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Info Service on WTO and Trade Issues (Jul21/28) Geneva, 29 Jul (D. Ravi Kanth) – A large majority of developing and least-developed countries on 28 July called for an outcome on the Group of 90 countries’ declaration on making special and differential treatment (S&DT) simple and effective at the WTO’s 12th ministerial conference (MC12) to be held in Geneva, in late November, said people familiar with the development. At the General Council meeting on 28 July, South Africa introduced the declaration on behalf of the G90, stating that a decision on making S&DT simple and effective was pending for the past 20 years. Given the enveloping global health, economic, and social crises due to the COVID-19 pandemic, the WTO must act with a human face to finalize the decision without delay, several developing and least-developed countries said at the meeting. However, a group of developed countries, including the United States, blocked the declaration, saying that they will not engage on an old proposal, said people familiar with the development. THE G90 PROPOSAL South Africa piloted the proposal at the GC meeting, stressing the grave economic and social crises arising from the pandemic. The G90 declaration on special and differential treatment, contained in document Job/GC/234, was presented on 15 July, the same day the WTO DG held the ministerial meeting on fisheries subsidies. More than 80 trade ministers who took part in the ministerial meeting said they will need S&DT as per the United Nations Sustainable Development Goal 14.6 and the Buenos Aires ministerial decision. On the G90 proposal, South Africa said that the widening inequalities in the developing and least-developed countries center around several factors. In the G90 proposal, it is argued that the developing countries and LDCs are facing “not only a health crisis in the short term but a devastating social and economic crisis over the months and years to come, and thereby exacerbating this inequality and asymmetric economic development patterns.” The G90, according to the South African trade envoy, calls for a global effort to protect the livelihoods and lives of the poorest of the poor in the Global South. Ambassador Xolelwa Mlumbi-Peter expressed concern over the lack of progress in the negotiations on S&DT in the Committee on Trade and Development. Ambassador Xolelwa underscored the need for S&DT provisions to be made more precise, effective and operational in accordance with paragraph 44 of the Doha Ministerial Declaration to enable developing countries and LDCs to further integrate into the multilateral trading system and to address various obstacles to the achievement of this objective, including addressing COVID-19 and its impacts, said people familiar with the process. The G90 proposal highlighted the following elements that need to be adhered to for an expeditious outcome. The elements include: 1. S&D is a central tenet of the WTO system that should be preserved and reinforced. In order to ensure equity and fairness, S&D must remain an integral part of WTO agreements and be part of any deliverable at MC12. 2. WTO Members should always undertake commitments commensurate with their level of development in recognition of differences in capabilities, capacities and resources. These differences should not stand in the way of the application of appropriate and effective special and differential treatment. 3. Any COVID-19 invention or other technologies must be temporarily treated as global public goods so that they can be manufactured and distributed with a view to make them accessible to all. The TRIPS flexibilities and the Agreement should continue to be interpreted and implemented in a manner supportive of WTO Members’ right to protect public health and, in particular to promote access to medicines for all. 4. WTO rules must give space for economic actors to grow local production capacities, thereby energizing local, domestic, and regional markets and economies, and improving the quality of employment and living standards. SMEs shall be allowed preferential market access in local distribution channels and systems. 5. Sufficient flexibility and policy space in the tariff structure should be maintained to be able to grant the tariff protection required for infant industries, promote the development of new industries, including those related to the production of COVID-19 related products. 6. Simplification of processes and clarification of conditions to allow for temporary modification of concessions in times of crises to promote economic recovery is of critical importance. This includes the need for the development of clearer guidelines for determining the adequacy of Member’s reserves within the context of developing countries’ economic development programmes. 7. In view of the impact of SPS and TBT measures on the trade interests of many developing countries and LDCs, developed countries and developing countries in a position to do so should notify all proposed SPS and TBT measures to enable early consultation with affected countries, prior to adoption of the measure, including providing adequate adjustment time and technical and financial capacity for developing countries and LDCs facing capacity constraints. 8. Introduction of new TRIMs for a limited period to encourage expanded production capacity for medical devices and components and personal protective equipment, promote domestic manufacturing capabilities, accelerate industrialization, stimulate the transfer of technology and close the digital divide should be allowed. 9. Flexibilities are required in relation to the use of subsidies in the ASCM contingent upon the use of domestic content in order to promote resuscitation of ailing industries, upgrade and modernize domestic manufacturing capabilities, employment generation, support small and medium enterprises and to promote exports. WTO Members should exercise due restraint with respect to challenging subsidies provided by developing countries, in order to achieve development goals. 10. Building resilient economies requires transfer of technology. Members are encouraged to put in place measures to incentivize the transfer of technology to achieve their developmental objectives. Members should adhere to the implementation of commitments under the TRIPS Agreement. 11. In simplification of processes and with the principles of universalizing the multilateral trading system in a balanced manner consistent with the level of development, ambition and developmental needs of LDCs, WTO Members are encouraged to consider sufficient flexibility and fully implement the 2012 General Council Decision on LDCs Accession to further strengthen, streamline and operationalize the 2002 Guidelines as an S&D instrument of accession for LDCs. 12. The revised S&D proposals which were tabled by the G90 in the CTD SS and discussed in successive meetings are critical to increasing trade opportunities of developing countries and LDCs, promoting economic recovery, providing an effective response to the current crises and building resilience to future shocks, putting developing countries on a sustainable development path and contributing to the achievement of the SDG Agenda 2030. “We urge Members to constructively engage in good faith in these discussions so as not to erode the confidence of developing countries in the multilateral trading system, and agree on meaningful outcomes before MC12.” Trade envoys from developing countries and LDCs endorsed the declaration at the meeting, saying that the credibility of the WTO hinges on whether it comes out with an outcome at MC12. Otherwise, the inter-governmental multilateral trade body will be seen as an organization that serves the interests of developed countries, said people familiar with the development. However, several industrialized countries, including the US, raised objections that the G90 proposal is an old proposal and it cannot be subjected to further negotiations, said people familiar with the development. THE LDC WAIVER The United States objected to a proposal from the least-developed countries seeking support measures, especially special and differential treatment, for a period of 12 years after they graduate from their current LDC status, said people familiar with the development. At the GC meeting, the LDCs introduced their draft proposal to be agreed at MC12. Chad, which is the coordinator of the LDC group at the WTO, presented the draft ministerial decision for discussion. The draft decision states that “support measures available to least developed countries shall be extended 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.” The support measures shall include the following elements: 1. All special and differential treatment measures and exemptions available to a least developed country under existing and future WTO Agreements, Understandings, Ministerial, General Council and other relevant Decisions; 2. All LDC-specific technical assistance and capacity building programmes and facilities provided under the WTO system; 3. Any other relevant measures in favour of LDCs; 4. If a decision of the UN General Assembly to exclude a least developed country Member from the least developed country category enters into force during a transition period for LDCs provided under any existing or future WTO Agreements, Understandings, Ministerial, General Council or other relevant Decisions, the Member shall be entitled to utilize the remaining period of delay provided for LDCs; 5. Developed and developing countries granting unilateral trade preferences to least developed countries shall establish procedures for extending and gradually phasing out their preferential market access scheme over a period of twelve years after the entry into force of a decision of the UN General Assembly to exclude a country from the least developed countries category; and 6. After the transition period provided under paragraph 1, a graduated LDC Member shall automatically benefit from the most favourable special and differential treatment granted to other developing countries Members. Many LDCs and developing countries, including the African Group, strongly supported the draft GC decision tabled by the LDCs. The US, however, objected to the draft decision, saying that countries such as Bangladesh and Laos cannot be retained in the same group as their economic status is much higher than several developing countries, said people familiar with the discussion on this item. In conclusion, it appears that the developed countries will go to any extent to block these two proposals at MC12, thereby making clear that the concerns of developing and LDCs are unlikely to be addressed at the ministerial meeting, said people familiar with the development.
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