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Info Service on WTO and Trade Issues (Oct23/21) In one go, such a change from a multilateral to a plurilateral framework would pave the way for any group of countries to take up issues of their choice while stymieing the multilaterally mandated issues on agriculture and development, said trade envoys, who asked not to be quoted. The first indication of such a change apparently came in the Chairpersons’ Summary circulated by the chair of the Doha Trade Negotiations Committee (TNC), Ms Ngozi Okonjo-Iweala, who is also the WTO Director-General, and the chair of the General Council (GC), Ambassador Athaliah Lesiba Molokomme of Botswana, at the end of the Senior Officials Meeting (SOM) on 24 October. That document, which was circulated as a hard “advance copy” (WT/GC/259, TN/C/22), seen by the SUNS, apparently put the proverbial “cat among the pigeons” when it brought about some new terminology on the WTO’s “negotiating function”, in paragraph 5.5. Under the rubric of “WTO reform”, which has now acquired salience in the negotiations for the past many months, with calls for a “reform ministerial”, the proposed language on the negotiating function somewhat scrumptiously shows a path to plurilateralization without saying it in direct/explicit terms, said a capital-based senior official, who asked not to be quoted. Paragraph 5.5 of the Chairpersons’ Summary reads: “With reference to reforming the WTO’s negotiating function, 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. In this regard, we heard the calls to sharpen the WTO’s decision-making process by exercising responsible consensus. While some Senior Officials expressed discomfort on integrating such results into the WTO’s legal architecture, they expressed willingness to discuss the matter. In recognizing this willingness, we urge Members to work together in this spirit to find a mutually agreeable way forward that respects the right balance.” The above paragraph appears to be couched in the typical WTO’s age-old practice of constructive ambiguity that conceals the hidden import of what is being aimed at, said a former trade envoy, who preferred not to be quoted. He said that paragraph 5.5 brings several issues to the forefront, despite some contradictions like “several Senior Officials” followed by “many Senior Officials” in the next line. That apart, he said that “flexible and open multilateralism” is a euphemism for pursuing plurilateral negotiations in any area by any group of countries. Without mentioning the ongoing plurilateral Joint Statement Initiatives (JSIs), which are allegedly being illegally pursued because of several alleged violations of the Marrakesh Agreement for the past six years, paragraph 5.5 refers to “Investment Facilitation for Development” and “Services Domestic Regulation”, which are both Joint Statement Initiatives that were announced at the WTO’s tenth ministerial conference in Buenos Aires, Argentina in December 2017. The failure to mention them as JSIs that have not been agreed by members on the basis of the consensus principle stands out as an eyesore, the former trade envoy said. The next line in the same paragraph says, “In this regard, we heard the calls to sharpen the WTO’s decision- making process by exercising responsible consensus”, which conveys the seemingly hidden motive to undermine the cardinal principle of decision-making by consensus. The very first sentence of Article IX of the Marrakesh Agreement on “decision-making” says, “The WTO shall continue the practice of decision-making by consensus followed under GATT 1947.” Therefore, to agree on a “responsible consensus” will be the most irresponsible act for negotiators, the trade envoy said. Effectively, what is being conveyed in paragraph 5.5 is to do away with the consensus principle, which has been repeatedly echoed by major industrialized countries, including the United States, over the past several years, said another trade envoy, who asked not to be quoted. Given the manner in which the multilaterally mandated issues on agriculture and development are dealt with, including at the SOM, where the mandated issues were apparently ignored and later allegedly “doctored” in the “Chairpersons’ Summary”, it appears somewhat clear that the plurilateral issues like investment facilitation for development, domestic regulation in services, and perhaps, an agreement on digital trade could be harvested at MC13 unless India and South Africa refuse to join the consensus, said several trade envoys, who asked not to be quoted. Of course, there are two other issues – fisheries subsidies and the reform of the dispute settlement system – whose fate remains unclear. The US is expected to throw its weight behind the Agreement on Fisheries Subsidies, as it is common knowledge that it is Washington’s priority, said a trade envoy, who asked not to be quoted. Interestingly, the US may not be eager to hasten negotiations on dispute settlement reform because of opposition from the others to turning the Appellate Body into a “toothless” body and thereby, permanently damaging the WTO’s enforcement function in the pursuit of plurilateral initiatives, said several trade envoys, who asked not to be quoted. STATE OF PLAY ON JSIs With the removal of the three most contentious issues – cross-border data flows, location of computing facilities, and source code – it appears as though the JSI on digital trade could be harvested at MC13, said a JSI negotiator, who asked not to be quoted. The JSI agreement on digital trade seems to have been converted into a digital trade facilitation agreement, the negotiator said, suggesting that without these three contentious issues, an agreement could be concluded at MC13. Although the reasons for withdrawing these three provisions from the agreement by the US remain somewhat unclear, it could be that the US decided to remove the three issues on security grounds as it could benefit China, the former trade envoy said, preferring not to be identified. According to a trade analyst, who asked not to be identified, the US decision to withdraw the three provisions could be due to controlling its digital giants – Google, Apple, Facebook, Amazon, and Microsoft – who depend on data flows. Perhaps, the US may want to follow the Chinese model of disciplining its Big Tech companies, the analyst said. INVESTMENT FACILITATION FOR DEVELOPMENT Negotiations on the text on investment facilitation for development by the 110 JSI members were concluded on 6 July. China recently mooted a proposal for legalizing the JSI initiative on investment facilitation for development but there is still no consensus on whether it would be an Annex I or Annex 4 plurilateral agreement. In all probability, it could be an Annex 4 plurilateral agreement, said a negotiator from a JSI participating country on investment facilitation. Finally, there is still no way forward on domestic regulation in services, as the proponents seem to be scrambling to address questions raised by India and South Africa, said people familiar with the negotiations. In conclusion, the WTO DG, who has been championing the JSIs since she took office in early 2021, could convert MC13 into a “reform ministerial” for bringing plurilaterals into the WTO framework, said trade envoys. It remains to be seen whether she will succeed in her alleged efforts with the major industrialized countries, said trade envoys, who asked not to be quoted.+
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