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TWN
Info Service on WTO and Trade Issues (Nov22/06) Geneva, 14 Nov (D. Ravi Kanth) — Members of the World Trade Organization, at an informal meeting on 10 November, apparently remained divided on various key issues on reforming the trade body, despite the short “positive” statements issued by the WTO General Council (GC) chair, Ambassador Didier Chambovey of Switzerland, and the WTO Director-General, Ms Ngozi Okonjo-Iweala, said participants after the meeting. At the end of a day-long informal meeting on 10 November, the GC chair, in a short statement contained in just one paragraph, said that “the engagement of members was constructive.” He hoped that “Members would continue working in a pragmatic and cooperative spirit to deliver meaningful WTO reforms for the benefit of all Members and their respective stakeholders.” However, Ambassador Chambovey did not provide any details to buttress his rather “positive” sentiment, or on the key issues that were raised by members during the informal meeting. In a similar vein, the WTO Director-General, Ms Okonjo-Iweala also made a short statement, saying that she was “impressed by the level of engagement and the substantive exchanges.” The DG also said, “while there were difficult issues to address along the way, the dialogue had been important to move along the path to WTO Reform – not as an end in itself, but as a means to helping trade and the WTO deliver for members.” Normally, the DG, who is prone to making rather elaborate statements as she did after the recent retreats on fisheries subsidies and agriculture, seems to have remained tight-lipped. According to members who spoke to the SUNS after the meeting, the continued divide on various issues persisted. The issues where differences persisted include: (1) on convening annual ministerial meetings instead of the current practice of holding biennial meetings; (2) the need to institutionalize “flexible” negotiating approaches based on plurilateral negotiations; (3) the issue of strengthening the special and differential treatment provisions so as to make them effective; (4) the continuation of the principle of consensus-based decision-making, as per the provisions set out in the Marrakesh Agreement; and (5) continuing negotiations to resolve the main issues in the unfinished Doha agriculture agenda among others. There appeared to be no consensus even on the proposals for strengthening the transparency and notification requirements. The informal meeting, conducted in five different groups based on Chatham House rules, has only added to the confusion, as well as confounding the discussions, said participants, who asked not to be quoted. The GC chair sought to know from members what needs to be accomplished to take advantage of available opportunities to address the challenges that the WTO is facing in ensuring its proper functioning. The GC chair also raised the issue of how to structure the WTO reform process “in order to steer the discussions towards realistic and meaningful outcomes”. He constituted five groups. The first group was led by Japan’s ambassador Mr Kazuyuki Yamazaki; the second group was chaired by Ambassador Mr Manuel Teehankee of the Philippines; the third group was led by Ambassador Ms Zhanar Aitzhanova of Kazakhstan; the fourth group was chaired by Ambassador Mr Kokou Yackoley Johnson of Togo; and the fifth group was led by Ambassador Ms Ana Patricia Benedetting Zelaya of El Salvador. Despite the DG’s claim that there were substantive discussions, several members said that issues were being confounded because of a lack of coherence in the way they were discussed in five different groups, said another trade envoy, expressing disappointment about the apparent “opacity” of the discussions. Given the Chatham House nature of the discussions, it was not clear on the extent of opposition to any of the new issues such as opening a window for the negotiations based on a “flexible” format to advance the plurilateral negotiations, said a trade envoy, who asked not to be quoted. Even though the GC chair and the WTO DG made some concluding remarks, given the opposition from several members for issuing any reports of the discussions, apparently there were no details provided on the issues that were discussed, the trade envoy said. “OPACITY” OF THE PROCESS While it was difficult to measure the depth of discussions on the main issues, the manner in which the meeting was conducted reinforced the “opacity” of the process, which is normally pursued in the annual Davos meetings of the World Economic Forum, said participants, who preferred not to be identified. Up until now, the WTO negotiations were conducted in the open, based on concrete proposals from members so that there is clarity and inclusivity, but the new methods adopted by the DG and the GC chair based on retreats and informal Chatham House discussions in separate groups seem to confound the negotiations, said people, who asked not to be quoted. During the informal meeting, it appears that many developing countries stuck to their development-oriented proposals for strengthening the WTO based on the Marrakesh Agreement. The developing countries apparently demanded that the principle of consensus-based decision-making and the special and differential treatment provisions must be safeguarded without any change, said a trade envoy, who asked not to be quoted. As reported in SUNS #9683 dated 7 November 2022, the developing countries stuck to their demands as elaborated in their proposals. MC12 MANDATE ON WTO REFORMS Paragraph three of the Outcome Document adopted by trade ministers at the WTO’s 12th Ministerial Conference (MC12) on 17 June, states: “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.” More importantly, the footnote attached to paragraph three of the Outcome Document says that: “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.” As reported in the SUNS, the footnote was proposed by major developed countries, to ensure that the door is kept open for bringing in proposals discussed by a group of countries in plurilateral settings without discussing them at the formal GC meetings, said an analyst, who asked not to be quoted. It could legitimize a process to “parachute proposals by stealth”, the analyst said. ISSUES RAISED BY DEVELOPING COUNTRIES It is also an open secret that while the developing countries have submitted concrete WTO reform proposals, the major industrialized countries are yet to submit concrete proposals covering all areas. A group of developing countries comprising India, Cuba, members of the African Group, and Pakistan had submitted a proposal for “strengthening the WTO to promote development and inclusivity”. The proposal by India, Cuba, the African Group, and Pakistan (WT/GC/W/778/Rev.5) has laid out the WTO reforms in three areas of the negotiating function; the enforcement function; and the monitoring function of the regular bodies. Later, another group of developing countries comprising Bolivia, Egypt, Indonesia, Pakistan, South Africa, Sri Lanka, Tunisia, Uganda, and Venezuela submitted a proposal (Job/GC/278/Rev.5) on what ought to be the WTO’s response “in light of the pandemic: trade rules that support resilience building, response and recovery to face domestic and global crises.” As reported in SUNS #9596 dated 16 June 2022, at MC12, many developing countries drawn from the African Group, as well as India, Pakistan, Sri Lanka, and Cuba issued a joint statement on 14 June on how the proposed WTO reforms must be conducted after MC12. In contrast, the United States, which earlier proposed differentiation among developing countries for availing of special and differential treatment (S&DT), apparently remained silent on the differentiation issue at the informal meeting on 10 November, said a participant, who asked not to be quoted. Apparently, the US said it wants to address only procedural issues involving the transparency and notification functions, but not on the negotiating pillar or the two-stage dispute settlement pillar that has been paralyzed by Washington since December 2019, the participant said. YEARLY MINISTERIAL CONFERENCES Australia and several other developed countries apparently raised the issue of conducting ministerial conferences every year instead of continuing with the current practice of biennial meetings, said several participants, who asked not to be quoted. The proposal (WT/MIN(22)/W/6) to host annual ministerial conferences was circulated by Brazil on 7 June. It had maintained that “long intervals between meetings of the Ministerial Conference may negatively impact on ministerial oversight and guidance for the work carried out in the WTO”. Brazil said that “following the twelfth Ministerial Conference, the Ministerial Conference shall meet once every year. Its next meeting shall be held in 2023.” However, it is not clear whether Brazil remains committed to its proposal, following the change in the government in Brasilia due to the victory of former President Luiz Inacio Lula da Silva in the recent national elections. With the election of President Lula, the trade policies adopted by the Bolsonaro government are likely to be jinxed. However, trade envoys from many developing countries opposed the proposal of holding annual ministerial conferences at the informal meeting on 10 November, said participants, who asked not to be quoted. SERVICES AS THE FUTURE Interestingly, the DG, in her concluding ” reflections”, is understood to have driven home the message that services are the future of global trade, while highlighting the issues of transparency, said a participant, who preferred not to be identified. Ms Okonjo-Iweala, who had emphasized on intensifying the Joint Statement Initiative (JSI) on digital trade in the past, appears to be preoccupied more with tagging the issue of environment and sustainability to trade issues, the participant said. At the ongoing COP 27 meeting in Sharm-el-Sheikh, Egypt, Ms Okonjo-Iweala appears to have carried out a sustained campaign for including trade in the nationally determined contributions (NDCs) of nations under the Paris Agreement. It appears that the DG’s demand did not get much support, undermining her goal of bringing the issue to the WTO, the participant said, suggesting that several developing countries seem to have opposed the issue of incorporating trade in the NDCs. The DG also apparently suggested the need for a “bottom-up” approach through different working groups, the participant said. RESTORING THE TWO-STAGE DISPUTE SETTLEMENT SYSTEM At the informal meeting, several countries also called for resolving the impasse in the functioning of the two-stage dispute settlement system before discussing WTO reforms. Members suggested that once the impasse in the functioning of the two-stage dispute settlement system is resolved, with the restoration of the Appellate Body being at the center, then they could intensify the discussions on the WTO reforms, the participant added. The US, which created the impasse by blocking the selection process for filling seven vacancies at the Appellate Body, is currently holding discussions at various levels, including at the G20. PLURILATERAL DISCUSSIONS On plurilateral discussions, as proposed by several industrialized countries and some developing countries, there were sharp differences, as many developing countries had opposed any change in the existing rules based on the Marrakesh Agreement. Several industrialized countries and some developing countries like the Philippines pressed for allowing negotiating flexibilities, particularly to pursue issues in plurilateral formats, despite their alleged legal inconsistency with the Marrakesh Agreement, a trade envoy said. The “brainstorming” meeting on WTO reforms reinforced divergent views and a divide between many developing countries on the one side, and industrialized countries on the other, said another trade envoy, who asked not to be quoted. In conclusion, it appears that the WTO reform discussions are strewn with hurdles due to the push-back against new negotiating approaches, including alleged attempts to undermine the consensus principle for arriving at decisions at the WTO. +
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