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Info Service on WTO and Trade Issues (Dec23/09) Geneva, 14 Dec (D. Ravi Kanth) — India on 13 December sought clarification from the World Trade Organization’s General Council (GC) chair whether the inclusion of item 18 on the GC agenda on “Information on Investment Facilitation for Development – Request from Chile and the Republic of Korea” was merely for information or any other purpose, during the adoption of the agenda. The GC meeting, which was scheduled for 14-15 December, was advanced by a day due to a long list of items to be discussed. Chile, which is one of the co-sponsors of the agenda item, said that indeed, it was only for information purposes. The GC chair, Ambassador Athaliah Lesiba Molokomme of Botswana, also clarified that it was only for information purposes. In 2017, it was agreed that the item on investment facilitation would only be included on the GC agenda for information purposes. During the Doha Trade Negotiations Committee (TNC) meeting held prior to the GC meeting on 13 December, China said that Investment Facilitation for Development (IFD) is being integrated into Annex 4 of the Marrakesh Agreement on the basis of consensus at MC13. Annex 4 of the Marrakesh Agreement covers plurilateral agreements only. China said that “IFD is an agreement on development, and benefits especially developing and LDC members”, suggesting that it has been supported by the broadest membership. According to China, “the IFD is also an example of pro-multilateral negotiations that is significant for reinvigorating the rule-making function of the WTO.” TNC MEETING The meeting of the Doha Trade Negotiations Committee on 12 December seems to have exposed the fault-lines and conflicting narratives on what needs to be accomplished at the WTO’s 13th ministerial conference (MC13), scheduled to take place in Abu Dhabi from 26 February 2024, said people familiar with the discussions. The conflicting narratives/goals on fisheries subsidies, agriculture, dispute settlement system reform, and issues concerning development among others, amidst somewhat unbridgeable differences among members and different coalitions, may not augur well for any likely concrete outcome at MC13, said several people, preferring not to be quoted. A rather disconcerting development that took place at the TNC meeting chaired by the WTO Director-General, Ms Ngozi Okonjo-Iweala, was a statement from the chair of the Doha agriculture negotiations, Ambassador Alparsian Acarsoy of Turkey, informing that he cancelled his consultations in disappointment after one member allegedly behaved in an “uncivilized” and seemingly “nasty” manner. Though Ambassador Acarsoy did not reveal the name of the member, speculation is rife that it could be a Cairns Group member, after which he cancelled his meetings with the other members, said a person who asked not to be quoted. The DG, who is also the chair of the TNC, expressed concern over the “very sobering report” issued by Ambassador Acarsoy, saying that “he has done his best to try and find common ground. Yet divergences continue to be deep. But they are not only deep. Sometimes they feel bitter – and I was sad to hear what he had to say.” Nevertheless, the DG said that Ambassador Acarsoy vowed “that he will move on and he is urging Members to try and help him now build up what they want to see at MC13.” The DG also expressed disappointment over the lack of progress in the Doha services negotiations, saying that “this organization cannot make significant advances on an issue so critical to the present and future of trade, and of trade-led growth, development, and job creation.” In her introductory statement at the TNC meeting, Ms Okonjo-Iweala said, “We know people are bearing the brunt of slow growth, volatile prices, climate impacts and debt pressures. We have a responsibility to contribute to efforts to reinvigorate growth and opportunities for people everywhere.” According to a news release posted on the WTO’s website, the DG said that “we must have a substantive and meaningful Ministerial with concrete results.” “It is welcome that stakeholders increasingly understand that trade is part of the solution for many contemporary global challenges we are facing. But we still have the onus on us here in Geneva to deliver.” However, the reports presented by the chairs of the Doha agriculture negotiations, the Doha fisheries subsidies negotiations, and on the Doha development issues indicated that while there was modest progress in all the areas, there were widening differences in these three and other areas, said people familiar with the discussions. AGRICULTURE The clash of narratives among members on the issue of agriculture seemed rather stark on the issues as well as the results to be achieved at MC13. The Africa Group, which was the first to speak, was seemingly interrupted by the TNC chair halfway through its statement, said people present at the meeting. On agriculture, the Africa Group said, “in the context of the persistent state of global food insecurity that has a disproportionate impact on developing economies, including on the African continent,” MC13 must “produce a credible outcome that effectively responds to its structural causes.” The Africa Group bemoaned that the “food and livelihood insecurity situation continues to deteriorate because our farmers are unable to compete in international markets as well as in our own domestic markets in the face of highly subsidised products and our economy continues to face the brunt of an uneven playing field in global agricultural trade.” Consequently, according to the Africa Group, “it is of critical importance that the WTO contribute, within its mandate, to address the structural causes of food and livelihood insecurity and unlock developing countries’ productive capacity.” The Africa Group emphatically called for an “MC13 outcome that includes substantive food security and livelihoods package that would address trade-distorting domestic support, especially with regards to levelling the playing field, PSH, SSM and cotton.” Brazil, which in the past led the G20 group of developing countries on agriculture and is now at the forefront of the Latin American Group and the Cairns Group of farm-exporting countries, said, “The success of MC13 as a “Reform Ministerial” hinges on a successful outcome in Agriculture.” According to Brazil, MC13 should “set parameters and give clear political instructions for all members on a package in Agriculture”, and conclude “modalities in agriculture by MC14.” As for the MC13 Outcome Document, which is still in the works and lacks clarity, Brazil said: “It must mention the decision reached in agriculture to pursue a holistic/inclusive package for the reform, in accordance with Article 20 of the WTO’s Agreement on Agriculture (AoA) and other relevant mandates, as the best approach to conclude full modalities by MC14 (expected to be held in 2026).” In sharp contrast to Brazil’s asks in agriculture, Indonesia, the coordinator of the G33 coalition comprising more than 40 developing countries, emphasized that MC13 should deliver on the mandated issues in agriculture like the permanent solution for public stockholding (PSH) programs for food security and the special safeguard mechanism (SSM) for developing countries. Indonesia said that it is disappointed over the lack of progress in agriculture, as “members continued to differ on fundamental issues.” The G33 coordinator said, “we all have our mandates, and the pressure is increasing for us to deliver – but to move forward, we need more give-and-take.” It urged “all members to first work on rectifying the existing imbalances in the AoA – including providing DCs (developing countries) and LDCs with adequate policy space to address urgent challenges, such as food security.” Indonesia underscored the need to use “the next six weeks to intensify discussion among members, continue exploring possible convergence, and recommit ourselves to make meaningful progress.” India, another key member of the G33 coalition, said that it would judge MC13 on whether it delivers on the mandated issues concerning the permanent solution for public stockholding (PSH) programs for food security and the SSM, hinting that the PSH issue could “make-or-break” MC13, said people familiar with the development. China also expressed sharp concern over what it called “members’ extreme positions,” suggesting that “a post- MC13 work plan without prejudgement such as on target or modality could be the most pragmatic landing zone.” China emphasized the need to respect all the mandates, adding that “all members’ concerns should be taken into account and all the issues should be on the table.” “Besides, as we always reiterate, there should be a food security deliverable at MC13,” China said. The European Union, which is known for its farm-defensive policies, said that, “it is time to find some realistic convergence on a way forward on agriculture reform, in particular by addressing trade-distorting domestic support and making progress towards a permanent solution to public stockholding for food security purposes (PSH).” At MC13, the EU wants deliverables “on the immediate needs of vulnerable members, who are impacted by the current food insecurity context.” The United States appears to have expressed disappointment over the continued entrenched positions, suggesting that time is running short and a lot of work remains to be done, said people familiar with the discussions. At a mini-ministerial meeting held last month on agriculture, the US Trade Representative (USTR), Ambassador Katherine Tai, had reiterated that “old WTO members particularly those with large roles in agricultural trade, and with significant potential to distort trade must be willing to come to the table to say not only what they want, but also what they are willing to contribute.” The US, which seems to be averse to any changes in the fixed external reference price based on 1986-88 prices or delivering on the mandated issues like PSH, said at the mini-ministerial meeting that it “remains willing to contribute to market access, domestic support, and all aspects of agricultural negotiations”. Ambassador Tai expressed hope that “for MC13 we can come together with this type of acknowledgement that can set our negotiations on the right track.” FISHERIES SUBSIDIES The chair of the Doha fisheries subsidies negotiations, Ambassador Einar Gunnarsson of Iceland, appears to have delivered a rather mixed statement on the conclusion of the eighth “Fish Week” of negotiations on crafting disciplines for prohibiting subsidies contributing to overcapacity and overfishing (OCOF), said people familiar with the development. Though the fisheries chair is yet to circulate his detailed statement on progress, or lack of it, at the eighth “Fish Week”, members expressed sharp concerns at the TNC meeting. The Africa Group said that “the OCOF pillar with effective and appropriate SDT is a cardinal element.” It argued that “the most harmful subsidies should be identified and disciplined, should be prohibited beyond the EEZs [Exclusive Economic Zones] and the disciplines must not contain loopholes that enable the large subsidizers to continue their subsidies regimes.” According to several studies, the five biggest subsidizers are China, the European Union, the United States, Japan, and Korea among others. Cameroon, on behalf of the Africa Group, pressed for “a tiered approach” that “is appropriate and will uphold the principles of common but differentiated responsibilities.” It said that “mere notifications should not be the only form of discipline to the largest subsidizers,” stressing that “the fish stocks should actually be maintained at a sustainable level and this information should be adequately notified among others, in accordance with the rules.” On special and differential treatment (SDT) provisions for developing and least-developed countries, which did not cause the global depletion of fish stocks through OCOF subsidies, the Africa Group said, “SDT should take into account the various needs of developing countries and therefore should include the capping approach.” In the same vein, the Africa Group said, “countries without a definitively defined exclusive economic zone should not be prevented from providing subsidies within 200 nautical miles. Small-scale fishers in small developing countries should be given special consideration due to the socio-economic role they play and therefore should not be limited by geographical limits or by a definition of the words “low income, resource poor and livelihood fishing”.” Indonesia said that the chair’s latest text “is not balanced yet”, arguing that “pursuing equal burden-sharing to address overcapacity and overfishing is not appropriate given the existing circumstances.” It wants that members should “target those who were historically responsible in depleting global fish stocks, through commercial distant water fishing ventures – and give them more responsibilities to adjust their behaviours.” Indonesia said that “at the moment, while CBDR (common but differentiated responsibilities) principle seems to exist through the two-tier approach, it is still limited in notification obligation – and will not change the status quo.” Worse still, said Indonesia, “the present text further restricts the S&DT to a handful of members, without due regard for the importance of the fishing sectors to developing members and LDCs, particularly coastal states, to provide decent living and food security for their people.” It noted that “70-80% of Indonesia’s catch is for domestic consumption.” The European Union, which is regarded as one of the biggest subsidizers, expressed sharp concern, saying that “the positions in the negotiations are growing further apart.” The EU said “to change the dynamic and deliver an agreement by MC13, members need to reflect on what they can live with rather than push for long menus of nice-to-haves.” The EU expressed confidence in the chair guiding this process, “including focusing on the core discipline and the sustainability standard.” China merely said that it is looking forward “to outcomes on fisheries subsidies, TBT (Technical Barriers to Trade) Ministerial Declaration, trade and environment and development issues such as LDC graduation Annex 2 and G90 proposal on S&DT.” DISPUTE SETTLEMENT REFORM The prospects for a credible outcome on dispute settlement reform look extremely bleak at MC13, as the latest draft “ministerial decision on dispute settlement” issued by the controversial facilitator from Guatemala conducting the informal discussions seems to be overly biassed in favour of a major industrialized country that appears to be opposed to a strong appeal review mechanism, cross-retaliation, and negative consensus, said people familiar with the discussions. According to paragraph four of the MC12 Outcome Document, trade ministers acknowledged “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 conduct discussions with the view to having a fully and well-functioning dispute settlement system accessible to all Members by 2024.” Yet, the latest draft ministerial decision is far from addressing the core issues while seemingly engaging in changing the two-tier dispute settlement system once and for all, said several members, who asked not to be quoted. China said dispute settlement reform “is the top priority of most members and the WTO itself.” “In order to deliver an outcome at MC13, in the next two months, we need to address the remaining issues based on the already-good draft and figure out the solution to the most difficult one, like the appeal review mechanism,” it added. The European Union said emphatically that “a fully functioning dispute settlement system remains our top priority for MC13.” It added that “in the six remaining weeks, we need to intensify the discussions” as it is critical “to find a solution that preserves the right to appeal.” Brazil said “core issues remain un-bridged and the work flow needs to be formalized sooner rather than later.” It urged “members to recognize in the Ministerial Declaration the progress achieved thus far on DS reform and encourage the conclusion of the work with a view to a fully functioning two-tier system by 2024.” The Africa Group called for “restoring the two-tier system with the right to automatic appeal; ensuring accessibility and equitable participation.” It also called for “a multilateral process with a clear roadmap towards achieving these objectives,” and demanded “a fully and well-functioning dispute settlement system”, accessible to all Members by 2024, as mandated by Ministers. The Africa Group reminded members that some difficult issues like “the issue of the Appellate Body impasse, compliance, panel composition, ADR [Alternative Dispute Resolution] modalities among others”, which are consistent with the restoration of the Appellate Body, are yet to be resolved. DEVELOPMENT The Africa Group expressed sharp concern over the pending mandated issues on development, particularly the ten Agreement-specific proposals by the G90 countries. At the TNC meeting, the chair of the Doha development negotiating body, Ambassador Kadri Hassan of Djibouti, stressed the importance of S&DT issues. She offered a mixed picture of progress on the S&DT issues. The Africa Group stressed that ensuring that “existing S&DT provisions are improved to make them more precise, effective and operational, is a long overdue mandate and MC13 must deliver a meaningful outcome on the G90 proposals.” Indonesia emphasized the urgent need “to address the specific needs and vulnerabilities of developing countries.” It pointed out that “incorporating these proposals into the ongoing negotiations will make a significant contribution to the inclusiveness and balance needed in the global trade framework.” According to Brazil, “Development is not just a list of S&DT, or a couple of flexibilities in exchange for strong disciplines that limit the policy space of developing countries.” Brazil argued that “the outcome of MC13 must recognize that sustainable development is a central objective of both trade and environmental regimes and that the WTO system needs to be balanced in support of all three dimensions of sustainable development: economic growth, social inclusion and environmental protection.” The EU said it has been engaging in the analytical work of the LDC graduation proposal, while insisting that aside from TBT and SPS agreements, it “supports work to find practical solutions, such as best practices, to improve implementation of the available practices under the S&DT provisions under these agreements.” WTO REFORMS In the controversial topic of WTO reforms, which appear to mean different things to different members, there is still no clarity on what would be accomplished at MC13. The GC chair, Ambassador Molokomme of Botswana, who is overseeing the negotiations, has presented a third skeleton of issues. It shows that members are yet to begin discussions on the controversial issues like the negotiating function, and integrating the Joint Statement Initiatives (JSIs) into the WTO rule-book. The Africa Group said WTO reform is a high-priority issue for its members as “it relates to its development dimension and the urgent need for Africa to embark on a sustainable growth path, integrate into high-value global value chains, confront contemporary challenges and build resilience against the multiple crises the world faces.” It called for “concrete outcomes at MC13 on our initiative and submissions calling for focused negotiations on select WTO Agreements to re-balance trade rules and availing policy space and tools in support of the industrialization, diversification, and structural transformation of our economies.” The Africa Group called “for a re-balancing of certain trade rules and addressing constraints we have identified under Agreements on Subsidies and Countervailing Measures (ASCM), Trade-Related Investment Measures (TRIMs), and the Trade-Related Aspects of Intellectual Property Rights (TRIPS), including exploiting the potential role of transfer of technology to support these objectives.” It expressed the hope that members “shall agree towards outcomes that ensure that MC13 provides clear political instructions for negotiations towards availing policy space for industrial development of our economies to earnestly commence with a view to concrete outcomes before MC14.” China merely called for seizing “the window of opportunity of MC13 to push forward the reform agenda and obtain some important ministerial mandates.” +
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