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Info Service on WTO and Trade Issues (Oct23/19) Geneva, 24 Oct (D. Ravi Kanth) — The chair of the World Trade Organization’s General Council (GC) and the WTO Director-General said on 24 October that the two-day Senior Officials Meeting (SOM) ended on an optimistic note with clear guidance for accelerating negotiations on “some” key issues, a sentiment that seemingly was not shared by several senior officials, particularly from the Latin American countries, India, and Indonesia among others, said participants familiar with the discussions. At the end of the SOM on 24 October, apparently there was bedlam on the non-inclusion of the issues raised by senior officials in agriculture, after complaints by several capital-based senior officials about the “Chairpersons’ Summary” that failed to reflect the concerns raised by them. The five-page advance copy of the Chairpersons’ Summary (WT/GC/259, TN/C/22), seen by the SUNS, was circulated to the senior officials as a hard copy at the end of the meeting. The Chairpersons’ Summary issued by the DG and the GC chair raised serious questions about the omission of specific issues/concerns raised by senior officials at the meeting, said participants who asked not to be quoted. Subsequently, the complaining officials were called to the podium by the DG to address their specific concerns, said participants who asked not to be quoted. After hearing the complaints, the DG was apparently forced to correct the earlier draft and include the specific concerns in the document at the podium, said senior officials, who preferred not to be quoted. Consequently, issues like the permanent solution for public stockholding (PSH) programs for food security, the special safeguard mechanism (SSM), domestic support, and agriculture reform based on Article 20 of the Agreement on Agriculture were included in the final document, which had not been circulated yet (at the time of writing this article), said participants who asked not to be quoted. DISPUTE SETTLEMENT REFORM On the critical issue concerning the formalization of the ongoing informal discussions on the dispute settlement (DS) reform, participants were unhappy that their specific concerns on formalizing the discussions were not correctly included in the final text. Apparently, many countries sought the formalization of the ongoing informal discussions before the WTO’s 13th ministerial conference (MC13), to be held in Abu Dhabi in February next year. Privately, they told the SUNS that they were disappointed with the language in the Chairpersons’ Summary on the reform of the dispute settlement system, wherein it did not adequately address their demands. In the Chairpersons’ Summary issued at the end of the meeting by the DG, Ms Ngozi Okonjo-Iweala, and the GC chair, Ambassador Athaliah Lesiba Molokomme of Botswana, the formulation on DS reform seemed somewhat biased, stating as follows: “Overwhelmingly, Senior Officials strongly supported the ongoing informal process on DS reform being carried out in Geneva by technical experts. They recognized the value of the process and the progress made so far in order to achieve a tangible and meaningful outcome at MC13 – while cognizant of the different views expressed on the issue of the timing of the formalization of this process under the auspices of the DSB chair. “In expressing their political support for the DS reform work, Senior Officials indicated the following elements on the way forward: first, the need to focus on addressing the DS challenges with a sense of urgency; second, the need to take into account the dispute settlement interests of all Members; and third, the need to uphold the WTO Member-driven nature as well as to ensure full participation, inclusiveness, and transparency, including facilitating the effective participation of developing and LDC Members taking into account capacity constraints.” Apparently, the formulation on DS reform appears to favour the United States which wants the informal discussions to go on beyond February 2024, said several participants, who asked not to be quoted. However, many countries that took part in the discussions facilitated by the DSB chair sought a clear time-frame for formalizing the discussions before MC13. The US, which is demanding a wholesale reform of the Dispute Settlement System so as to jettison the Appellate Body, is apparently not keen to set any deadline on the formalization of the talks, the participants said. TRIPS The Chairpersons’ Summary also contains a paragraph on “MC12 Decision on the TRIPS Agreement”, stating: “On the MC12 Decision on the TRIPS Agreement, several Senior Officials called on Members to agree on Paragraph 8 concerning the decision’s extension to (COVID-19) diagnostics and therapeutics.” It said: “In highlighting the need to decide on an outcome before MC13, they noted that such an extension would stimulate industrial production needed to timely address health crises. “They further noted that intellectual property rights (IPRs) should not constitute as a barrier to achieve equitable and timely access to all these tools during pandemics. Others however highlighted that IP protection was crucial for stimulating innovation, investment, industrial partnerships and technology transfer – to increase and diversify production and achieve Members’ collective goal in this regard.” AGRICULTURE The discussions on agriculture that took place on 23 October were the most contentious with the Senior Officials failing to reach consensus on the central mandated issues. As reported in the SUNS, there was apparently no consensus on the potential deliverables in agriculture for MC13 in the face of divergent views on food security, export restrictions, PSH, SSM, domestic support, and reform based on Article 20 of the Agreement on Agriculture at the meeting on 23 October. Yet, Turkiye’s vice-minister, who acted as a facilitator for the agriculture discussions, issued a report that was severely challenged by many Latin American countries and others, said participants, who asked not to be quoted. Finally, in the face of protests against the report on agriculture, it was dropped and a new formulation was made in the Chairpersons’ Summary. It states: “Regarding agriculture, it was reassuring to see that all Senior Officials stressed the necessity of breaking the stalemate in the agriculture negotiations and obtaining credible results at MC13 which would enable the sector to address food security and other inter-linked contemporary challenges, including rural livelihoods and environmental sustainability. “From the facilitator’s report, the discussions yesterday demonstrated Senior Officials’ strong engagement in favour of a credible food security outcome at MC13, including a commitment to agree on broad parameters to guide the negotiations post MC13 to reach a substantive outcome by MC14 which would strengthen the agriculture trading system. But more discussions are required on how to shape the discussions.” Subsequently, the DG changed the above formulation by including all the issues for further discussions ahead of MC13, said participants, who asked not to be quoted. DEVELOPMENT At the concluding press conference, the DG and the GC chair projected that what was agreed on extending the duty-free and quota-free (DF&QF) benefits to those graduating from the category of least-developed countries (LDCs) was a significant outcome. Yet, the language proposed in the outcome document on LDC graduation and eligibility to avail of DF&QF benefits was on a best endeavour basis, which is not binding. It implies that there is no predictability and certainty that the major donor countries will continue to provide DF&QF market access to the LDCs, said several LDC participants, who asked not to be quoted. In the Chairpersons’ Summary, on Trade and Development, the DG and the GC chair said that “the decision demonstrated coherence between the work of the WTO and the UN to support the most vulnerable members of the international community. Members remain committed to making further progress on LDC graduation including trying to conclude on Annex 2 negotiations before MC13.” The Chairpersons’ Summary, on special and differential treatment (S&DT), seems rather vague and did not reflect how some major industrialized countries, particularly the US, seem to have scuttled the discussions on the ten Agreement-specific proposals raised by more than 90 developing countries, said participants, who asked not to be quoted. According to the Chairpersons’ Summary, the language on Trade and Development appears to be vague without any firm commitment to conclude the discussions on the ten Agreement-specific proposals by MC13. It merely states: “Senior officials were committed to strengthening the development dimension of the WTO, including through the WTO reform process and through making S&DT fit for purpose for the 21st century.” Essentially, making S&DT “fit for purpose for the 21st century” seems to imply that it would be tailored to the specific needs of the developing countries and not a blank cheque, as mentioned by the US, said participants who asked not to be quoted. The Chairpersons’ Summary also states that “Developing country Members expressed strong need for the WTO to deliver more support and policy space for development and industrialization.” On the next steps, it says, “discussions will continue in the CTD-SS (Doha negotiating body on development) on the ten G90 ASPs (Agreement-specific proposals). Discussions on the developmental aspects of WTO reform will continue in the CTD.” The Chairpersons’ Summary appears to be full of platitudinal claims such as: “Development is a core principle of the WTO. This is recognized by all Members. There are certainly different perspectives among Members on how the WTO should best move forward in addressing a number of key development issues, including ensuring effective S&DT for developing countries.” The moot issue remains how proposals raised for more simple and effective S&DT provisions, first as part of the implementation issues in the Doha mandate and now as the ten Agreement-specific proposals, have been stymied for more than a decade by the US and other developed countries on intransigent grounds, said participants familiar with the discussions. FISHERIES SUBSIDIES During the discussions on fisheries subsidies on 23 October, members apparently remained sharply divided on the issues to be included in the text on the proposed disciplines for subsidies contributing to overcapacity and overfishing. The fisheries chair’s recent room document where all the additions and deletions were listed indicates that an outcome by MC13 seems somewhat difficult. Yet, the Chairpersons’ Summary says somewhat confidently that “Prospects remain high for two outcomes at MC13: the conclusion of the second phase of negotiations (Fish 2) and the entry into force of the Agreement on Fisheries Subsidies – which are firmly on track.” “On Fish 2, the response to the two questions were a “resounding yes” to reaffirm the MC12 commitment to complete by MC13 and to conclude text-based discussions by December.” It states: “Senior Officials called for strong and effective disciplines that will meaningfully reduce subsidies contributing to overcapacity and overfishing whilst at the same time emphasizing that special and differential treatment remains an integral part of the negotiations.” So far, according to the Chairpersons’ Summary, 52 countries have deposited their instruments of acceptance of the 2022 Fisheries Subsidies Agreement. The Agreement will come into force only after close to 110 countries ratify the agreement. WTO REFORM Although there is considerable opposition and resistance to the “deliberative function”, which is being promoted as part of the WTO reforms, the Chairpersons’ Summary seems to have tweaked the Senior Officials’ remarks by saying, “Senior Officials said that the WTO should be a living and relevant institution that responds to current and future challenges.” In the run-up to the SOM, members like India challenged the time being catered to the proposed reforms introduced by the EU. Despite opposition to the deliberative function, the Chairpersons’ Summary says somewhat puzzlingly that “in this regard, they welcomed the momentum to launch a package of deliberative reforms at MC13 that positions the WTO to address key global trade-related challenges”. It says that “many Senior Officials said that Ministers should endorse a package that includes trade and industrial policy, trade and environmental sustainability and inclusivity, incorporating development, gender equality, MSMEs (micro, small, and medium enterprises) and indigenous economic empowerment among others.” JSIs The issue of legalizing the controversial Joint Statement Initiatives (JSIs) was somewhat surreptitiously raised in the Chairpersons’ Summary through reforming the negotiating function. It says, “there was a strong call by several Senior Officials for a viable path for the WTO to respond to flexible and open multilateralism with many Senior Officials referring to the significant progress made with the conclusion of the Investment Facilitation for Development and Services Domestic Regulation negotiations.” Interestingly, the Chairpersons’ Summary seems to have coined a new term called “responsible consensus” – which is not in the Marrakesh Agreement. The Chairpersons’ Summary says that “in this regard, we heard the call to sharpen the WTO’s decision-making process by exercising responsible consensus.” However, it notes that “while some Senior Officials expressed discomfort on integrating such results into the WTO’s legal architecture, they expressed willingness to discuss the matter.” In short, questions are being raised about the veracity of the Chairpersons’ Summary and whether it was seemingly “doctored” to suit a narrative that is helpful to the major industrialized countries, said participants, who asked not to be quoted. +
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