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TWN
Info Service on WTO and Trade Issues (Jun22/24)
WTO: MC12 concludes with outcomes favourable to US & EU Geneva, 17 Jun (D. Ravi Kanth) -- The World Trade Organization's 12th ministerial conference (MC12) concluded in the early hours of 17 June with WTO Director-General Ms Ngozi Okonjo-Iweala having declared it as an "unprecedented" meeting with "very, very substantive outcomes". The "substantive outcomes" include three major decisions: (1) extending the e-commerce moratorium for two more years with the promise, for the first time, of "terminating" the decision at the end of this period; (2) the TRIPS waiver; and (3) the Ministerial "Outcome" document that paves the way for starting discussions on WTO reforms under the direction of the WTO's General Council and the subsidiary bodies with a footnote that could raise more problems. The other three decisions/declarations are: the decision on removing export restrictions on the food purchases made by the World Food Programme (WFP) with a caveat that allows countries to adopt measures according to their domestic situation; a "truncated" fisheries subsidies agreement that stands to be terminated within four years if a new "comprehensive" agreement is not negotiated; and a declaration on trade and food security containing best endeavour language. "We got very, very substantive outcomes," the DG said at a closing press conference early morning of 17 June, adding that she ensured that "trust" was brought back. She pointed out that there was no decision on agriculture due to sharp differences, including on the mandated issue of the permanent solution for public stockholding (PSH) programs for food security raised by India. That issue will be further negotiated along with other issues as per Article 20 of the Agreement on Agriculture, she suggested. Effectively, there is no decision on agriculture reform which was allegedly muddied by the United States on 13 June where Washington sought parity in finalizing the modalities between PSH, domestic support, and market access by the 13th ministerial conference, said several people, who asked not to be quoted. Amidst the so-called "substantive" outcomes, the absence of either a decision or a best endeavour outcome on agriculture reform seemed like an "eyesore", said a South American agriculture negotiator. Ms Okonjo-Iweala said that she is "delighted" that the WTO can deliver "multilateral outcomes." Speaking to members at the closing of MC12, Ms Okonjo-Iweala said that "the package of agreements you have reached will make a difference to the lives of people around the world. The outcomes demonstrate that the WTO is, in fact, capable of responding to emergencies of our time." She recalled her old narrative by saying that the "substantive" outcomes "show the world that WTO members can come together, across geopolitical fault lines, to address problems of the global commons, and to reinforce and reinvigorate this institution." In response to the ongoing shocks from COVID-19, the DG said that "the declaration you just adopted will make access to medical supplies and components more predictable in this pandemic - and in the next one." Notwithstanding the continuing "vaccine inequity" while the developed countries are being forced to destroy their hoarded vaccines, she said "the TRIPS waiver compromise will contribute to ongoing efforts to deconcentrate and diversify vaccine manufacturing capacity, so that a crisis in one region does not leave others cut off." "And you are going to make it easier for the World Food Programme to do its difficult job of feeding millions of the world's most vulnerable people," she told the members. On the "truncated" fisheries subsidies agreement wherein Article 5 on subsidies in the overcapacity and overfishing pillar has been dropped, the DG said that "WTO members have for the first time concluded an agreement with environmental sustainability at its heart." Mr Timur Suleimenov, First Deputy Chief of Staff of the Kazakh President and the chair of MC12, apparently said that "after a "roller coaster" of a week including two sleepless nights, multilateralism is alive and the rules-based system is alive." At the closing press conference, the SUNS sought to know whether it is right to say that, barring two or three decisions, the rest of the outcomes are best endeavour in nature or "Plan B" outcomes and whether these outcomes have set a precedent for future negotiations? The SUNS also asked whether the DG has successfully institutionalized the "green room" process where a large part of the membership was kept out of it, and whether these precedents are good for the future negotiations? To the two questions, Ms Okonjo-Iweala's reply is as follows: "Can I ask you a question? Why are your questions based on the wrong premise? You know you did that before. You cannot ask a question that is not based on facts. That it is not correct. Let me answer the first question, Ravi. If you must ask questions, you cannot ask subjective questions that are not based on facts. You told me that these are kicking the cans down the road. Great. Those agreements were not there before. If you don't get it, (it) is a failure and now you have got it then it is kicking the can down the road. So you know that kind of journalism and if you have already made up your mind of writing a story then write it. No, no just write the story, you need it (and) if you don't need facts, they are there. Some of them are called declarations and that's why they are called declarations. That is very standard and sometimes those declarations are not agreed on by everybody multilaterally. The fact we are able to come around a declaration on food security and a decision on the World Food Programme where (the head of WFP) David Beasley has said this is something that is unique to enable him to be able to access food for poor people. These are being stopped by export restrictions and this is real. And you have got fisheries subsidies. I think it is very creative of Chair Santiago Wills (Colombia's trade envoy to the WTO and the chair of Doha Rules negotiations) to say listen, if we can't get the whole package now, instead of spending another 15 years arguing with each other, let's start off with what all of you could agree on. That's commendable and that is going to have an impact. Then you take it to the next stage. So, we are not going to be locked into the old pattern of doing things. Because when you do the same things and getting the same results then something is wrong. So, he tried something new and it worked. When we got stuck on TRIPS, we tried something slightly different and it worked. On "green rooms", there were a lot of small group meetings calling different people, and we are not even calling "green rooms". They were not even in the so-called "green room" in my office. You must understand the reason why we called small group meetings, they were not "green rooms", because we have the war in Ukraine. It has changed everything, and when we negotiate, we can't come into a big room and negotiate because there are members who do not want to negotiate in the same room with Russia. Instead of commending the ability to find a way forward with the small group approaches, you tell me it is a "green room". These are not "green rooms", it is just that any small group is called a "green room". The point is these meetings, these are HoDs and they are working." CHANGING TEXTS TO SUIT INTERESTS OF US & EU The US and EU along with other industrialized countries fought hard for the extension of the moratorium on customs duties on electronic transmissions, despite considerable opposition to the continuation of the moratorium by India, South Africa, Pakistan, and several other countries, said people, who asked not to be quoted. At one point during the "green room" meetings, developing countries asked for the termination of the moratorium at once but the US sought the termination of the moratorium in nine months, said people who asked not to be quoted. Around the time when developing countries seemed determined to press ahead with their demand for the termination of the moratorium, the United Kingdom and European Union apparently went out of the room and came back with their proposal to continue the moratorium until the 13th ministerial conference, or beyond, said people who asked not to be quoted. South Africa and Pakistan pressed for the language on termination to remain but they were almost marginalized, resulting in the final text that actually preserved the moratorium for two more years, or beyond, said people who asked not to be quoted. In effect, the US, the EU and other industrialized countries secured what they had asked for all along, i.e., for the continuation of the moratorium for two more years with the language that it will "expire" at the end of this period. Perhaps, for the first time since 1998, the word "termination" figured in the e-commerce moratorium with tightened language on the work program, said people who asked not to be quoted. The e-commerce decision that was gaveled states: "We reinvigorate the work under the Work Programme on electronic commerce based on the mandate as set out in WT/L/274 and particularly in line with its development dimension. We shall intensify discussions on the moratorium and instruct the General Council to hold periodic reviews based on the reports that may be submitted by relevant WTO bodies, including on scope, definition, and impact of the moratorium on customs duties on electronic transmissions. We agree to maintain the current practice of not imposing customs duties on electronic transmissions until MC 13, which should ordinarily be held by 31 December 2023. Should MC 13 be delayed beyond 31 March 2024, the moratorium will expire on the date unless Ministers or the General Council take a decision to extend." In a similar vein, the texts on trade and food security and the removal of export restrictions on food purchases made by the WFP faced opposition from Tanzania, said people, who asked not to be quoted. But subsequently under pressure from several countries, and allegedly a senior official of the WTO, Tanzania appears to have retracted its opposition, said people familiar with the development. The MC12 outcome document was also gaveled. It contains some difficult issues on environment and disciplines for MSMEs (micro, small, and medium enterprises) and trade and gender among other issues, said people, who asked not to be quoted. The twists and turns in finalizing the TRIPS Decision were allegedly brought about by the United Kingdom, which said it would need time to consult with its capital and held up things on an agreement, said people, who asked not to be quoted. It was the same case with trade and food security whose text also underwent changes. MC12 OUTCOME DOCUMENT The full text of the MC12 outcome document is as follows: "MC12 OUTCOME DOCUMENT - DRAFT* Revision We, the Ministers, have met in Geneva from 12 to 16 June 2022 for our Twelfth Session. 1. We resolve to strengthen the rules-based, non-discriminatory, open, fair, inclusive, equitable and transparent multilateral trading system with the WTO at its core. In this regard, we reaffirm the principles and objectives set out in the Marrakesh Agreement Establishing the World Trade Organization and underscore the relevance and critical role of international trade and the WTO in global economic recovery, growth, prosperity, alleviation of poverty, welfare of all people, sustainable development and to facilitate cooperation in relation to the protection and preservation of the environment in a manner consistent with respective needs and concerns at different levels of economic development. 2. We reaffirm the provisions of special and differential treatment for developing country Members and LDCs as an integral part of the WTO and its agreements. Special and differential treatment in WTO agreements should be precise, effective and operational. In addition, we recall that trade is to be conducted with a view to raising standards of living, ensuring full employment, pursuing sustainable development of Members, and enhancing the means for doing so in a manner consistent with Members' respective needs and concerns at different levels of economic development. We instruct officials to continue to work on improving the application of special and differential treatment in the CTD SS and other relevant venues in the WTO, as agreed and report on progress to the General Council before MC13. 3. We acknowledge the need to take advantage of available opportunities, address the challenges that the WTO is facing, and ensure the WTO's proper functioning. We commit to work towards necessary reform of the WTO. While reaffirming the foundational principles of the WTO, we envision reforms to improve all its functions. The work shall be Member-driven, open, transparent, inclusive, and must address the interests of all Members, including development issues. The General Council and its subsidiary bodies will conduct the work, review progress, and consider decisions, as appropriate, to be submitted to the next Ministerial Conference [1]. 4. We acknowledge the challenges and concerns with respect to the dispute settlement system including those related to the Appellate Body, recognize the importance and urgency of addressing those challenges and concerns, and commit to conduct discussions with the view to having a fully and well-functioning dispute settlement system accessible to all Members by 2024. 5. In this difficult context, we note with satisfaction the progress achieved by LDC Members who have met or who are about to meet the graduation criteria set by the United Nations Committee for Development Policy (CDP) and acknowledge the particular challenges that graduation presents, including the loss of trade-related international support measures, as they leave the LDC category. We recognize the role that certain measures in the WTO can play in facilitating smooth and sustainable transition for these Members after graduation from the LDC Category. 6. We underscore the importance of accessions, noting that although no new accession has taken place since July 2016, several applicants have made encouraging progress. In this regard, we remain committed to facilitate the conclusion of ongoing accessions, especially for least-developed countries fully in line with the General Council Guidelines on LDC Accessions, and to provide technical assistance, where appropriate, including in the post-accession phase. 7. We recognize the special situation of the Members acceded in accordance with Article XII of the Agreement Establishing the World Trade Organization who have undertaken extensive commitments at the time of accession, including in market access. This situation shall be taken into account in negotiations. 8. We reaffirm our decision at the Tenth Ministerial Conference in Nairobi on implementation of preferential treatment in favour of services and service suppliers of least-developed countries and increasing LDC participation in services trade, and instruct the Council for Trade in Services to review and promote the operationalization of the waiver including to explore improvements in LDC services export data; to review information on LDC services suppliers and consumers of LDC services in preference providing Member markets; and to assess best practices in facilitating the use of the preferences. On this matter, we instruct the General Council to report to our next session on progress. We reaffirm our decision at the Ninth Ministerial Conference in Bali on Duty-Free Quota-Free Market Access for Least-Developed Countries and instruct the Committee on Trade and Development to re-commence the annual review process on preferential DFQF market access for LDCs. On this matter, we instruct the General Council to report on the progress to our next session. We welcome the decision of the Committee on Rules of Origin (CRO) adopted on 14 April 2022 (G/RO/95) on Preferential Rules of Origin and the Implementation of the Nairobi Ministerial Decision. We instruct the CRO to report its work to the General Council ahead of the Thirteenth Ministerial Conference. We also acknowledge LDCs' commitment and efforts in implementation of the TFA. We urge all Members to assist the LDCs in meeting their definitive category C deadlines. We recognize the importance of Aid for Trade initiatives in trade-related capacity building for the LDCs. We recommend that such programmes prioritise the objectives identified by the LDCs. 9. We instruct the Trade Facilitation Committee to hold a Dedicated Session on transit issues annually until the next review of the Trade Facilitation Agreement is completed. These dedicated sessions will highlight the importance of transit and reserve time for the Committee to discuss best practices, as well as the constraints and challenges faced by all landlocked WTO Members, including landlocked developing countries and LDCs as outlined in G/TFA/W/53. 10. Services trade is vital to the global economy and has a major role to play in global economic output and employment. The COVID-19 pandemic has highlighted the importance of services and has had a significant impact on services trade and services sectors, particularly for developing Members, including least-developed countries (LDCs). We underscore the importance of recovery for services most impacted by the pandemic and of efforts to strengthen such services, taking into account challenges and opportunities encountered by Members. We acknowledge the need to facilitate the increasing participation of developing Members, including LDCs, in global services trade, including by paying particular attention to sectors and modes of supply of export interest to them. We take note of work in the area of trade in services. 11. We take note of the reports from the General Council and its subsidiary bodies. These reports, and the Decisions stemming from them demonstrate Members' continued commitment to the work of the WTO, thereby strengthening its effectiveness and the multilateral trading system as a whole. 12. We recognize the importance of strengthened collaboration and cooperation with other intergovernmental organizations and other relevant stakeholders that have responsibilities related to those of the WTO, in accordance with the rules and principles of the WTO, to restore trust, certainty and predictability in the world economy and effectively address current and future multidimensional challenges. 13. We recognize women's economic empowerment and the contribution of MSMEs to inclusive and sustainable economic growth, acknowledge their different context, challenges and capabilities in countries at different stages of development, and we take note of the WTO, UNCTAD and ITC's work on these issues. [2] 14. We recognize global environmental challenges including climate change and related natural disasters, loss of biodiversity and pollution. We note the importance of the contribution of the multilateral trading system to promote the UN 2030 Agenda and its Sustainable Development Goals in its economic, social, and environmental dimensions, in so far as they relate to WTO mandates and in a manner consistent with the respective needs and concerns of Members at different levels of economic development. In this regard, we reaffirm the importance of providing relevant support to developing country Members, especially LDCs, to achieve sustainable development, including through technological innovations. We note the role of the Committee on Trade and Environment as a standing forum dedicated to dialogue among Members on the relationship between trade measures and environmental measures. Part II: Reference to separate decisions or declarations as adopted by Ministers. * This draft text is without prejudice to Members' positions and to any action that Ministers may decide to take. [1] For greater certainty, in this context, this does not prevent groupings of WTO Members from meeting to discuss relevant matters or making submissions for consideration by the General Council or its subsidiary bodies. [2] These are general messages on cross-cutting issues that do not change the rights or obligations of WTO Members (and do not relate to any Joint Statement Initiatives)." +
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