TWN Info Service on WTO and Trade Issues (May23/04)
10 May 2023
Third World Network

Trade: WTO members step up discussions on reforms
Published in SUNS #9778 dated 10 May 2023

Geneva, 9 May (D. Ravi Kanth) — Members of the World Trade Organization on 8 May discussed several proposals with differing goals for reforming the WTO, but they seemingly faced difficulties in expressing their considered assessments/opinions within the three-minute time limit for making statements, as prescribed by the new General Council (GC) chair, said people familiar with the discussions.

At the General Council meeting on 8 May, the new chair, Ambassador Dr Athaliah Lesiba Molokomme of Botswana, apparently adopted what appears to be an unconventional method by clubbing together the different proposals and insisting that members make their statements within three minutes, with five minutes being allocated for coordinators of different groups, said participants, who asked not to be quoted.

While some members like Singapore and Japan among others praised the chair on insisting that members complete their statements within a span of three minutes, many developing and least-developed countries found it difficult to give their honest assessment of the range of proposals covering the WTO reforms, including reform of the Dispute Settlement Body, as well as other issues, said participants, who asked not to be quoted.

The new GC chair also informed members that she is planning to host a retreat on WTO reforms soon but gave no specific details.

Some members seemed somewhat confused when the GC chair informed them that she would be convening high-level discussions on WTO reforms, as she did not clarify who would be included in the discussions, said participants, who preferred not to be quoted.

The GC chair also provided a snapshot of her recent meetings with select members on WTO reforms, in an attempt to accelerate the discussions.

Ambassador Molokomme said she is encouraged by the formal meetings on the reform of the dispute settlement system (DSS), but one member pointed out that these meetings are informally held by Guatemala’s deputy trade envoy.

One delegation complained that the regular informal meetings are also posing difficulties for small delegations to participate in the DSS discussions.

The GC chair’s remarks, posted on the WTO’s website, suggest that she is encouraged by a high level of interest and engagement demonstrated on WTO reforms, emphasizing “members’ commitment to ensuring that the WTO is resilient, responsive, relevant and with equitable rules.”

“I believe that we are already on the right path,” she said on a somewhat upbeat note, adding that, “Members are fuelling the reform discussions.”

“Several ideas which had been put forward informally have now been translated into formal written proposals, as is reflected in the current agenda. Other views are also being offered,” she said.

Significantly, she informed members that she plans to hold a second informal meeting on WTO reform, with a focus on the deliberative function of the WTO and institutional matters.

It is not clear whether she intends to take up the European Union’s proposal on reinforcing the deliberative function of the WTO or the United States proposal on improving the functioning of the General Council and the Trade Negotiations Committee (TNC), said a participant, who asked not to be quoted.

DG’S REMARKS

The GC meeting began with comments by the chair of the Doha Trade Negotiations Committee, Ms Ngozi Okonjo-Iweala, the DG, on her recent tour of several African countries.

“There was a great deal of appreciation for what members did at MC12 and I talked about renewed momentum towards MC13,” she said.

Ms Okonjo-Iweala emphasized that several African countries highlighted the need to address the development issues, which seem to have been put on the backburner due to opposition from several industrialized countries.

The DG said that development issues must be discussed within the context of WTO reform and in the work of the Committee on Trade and Development (CTD) and the Committee on Trade and Development in Special Session (CTD SS).

“The eyes of Africa are on us, specifically on special and differential treatment. … I, therefore, encourage you all to work hard and speed up this area of work to constructively engage in line with paragraph two of the MC12 Outcome Document,” she said, according to the statement posted on the WTO website.

Paragraph two of the MC12 Outcome Document (WT/MIN(22)/24) states: “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.”

The DG also stepped up her outreach efforts to garner support for the Fisheries Subsidies Agreement (FSA) by urging countries in Africa to speed up relevant domestic processes towards the two-thirds of members’ acceptance of the Fisheries Subsidies Agreement needed for the Agreement to enter into force.

Apparently, several African government officials expressed heightened concern on the issue of illegal, unreported and unregulated (IUU) fishing in Africa as well as on overcapacity and overfishing.

The DG also announced her intention to convene in July a two-day formal meeting of the Trade Negotiations Committee at the level of senior officials “to facilitate our Geneva processes and have clear political guidance on our work after the summer break.”

CHINA’S RESPONSE

In response to the WTO reform proposals, China said that it is “really encouraging to see that the momentum of reform is gaining, and members are practising the approach of “reform by doing”, especially through two different channels.”

The first channel is obviously the dispute settlement reform, and the second channel is to improve the WTO’s functions, it added.

China said that it welcomes “the 6 proposals on the table and the one on GC & TNC [General Council and Trade Negotiations Committee] reform which is circulated by the US, yet not on today’s agenda.”

China argued, “in order to have our discussions in a well-structured manner with a view to translating all the valuable ideas into concrete actions.”

It supported the GC chair’s initiative “to have an informal meeting on all the relevant issues with a clear objective.”

China said, “To facilitate the discussion, we would also suggest the Secretariat to categorize all the issues raised in the relevant proposals and indicate the status of each suggestion, such as “done already”, “could be done”, “need further discussion”, etc. For those that can be done now, let’s do it immediately.”

China said it believes that “those technical and less-controversial suggestions on improving the daily operation of WTO bodies, such as annotated agenda, earlier circulation of meeting documents and minutes, etc. could and should be harvested and implemented as soon as possible by GC decisions.”

It extended support to having discussions on enhancing external stakeholders’ engagement, but pointed out that “any decision-making process will remain member-driven.”

SIX PROPOSALS

At the GC meeting on 8 May, six proposals were briefly discussed due to the time constraint imposed by the new GC chair.

The six proposals are: (1) a proposal by a group of countries, including the United States, for “improving inclusiveness by reviewing and evaluating external engagement”; (2) a proposal by a group of countries for “improving the operation of WTO bodies to revitalize the WTO’s monitoring and deliberative function”; (3) a proposal from the European Union on reinforcing the deliberative function of the WTO to discuss issues such as industrial policy and climate change; (4) India’s proposal to make the Committee on Trade Development as a focal point for consideration and coordination of work on development in the WTO; (5) India’s “30-for-30” suggestions to bring about certain significant incremental changes in the functioning of the WTO; and (6) Australia’s proposal on maximizing the value of WTO ministerial conferences.

Aside from these six proposals, Brazil pressed for consideration of its long-pending proposal on hosting ministerial conferences annually, but its proposal did not get any traction, said a participant, who asked not to be quoted.

Interestingly, the US on 26 April circulated a proposal on “improving the operation of the General Council and Heads of Delegation/Trade Negotiations Committee”, but it was not placed for discussion on the agenda of the GC meeting on 8 May, said people familiar with the proposal.

The six proposals, which have been received favourably by the members, focused on improving the overall functioning of the WTO’s bodies.

To start with, the first proposal on improving inclusiveness by reviewing and evaluating external engagement by a group of countries comprising Colombia, Guatemala, Israel, New Zealand, the Philippines, Chinese Taipei, and the United States seeks “the optimal balance necessary to fulfill our objective of ensuring sustainable development.”

Recently, the US National Security Advisor Jake Sullivan emphasized that the US is interested in promoting sustainable development in the WTO.

The co-sponsors, according to the first proposal, “are interested in reviewing and evaluating how Members may better use the WTO as a convening forum for engagement with diverse stakeholders and interested persons impacted by global trade challenges.”

It states that the co-sponsors “are interested in hearing from Members what their experience has been with regard to external engagement in the conduct of committee and body work, with multi-stakeholder dialogues, and other opportunities they have had to solicit and incorporate diverse stakeholder interests and perspectives.”

They want to initiate an informal, Member-driven dialogue as a first step to solicit the interests and perspectives of other Members on multi-stakeholder engagement and to identify overlapping interests in the search for common ground in order to strengthen the Organization’s relevance.

The second proposal on improving the operations of WTO bodies to revitalize the WTO’s monitoring and deliberative function is being piloted by Australia, Brunei Darussalam, Canada,  Chile, Costa Rica, Guatemala,  Iceland,  Israel, Japan, Korea, New Zealand, Norway, Peru, the Philippines, Singapore, Switzerland, Chinese Taipei, and the United Kingdom.

In their concluding remarks, the co-sponsors of the second proposal state that “the various suggested ways of promoting engagement in the substantive work of WTO bodies can reinforce each other, are not mutually exclusive, and will not necessarily be appropriate for each and every WTO body in the same way.”

The proposal says, “The different ways of improving participation in meetings could be discussed also as ways of adding value to meetings more broadly.”

The co-sponsors suggested that “several ways of facilitating transparency may also improve the dialogue on trade concerns. The inclusion of ideas in this paper is not indicative of the co-sponsors’ support for them in every WTO body, but rather as a means of idea generation and discussion of how to improve the WTO’s overall functioning for the benefit of all Members.”

The third proposal by Australia on maximizing the value of WTO ministerial conferences seeks to make ministerial meetings a better fit for purpose for the challenges facing the multilateral trading system.

Australia suggested “five new approaches that would help the Membership better use Ministerial Conferences.”

These approaches include “deeper policy engagement”; “a focus on WTO reform”; “deliberative and rule making work”; “increasing inter-sessional ministerial gatherings”; and “endorsing outcomes and negotiating guidance.”

Australia said, “As a first step, there is an opportunity for Ministers to use the Thirteenth Ministerial Conference in Abu Dhabi to reflect upon and consider options for reforming the Membership’s approach to future Ministerial Conferences. A Decision on this issue in Abu Dhabi could ensure that MC13 becomes our first genuine WTO Reform Ministerial.”

The fourth proposal by the European Union on reinforcing the deliberative function of the WTO to respond to global trade policy challenges seeks to reinforce the deliberative function in the WTO’s committees in order to address what it calls trade-related global challenges, particularly climate change in the Committee on Environment.

At the last GC meeting, the EU’s trade envoy, Ambassador Joao Aguiar Machado, had said, “The background to the paper is the recognition that the WTO’s effectiveness has been eroded over the past decade across its three pillars, with a paralyzed dispute settlement system, limited progress in multilateral rule-making and a deliberating function that is not being used to its full potential to engage each other on the trading system’s most pressing challenges.”

He emphasized that “the WTO, however, remains a vital institution to safeguard rules-based trade and counter increasing economic fragmentation.”

Ambassador Machado drove home the message that the EU’s first priority is the restoration of a fully-functioning dispute settlement system.

As part of the WTO reforms, the EU proposal “focuses on the deliberative function, as the third essential pillar of WTO reform,” saying that “if the organization is to maintain relevance, it needs to re-establish itself as a forum for more meaningful deliberation in areas that impact global trade policy making.”

The EU has proposed to reinforce deliberation in the following three areas of systemic importance: (1) trade policy and state intervention in support of industrial sectors; (2) global environmental challenges; and (3) trade and inclusiveness.

Other areas of the deliberative function are to address the following issues:

1. State intervention in industrial sectors, including subsidies, has for several years now been a growing concern of Members, as it can generate negative spill-overs that un-level the global playing field and reduce fair conditions of competition. This can over time undermine confidence in the balance of benefits of countries participating in the trading system, and even erode the goodwill of the Organisation itself.

2. At the same time, certain forms of government support are generally considered necessary and legitimate policy responses to meet certain objectives, including recently the urgent need to drive the climate and environmental transitions. But even these measures should be well designed to minimise negative spill-overs, including on other Members.

INDIA’S PROPOSAL ON CTD AS FOCAL POINT

The fifth proposal by India on “Committee on Trade and Development Mandate: Focal Point for Consideration and Coordination of Work on Development in the WTO” underscores the need for reaffirming, reiterating, and operationalising the mandate of the Committee on Trade and Development (CTD) as the focal point for consideration and coordination of work on development in the WTO.

In its proposal, India has argued that “development is a cross-cutting issue that is dealt with in various Committees in the WTO. Work on development dimension is also done in other multilateral organizations.”

Since “development dimensions have wide amplitude, it necessitates a focussed consideration and coordination in WTO for a sustained effort. CTD, as per its Terms of Reference (TOR), is required inter alia to discharge the following development functions:

* To keep under continuous review the participation of developing country Members in the multilateral trading system and to consider measures and initiatives to assist developing country Members, and in particular the least-developed country Members, in the expansion of their trade and investment opportunities, including support for their measures of trade liberalization.

* To review periodically, in consultation as appropriate with the relevant bodies of the WTO, the application of special provisions in the Multilateral Trade Agreements and related Ministerial Decisions in favour of developing country Members, and in particular least-developed country Members, and report to the General Council for appropriate action.”

According to India, “these mandates require CTD to function as a focal point on development matter. This has been clearly recognized in the WTO System. According to the Decision by the General Council (GC) on 31 January 1995, the first function of the CTD” is: “1. To serve as a focal point for consideration and coordination of work on development in the World Trade Organization (WTO) and its relationship to development-related activities in other multilateral agencies.”

India said that at the Ninth Ministerial Conference, Ministers decided the Monitoring Mechanism to operate in the dedicated session of the CTD, and also laid out its Terms of Reference, which inter alia include:

* The Mechanism shall act as a focal point within the WTO to analyze and review the implementation of S&D provisions. The Mechanism will complement, not replace, other relevant review mechanisms and/or processes in other bodies of the WTO.

* The Mechanism shall review all aspects of the implementation of S&D provisions with a view to facilitating integration of developing and least-developed Members into the multilateral trading system. Where the review of the implementation of an S&D provision under this Mechanism identifies a problem, the Mechanism may consider whether it results from implementation, or from the provision itself.

* The Mechanism can, as appropriate, make recommendations to the relevant WTO body that propose:

— the consideration of actions to improve the implementation of a special and differential provision; or

—  the initiation of negotiations aiming at improving the special and differential provision(s) that have been reviewed under the Mechanism.

India noted that “certain discussions, in past, on this issue in CTD have brought out the concerns of some Members that this mandate may give an oversight to the CTD over other bodies and that it may not be feasible to separate out development function from other WTO bodies.”

However, said India, “the mandate of CTD, as focal point on development, is not to replace but to complement the work of other bodies on development dimension through coordination and consultation with these WTO bodies; continuous review of participation of developing countries in multilateral trading system; acting as a platform for developing countries to raise issues that have implications on their development and for considering measures and initiatives to assist them in this regard; keeping account of Ministerial Decisions on development aspects; and reporting to the GC, for appropriate action, on the issue concerning development.”

In short, India argued in its proposal that “in the process, no other WTO Committee gets undermined or give in to the oversight of CTD. Ministerial Decisions reiterate the need for fully operationalizing the mandate of CTD and making it a focal point on the Development dimension in WTO.”

INDIA’S PROPOSAL ON INCREMENTAL WTO REFORMS

The sixth proposal by India says that the WTO will complete 30 years of its functioning on 31 December 2024, after the signing of the Marrakesh Agreement that established the WTO in 1995 while replacing the General Agreement on Tariffs and Trade (GATT) that lasted between 1948 and 1995.

Of late, the WTO remains somewhat derailed as one of its core pillars, namely the enforcement function, remains paralyzed due to the allegedly obdurate positions adopted by the US since December 2019.

Against this backdrop, paragraph three of the Outcome Document (WT/MIN/(22)/24) of the WTO’s 12th ministerial conference (MC12) issued in June 2022 states: “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.”

“Beginning next January, as we enter the thirtieth year of this organization as the central pillar of the global multilateral trading system, we have a collective opportunity to demonstrate Members’ continued commitment to the work of the WTO, thereby strengthening its effectiveness,” India said in its proposal.

Towards this end, India proposed to “galvanize the collective resolve of this Organization behind an initiative we have dubbed as “30 For 30″ – a Member-led effort to bring at least 30 operational improvements to the WTO before the Organization completes 30 years, i.e., by 1 January 2025.”

Actually, India’s proposal for bringing about operational improvements to the WTO contains 34 suggestions, covering areas ranging from the functioning of the WTO committees, the allegedly questionable work done by the WTO’s External Communications division, to changes in the WTO rules and procedures among others.

India has argued that the WTO would be able to showcase these 30 “incremental yet collectively very significant transformational changes on completing 30 years of its existence.”

According to India, “the WTO bodies can benefit from operational efficiency improvement through interventions which may include technology adoption, cross-pollination of best practices amongst WTO bodies and adapting the working conventions in a way which benefit delegates in Geneva and in the capitals on a day-to-day basis.”

India said its proposal contains a first list of ideas to help start the “30 For 30” discussions, adding that the suggestions are a preliminary list meant to guide the discussion.

While “deliberations on the larger WTO reform agenda are ongoing,” India said that the suggested incremental changes “could be implemented quickly, as developing a common understanding on these would be easy considering the nature of these suggestions for enhancing (the) operational efficiency of the organization.”

It proposed that the Council and Trade Negotiations Committee Division of the WTO Secretariat collate the list of changes implemented, and accordingly, “communicate to the WTO Members and external stakeholders on a periodic basis on this collective initiative by the Members.”

At the GC meeting, India’s proposal on incremental reforms garnered considerable support, with many members having suggested that the reforms are doable.

The Indian trade envoy Ambassador Brajendra Navnit said some of the items in the proposal have already been implemented. +