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TWN
Info Service on WTO and Trade Issues (Feb24/14) Geneva, 19 Feb (D. Ravi Kanth) — As the World Trade Organization’s 13th ministerial conference (MC13) shifts into high gear involving negotiations among trade ministers in the next seven days, the WTO Director-General, Ms Ngozi Okonjo-Iweala, on 16 February issued “a draft Abu Dhabi Package”, with several proposed deliverables that contain many “outstanding issues” to be resolved in a likely “pressure-cooker environment of intimidation, arm-twisting, and naming or shaming”, said people familiar with the negotiations. A taste of what is likely to come in Abu Dhabi has already been witnessed at a special General Council meeting on 14 February when the DG seemingly resorted to finger-pointing against India and South Africa, when the two countries opposed the proposed plurilateral agreement on Investment Facilitation for Development (IFD) on procedural as well as systemic grounds, said people, who asked not to be quoted. After some puzzling developments in the late evening of 16 February, particularly on agriculture, the DG issued the draft package, telling ministers that “a number of outstanding issues remain to be resolved at Ministerial level as reflected in the brackets in the texts.” The DG also proposed language on trade and climate change on her own in square brackets in the section on additional issues in the draft Abu Dhabi Ministerial Declaration (ADMD). The alternative text from the Director-General says: “[We reaffirm the importance of the contribution that the multilateral trading system can make to addressing global environmental challenges, including climate change and related natural disasters, loss of biodiversity and pollution, and promoting the UN 2030 Agenda and its Sustainable Development Goals (SDGs) in its economic, social and environmental dimensions, insofar as they relate to WTO mandates and in a manner consistent with the Members’ respective needs and concerns at different levels of economic development. We recognise the ongoing efforts of the Committee on Trade and Environment (CTE), including hosting Thematic Sessions to allow Members to deepen discussions, including on the relationship between trade measures and environmental measures. The CTE will provide a factual report on its activities to the General Council before the Fourteenth Session of the Ministerial Conference, including possible recommendations.]” The texts attached to the letter sent to trade ministers, seen by the SUNS, comprise: (1) draft “Abu Dhabi Ministerial Declaration”; (2) draft text on “Agriculture”; (3) a very short draft text on “Dispute Settlement Reform”; (4) draft text on “fisheries subsidies”; and (5) “Work Program on Electronic Commerce” with several proposals contesting the proposed mandated termination of the moratorium on customs duties on electronic transmissions. Several issues that are not mentioned in the DG’s letter to be resolved in Abu Dhabi are included in the draft Abu Dhabi Ministerial Declaration such as development that includes improvements in special and differential treatment provisions, said people familiar with the letter. The DG urged trade ministers “to focus on issues that are bracketed and not reopen areas where there is convergence”. But, in trade negotiations, it is the members’ prerogative to open or not open issues depending upon their respective sovereign positions, which may or may not have been properly reflected in the draft texts, said people who asked not to be quoted. Ms Okonjo-Iweala says that “while these draft texts reflect where your negotiators are today, rest assured their hard work is continuing to bridge further gaps before you arrive in Abu Dhabi,” adding that the progress of the work among negotiators will be reflected at an informal heads of delegation meeting on 27 February. She informed members on the implementation of the first fisheries subsidies agreement on disciplines on subsidies contributing to IUU (illegal, unreported, and unregulated) fishing and overfished stocks adopted at MC12 in Geneva in June 2022. The DG asked countries that have not submitted their instruments of acceptance to do so. So far, only 70 countries have submitted their instruments of acceptance of the protocol of the Fisheries Subsidies Agreement. The agreement will come into effect only after two-thirds of the members (around 110) submit the instruments of acceptance. The DG told ministers that she is transmitting “the updated modalities of the Conference”, which now “includes the guide questions for the ministerial conversations on Trade and Sustainable Development, including Trade and Industrial Policy Space, and on Trade and Inclusion, among other information.” The DG wants ministers to “come prepared to build on the emerging convergence in the areas reflected in the texts and get the job done,” adding that she expects that the meeting will be “finished” on 29 February. In all probability, the meeting could be extended given several make-or-break issues in each area, particularly in agriculture and fisheries subsidies, as well as in the draft “Abu Dhabi Ministerial Declaration” where the real battle lies, said people who asked not to be quoted. DRAFT ADMD Among several battles that are expected to surface on the draft texts at MC13, the one on the ministerial declaration is going to be crucial as there has been no convergence on the real weighty issues concerning the proposed WTO “reforms” where attempts are likely to be made on the integration of the proposed plurilateral agreement on IFD and other Joint Statement Initiatives (JSIs) such as on digital trade, said people familiar with the negotiations. DS REFORM As previously reported in the SUNS, the issue of dispute settlement (DS) reform has been kicked further down the road because of unfinished business, particularly concerning “appeal/review and accessibility.” In the draft text, it is mentioned that discussions were held as per the MC12 mandate to have “a fully and well-functioning dispute settlement system accessible to all Members by 2024.” However, it does not mention the restoration of the two-stage dispute settlement system with the Appellate Body as the final adjudicating body with binding recommendations to be implemented by Members as per Article 17 of the Dispute Settlement Understanding (DSU), said people familiar with the draft text. More importantly, the draft decision on DS reform does not mention the demand from a large majority of countries to “formalize” the current informal discussions on account of a lack of transparency and inclusion, said people familiar with the discussions. The United States and the European Union among others seemingly support the informal discussions being facilitated by Mr Marco Molina, the deputy trade envoy of Guatemala, while a majority of developing countries want the formalization of the discussions under the aegis of the Dispute Settlement Body, said people, who asked not to be quoted. WTO’S ROLE In paragraph six of the draft ADMD, it is proposed “to preserve and strengthen the ability of the multilateral trading system, with the WTO at its core, to provide meaningful impetus to respond to current trade challenges, take advantage of available opportunities, and ensure the WTO’s proper functioning. [We acknowledge that Members have engaged on and explored some of these issues and recognise the need to deepen dialogue.]” However, it does not mention the centrality of “consensus-based decision-making” as set out in paragraph IX of the Marrakesh Agreement, as new norms like “responsible” consensus, “flexible” negotiating approaches, and “constructive consensus” are being bandied about in an attempt to jettison consensus-based decision-making, said people familiar with the discussions. The draft ADMD reiterates the “centrality of the development dimension in the work of the WTO.” In paragraph 15, it recognizes “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, including for developing Members and LDCs, and contributes to ensuring the gains of trade benefit all, within and among [Members]. [We welcome further work by Members to hold thematic discussions on trade inclusiveness [insofar as they relate to Members concerning their multilateral trade relations]. Such thematic sessions shall be under the overall supervision of the General Council, which should report, as appropriate, to the Fourteenth Session of the Ministerial Conference.]” It emphasizes the “role and importance of services” to the global economy, apparently giving a short shrift to the JSI on services domestic regulation, which is now stuck in the regular Council for Trade in Services. In paragraph 19, the expected outcomes that include specific decisions/declarations are mentioned in square brackets. It says: “[We acknowledge progress/welcome outcomes as reflected in specific decisions/declarations/decide or guide on WTO Negotiations: a. Agriculture b. Fisheries Subsidies i. Welcome deposits of instruments of acceptance and thank contributions to Fish Fund ii. Fish 2 c. S&DT d. [catch all messaging on other negotiating areas in Negotiating Groups]]” In paragraph 24, the draft ADMD states: “[We acknowledge progress/welcome outcomes as reflected in specific decisions/declarations/decide or guide on WTO Regular Work including on the Work Programme on Electronic Commerce, the Moratorium on TRIPS Non-Violation and Situation Complaints, the Work Programme on Small Economies, LDC Graduation – Annex 2, and TRIPS Waiver Extension, among others.]” The draft ADMD also includes several additional textual proposals in square brackets in rainbow colours that seek to make several changes including in the negotiating function of the WTO by bringing in new forms of consensus: “[We reaffirm the value of [our consistent practice of] taking decisions through a [[flexible] [constructive,] [responsible]] consensus-based, Member-driven process].” On trade and industrial policy, it states: “[We agree to establish a temporary Working Party to organise regular dedicated discussions on trade and industrial policy. The Working Party will provide a forum for Members to share and discuss factual analysis and could examine, inter alia, (a) the different types of policy tools or measures being used by Members and their impact on global trade and investment; (b) how to better support transparency; ( c) whether WTO rules need to be improved or developed; and (d) the challenges faced by Members, particularly developing Members, including LDCs. 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.]” On policy space for industrial development, it states: “[We resolve to examine the effect of WTO agreements on the industrialization, economic diversification and structural transformation of developing Members, including LDCs. To this end, this work will, inter alia, (a) assess any relevant challenges presented by WTO rules and consider how to address them, (b) take account of any relevant opportunities presented by WTO rules and ways to enhance them, and ( c) consider how WTO agreements can better facilitate industrialization and contribute to building resilience to global challenges. The work shall focus on existing needs of Members, be based on submissions by Members and be conducted in relevant subsidiary bodies, including in dedicated sessions as needed. The General Council shall oversee and provide a report on this work, including any recommendations, by the 14th Ministerial Conference.]” On special and differential treatment, it states: “[We reaffirm the provisions of special and differential treatment for developing Members, including LDCs, as an integral part of the WTO [and its] agreements. We note the progress and encourage the continuation of work in the CTD SS and other relevant bodies of the WTO to improve the application of special and differential treatment and look forward to a report on any progress to the General Council and subsequently to the Fourteenth Session of the Ministerial Conference.] SUSTAINABLE AGRICULTURE Brazil’s proposal to advance work on sustainable agriculture is as follows: “[We agree to establish a dedicated dialogue on sustainable agriculture, taking into account the UN 2030 Agenda for Sustainable Development. The dialogue will provide a forum for discussions on sustainable agriculture production, productivity, and trade, as well as on resilient and sustainable food systems, in recognition of Members’ unique agricultural conditions, circumstances, practices, and common concerns related to the environment and climate. We instruct the General Council to organize a retreat in 2024 to identify priorities. The General Council shall appoint a facilitator for the dialogue, oversee its work, and, as a result of the discussions, report on this work, including any recommendations for future multilateral work, at the Fourteenth Session of the Ministerial Conference.] TRADE & TRANSFER OF TECHNOLOGY Following the COVID-19 pandemic when the US and other industrialized countries refused to share technology for the production of vaccines, therapeutics and diagnostics, the developing countries proposed the following language on trade and transfer of technology: “[We acknowledge the importance of the relationship between trade and technology transfer [, on voluntary and mutually agreed terms] in responding to global challenges and building economic resilience and prosperity for all WTO Members, in particular developing Members, including LDCs. We recognise the role of the Working Group on Trade and Technology Transfer in coordinating discussions within the WTO and encourage their continuation, including by continuing to work with other relevant international organizations.]” TRADE & ENVIRONMENT The proposed language in square brackets on trade and environment is likely to generate considerable debate/ negotiation at MC13. The proposed language on trade and environment, which includes an alternative proposal from the DG, is as follows: “[We reaffirm the importance of the contribution that the multilateral trading system can make to addressing the global environmental challenges and promoting the UN 2030 Agenda and its Sustainable Development Goals (SDGs) in its three dimensions, insofar as they relate to WTO mandates and in a manner consistent with the Members’ respective needs and concerns at different levels of economic development. In this regard, we will promote cooperation on environmental aspects of trade, innovation, and technology transfer, particularly to developing Members, including LDCs. Recalling the 1994 Marrakesh Ministerial Decision and subsequent ministerial decisions on trade and environment, the Committee on Trade and Environment (CTE) must continue to promote Member’s engagement on its agenda, including by fostering transparency and structured dialogue on trade-related aspects of environmental measures as well as their effects on market access, organizing the sharing of Members’ practices and experiences, identifying trade policy tools that facilitate trade while contributing to addressing global environmental challenges, revitalizing its procedures, and collaborating with other WTO bodies as appropriate. We recognise the ongoing efforts of the CTE, including hosting Thematic Sessions to allow Members to deepen discussions and explore new topics with inclusivity and transparency, reaching out to the secretariats of international organizations, and learning views from external stakeholders. The CTE will provide a factual report on its activities to the General Council towards the Fourteenth Session of the Ministerial Conference, offering recommendations, if needed, that reflect the discussions among Members.]” ALTERNATIVE TEXT FROM DG In what appears to be an attempt to bolster the proposal from the major industrialized countries, including the US and the EU, the DG has proposed alternative language, in red coloured square brackets: “[We reaffirm the importance of the contribution that the multilateral trading system can make to addressing global environmental challenges, including climate change and related natural disasters, loss of biodiversity and pollution, and promoting the UN 2030 Agenda and its Sustainable Development Goals (SDGs) in its economic, social and environmental dimensions, insofar as they relate to WTO mandates and in a manner consistent with the Members’ respective needs and concerns at different levels of economic development. We recognise the ongoing efforts of the Committee on Trade and Environment (CTE), including hosting Thematic Sessions to allow Members to deepen discussions, including on the relationship between trade measures and environmental measures. The CTE will provide a factual report on its activities to the General Council before the Fourteenth Session of the Ministerial Conference, including possible recommendations.]” Besides, there are other additional issues included such as strengthening the role of the Enhanced Integrated Framework, accessions, cross-border telemedicine services, cost of remittances, TRIPS matters, trade and debt, coherence, as well as some other additional paragraphs. In short, the draft ADMD is expected to give rise to several battles which may take up considerable time at MC13 with severe consequences, said people who asked not to be quoted. +
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