summary on industrial subsidies, “many members affirm the need to strengthen international rules on industrial subsidies and welcome ongoing international efforts to improve trade rules affecting agriculture.” China, India, and South Africa insisted on having language on trade-distorting farm subsidies, and consequently, the G20 trade ministers “highlighted agricultural subsidies and agricultural market access.” On the continued paralysis of the two-stage dispute settlement system, particularly the Appellate Body, the US ensured that there was no mention of the Appellate Body in the G20 trade ministers’ summary. The G20 trade ministers merely agreed on a weak formulation that says, “we also stress that urgent action is necessary regarding the functioning of the dispute settlement system in order to contribute to predictability and security in the multilateral trading system.” Commenting on the non-mandated Joint Statement Initiatives (JSI) on electronic commerce, investment facilitation for development, disciplines for micro, small, and medium enterprises (MSMEs), and services domestic regulation, the G20 trade ministers said that “G20 participants in these initiatives call for significant progress in the lead up to the 12th WTO Ministerial Conference.” At the same time, due to concerns raised by India and South Africa, the G20 trade ministers said that “we note that concerns have been expressed on rule-making by some G20 members who are not part of the JSIs.” On the ongoing selection process for the new director-general of the WTO, the G20 trade ministers called for selecting “the next Director General of the WTO. We look forward to working with all WTO Members towards concluding the selection process by the 7th of November 2020.” As regards the proposed reforms at the upcoming WTO’s 12th ministerial conference in Nur Sultan, Kazakhstan next year, the G20 trade ministers ambiguously said that “the 12th WTO Ministerial Conference represents an important milestone in an inclusive and ambitious process of WTO reform.” “We will use the additional time available until then to bolster our efforts to work constructively with other WTO Members to achieve meaningful progress in advancing our shared interests, including emerging stronger from the COVID-19 pandemic and progressing with the necessary reform of the WTO to improve its functioning,” the G20 ministers emphasized.
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