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TWN
Info Service on WTO and Trade Issues (Sept23/14) Geneva, 22 Sep (D. Ravi Kanth) — As the facilitator overseeing the informal discussions on reforming the WTO’s dispute settlement system is about to issue a draft negotiating text, Indonesia has expressed grave concern that many members from developing and least-developed countries, “who inherently do not have a dedicated delegate for the dispute settlement reform issue,” are unable to participate in the discussions and that this situation will create gaps in the knowledge, said people familiar with the development. In a note circulated on 15 September, Indonesia said that the inability of many developing and least-developed countries (LDCs) to participate fully in the discussions will “create gaps in knowledge and understanding of developing and LDC Members about the progress of the discussion, and consequently prevent them from making an active and valuable contribution during the whole process.” “Such challenges need to be seriously taken into consideration and addressed with concrete solutions,” Indonesia said. At a time when attempts are allegedly being made to downsize the WTO’s dispute settlement system (DSS), with a seemingly “truncated” Appellate Body that will be unable to perform its erstwhile role of being the final adjudicator in resolving global trade disputes, Indonesia argued that it shares the view of many Members “who believe that the dispute settlement system, as elaborated by the Dispute Settlement Understanding (DSU), Article 3.2 in particular, is central in providing security and predictability to the multilateral trading system.” Indonesia said that such belief “is evident in the participation of WTO Members in the WTO Dispute Settlement System that is substantially improved as compared to the Dispute Settlement System under the GATT 1947,” adding that more than 600 disputes have been brought by Members to the WTO Dispute Settlement System, both by developing and developed countries. Being one of the frequent users of the DSS, Indonesia said: “While minor flaws exist, the system has worked well for Members.” MC12 MANDATE Indonesia recalled paragraphs 3 and 4 of the Outcome Document (WT/MIN(22)/24) of the WTO’s 12th ministerial conference (MC12) adopted last June. Ministers “reaffirmed the foundational principles of the WTO and set out that the work on WTO reform shall be Member-driven, open, transparent, inclusive, and must address the interests of all Members, including development issues; and recognized the importance and urgency of addressing the challenges and concerns with respect to the dispute settlement system including those related to the Appellate Body, and the need to conduct discussions with the view to having a fully and well functioning dispute settlement system accessible to all Members by 2024.” Indonesia said that it recognizes, in fulfilling the mandate, “the importance of the informal discussions on the Dispute Settlement Reform in addressing Members’ interests and matters surrounding the WTO Dispute Settlement System as well as the hard work of all participants of the discussion in the last 2 years.” According to Indonesia, “many Members from developing countries and LDCs, who inherently do not have a dedicated delegate for the dispute settlement reform issue, experience difficulties in fully and effectively participating in the informal discussion due to conflicting schedule between such discussion and other formal meetings or negotiations.” “This situation will also create gaps in knowledge and understanding of developing and LDC Members about the progress of the discussion, and consequently prevent them from making active and valuable contributions during the whole process. Such challenges need to be seriously taken into consideration and addressed with concrete solutions,” Indonesia emphasized. Indonesia proposed the following thoughts “with the aim of increasing the full and effective participation of developing and LDC Members throughout the process of the WTO Dispute Settlement Reform discussion”: a. The discussions on the WTO Dispute Settlement System should be carried out by the Dispute Settlement Body and/or the General Council in an inclusive and transparent manner, and shall be open to all Members. b. In this regard, the functional differentiation based on the level of participation as proposed by the facilitator could serve the purpose of optimizing the flow of discussion. Nevertheless, it should be designed to foster inclusivity and, without undermining the Member’s equal rights to contribute their views and for the views to be reflected in the text. c. The discussions/meetings, including small group meetings, should be based on a structural plan to avoid a conflicted agenda and schedule of meetings mainly with other negotiations. d. Minimize the proliferation of open ended meetings conducted without written records and, consider distributing annotated agendas before scheduled meetings. e. Any time in the course of the discussions, any WTO Member may introduce new proposals, comments, or positions without prejudice to the ongoing discussion as the process is Member-driven in nature. f. At the end of each meeting, the facilitator will prepare a report to document the progress of the discussion and the next steps. g. All information, submissions, or proposals from Members should be reflected in the meeting documents and are accessible by all Members on a dedicated webpage of the WTO website, if necessary. h. Any documents issued as a result of the discussions will be treated as confidential. FACILITATOR’S TEXT It remains to be seen whether the much-anticipated facilitator’s draft text, to be issued any time soon, will be “a litmus test” of whether it would strengthen the DSS, as demanded by a large majority of members, or will endorse the US concerns to stymie the Appellate Body. The draft text would also be judged on whether it reflects the seemingly weak language in the G20 Leaders’ Declaration on DSS reform that was adopted at the recent G20 summit in India. The G20 Leaders’ Declaration merely said: “We reiterate the need to pursue WTO reform to improve all its functions through an inclusive member-driven process and remain committed to conducting discussions with a view to having a fully and well-functioning dispute settlement system accessible to all members by 2024. We commit to work constructively to ensure positive outcomes at the WTO’s Thirteenth Ministerial Conference (MC13).” Surprisingly, the G20 Leaders’ Declaration remained silent on the issue of preserving the two-tier binding dispute settlement system at the WTO with the Appellate Body being the final adjudicator of global trade disputes. In an interview with The Times of India on the day when the G20 leaders’ summit began in New Delhi on 9 September, the WTO Director-General, Ms Ngozi Okonjo-Iweala, apparently downplayed the issue of DSS reform. She told The Times of India on 9 September that the “Dispute Settlement System has been one problem and somehow WTO came to be defined by that. It took time to explain to people that it is not defined by that alone. Even now, the first level system (the panel process) is working… only the Appellate Body is not working. We need to bring it up-to-date with things like digital trade.” Significantly, the expanded BRICS (Brazil, Russia, India, China, and South Africa, with the addition of six new members Egypt, Argentina, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates), in its declaration issued on 24 August, apparently called for “the restoration of a fully and well-functioning two-tier binding WTO dispute settlement system accessible to all members by 2024, and the selection of new Appellate Body Members without further delay.” The rather weak language in the G20 Leaders’ Declaration on DSS reform would imply that one critical pillar of the WTO, namely, the “two-tier binding dispute settlement system accessible to all members by 2024” is likely to be permanently weakened, said people, who asked not to be quoted. +
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