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Info Service on WTO and Trade Issues (Sept23/06) Geneva, 13 Sep (D. Ravi Kanth) — The World Trade Organization’s Director-General Ms Ngozi Okonjo-Iweala says that she is “excited” about the upcoming WTO’s 13th ministerial conference (MC13), to be held in Abu Dhabi in February 2024, while acknowledging that the road to MC13 is “full of potholes”. Delivering a rather upbeat assessment at the annual WTO Public Forum on 12 September, the DG said she is confident that like the 12th ministerial conference (MC12), which delivered significant outcomes at the WTO last year, MC13 needs to deliver on a range of deliverables. Perhaps for the first time in the history of the WTO’s Public Forums, the meeting was moderated by the chair of the WTO’s General Council (GC), Ambassador Athaliah Lesiba Molokomme of Botswana. Although the GC chair is ranked higher than the WTO DG according to the rules and conventions, it is somewhat unusual to witness her acting as a moderator, said people familiar with the discussion. Under the theme of “Conversations on Trade, Global Economy and Climate Nexus,” the DG’s observations on a range of issues, including her observation that the plurilateral Government Procurement Agreement (GPA) can be used to promote “green” procurement by members seemed somewhat inconsistent with the WTO rules, as members who are not party to the GPA may be required to pay a huge price to join the GPA. In her list of issues/priorities for MC13, Ms Okonjo-Iweala said that “WTO reform is very, very important.” She praised the trade envoys at the WTO for their engagement in the discussions on “reforms by doing” that involve several procedural issues. “We have other big reforms” involving how to institutionalize the “deliberative function”, wherein issues like trade and climate change can be discussed, she said. Incidentally, the European Union is the prime mover of the discussion on the WTO’s deliberative function, despite sharp concerns over taking up issues without a proper General Council/ministerial mandate, said a person familiar with the discussion. The DG went on to ask somewhat rhetorically, “How do we talk about carbonization” and “carbon pricing”, of which the EU is again the main proponent. The EU’s carbon border adjustment mechanism (CBAM) and measures targeted at deforestation are likely to come into force next year. The DG, however, maintained that at the just-concluded G20 leaders’ meeting in India, the president of the European Commission, Ms Ursula von der Leyen, conveyed the message about unilateral measures like the CBAM. Speaking on the unfulfilled mandates of the Doha Development Agenda particularly on development, the DG mentioned the graduation of the least-developed countries. She asked how the G90’s ten Agreement-specific proposals can be dealt with to make special and differential treatment simple and effective. As previously reported in the SUNS, the ten Agreement-specific proposals faced “rough weather” for a considerable period of time due to opposition from the major industrialized countries, including the US, the person said. The DG also mentioned agriculture somewhat fleetingly, suggesting that this is an important issue. She highlighted the importance of concluding the Fisheries Subsidies Agreement, which underscored the need for an early ratification of the partial agreement. The DG mentioned “industrial subsidies”, a topic that is at the core of the Group of Seven (G7) industrialized countries and primarily aimed at China. The need for enhancing inclusiveness is another major deliverable for increasing the presence of women in global trade, Ms Okonjo-Iweala suggested. Under the theme of “Conversations on Trade, Global Economy and Climate Nexus,” moderated by the GC chair, the DG appeared to take the lion’s share in replying to questions about the proposed deliverables for MC13. As part of her 21st century trade agenda, the DG highlighted the issue of digital trade, mentioning in this context the moratorium on customs duties on electronic transmissions, which is mandated to end at MC13 unless there is consensus on its continuation. According to the DG, other areas for MC13 include working on plurilateral initiatives such as “trade and investment” which has been negotiated by 110 countries. Instead of referring to the plurilateral initiative as an Investment Facilitation Agreement, which is a non- mandated issue allegedly lacking legal consistency as a plurilateral agreement, the DG merely highlighted the issue. She mentioned the issue of services domestic regulation, the outcome of which is yet to be approved by India and South Africa among others. In the run-up to MC12, the DG had said that if three or four issues are agreed then it would be a great success. She repeated the same slogan for MC13, saying that if three or four issues are adopted at MC13 then it would be a big victory, according to the discussions, whose session was posted on YouTube on 12 September. FRAGMENTATION OF MTS In her opening remarks at the Public Forum, the DG presented a somewhat downbeat picture of the prevailing trends that indicate the growing fragmentation of the multilateral trading system (MTS). She pointed to “geopolitical tensions”, including US-China, the Russia-Ukraine war, North-South tensions, and so on. She said the biggest tension at this juncture is the one between the United States and China. “I do think that these geopolitical tensions have an impact on the shaping of trade”. She said that these tensions, leading to re-shoring, “friend-shoring”, and changes in the supply chains as they are configured before the crisis, are yet to severely impact global trade. The DG said the second major trend is growing digitization. Ms Okonjo-Iweala said that “digital is the future”, adding that digitally-delivered services growth at 8% is more than that of trade in goods and services. She said digital trade currently contributes USD 4 trillion out of the total global trade of USD 31 trillion. The DG pointed out that digital trade can enhance the participation of women in global trade and also help MSMEs (micro, small, and medium enterprises). TRADE AND CLIMATE ACTIONS With the seemingly avowed agenda of giving primacy to trade and climate actions at the WTO, the DG emphasized the importance of pursuing a sustainable trade agenda. She argued that trade is a central component in the drive towards net zero emissions by 2050. She said the movement of green technologies and green goods is made possible through trade, stressing that “you cannot decarbonize without trade and that is the first thing”. Ms Okonjo-Iweala said trade agreements made at the WTO can play a critical role, suggesting that the GPA is aimed at bringing good governance and procurement of goods. The DG maintained that the GPA, which is estimated at USD 13 trillion, can play an important role in “green procurement.” The DG also highlighted the positive role of the Trade Facilitation Agreement. When an African participant asked the DG about the hurdles/barriers posed by the WTO’s Agreement on Trade- Related Investment Measures (TRIMs) and other WTO rules for pursuing green initiatives in the continent, the DG expressed her satisfaction with the growing focus on green initiatives. However, she remained silent on the question of WTO agreements like the TRIMs being a barrier for pursuing the green agenda. +
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