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TWN
Info Service on WTO and Trade Issues (Jun23/01) Geneva, 31 May (D. Ravi Kanth) – Several developing countries on 30 May apparently expressed sharp concerns over the manner in which the informal discussions on dispute settlement (DS) reforms are being conducted at a seemingly furious speed at the World Trade Organization, citing a lack of transparency and inclusivity as well as the pace of the discussions, said people familiar with the discussions. At a meeting of the WTO’s Dispute Settlement Body (DSB) on 30 May, several developing countries including India, South Africa, Indonesia, Malaysia, and Nigeria, on behalf of the African Group, apparently expressed their concerns over the informal discussions on DS reforms being chaired by Guatemala’s deputy trade envoy, Mr Marco Molina. The discussions exposed the difficulties being faced by the developing countries that currently possess limited negotiating resources to participate in negotiations on the various deliverables being targeted for the WTO’s 13th ministerial conference (MC13), to be held in Abu Dhabi in February next year. In varying levels of concern expressed at the meeting, the developing countries seem to have highlighted the difficulties arising from the frequency and fast pace of the discussions. They cited, for example, that members with small delegations – unlike the overly staffed negotiators in developed country missions like the United States, the European Union, Japan, Canada, and Australia among others – have to participate effectively in all the ongoing meetings at the same time. However, the major industrialized countries, including the US and the EU, as well as Brazil and Chinese Taipei, expressed their appreciation of what they viewed as the facilitator’s transparent and inclusive process. They also endorsed the pace of the discussions, suggesting that the priorities attached to DS reform remain key to the success of MC13, said negotiators, who asked not to be quoted. Even China concurred with the facilitator over the urgency of arriving at proper solutions in the next couple of months. China underscored the need for frank and solution-oriented discussions, and the narrowing down of options, said negotiators familiar with the discussions. The facilitator apparently acknowledged the overlapping meetings with the “Fish Week” and the difficulties involved in covering meetings simultaneously on the major deliverables, said an Asian negotiator, who asked not to be quoted. “UPBEAT” REPORT BY FACILITATOR The facilitator overseeing the informal discussions on DS reforms presented a somewhat upbeat report on 30 May on the progress of his consultations. However, several developing countries expressed sharp concerns over the lack of transparency and inclusivity as well as the pace of the discussions, said people familiar with the discussions. At the DSB meeting, the facilitator, Mr Molina of Guatemala, apparently presented a positive report about the progress being made in his informal consultations with the members. The facilitator’s report suggests that the consultations are being held in fulfilling the objective set out by trade ministers at the WTO’s 12th ministerial conference (MC12) in June last year. That mandate states: “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 conducting discussions with the view to having a full and well- functioning dispute settlement system accessible to all Members by 2024.” Although the facilitator’s process was not formally agreed upon by members, it has assumed enormous importance over the past several months. Apparently, the informal consultations are being driven by one powerful member from behind the scenes, said a negotiator, who asked not to be identified. Mr Molina claimed that there has been rapid progress during the last two months, saying that there were multiple meetings that focused on substantive as well as technical issues. These issues are based on the specific concerns and interests identified by members, with the US appearing to be a major driver. The facilitator informed that he had held 57 meetings during the months of March and May, including 12 plenary sessions, six follow-up thematic meetings, six small group meetings, two information sessions, and 31 bilateral meetings with individual delegations and regional groups. Mr Molina also suggested that members had submitted 70 initial proposals, which were earlier placed in a “red box.” He indicated that all these 70 proposals are now elevated to the “yellow box”, suggesting that these proposals in the “yellow box” underline refined and elaborated proposed solutions. In a way, the proposals contain options for further consideration. According to the facilitator, everyone has changed their views/mind-sets and do not consider any more red lines but an attempt to grasp the underlying rationale. The confidential document issued by Mr Molina on the so-called “yellow box” proposals, seen by the SUNS, lists out the proposals, options, and observations. The proposals include (1) alternative dispute resolution mechanisms, (2) streamlining the panel process, (3) accessibility, (4) accountability, and (5) what is necessary to resolve the dispute. As previously reported in the SUNS on the US proposals, it is clear that Washington seems to prefer a single-tier dispute settlement system, while acknowledging that it can consider a two-tiered system in some bilateral disputes, said a negotiator, who preferred not to be quoted. Apparently, when Pakistan, supported by India and Indonesia, sought to know if the US is in a position to suggest a template for the single-tier dispute settlement system during one of the recent meetings, the US apparently kept silent, said a South American negotiator, who asked not to be quoted. As regards the next steps, Mr Molina said that members were making progress at a steady pace and are starting to identify practical solutions that could be good candidates to include in the forthcoming “green tables”, which will be the basis for the drafting exercise that will take place after the WTO’s summer break (in August). He urged members not to be complacent and to keep up the pace, with the intensive work program continuing in June and July. Mr Molina also suggested that members need to focus on certain issues that require further work and where they are running out of time. The deputy trade envoy of Guatemala also indicated that he would convene a series of bilateral meetings with individual delegations and regional groups in addition to the meetings already scheduled for June and July. He underscored the need for fully-agreed decisions at MC13. Mr Molina concluded by saying that he is confident that members have the necessary ingredients to deliver an outcome that is satisfactory to all. He said it will not be easy, but he is confident that with the right approach, members can deliver. The facilitator’s report came under intense scrutiny at the meeting, as more than two dozen members apparently voiced their differing assessments. US AGAIN BLOCKS APPELLATE BODY APPOINTMENTS For the 66th time at the meeting, the US blocked a proposal from 129 members for expeditiously filling the vacancies on the Appellate Body, stating its allegedly intransigent position that Washington’s longstanding concerns over the Appellate Body remain unaddressed, said participants present at the meeting. Even the facilitator from Guatemala, who is currently overseeing the DS reform discussions, said on behalf of the 129 members that he regrets that for the 66th occasion, members have not been able to launch the selection processes to fill the vacancies on the Appellate Body. Without naming the US, the sole member that is blocking the Appellate Body appointment process, the facilitator apparently said the ongoing conversations about reform of the dispute settlement system should not prevent the Appellate Body from continuing to operate fully. He said that members should comply with their obligation under the Dispute Settlement Understanding to fill the vacancies as they arise. The US, while blocking somewhat unilaterally the Appellate Body appointments for the past five and a half years, underscored the need for fundamental reform of the WTO’s dispute settlement system to ensure a well- functioning system. Such a reformed system, in the eyes and ears of the US, must support WTO members in the resolution of their disputes in an efficient and transparent manner, and in doing so limits the needless complexity and interpretive overreach that has characterized dispute settlement in recent years. Also at the meeting, Russia’s war against Ukraine came under criticism/condemnation from eleven members, who expressed their support and solidarity with Ukraine and its people. Russia, however, hit back by saying that none of the political issues raised by the eleven members were within the competence of the DSB and that the WTO was not a political organization. INDONESIA SECURES DSB APPROVAL FOR A PANEL At the meeting, Indonesia pressed ahead with its second request for a WTO dispute panel to adjudicate on the countervailing and anti-dumping measures imposed by the EU on imports of stainless steel cold-rolled flat products from Indonesia. The DSB agreed to the establishment of the panel, with the EU expressing its disapproval. The EU said it regretted Indonesia’s decision to submit its second request for a panel and that it is confident that it will prevail in the dispute and that its measures will be declared to be in line with the WTO rules. India, the US, the United Kingdom, Turkiye, Japan, the Republic of Korea, Brazil, Canada, Argentina, Ukraine, Singapore, Thailand, Russia, and China reserved their third party rights to the dispute. On another dispute concerning India’s decision to appeal against a recent panel report before the Appellate Body on its tariff treatment on certain goods, several members including Japan, Chinese Taipei, the US, and China seemed concerned with India’s decision to take the issue to the Appellate Body. According to these countries, India’s decision effectively pushes the dispute “into the void” despite the clear and reasoned assessment by the panel. The panel had found that India’s raising of its customs duties on certain products in the information and communications technology sector in excess of its bound rates is inconsistent with its WTO commitments. New Delhi said that in its notification of appeal, it made detailed arguments on the errors of law and legal interpretations made by the panel in its report. India expressed hope that the early restoration of the Appellate Body will soon enable the review and correction of these errors and the expeditious resolution of this dispute. India reiterated its willingness to engage in bilateral discussions with Japan on a mutually acceptable way forward. Japan indicated that India indeed proposed bilateral discussions on the matter but that India has never provided any concrete proposal to address the WTO-inconsistency of its measures. +
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