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Info Service on WTO and Trade Issues (Jun22/15) Geneva, 13 Jun (D. Ravi Kanth) — The World Trade Organization’s 12th ministerial conference (MC12) got underway on 12 June on a rather grim note with the WTO Director-General, Ms Ngozi Okonjo-Iweala, having allegedly defied the rules laid out in the Marrakesh Agreement by raising questions on the “deadlocks” caused due to the consensus-based decision-making process. In her opening statement at MC12 as well as at an earlier press conference, the DG espoused the controversial Joint Statement Initiatives (JSIs) that have been challenged by India and South Africa, and seems to have crossed the “red line” in a member-driven and rules-based trade body, said people familiar with her statements. The DG suggested that there could be a few “land mines” in concluding the deliverables at MC12. She charted a new path for the 164-member trade body to do things more flexibly, claiming that the consensus-based decision- making process causes “deadlocks”. Even one member could block decisions in the consensus-based decision-making, she said, suggesting that the time has come to review this cardinal principle of the Marrakesh Agreement. The DG’s comments on the principle of consensus-based decision-making seem to have violated Article IX of the Marrakesh Agreement, which states: “The WTO shall continue the practice of decision-making by consensus followed under GATT 1947. Except as otherwise provided, where a decision cannot be arrived at by consensus, the matter at issue shall be decided by voting. At meetings of the Ministerial Conference and the General Council, each Member of the WTO shall have one vote.” “My dream is to deliver,” she said, adding that “three deliverables are better than two, and two are better than one. But even one result is a bigger step towards our dreams than all of us going home empty handed.” Her seeming desperation for results at MC12, though inimical to the interests of developing countries, is a cause for concern as to how successfully the DG along with the United States and the European Union are attempting to change the entire architecture of the WTO, said people, who asked not to be quoted. She posed a rhetorical question: “Will the road to deliver at this MC12 be smooth?” “Absolutely not,” she said, emphasizing that she “expect(s) a rocky, bumpy road (ahead) with a few land mines along the way.” Without explaining what these land mines are and how she is aware of them, the DG said, “but we shall overcome them.” She railed against “MIGHT” as the “RIGHT” approach, saying that “a return to “might makes right” in international commercial relations would be costly for the mighty, and even more damaging for everyone else.” Interestingly, the WTO seems to be increasingly transformed into an organization where “MIGHT” is right, as its enforcement function involving the two-stage dispute settlement system with the Appellate Body as the final adjudicating body has been paralyzed by the United States. In her statement, the DG touched upon many issues ranging from the proposed five deliverables to the importance of the informal plurilateral JSIs on digital trade, investment facilitation, trade and gender, and more controversially, the environment related to climate change. While espousing on WTO reforms, she clubbed together the controversial issue of industrial subsidies with agriculture and other subsidies. “Other aspects of reform include dealing with industrial, agricultural, and other subsidies and level playing field issues so the rules-based multilateral trading system can continue to be predictable and transparent, ensuring fair competition and a free flow of goods and services,” she said. The DG expressed hope that members can overcome the differences in the outcome document on MSMEs (micro, small, and medium enterprises). Commenting on digital trade, Ms Okonjo-Iweala said that “trade is going digital and going green. Reform means making the WTO fit for purpose to embrace and navigate these new areas.” On environment, the DG said that “forging agreements that underpin the services economy, e-commerce, and green trade in line with the net-zero carbon emissions target for 2050 will all be essential.” The DG said, “I am happy to say WTO members are already delivering in these new areas, be it through the Services Domestic Regulation Agreement reached last December, the e-commerce and investment facilitation negotiations, or the structured discussions on environmental sustainability, climate change and trade, and of course, the Informal Working Group on Women.” On the e-commerce moratorium, the DG noted that “in the area of digital trade is the issue of the moratorium on levying customs duties on electric transmissions.” “I have never received so many letters from business associations all over the world as I have on this issue. I hope ministers will have the courage to make the right decision in this critical area.” “So what are we seeking at MC12 in terms of movement on WTO reform? We are seeking a decision on process. What approach should the WTO follow to pursue these reforms? What approach would facilitate agreement on the substance of reforms, a work programme, and a timeline for starting to deliver changes by MC13? Excellencies, it will be important for the organization’s credibility to achieve consensus on the process for reforms.” She spoke a great deal on “trust deficit” and the “negative” sentiments that are “internalized” in Geneva. The DG highlighted the crucial role the WTO plays in the global trading system by lifting people out of poverty. Even though much of the WTO reforms suggested by the DG in her speech sounded like “music to the ears” of the powerful members such as the US, the EU, and other industrialized countries, it is a question mark whether other WTO members share her so-called blueprint for reforms, said two trade ministers, who asked not to be quoted. The DG praised the draft texts put out by the chairs of the Doha agriculture negotiations as well as the Doha fisheries negotiating body. Ms Okonjo-Iweala maintained that without economic and regulatory changes, it would be difficult to address global trade challenges. She emphasized on tackling the global food crisis, saying how this issue has been made worse during the Russia- Ukraine war, as both countries are major producers of wheat, edible oils, fertilizers and several other items. DG’S PRESS CONFERENCE At an earlier press conference held before the opening of MC12, the SUNS asked the DG to comment on the fact that the central message coming out of the draft texts submitted 48 hours before the start of the conference seems to be that “developing countries are being pushed to the wall, while the big boys of the global trading system seem to have got the language according to what they demanded.” SUNS sought to know whether it is a “fair game” to push the developing countries “to the wall” while enabling the “big boys” to get what they wanted. Before answering the question, the DG said that “you actually are here to get facts, and I am so delighted.” However, in response to the question, the DG’s gestures as well as her answer seemed rather combative instead of explaining what happens in a member-driven body. Ms Okonjo-Iweala “questioned the very premises of the question,” and went on to suggest how the members “negotiate” the outcomes sitting across the table. Ms Okonjo-Iweala said that whatever is the outcome of these negotiations is what you see in the texts. The DG questioned the value judgement that developing countries are “put to the wall”. Ms Okonjo-Iweala said you should not prejudge, adding that developing countries know what they want in a negotiation. Elaborating on her reply to the SUNS, she said that the WTO is becoming “a diktat forum”, wherein if one set of members do not get what they want they will complain, and the other group says “I want this” and they don’t get it then they will complain. “There is no negotiation”, the DG said. The DG, however, claimed about her negotiating prowess when she said “I have negotiated $30 billion with the Paris Club for Nigeria.” She maintained that no one side is going to get all that they want; if developing countries are fierce negotiators they should negotiate for them. She told this writer you should allow them to negotiate. Her remarks seemed like blatant “lies”, said a senior official of a major developing country, adding that negotiations in the WTO would be tantamount to a power game. The official asked why day-and-night “green room” meetings were conducted by the DG in which she overly dominated the discussions. Given that the WTO is a rules-based organization with clear rules on the DG’s functioning as set out in paragraph 4 of Article VI of the Marrakesh Agreement, it would be interesting to test her claims on a truth-meter as to whether she obeys the rules or allegedly disregards them with contempt to pursue her goals, said several people, who asked not to be quoted. +
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