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Info Service on WTO and Trade Issues (May24/08) Geneva, 13 May (D. Ravi Kanth) — India and China issued two separate proposals on 7 May on how to address a plethora of issues concerning development at the World Trade Organization, coinciding with the 30th anniversary of the multilateral trade body, which appears to have failed to accord importance to development as compared to other issues, said people familiar with the development. The Marrakesh Agreement that established the WTO in 1995 placed development at the heart of the new member-driven, rules-based, multilateral trade organization. In 2001, at the WTO’s fourth ministerial conference in Doha, Qatar, the major industrialized countries agreed to address the long list of implementation issues focusing on development, particularly for making special and differential treatment (S&DT) simple and effective. The United States and the European Union along with other industrialized and developing countries launched the Doha Round of trade negotiations in 2001, under the much-publicized title, the Doha Development Agenda (DDA). At that meeting, China joined the WTO as a new member. Yet, the development issues were either pushed into the backburner or shabbily treated, said a former developing country trade envoy on a background basis. In 2019, India and China issued a joint proposal at the WTO opposing attempts by the former Trump administration to bring about “differentiation” among developing countries for availing of S&DT in current and future trade negotiations at the WTO. As reported in the SUNS, at the WTO’s General Council meeting on 3 March 2019, the US brought up its proposal, titled “Procedures to strengthen the negotiating function of the WTO.” However, the proposal was opposed by a large majority of developing countries at the meeting. Surprisingly, the Trump administration’s proposal on “differentiation” was voiced in varying levels of emphasis by the US trade officials in negotiations since 2019, said people familiar with the development. It is against this backdrop that the two separate proposals on development by India and China assume importance, though they did not mention the negotiating struggles in the run-up to the Doha meeting and later during the actual negotiations, said a former trade envoy, on a background basis. Both proposals will come up for discussion at the WTO’s General Council meeting on 22 May. INDIA’S PROPOSAL India’s proposal (WT/GC/W/934), titled “30 years of WTO: How Has Development Dimension Progressed? – A Way Forward”, briefly recounted the discussions on the development dimension in the run-up to the WTO’s 13th ministerial conference in Abu Dhabi, arguing that “tangible outcomes have been limited.” According to India, at the Abu Dhabi ministerial meeting, trade ministers “reiterated the centrality of the development dimension in the work of the WTO and recognized that the full integration of developing Members, including LDCs, in the multilateral trading system is important for their economic development.” India said, “Ministers, while reaffirming the S&DT provisions, have instructed officials to continue the work on improving the application of S&DT in the CTD’s Special Sessions and other relevant venues in the WTO, and report on the progress to the General Council before the 14th Ministerial Conference (MC14)”. India said the ministers have “emphasized prioritizing the work on issues of interest to the LDCs for securing their meaningful integration in the multilateral trading system, smooth and sustainable transition for LDCs on their graduation, Aid for Trade Initiative, Work Programme on Small Economies (SEs), technology transfer and focused session on trade-related challenges of landlocked developing countries (LLDC) in CTD.” Given the “substantial unfinished development agenda emanating from the MC13 Abu Dhabi Ministerial Declaration,” India sought to strengthen “the discussions and debate on the issue of development in the working of all regular bodies of this Organization” as well as for “structured” discussions. To guide the discussions in a meaningful way, India raised the following questions: “1. How could the discussions be better structured and taken forward in WTO on development issues? 2. Ministers have provided significant direction on development issues in MC13. The development agenda is also pending from the previous Ministerial Conferences. Considering this: a. How could the General Council provide impetus to further the discussions on the unfinished development agenda? b. What roadmap could the General Council provide to navigate the impasse on the development agenda? c. What role could the General Council play in agenda setting and prescribing modalities in respective WTO bodies for time-bound discussions on each of the issues relating to development agenda on which Ministers have provided direction in MC13? 3. What is expected of the Committee on Trade and Development in terms of the action it should take in discharge of its obligation as focal point on development dimension in WTO and other deliverables on its Terms of Reference? 4. Development dimension is cross-cutting and is at the core of the WTO. What instruction could the General Council issue for a stock-take of development agenda in the last 30 years? 5. Does a stocktaking exercise need to be initiated on how flexibilities in WTO Agreements have contributed to development? If so, what could be the relevant parameters? 6. What steps can be taken to reinvigorate the work at different WTO bodies, including the Committee on Balance-of-Payments Restrictions; Working Group on Trade, Debt and Finance; and the Working Group on Trade and Transfer of Technology; to further the development agenda? India also included an Annex in which it proposed several procedural and substantive issues to be discussed. Among the issues, India called for constructive and focused discussion on several “cross-cutting” issues that impact the developing countries disproportionately. These issues include: * access to finance including trade finance; * access to technology; * bridging digital divide; * enhancing effective aid for trade that is effective, demand driven, untied, and has recipient ownership; * flexibilities needed by the developing countries for industrialization; * food security; * issues holding back digital development such as competition; * manufacturing concentration; * reducing transaction costs in international trade and services; * supply chain resilience.” India said “as the WTO completes its 30th year, the CTD can publish a stocktaking report on not just what has been achieved so far, but also the gaps, which Members believe are holding up its progress. The CTD should also prepare a way forward for taking up development dimension starting from the WTO Informal Retreat on Development.” CHINA’S PROPOSAL In its proposal (WT/GC/W/935), titled “Reflections on Approaches to Development Issues”, China argued that “deficits in current rules have not been addressed yet” while “other long-standing development agenda remains unfinished.” According to China, several “contemporary challenges, such as climate change, food insecurity and digital divide, are calling for urgent and effective trade policy responses.” Stating the old Chinese maxim “A journey of a thousand miles begins with small steps,” Beijing argued that the first step “could be to revisit the approaches to WTO development issues.” Without naming the countries, China said “position-based debates sometimes precluded meaningful discussions on the real interests and concerns.” Further, “the ends of development were sometimes mixed up with the means such that divergence over the means soured the pursuit of the common ends.” Citing the WTO Director-General Ms Ngozi Okonjo-Iweala’s statement after the failed MC13, China said that “the lose-lose approach and the all-or-nothing strategy also hindered much-needed progress in key areas.” China shared its reflections on the approaches to development issues. Like the European Union, which called for strengthening the “deliberative” function to discuss non-mandated issues like trade and climate change, China also called for “revitalizing the deliberative functions of the CTD.” In its proposal, the approaches to development issues appear to be undergirded by the following reflections: 1. New Perspectives. Discussions on long-standing issues could be informed and rekindled by current challenges, so as to keep abreast with the time. To revitalize certain discussions, it is worth exploring long-standing issues from new angles. 2. Not Only Positions. To get past position-based strategies and the all-or-nothing approaches, all forms of discussions could be held to facilitate exchanges on the real problems faced by developing and least-developed Members, on the merits of solutions, as well as on how to address the core concerns reflected in the principled positions. 3. Incremental Steps. As complex or systemic issues may take longer time for discussions, it could be advisable to simultaneously identify and focus on specific issues affecting trade of developing Members including the LDCs, where policy solutions could be more targeted, appropriate and practical. 4. Stronger Capacity Building. To increase the capacity of developing Members in negotiations and implementations, the WTO’s multilateral platform and convening power could be further mobilized to pool the available expertise and resources from within the Organization and from other relevant international organizations (IOs) and development partners. 5. Special and Differential Treatment. In upholding the principles of special and differential treatment for developing Members including LDCs, flexible and pragmatic approaches could also be explored, including choosing not to avail oneself of such treatment in specific negotiations on a voluntary basis in a practical manner. On the way forward, China proposed that “thematic discussions on current development challenges could be held, including joint sessions with other relevant WTO committees, to share perspectives on issues of common interest and identify potential areas of further work.” It suggested that topics “may include, for example, policy space for industrialization, climate change mitigation and adaptation, food security, digital trade, and supply chain for inclusive trade.” “With respect to long-standing agenda items, a hybrid approach could be taken, combining both formal and informal discussions, to allow more space for meaningful engagement.” According to China, “on negotiation issues such as Agreement-specific proposals (ASPs) on SDT, LDCs graduation, some new approaches” may be followed. China wants to bring in other international organizations, including “development partners” into play for “tackling urgent challenges of a cross-cutting nature, where trade could become part of the solutions.” Further, according to China, “the General Council, in carrying out its oversight functions in the intervals of Ministerial Conference, could play a more active role in supervising the reform of the approaches to development issues.” “This would contribute to mainstreaming the development dimensions in the work of the WTO,” China said. China’s proposal comes at a time when the WTO is being likened to a “moribund” institution by The Economist magazine. In its latest issue dated 9 May, The Economist called the WTO “the most moribund multilateral institution”, beginning with “the relentless vetoes (to fill vacancies for the Appellate Body since December 2019), “obscure as they might sound, have in effect completely defanged the WTO for almost five years.” In short, in the current atmosphere where nations are pursuing their own independent trade and industrialization policies as well as unilateral trade measures, it seems doubtful whether there would be any fruitful discussions on development at the WTO, said people familiar with the development. +
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