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TWN
Info Service on WTO and Trade Issues (Mar21/02) Geneva, 1 Mar (D. Ravi Kanth) – The new WTO Director-General Ms Ngozi Okonjo-Iweala has apparently delivered a “divisive” trade agenda for the WTO’s 12th ministerial conference in Geneva, in December, seeking to allegedly promote the priorities of the United States, the European Union and Japan in accelerating work on non- mandated issues such as the informal Joint Statement Initiatives, disciplines on industrial subsidies and state-owned enterprises, and reforming special and differential treatment to provide “policy space” for the least-developed countries, said people familiar with her statement made on Monday. At the first WTO General Council meeting held in 2021, Members also apparently agreed to host MC12 in Geneva, in December, to be hosted by Kazakhstan, said a person, who asked not to be quoted. In her first major address to the WTO’s General Council (GC) on 1 March, the new DG emphasized that a business-as-usual approach will not work, arguing that trade ministers want outcomes at the WTO, otherwise they will lose confidence in the organization’s ability to deliver results. She said the WTO is a “member-driven organization” working on a “tripartite” basis, said people, who asked not to be quoted. She called for finalizing the work program for the 12th ministerial conference (MC12), continuing the dialogue on the proposed TRIPS waiver to combat the COVID-19 pandemic while discussing with Big Pharma as to how vaccines can be rapidly rolled out, and accelerating work on the controversial informal Joint Statement Initiatives (JSIs) regardless of the questions being raised on their legal status. “Permit me to speak frankly,” she said at the meeting, suggesting that if things don’t change, trade ministers will change their stand on the WTO. “But there is hope,” Ms Okonjo-Iweala maintained, suggesting that she heard that the 66 statements made by the delegations at the informal Doha Trade Negotiations Committee (TNC) meeting on 25 February “were virtually identical to the priorities listed in my acceptance speech” made at a special GC meeting on 15 February. At the informal TNC meeting on 25 February, Ms Okonjo-Iweala said that members talked past each other but not directly to each other, people familiar with her statement said. Ms Okonjo-Iweala said she heard that delegations want the following priorities to be taken up. They include: (1) Address the COVID-19 pandemic, particularly public health and revival of economic recovery; (2) Conclude the fisheries subsidies negotiations; (3) Reform the dispute settlement system, including the restoration of the Appellate Body; (4) Action on agriculture, domestic support, market access and the exemption for World Food Program to procure food items without any restrictions; (5) Complete existing mandates on public stockholding programs for food security, special safeguard mechanism, and cotton; (6) Work on industrial subsidies and state-owned enterprises and special and differential treatment; (7) Without raising the question on the legal status of the JSIs, delegations want forward movement on JSIs involving e-commerce, investment facilitation, disciplines for micro, small and medium enterprises, domestic regulation in services and trade and gender; (8) Work on trade and environment and climate change; (9) Work on LDC-specific issues such as services waiver, graduation of LDCs; and (10) Work on issues concerning small and vulnerable economies. Surprisingly, she did not mention the 1998 work program on electronic commerce involving the moratorium on customs duties on electronic transmissions, and other multilateral issues, said a person, who asked not to be quoted. Ms Okonjo-Iweala said that she wants to meet delegations individually, arguing that she wants to “listen and brainstorm” with delegations to finalize the “deliverables” at MC12. DG BYPASSES MARRAKESH AGREEMENT Clearly, the new DG’s remarks at the GC meeting has raised the alarm over her priorities which appear to be inconsistent with the DG’s role as per the Marrakesh Agreement, said a person, who asked not to be quoted. As per paragraph 4 of Article VI of the Marrakesh Agreement, “the responsibilities of the Director-General and of the staff of the Secretariat should be exclusively international in character,” the person said. “In the discharge of their duties,” according to the Marrakesh Agreement, “the Director-General and the staff of the Secretariat shall not seek or accept instructions from any government or any other authority external to the WTO.” More importantly, “they (the DG and the staff) shall refrain from any action which might adversely reflect on their position as international officials.” The Marrakesh Agreement also requires members to “respect the international character of the responsibilities of the Director-General and of the staff of the Secretariat and shall not seek to influence them in the discharge of their duties.” In effect, the specific role and duties of the DG are well-defined to ensure that the DG remains impartial and independent without attracting the wrath of the members, the person said. Her independent and impartial discharge of duties as the DG is a sine qua non for addressing a range of crises being faced by the WTO. That the WTO is mired in systemic crises over the last four years is well known. These crises are largely due to: (1) unilateral trade policies by the United States as well as trade restrictions by the EU and other members of the Ottawa Group on the supply of COVID-19 vaccines; (2) dysfunctional two-stage dispute settlement system with the enforcement function being almost destroyed by one country; (3) mandated multilateral negotiations being irreparably damaged by powerful members; (4) attempts to change the WTO’s negotiating function without any clear idea on the structure, scope, and objectives of the proposed reforms; and (5) the questionable legal status of the Joint Statement Initiatives (JSI) on e-commerce, investment facilitation, disciplines for micro, small, and medium enterprises (MSMEs) and domestic regulation in services. Even though Ms Okonjo-Iweala’s latest statement is a shot in the arm for the United States, the European Union, Japan, and Canada to pursue their non-mandated and legally unjustifiable JSIs, it is an early warning that the new DG might not advance the “development and inclusive” agenda proposed by the developing countries in reforming the WTO, the person said. Clearly, the new DG’s remarks may amount to causing confusion and uncertainty because of their excessive reliance on the trade priorities being advanced by the US, the EU, Japan, Canada, and other industrialized and some developing countries, the person suggested. Moreover, Ms Okonjo-Iweala’s remarks appear to be a violation of the duties assigned to the DG in Article VI of the Marrakesh Agreement. Further, the delay in finalizing her cabinet and the new deputy directors-general has apparently caused some dismay within the Secretariat, said a person familiar with the situation. The time has come for the WTO to play a major role in ensuring the centrality of development instead of pursuing the same old trade liberalization policies that are being discarded by the powerful members in the face of the worsening COVID-19 pandemic, the person said. AGENDA OF GC MEETING The proposed agenda for the GC meeting on 1-2 March includes a report by the DG on the informal Doha TNC and Heads of Delegation meeting held on 25 February. The TNC was established under the Doha work program in 2002. The other issues include: 1. A statement by the outgoing GC chair Ambassador David Walker from New Zealand on the implementation of the Bali, Nairobi, and Buenos Aires outcomes; 2. The date and venue of the WTO’s 12th ministerial conference; 3. TRIPS Council matters by the chair Ambassador Xolelwa Mlumbi-Peter of South Africa on a status report on the “proposal for a waiver from certain provisions of the TRIPS Agreement for the prevention, containment and treatment of COVID-19” that is being supported by almost 120 countries; 4. A draft GC decision by Brazil for supporting the conclusion of the fisheries subsidies negotiations for the sustainability of the oceans and fishing communities; 5. The multilaterally mandated work program on electronic commerce and moratorium on imposing customs duties on electronic transmissions; 6. A call by five South American countries – Colombia, Costa Rica, Ecuador, Panama, and Paraguay – to prevent export restrictions on COVID-19 vaccines; 7. A paper on challenging the “legal status of joint statement initiatives and their negotiating outcomes” by India and South Africa; 8. An update by Canada, on behalf of the Ottawa Group, on “trade and health” in the context of the COVID-19 pandemic and beyond; 9. Review of the 25-year-long special exemption provided under paragraph 3 of the GATT 1994, commonly referred to as the Jones Act: 10. A draft ministerial decision proposed by the least-developed countries to extend support measures available to least-developed countries “to a least-developed country member for a period of twelve years after the entry into force of a decision of the UN General Assembly to exclude the member from the least developed country category”. Significantly, the US has not listed any of its previous proposals in the GC agenda. For the past two years, the Trump administration has advanced several controversial proposals in a concerted manner such as (i) “importance of market-oriented conditions to the WTO system” which was jointly co-sponsored by Brazil and Japan; (ii) “procedures to strengthen the negotiating function of the WTO” that seeks to bring about differentiation/graduation for availing of special and differential treatment by developing countries; (iii) enhanced transparency and notification requirements; and (iv) proposed disciplines on industrial subsidies and state-owned enterprises. At a time when most of the industrialized countries are providing trillions of dollars of state aid, fiscal relief and targeted assistance to pharmaceutical companies and other industries, it is “disingenuous and hypocritical to preach/pontificate” to the developing countries that they should pursue trade liberalization and not provide industrial or agricultural support to their workers and farmers, said a trade envoy, who asked not to be quoted.
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