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TWN
Info Service on WTO and Trade Issues (Nov21/03) Geneva, 2 Nov (D. Ravi Kanth) – The prospects for a likely new “stealth” round of trade negotiations are growing at the World Trade Organization, with likely top-down, “take-it-or-leave-it” decisions and work programs in different tracks that could permanently damage the multilateral trading system once and for all, said people familiar with the development. Until now, new rounds of trade negotiations were launched with considerable groundwork and consensus on all the controversial/divisive issues. The Uruguay Round of trade negotiations, for example, was launched in Punta del Este, Uruguay, in 1986, after massive differences over the introduction of trade-related aspects of intellectual property rights and trade in services resulted in these issues being taken up on a separate track. The Uruguay Round of trade negotiations lasted for almost eight years until it was concluded at the official level in December 1993, and subsequently an agreement was ratified in April 1994 at Marrakesh, Morocco. The Uruguay Round led to the creation of the World Trade Organization in 1995 to replace the GATT (General Agreement on Tariffs and Trade). Between 1996, the first WTO ministerial conference in Singapore, and the fourth WTO ministerial conference in Doha, Qatar in November 2001, there were repeated attempts to launch a new round of negotiations. Finally, the new round, based on the principle of single undertaking whereby nothing is concluded until everything in the Doha work program is concluded, came into existence. The Doha work program included many issues including agriculture; industrial subsidies; services; rules covering anti-dumping, subsidies and countervailing measures, regional trade agreements, and fisheries subsidies; implementation issues arising from the Uruguay Round commitments in the covered WTO agreements and improvements in special and differential treatment; environmental issues; dispute settlement; and electronic commerce incorporating the 1998 work program. The Doha agenda also included the most divisive issues, referred to as the four “Singapore issues”, namely transparency in government procurement, trade and investment, competition policy, and trade facilitation. At the WTO’s fifth ministerial conference in Cancun, Mexico in 2003, which was referred to as a mid-term review, the four “Singapore issues” failed to secure “explicit” consensus. The meeting subsequently collapsed with the United States coming under fire for its positions on farm subsidy reduction commitments and cotton. Subsequently, the negotiations were revived in 2004, when members concluded a framework agreement. It included trade facilitation along with other issues, and also included the principle of less-than-full-reciprocity (LTFR) wherein developing countries will undertake less than the reduction commitments set out for the developed countries. It took almost nine years for the developed countries to pocket the Trade Facilitation Agreement (TFA) at the WTO’s ninth ministerial conference in Bali, Indonesia, in December 2013, under paragraph 47 of the Doha ministerial declaration. According to paragraph 47, “with the exception of the improvements and clarifications of the Dispute Settlement Understanding, the conduct, conclusion and entry into force of the outcome of the negotiations shall be treated as parts of a single undertaking. However, agreements reached at an early stage may be implemented on a provisional or a definitive basis. Early agreements shall be taken into account in assessing the overall balance of the negotiations.” After pocketing the TFA in December 2013, the developed countries “cheated” the developing countries by refusing to conclude any other agreements under the Doha work program. Effectively, the Doha work program, under which the Doha Trade Negotiations Committee (TNC) was established in 2002, remains on the table. Yet, it’s a peculiar situation where the Doha work program has been insidiously atrophied. As the WTO members proceed to the 12th ministerial conference (MC12) taking place in Geneva from 30 November, a new “stealth” round of trade negotiations, which could proceed on different tracks with different objectives, is likely to take birth without being formally announced, said people familiar with the development. ISSUES IN A NEW “STEALTH” ROUND According to the report of the chair of the WTO General Council (GC), Ambassador Dacio Castillo from Honduras, on the MC12 outcome document at the informal TNC meeting on 25 October, “to respond to emerging opportunities, address the challenges that the WTO is facing and ensure its sound working in all its functions, Ministers [commit] [agree] to undertake necessary reforms of the WTO, and instruct officials to take this work forward with the view to presenting reports periodically.” More importantly, “ministers undertake to review progress regularly and take appropriate decisions by the next Ministerial Conference (or the 13th ministerial conference).” So far, there is no consensus on what would constitute the proposed WTO reforms. Yet, the GC chair has suggested that work on WTO reforms will be continued until the 13th ministerial conference and then it will be decided there. On the Appellate Body, which is unlikely to be restored any time soon, the chair’s report (containing the draft paragraphs of the outcome document) says, the “ministers acknowledge the [concerns surrounding] [unprecedented challenges] the two-tier Dispute Settlement System is facing and recognize the importance and urgency of addressing those * [challenges] [including those related to Appellate Body] and commit to conduct solution-oriented discussions towards an improved and fully functioning] OR * [concerns] in order to [improve the functioning of the] OR * [challenges to ensure a fully functioning] Dispute Settlement System accessible to all Members [, while preserving the essential features of a two-tier adjudication process].” NEGOTIATING FUNCTION OF THE WTO This has been the most controversial demand introduced by the US since 2018. Washington wants to bring about differentiation among developing countries for availing of special and differential treatment, which is currently guided by the principle of self-designation. Also, the developed countries want to do away with the principle of consensus-based decision making and pave the way for plurilateralization of the WTO. More disturbingly, the changes in the negotiating function of the WTO are being mooted by Brazil on behalf of its developed country partners. The Brazilian proposal says in bracketed language that “[Ministers commit to revitalize the proper functioning of the WTO negotiating function and to strengthen its rule-making by facilitating trade negotiations.]” In a similar vein, “ministers take note of the important work that is taking place in WTO Bodies and instruct officials to continue to carry this work forward and build on it and, as appropriate, work towards [delivering outcomes soon]. [Noting in particular:]” Furthermore, the WTO, which is an inter-governmental body, is being asked to strengthen “international collaboration and coherence of action between international organizations to restore trust, certainty and predictability in the world economy and effectively address current and future multi-dimensional challenges.” In a restricted proposal (Job/GC/278) circulated on 26 October, Egypt, Pakistan, South Africa, and Sri Lanka cautioned that “several proposals with respect to collaboration go substantially beyond the function of the WTO Secretariat as well as risk undermining the Member-driven character of the WTO. It is crucial that as a rules-based organization, WTO Secretariat’s role is limited to the various agreements within the WTO and is not expanded to addressing matters beyond its competency. The Member-driven nature of the WTO should be safeguarded.” In addition to the above proposals, the GC chair has also included proposals tabled by Japan concerning “COP26 Notation,” “digitalization,” “level playing field,” and other issues such as the informal plurilateral Joint Statement Initiatives (JSIs) in electronic commerce, disciplines for MSMEs (micro, small, and medium enterprises), investment facilitation, and trade and gender among others. Then there is the TESSD initiative concerning trade and environmental sustainability structured discussions being coordinated by Australia. The TESSD issues include fuel subsidies, plastics pollution and environmentally sustainable plastics trade among others. In short, it seems more like an “inflection” point towards the launch of a “stealth” round of trade negotiations, said people familiar with the development. FISHERIES SUBSIDIES NEGOTIATIONS After the chair of the Doha fisheries subsidies negotiations deferred the negotiations to 8 November with the promise of a revised draft text, many members seem worried over the increasing prospects of a top-down, “take-it- or-leave-it” approach being foisted on them. On 29 October, the chair, Ambassador Santiago Wills from Colombia, informed members that he is going to wait for proposals from those members who are currently engaged in intense consultations. He said that he expects to hear from them on 3 November, said people familiar with the development. Following the proposals from a small set of countries including the United States, India, the European Union, China, and others, the chair said he will issue a revised draft text in the week beginning on 8 November. At the meeting on 29 October, several members, including the United States, Russia, the European Union, China, the United Kingdom, Indonesia, Jamaica, on behalf of the ACP (African, Caribbean, and Pacific) group, and Bangladesh spoke expressing their respective views. Many developing countries spoke about the need for robust special and differential treatment as well as expressed concerns about the short time that they would be left with for actual negotiations before MC12, said participants, who asked not to be quoted. Significantly, the negotiations remained frozen for the past three weeks. The WTO director-general Ms Ngozi Okonjo-Iweala told the Indian trade minister that she apparently asked the chair to defer the negotiations until her conversations with the trade ministers at the G20 meeting and discussions with India, said sources in New Delhi. She is understood to have told the Indian minister that she will include the Indian proposal in the text, and that India will have to do advocacy for its proposal, sources said. With her departure for the G20 leaders’ meeting in Rome over the weekend, and the COP26 meeting taking place in Glasgow, it remains to be seen whether she has managed to secure approval for the ideas she is carrying on fisheries subsidies. Effectively, there will be about ten days left for negotiations on the second revised draft text, which is expected to be issued next week. Hence, the growing fears of a top-down, “take-it-or-leave-it” approach, said a person, who asked not to be quoted. FORCED LABOUR The US has apparently raised the stakes for the inclusion of the issue of forced labour in the revised draft text, said people familiar with the consultations. Even China does not seem to be unduly worried about the inclusion of the issue of forced labour as its vice-minister for trade, Mr Wang Shouwen, made it clear during China’s recent trade policy review, that “China is firmly opposed to any form of forced labour in China’s economic activities.” He said “the laws and regulations of China clearly prohibit the export of forced-labour products. Therefore, it is totally unwarranted to withhold export from China into some Members on the ground of forced labour.” In conclusion, it seems ironic that all the mandated issues such as cotton, agriculture subsidies, public stockholding programs for food security, and the developmental issues including improvements in special and differential treatment, seem to be almost buried. In their place, all the non-mandated issues such as the JSIs, climate change related issues, and proposed WTO reforms have all taken precedence on the path towards the apparent launch of an unannounced new round of trade negotiations.
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