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Info Service on WTO and Trade Issues (Feb24/11) Geneva, 9 Feb (D. Ravi Kanth) — Several developing countries on 8 February seem to have fiercely opposed moves by major industrialized countries to bring “responsible” or “flexible” consensus into the Abu Dhabi Ministerial Declaration (ADMD), in an apparent attempt to jettison the core principles of the WTO’s Marrakesh Agreement that calls for consensus-based decision-making, said people familiar with the discussions. With the clock ticking down for the WTO’s 13th ministerial conference (MC13), to be held in Abu Dhabi from 26 February, members seemingly squabbled over how decisions must be taken at the WTO, with some countries like Canada, a member of the Group of Seven (G7) industrialized countries, calling for “flexible” negotiating approaches, while Singapore insisted on “responsible” consensus among others, said people familiar with the discussions. In the continuing discussions on the draft Abu Dhabi Ministerial Declaration, members remained far apart on the attempts to undermine the Marrakesh Agreement, particularly paragraph 1 of Article IX, which states, “the WTO shall continue the practice of decision-making by consensus followed under GATT 1947…” It appears that the United States, the European Union, and other industrialized countries as well as some developing countries want MC13 to take a radical departure from the fundamental principles of the Marrakesh Agreement to pursue their plurilateral approaches, said people familiar with the discussions. During an event in Washington DC last week, the US trade envoy Ambassador Maria Pagan reportedly spoke about how the WTO could avoid gridlock through “responsible” consensus, describing it as “the ability to say something that maybe I don’t care that much about, but it doesn’t hurt me. And I’m not gonna hold it back as a chip… until I get… what I want.” A blog post on “Responsible Consensus at the WTO Can Save the Global Trading system”, posted on the website of the New York-based Council on Foreign Relations on 22 January, quoted Ambassador Pagan as saying that important allies like the United Kingdom support “the spirit of collaboration and responsible consensus so as to ensure that MC13 builds on the success of MC12.” Coincidentally, the joint communique issued by the G7 trade ministers on 7 February following a virtual meeting held under the Italian Presidency, states: “On the eve of MC13, we reaffirm our strong determination to seize this opportunity to boost the reform process of the Organization launched at the 12th Ministerial Conference (MC12) and to strengthen a rules-based, inclusive, free and fair multilateral trading system, with the WTO at its core.” The joint communique, however, does not refer to either the Marrakesh Agreement on which the WTO was founded in 1995 or the consensus-based decision-making process, said a developing country trade envoy, who asked not to be quoted. Unsurprisingly, the language on “flexible” negotiating approaches as well as “responsible” consensus figured in the draft ADMD issued by the WTO’s General Council chair, Ambassador Lesiba Athaliah Molokomme of Botswana. Although the paragraph in the draft ADMD obliquely refers to changing the negotiating function of the WTO that is based on the principle of consensus-based decision-making, it includes the following language in square brackets: “[We reaffirm the value of [our consistent practice of] taking decisions through a transparent, inclusive, [[flexible, (Canada)] [constructive, (Jamaica)] [responsible (Singapore)]] consensus-based, Member-driven process]. (India)”. It is clear that while Canada is seeking “flexible” negotiating approaches and Singapore is proposing “responsible” consensus, India is arguing for following Article IX of the Marrakesh Agreement, namely a “consensus-based, Member-driven process,” said people familiar with the discussions. SCOPE In a similar vein, under the heading of scope in the draft ADMD, the General Council chair suggested the following language: “[[within the scope of the WTO objectives (Brazil)] [in so far as they relate to the WTO relevant mandate[s]]] (Egypt) and ensure inclusive prosperity and increased welfare gains for all Members (United States suggesting to add text in black from Version 4 if text in blue stays).]” Further, tensions remain concerning Article 20 of the WTO’s Agreement on Agriculture versus the unfulfilled mandates of the WTO Agreements. Reflecting the tensions, the draft ADMD says: “[and recognise the concerns raised [by some Members (United Kingdom)] on their status of implementation (Philippines).] [We recognise the concerns raised by [some (Canada)] Members regarding [the unfulfilled mandate on Article 20 of the Agreement on Agriculture and (Brazil)] [the unfulfilled mandates of the WTO Agreements and] unimplemented previously agreed Ministerial Decisions and Declarations (India)].” TRADE & INDUSTRIAL POLICY The differences among members on trade and industrial policy, a non-mandated issue, also seem somewhat unbridgeable at this juncture. The draft ADMD proposes language in square brackets on this issue: “[We agree to establish a temporary Working Party to organize regular dedicated discussions on trade and [industrial policy] [subsidies (China)]. The Working Party will provide a forum for Members to share and discuss factual analysis and could examine, inter alia, (a) the challenges faced by [developing Members (in particular LDCs)] [Members (in particular developing and LDC Members) (Thailand)] to industrialize and diversify their economies] [Members, in particular, difficulties faced by developing and LDC Members to industrialize and diversify their economies (Russian Federation)]; (b) the different types of policy tools or measures being used by Members and their impact on global trade [and] investment, environment and development (China); ( c) how to improve and enhance transparency; and (d) whether WTO rules need to be further [[improved (Thailand)] [strengthened] or] developed. [The Working Party shall be conducted in an objective and neutral manner.] (China) The Working Party will provide a factual report on these discussions no later than the next Ministerial Conference and may also, as appropriate, propose initiatives, concrete actions, or recommendations for future work.] (Canada).” TRADE & INCLUSION On trade and inclusion, another non-mandated issue, key developing countries proposed language in the ADMD as evident from the following paragraph that remains in square brackets: “[We recognise the importance of an inclusive and equitable multilateral trading system that enhances WTO Members’ relations in the field of trade and economic endeavour with a view to supporting development and raising standards of living (Egypt), including for developing Members and (Egypt) LDCs, and contributes to ensuring the gains of trade benefit all Members (India). We recognise work already underway and welcome further work by Members to hold thematic discussions [on trade-related aspects of inclusion] [on trade inclusiveness (China)] [on relevant issues (Egypt)]. The General Council should provide a report, including recommendations if any, to Ministers at the Fourteenth Ministerial Conference.] (Australia)” SUSTAINABLE AGRICULTURE At a time when the negotiations between the European Union and the South American regional trading group of MERCOSUR almost broke down on the agriculture chapter, particularly on sustainable agriculture, Brazil has introduced one full paragraph in the draft ADMD. Brazil’s proposed language on Sustainable Agriculture says: [We agree to organize dedicated dialogues on sustainable agriculture production, productivity, and trade, as well as on resilient and sustainable food systems, taking into account the UN 2030 Sustainable Development Goals in its economic, social, and environmental dimensions. The dialogues will provide an opportunity for sharing and discussing factual analysis, experiences, and best practices on the environmental impacts of trade-related agriculture policies, on the agriculture trade impacts of environmental policies, and on measures to enhance sustainable, climate- and environment-friendly agriculture production, productivity, food systems, and trade. The dialogues will proceed in a manner consistent with the WTO rules and in recognition of Members’ unique agricultural conditions, circumstances, and practices. We call on the General Council to organize a retreat on sustainable agriculture production, food system, and trade in 2024 in order to identify priorities for the dialogues to be held at Members-driven joint-sessions of the Committee on Agriculture (CoA) and the Committee on Trade and Environment (CTE). Other WTO bodies may join the sessions at the request of Members, depending on the nature of discussions. The chair of the CoA will report on a regular basis to the General Council on the status of the discussions. As a result of the dialogues and within the WTO mandate, Members may propose recommendations for future multilateral work on sustainable agriculture production, food systems, and trade to be reported at MC14.] (Brazil) It remains to be seen whether Brazil will be able to garner support for sustainable agriculture, said people familiar with the discussions. G7 JOINT COMMUNIQUE Meanwhile, the trade ministers of the Group of Seven (G7) industrialized countries (the US, Canada, Italy, France, Germany, the United Kingdom, Japan, as well as the European Union), who held a virtual meeting on 7 February in which the WTO’s Director-General Ms Ngozi Okonjo-Iweala participated, seemingly emphasized on WTO reforms and plurilateral negotiations. The G7 joint communique states: “In line with MC12 Outcome Document, we confirmed our commitment to continue to pursue reforms to improve the WTO’s monitoring, negotiating and dispute settlement system functions. We recognized the progress made during the ongoing discussions in Geneva. Regarding dispute settlement reform, we remain committed to conducting discussions with a view to achieving a fully and well-functioning dispute settlement system accessible to all Members by 2024.” The communique emphasizes on the deliberative function, which is advanced by the European Union, to discuss controversial issues like trade and climate change without any prior mandate. It says: “As part of our effort to reform the WTO, we affirmed the need to strengthen the deliberative function of the WTO to launch forward-looking work and to properly feed into the discussions on contemporary key trade issues, including on areas such as the nexus between trade and industrial policy, trade and environment and trade and inclusiveness. We recognized that transparency from all Members is vital for the WTO’s deliberative function to be effective. We therefore encourage all WTO Members to support the launching of deliberations on those issues at MC13.” It reaffirmed the commitment “to resolve outstanding issues and finalize the negotiations for a meaningful outcome under Phase 2 of the WTO Agreement on Fisheries Subsidies at MC13. We also call on all WTO members to complete their respective acceptance processes, necessary for the entry into force of the Phase 1 Agreement.” More importantly, the G7 countries demanded “a permanent prohibition of customs duties on electronic transmissions or, at least, for the renewal of the e-commerce moratorium at MC13 and, in parallel, we support the continuation of work under a reinvigorated work programme on electronic commerce with a development- oriented and inclusive approach.” The G7 countries seem to be in no mood to agree to the mandated issues like the permanent solution for public stockholding (PSH) programs for food security while demanding a permanent moratorium on customs duties on electronic transmissions, said people, who asked not to be identified.+
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