|
||
|
TWN
Info Service on WTO and Trade Issues (May21/20) Washington DC, 27 May (D. Ravi Kanth) – The WTO director-general Ms Ngozi Okonjo-Iweala, during her visit to Brussels last week, has praised the European Union for “its forward leaning attitude” on WTO deliverables and reforms, giving the impression that her priorities for the WTO’s 12th ministerial conference (MC12) to be held in Geneva at end November appear to be in consonance with the EU’s goals. However, she did not reveal all the proposed “forward leaning” deliverables and reforms that were zeroed in on during the consultations with the EU’s top trade and environment policymakers. PRIORITIES FOR WTO DG AND EU But it seems clear that going by the EU’s constant stream of pronouncements, the WTO DG and Brussels may have reached a substantive understanding on several controversial topics. They include: (1) trade and health; (2) trade and environment, especially issues concerning environmental goods; (3) WTO reforms that seek to fundamentally alter the WTO’s rule-book once and for all; and (4) the EU’s initiatives to legitimize the un-mandated plurilateral initiatives that are currently being pursued in the Joint Statement Initiatives (JSIs) on electronic commerce, investment facilitation, disciplines for micro, small and medium enterprises (MSMEs), and domestic regulation on trade in services among others, according to people familiar with the EU’s agenda. After all, the DG has already spoken her mind in favour of “the green and circular economy and addresses more broadly the nexus between trade and climate change.” In her first statement made after being appointed as the WTO DG on 15 February, she said that “trade and environmental protection can be mutually reinforcing, both contributing to sustainable development. It will be important for Members to re-activate and broaden the negotiations on environmental goods and services.” In a similar vein, Ms Okonjo-Iweala said at the Doha Trade Negotiations Committee (TNC) meeting on 3 May that “we are also likely to be able to continue work on some of the issues that were mentioned around structured discussions on trade and sustainability issues, including plastics pollution, trade and environment, and so on.” “These are some of the areas that probably are not ripe or mature for deliveries at MC12 – but we will wait to see what can come out of them. But, post-MC12, these are some of the areas we could also see some work,” she said in her TNC statement on 3 May. Against this backdrop, the WTO DG’s and the EU’s approach on trade and environment have been strongly reflected and amplified in a report issued by the United Nations Conference on Trade and Development (UNCTAD) on “climate change, recovery, and trade”, according to several analysts familiar with the UNCTAD report. The report prepared by Mr Alexey Vikhlyaev, a senior economist in UNCTAD’s Division on International Trade and Commodities (DITC), says that “subsidies could be treated on the basis of their environmental as well as economic effects. Local content requirements may be allowed in conjunction with subsidies to feed-in tariff schemes. Anti-dumping could be changed. The prices used to calculate dumping could be adjusted to reflect GHG [greenhouse gas] emissions.” He argues that “injury could be assessed looking at harm to the environment as well as competitors – to include possible damage caused by local producers.” In what appears to reflect the developed countries’ trade liberalization agenda, Mr Vikhlyaev says that “with respect to safeguards, the injury and causation analyses, and the proposed adjustment, could incorporate climate change factors.” TWO FACES OF UNCTAD UNCTAD’s Division on International Trade and Commodities (DITC) and its Division on Globalisation and Development Strategies (DGDS) have dramatically opposite views. Given that the developing countries are going to be hit harder economically by the COVID-19 pandemic and will take more time to recover, UNCTAD’s DGDS, in its publication, proposes a temporary “Peace Clause” with respect to industrial subsidies in order for developing countries to revive their industrial and trade sectors. In sharp contrast, UNCTAD’s DITC appears to endorse the developed countries’ agenda on subsidies while bringing environment conditions into the WTO’s Agreement on Subsidies and Countervailing Measures (ASCM). “Such a move will not only make it more difficult for developing countries to use subsidies but will also allow developed countries to impose anti-dumping duties on the developing countries on the pretext of preserving the environment,” according to a trade analyst, who asked not to be quoted. SPECIAL AND DIFFERENTIAL TREATMENT While DGDS strongly supports effective special and differential treatment (S&DT) for developing countries in its Research Paper No. 33, DITC appears to support the developed countries’ agenda and goes further to suggest refining S&DT by taking into account “green markets” and their CO2 emissions, which will probably result in the exclusion of most of the developing world from availing of S&DT. According to the DITC’s report, “it is important to make sure that the trade disciplines target those with the means of distorting markets and competition. “Although the WTO Agreements contain provisions on S&DT, with special rights for developing countries, they lack an effective graduation system for changing the status of developing countries and countries in transition. “The concept of S&DT may be refined to accommodate the idea of applying WTO rules in a manner that the differing levels of green markets are taken into account, even considered as inherent to the rule itself. “Such an approach would mean phasing in obligations, rather than defining opt-outs and exceptions. “The idea of graduation is closely related to the principle of common but differentiated responsibilities. Rather than merely differentiating between developed and developing countries, graduation could link substantial obligations to objective indicators, such as a country’s absolute or per capita CO2 emissions. “Graduation, based on recourse to economic factors within substantive rules, and scheduling of additional commitments could replace traditional perceptions of S&D treatment and render the WTO more responsive to the needs of developing member states.” In short, with no mention of the limitations of the attempts to bring tariffs down to zero on environmental goods which are mainly exported by the developed countries, DITC supports these attempts and strengthens them by proposing a formula cut based on CO2 emissions. According to the DITC’s report, “the frustrated attempts at the liberalization of trade in environmental goods and services have shown the limits of “retail” tariff negotiations. However, these limits have been known since the third and the fourth GATT rounds. A formula cut based on emissions could provide an alternative. Regional trade agreements may require emissions cuts to qualify for Art. XXIV [of the GATT].” DITC goes further to justify and propose plurilateral agreements between some developed countries with respect to environmental standards which would then be imposed on a Most Favoured Nation (MFN) basis. According to the DITC’s report, “carbon footprint standards and labelling may enjoy preferential treatment, provided they follow good practice, including proper notice, opportunity to comment or if they are based on international standards. A group of Members could agree to implement specific standards, which would then be applied on an MFN basis. Members might also consider a smorgasbord approach, along the lines of the current trend in the ISO towards declaring specific national, or regional or international standards as equivalent rather than having one standard as the only option.” The publication further assumes that the negotiated rules of the Joint Statement Initiative (JSI) on e-commerce, particularly with respect to free flow of data, will be accepted with expanded membership, ignoring the fact that the legal status of these initiatives has been challenged in the WTO by developing countries like India and South Africa. It also glorifies trade agreements which may hurt developing countries in the future, said another analyst, who asked not to be quoted. According to the DITC’s report, “One can expect the proliferation of small high-quality rules agreements in priority areas such as e-commerce, the free flow of data, the interoperability of technology, services, and sustainability. Once concluded, these agreements will look to expand the membership over time and shape emerging trade rules and architecture, creating turbulence in the process as outsider economies will seek some agency over the process. “The launch of negotiations for an Agreement on Climate, Trade and Sustainability (ACTS) between Costa Rica, Fiji, Iceland, New Zealand and Norway – which will focus on fossil-fuel subsidy reform, market access for climate-friendly technologies, and climate-related labelling – is a valuable pathfinder for addressing the intersection of climate, trade and sustainability … Prioritizing environmental goods and services for liberalization in ongoing and future FTAs could potentially help advance the negotiations on the plurilateral Environmental Goods Agreement as well as the development of criteria for environmental services given the increasing priority given to services liberalization.” Going against the recent Research Paper No. 65 by UNCTAD’s DGDS on Reforming the Trading System, where the authors warn that “developing countries should be cautious about premature tariff liberalization on environmental goods before building their own requisite capacities”, the publication from DITC proposes prioritising liberalisation of environmental goods as well as services. The DITC report concludes by stating that: “As a member of the Marrakesh Partnership, UNCTAD can engage in targeted networking with a view to maximizing its presence and promoting a positive agenda on climate and trade at various fora and COPs [Conference of Parties].” At a time when developing countries are being brutally ravaged by the COVID-19 pandemic, UNCTAD, which is supposed to defend the interests of the developing countries, seems to be dangerously transformed to advance the interests and agenda of developed countries led by the European Union, said analysts, who asked not to be quoted. [Established in 1964, UNCTAD was intended to be the UN’s focal point for the integrated treatment of all trade and related development problems, and was supposed to assist developing countries in shaping fairer and more equitable global economic relations. From the mid-1960s to the mid-1980s, it supported developing countries in articulating, aggregating, and pressing their demands for a reshaping of the international political and economic environment to give them a role of increased importance on issues directly affecting their welfare and to structure North-South dialogue on development issues.] Therefore, developing countries in the G77 need to be extremely cautious in extending the UNCTAD Trade Division’s mandate on trade and environment, said analysts familiar with the reports of the two UNCTAD divisions.
|
||
