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TWN
Info Service on WTO and Trade Issues (Apr24/09) Geneva, 8 Apr (D. Ravi Kanth) — The World Trade Organization’s Director-General, Ms Ngozi Okonjo-Iweala, held a meeting with Latin American countries on 8 April to drive home the message on intensifying work on fisheries subsidies, agriculture, and the proposed plurilateral Investment Facilitation for Development (IFD) Agreement, said people familiar with the meeting. At a meeting with the trade envoys/officials of South American countries on 8 April, the DG shared her assessment of the failed WTO’s 13th ministerial conference (MC13) in Abu Dhabi, particularly on what she claimed was the “lose-lose” negotiating approach adopted by India and Brazil among others on fisheries subsidies and agriculture, said people familiar with the discussions. The DG suggested that an outcome on fisheries subsidies was blocked due to a lack of agreement on agriculture, indicating that “lose-lose” negotiating approaches were adopted and that they need to be eschewed by members, said people who asked not to be quoted. At the meeting, she highlighted the need for building “trust”, which is lacking in the current trade ecosystem, said people, who preferred not to be identified. An apparently aggrieved DG is understood to have urged the South American countries to “strategize” their positions in order to come out of the negative loop that they are currently caught in. Among the three issues of importance highlighted by the DG, two issues – fisheries subsidies and agriculture – are part of the Doha multilateral trade agenda, while the proposed plurilateral IFD Agreement among 124 countries is being sought to be integrated into Annex 4 of the Marrakesh Agreement that established the WTO in 1995. In her restricted statement (Job/GC/390) made at the Doha Trade Negotiations Committee (TNC) meeting on 21 March, the DG said that “members also advanced in plurilateral processes.” She went on to say that, “As I have said on many occasions, including at MC13, while the multilateral instrument remains the gold standard at the WTO, we should also be open to additional instruments to deliver outcomes for our people as we did on Services Domestic Regulation and the Investment Facilitation Agreement – the latter with the participation of three-quarters of the Membership. I take note that the IFD will be picked up in the GC and I look forward to the discussions under Agenda Item 8.” However, at the General Council meeting on 23 March, India, South Africa and Turkiye said that their positions against the proposed IFD Agreement remain unchanged, indicating that it cannot be discussed or adopted by the General Council, said people, who asked not to be quoted. In an opinion piece in Project Syndicate on 28 March, the DG threw her weight behind the proposed IFD Agreement, arguing that “125 WTO members – representing three quarters of the membership and including nearly 90 developing countries – used the plurilateral negotiating instrument to finalize the Investment Facilitation for Development (IFD) Agreement to eliminate bureaucratic barriers to domestic and foreign direct investment.” According to Ms Okonjo-Iweala, the IFD Agreement “could save participating countries up to $1 billion a year in aggregated costs and make them much more attractive investment destinations.” “While work will continue in Geneva to insert the agreement into the WTO’s multilateral legal framework, there is no doubt that the IFD Agreement demonstrates that the WTO has innovative negotiating tools at its disposal to find common ground on topical issues,” she wrote in Project Syndicate. The DG’s apparently unabashed promotion of the IFD Agreement, which “has not cleared the procedural and systemic decks” as per Articles IX and X of the Marrakesh Agreement, could cause prolonged “lawlessness” in the global trade body as well as in the multilateral trading system, said a representative from one of the South American countries, preferring to remain anonymous. This comes at a time when “trust” in the rules-based WTO appears to be rapidly evaporating due to the allegedly WTO-illegal methods adopted by powerful members with support from the DG, the representative said. AGRICULTURE On agriculture, Brazil is understood to have said at the meeting that it will propose a paper on the way forward in the agriculture negotiations. Several South American countries seem to be unhappy with the final draft text on agriculture (WT/MIN(24)/W/ 13/Rev.1) that was circulated at MC13 on 29 February. The draft text, which was prepared by the European Union, was referred to as a “common text” by the DG. In her restricted statement (Job/GC/390) at the TNC meeting, the DG, as the chair of the TNC, said that “it was encouraging that for the first time in a very long time – despite Members’ political [sensitivities], you were working off a common text.” Surprisingly, the DG echoed a different view in her opinion piece in Project Syndicate despite “a common text” which included a permanent solution on public stockholding (PSH) programs for food security in paragraph 21. She said: “ … While a united bloc of mostly developing countries called for deep cuts in developed countries’ agricultural subsidies, clear divisions appeared among emerging markets regarding “public stockholding” – the practice of purchasing agricultural goods, often at fixed prices, to bolster domestic food security – and its potential effects on trade …” Nevertheless, the DG said that “these differences stymied efforts to move forward on outstanding agriculture negotiations, which unfortunately led some members to block an agreement further restricting harmful fisheries subsidies.” Regarding the EU-prepared draft text tabled during the final hours of MC13, some South American countries that worked with the EU in finalizing the revised draft text appear to be developing “cold feet” in aligning with that text, said a trade envoy, who asked not to be quoted. The “devil is in the details” of the revised draft text, as it has raised the proverbial issue of whether “the chicken comes first or the egg”. On behalf of several developed countries, including the US and the EU, the G10 farm-defensive countries led by Norway, Switzerland and Japan have raised several concerns over the issue of the modalities and time-lines on domestic support. The revised draft MC13 text on domestic support, which drastically changed the language as contained in document WT/MIN(24)/W/13, merely said: “Members commit to pursue and intensify negotiations on domestic support, with a view to reducing substantially and progressively trade-distorting support in a fair and equitable manner, to encourage a shift towards less trade-distorting support, and improving disciplines in accordance with the reform objective in the AoA [Agreement on Agriculture] within a reasonable implementation period to be agreed by Members. These negotiations shall preserve the special and differential treatment of developing country Members and LDCs, including support to low-income or resource-poor farmers, as well as to encourage diversification from growing illicit crops. Members will agree on the elements and the methodology of implementation of the reform according to the Timeline of Implementation section below.” Brazil seems to have submitted its proposal to the WTO, but the document has not been officially circulated yet, said a South American participant in the DG’s meeting. Several South American countries, including Paraguay and Colombia among others, raised the bar on TRIPS- related issues at the DG’s meeting. In a similar vein, Colombia also spoke about stepping up work on trade and environment issues during the meeting, said people familiar with the meeting. Surprisingly, the DG, who is likely to seek a second term as and when the selection process is initiated, did not mention the issue at the meeting, said people, who asked not to be quoted.
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