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Info Service on WTO and Trade Issues (Nov21/11) Geneva, 10 Nov (D. Ravi Kanth) – Attempts to bring fundamental changes to the World Trade Organization’s negotiating, monitoring and deliberative, and the dispute settlement functions apparently failed to garner consensus during the small-group consultations held by the WTO General Council chair for the past several days, said people familiar with the development. The General Council (GC) chair, Ambassador Dacio Castillo from Honduras, has been holding consultations for the past several days on the proposed outcome document for the upcoming WTO’s 12th ministerial conference (MC12) in which the proposed WTO reforms are one of the main components. In his report to members at an informal meeting of the Doha Trade Negotiations Committee (TNC) on 25 October, the chair said, in paragraph seven (of the outcome document), that “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. Ministers undertake to review progress regularly and take appropriate decisions by the next Ministerial Conference.” (See SUNS #9447 dated 28 October 2021.) Subsequently, the European Union and Brazil apparently floated an unofficial document titled “Mandate of the Working Group on institutional improvements to the functioning of the WTO.” Their proposal, which has not yet been circulated among the members, has apparently proposed fundamental reforms that appear to advance the Northern trade agenda to transform the WTO in all the three pillars of its architecture, said people familiar with the development. The EU-Brazil proposal, seen by the SUNS, states, in its chapeau: a. “having regard to paragraph 1 of Article IX of the Marrakesh Agreement Establishing the World Trade Organization; b. “recognizing the urgent need for a review of the operation of the World Trade Organization, in all of its three functions including in order to have a fully functioning dispute settlement system; c. “emphasizing that an effective WTO provides benefits to all Members at all levels of development; and d. “considering that such a review needs to be led by Members and concentrate on institutional issues relating to the functioning of the Organization.” The draft ministerial decision tabled by the EU and Brazil calls for establishing “a Working Group under the auspices of the General Council to consider institutional improvements to the functioning of the WTO.” It says that “the Working Group should serve as a forum for discussion and to issue recommendations around the institutional aspects of WTO reform that are of systemic interest.” More importantly, it emphasizes that “the Working Group shall prepare a recommendation on the following issues, among others, sufficiently in advance of MC13.” In short, the EU-Brazil proposal seeks a decision at MC13. However, WTO reforms are not part of the Doha Development Agenda (DDA) and without concluding the DDA negotiations, new issues such as WTO reforms cannot be pursued at the WTO, said an analyst, who asked not to be quoted. Unless MC12, which is scheduled to begin in Geneva on 30 November (see the tentative schedule below), decides unanimously that the DDA negotiations are to be terminated once and for all, there is no legal justification for pursuing new issues such as WTO reforms, the analyst said. According to the EU-Brazil proposal, the three functions of the WTO to be reviewed by a Working Group include: (1) Monitoring and deliberative function * Improving the WTO’s monitoring role; * Improving the effectiveness of WTO Committees; * Discussing arrangements on relations with stakeholders; * Enhancing cooperation between the WTO and other International Organizations. (2) Negotiating function * Considering how to revitalize the WTO’s negotiating function; * Facilitating inclusiveness and participation by developing countries, particularly noting the challenges faced by those with small delegations. (3) Dispute settlement function * Considering areas where reforms of the WTO dispute settlement are needed and identifying solutions to allow a fully functioning and improved dispute settlement system. As regards the elements in the monitoring and deliberative function, Egypt, Pakistan, South Africa, and Sri Lanka had said in their proposal (Job/GC/278/Rev.1) on 3 November: “We acknowledge the importance of transparency, but references to future work on transparency should not include additional cumbersome obligations.” As noted in the proposal submitted by Cuba, India, and the African Group on 4 December 2020 (WT/GC/W/778/ Rev.3), any work in this area must be in the provision of capacity building to developing countries, they said. Transparency and inclusiveness must also permeate the entire functioning of the WTO including in convening of meetings (i.e., scheduling of meetings, inclusiveness through fair and equitable geographical and regional representation by delegations at the meetings), Ministerial Conferences, and work of the Secretariat, they added. Strict requirements to publish information on trade measures taken during a pandemic must take due regard of limited institutional capacities that developing countries and LDCs have during such periods. Furthermore, Members should encourage transparency of contractual terms, as opaque conditions in licensing arrangements have greatly contributed to vaccine inequity, they said. Significantly, it will be a litmus test if MC12 is to be held based on “fair and equitable geographical and regional representation by delegations at the meeting,” said people familiar with the ongoing developments concerning the current heavily restricted in-person meetings. In a similar vein, as regards collaboration with other international organizations and stakeholders, Egypt, Pakistan, South Africa, and Sri Lanka said 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.” The four countries had cautioned that “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.” Regarding the EU-Brazil proposal on the negotiating function of the WTO, it is an open secret that the US, the EU, and other industrialized countries as well as their new ally, Brazil, want to bring about differentiation among developing countries for availing of special and differential treatment and to terminate the principle of consensus- based decision-making in arbitrarily pursuing plurilateral trade negotiations, said people familiar with the development. The EU and Brazil, according to people familiar with the GC chair’s small-group consultations, stood exposed when one member asked what is the credibility of undertaking WTO reforms when one leg of the WTO system, namely, the two-stage dispute settlement process, has been made dysfunctional. Effectively, the EU-Brazil proposal seeks to bring the private sector and international organizations into the operations of an inter-governmental trade body, which could have damaging consequences. The EU and Brazil suggested that the “participants to the Working Group shall include Ambassadors and, to the extent possible, senior officials based in capitals.” The draft ministerial decision noted that “the Working Group shall meet on a monthly basis. Subgroups may be established on individual topics. After an initial phase in which Members will present contributions to the discussion, the Working Group will engage in text-based negotiations no later than January 2023. The Working Group will issue recommendations sufficiently in advance of MC13.” Apparently, the draft ministerial decision failed to garner consensus during the GC chair-held consultations, as Brazil and the EU failed to address the questions raised by some members, and it remains to be seen whether it will be tossed up at MC12, said people familiar with the developments on the outcome document. TENTATIVE SCHEDULE FOR MC12 Meanwhile, the Chair of MC12 and the WTO director-general Ms Ngozi Okonjo-Iweala on Monday issued a tentative schedule for the ministerial conference. The tentative schedule of formal and informal meetings is as follows: (1) Tuesday, 30 November: (a) Formal (at CICG) – Opening Session (15h00-17h00); (b) Informal (in CWR) – HoDs at Ministerial Level (11h00-13h00). (2) Wednesday, 1 December: (a) Formal (at CICG) – Plenary Session (08h00-11h00), Plenary Session (15h00-18h00); (b) Informal (in CWR) – Thematic Ministerial HoDs meetings (11h30-17h30) (sequential 90 min meeting for each topic – specific schedule TBD), Horizontal HoDs (18h00). (3) Thursday, 2 December: (a) Formal (at CICG) – Plenary Session (10h00-13h00), Plenary Session (15h00-18h00); (b) Informal (in CWR) – Thematic Ministerial HoDs meetings (09h00-17h30) (sequential 90 min meeting for each topic – specific schedule TBD), Horizontal HoDs (18h00). (4) Friday, 3 December: (a) Formal (at CICG) – Plenary Session (as necessary, 10h00-13h00), Closing Session (18h00); (b) Informal (in CWR) – Thematic Ministerial HoDs meetings as necessary, Final HoDs (15h00). The Chair of MC12 and the DG said that “topics can include: WTO Response to the Pandemic; its TRIPS dimension; Fisheries subsidies; Agriculture; Development; E-commerce Work Program and moratorium; WTO Reform.” Incidentally, it does not indicate the closed-door “green room”, which is already taking place on the issue of agriculture among eight countries including the United States, the European Union, Canada, Australia, Brazil, China, India, and South Africa. Surprisingly, there is also no mention of the informal plurilateral Joint Statement Initiatives (JSIs) on digital trade, investment facilitation, disciplines for micro, small, and medium enterprises (MSMEs), and trade and gender. However, attempts will likely be made to sneak the JSIs into the ministerial discussions at MC12, said people, who asked not to be quoted.
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