TWN Info Service on WTO and Trade Issues (Jul24/19)
22 July 2024
Third World Network

WTO: Is EU pushing to advance the DG selection process for a second term?
Published in SUNS #10050 dated 22 July 2024

Geneva, 19 Jul (D. Ravi Kanth) — Several major industrialized countries, including the European Union, seem to be preparing the ground to support the request from the coordinator of the African Group on advancing the selection process of the incumbent World Trade Organization’s Director-General at the General Council meeting on 22 July, on alleged “fearmongering” grounds that a return of Donald Trump as US President later this year could lead to a permanent paralysis in the global trade body, said people familiar with the development.

So far, Chad, the coordinator of the African Group, along with countries like Nigeria, Sierra Leone, Djibouti, and The Gambia, are at the forefront in advancing the DG’s selection process, on grounds that an early selection process would not hinder the preparations of the WTO’s 14th ministerial conference (MC14), to be held in Cameroon in 2026.

The argument put forward by the African Group appears to lack evidence as the previous two Directors-General as well as the current DG were selected as per the rules set out in document WT/L/509 while coinciding with the preparations for the WTO’s sixth ministerial conference in Hong Kong, China in December 2005, the ninth ministerial conference in Bali, Indonesia, in December 2013, and the delayed 12th ministerial conference held in Geneva in June 2022, said several trade envoys and legal experts.

Chad’s request to the WTO’s General Council Chair, Ambassador Petter Olberg of Norway, to consider the proposal on deciding to advance the DG’s selection process, appears to be a clear attempt to circumvent the WTO rules, said several trade envoys, who asked not to be quoted.

The current GC chair does not agree that the African Group’s request would be tantamount to circumvention of the rules. He told the SUNS on 13 July that the African Group’s request is a “fair ask”.

Aside from the African Group’s request, the real movers for advancing the DG’s selection process behind the scenes appear to be the EU on grounds of the likely threat to the WTO should Trump stage a comeback for a second term of office, said several trade envoys who asked not to be quoted.

Interestingly, the US appears to be somewhat silent on the ongoing efforts by some African Group members as well as their trans-Atlantic partners, the envoys said.

The EU trade envoy, Ambassador Joao Aguiar Machado, is yet to respond to a request for a clarification/ comment on the informal discussions taking place at various levels among trade envoys.

WTO RETREAT

Meanwhile, the General Council chair has issued a rather glossy report on what transpired at the allegedly costly one-day retreat that he had convened at the Hilton Geneva Hotel on 8 July primarily to discuss the decision- making processes at the WTO.

The report (Job/GC/402), titled “Takeaways and Follow-up Suggestions From the 8 July Retreat on WTO Decision Making and Way Forward”, covered several issues concerning transparency, inclusion, and the decision-making processes at the WTO.

However, the report, while addressing several important but peripheral issues, has not addressed the core issue, which centers on how the Doha single undertaking was allegedly “killed” by the trans-Atlantic giants after securing the Trade Facilitation Agreement in 2013, said people familiar with the development.

As reported in SUNS #10019 dated 5 June 2024, a three-page concept note issued by the WTO, titled “Rebuilding trust and progress to address contemporary challenges”, states: “Difficulties in finding balances and trade-offs after the jettisoning of the single undertaking approach in the Doha negotiations in 2011, and the subsequent acknowledgement of differences on the agreed Doha negotiations framework and architecture as resulting from the Bali and Nairobi Decisions.”

It is commonplace knowledge that after members eschewed the single undertaking approach after the major industrialized countries secured the Trade Facilitation Agreement, there has been no forward movement in agriculture, said one trade envoy who asked not to be quoted.

More importantly, it has led to the erosion of trust among members, which was touched upon by several members during the retreat.

The report issued by the General Council chair seemed like the proverbial saying, “missing the forest for the trees”, said a former trade envoy.

It made several suggestions, including on “consensus: understanding and implementation”, “transparency” and “improving the consensus mechanisms”.

The report said, “the concept of consensus was discussed extensively, with a focus on distinguishing it from unanimity” and “consensus should not be (mis)used as a tool for vetoing but rather as a means to build convergence and foster genuine agreement.”

However, whether consensus means “unanimity” or not, the rule on the decision-making process as enshrined in Article IX of the Marrakesh Agreement is very clear: decisions shall be reached based on consensus, and in the event of a lack of consensus, voting can be requested by the concerned members.

Under the heading of “transparency”, the report suggests that: “Members that cannot join consensus should explain their reasons in a straightforward and transparent manner. This could help address misunderstandings and provide opportunities for dialogue to find a practical and workable way forward.”

As regards “improving the consensus mechanisms,” the report states: “There were discussions on how existing tools could be utilized more effectively to foster consensus decision-making. These tools include, but are not limited to, the application of footnotes, exemptions, opt-out and sunset clauses – to help Members navigate when deadlocks arise. In this context, the notion of “responsible consensus” was also mentioned in some interventions, calling on Members to use their right to object judiciously.”

Under the heading of “specific follow-up suggestions”, the report suggested the following:

* Transparency and inclusivity principles for informal, small group processes: Drawing on past experience, we could ask the Secretariat to formulate guidance for the effective operation of small groups, including green room meetings, to ensure transparency and inclusivity.

A. To ensure transparency, the following could be considered: live streaming when possible; listening-in rooms; information notes; informal plenary meetings to report on state-of-play; ad hoc briefing sessions for Members by Secretariat (especially during Ministerial Conferences).

B. To ensure inclusivity and address capacity challenges, the following could be considered: “reasonable representation of all interests”-approach (“burden sharing”); enhanced role of group and regional coordinators as appropriate; potentially topic-specific or “reasonably representative interest” groups.

* Call a spade a spade: Not all small meetings convened by the Director-General, the GC Chairperson or the MC Chairperson are automatically Green Room meetings. Not all small meetings convened during Ministerial Conferences, or in the run-up to Ministerial Conferences, are automatically Green Room meetings. Small group meetings are often also convened by a Member – or a group of Members, these should also not be mistaken for Green Room meetings/processes.

* Seek workable forward-looking solutions: The use of footnotes, exemptions, opt-out and sunset clauses to help navigate around obstacles and impasses.

* Improving the utility of GC meetings: Instead of five regular GC meetings, retain four regular GC meetings (quarterly) to ensure the necessary space to take administrative and substantive action/decisions. In addition to these regular meetings, convene, as necessary, 1-2 thematic/dedicated informal GC/HoDs (heads of delegation) meetings, including in the retreat format, to address key issues in an honest and in-depth manner, including to prepare for MCs. This could help carry substantive discussions forward, improve the understanding of each other’s positions and interests, as well as, in the context of Ministerial Conferences, reduce last-minute decision making or overloading of the MC/Ministerial agenda. Senior Officials’ Meetings (SOMs) were also mentioned as a possible tool in this context.

* Reaffirm “shepherd” role of Chairpersons: Chairpersons ought to keep everyone informed and all interests on board. Chairpersons need to steer focus on substance rather than process. In turn, Members need to afford their elected Chairpersons due trust and space to perform the role and function for which they have been elected.

* Enhance the role of the WTO Secretariat: To facilitate discussions, enhance the Secretariat’s role in providing expertise and analysis as a “neutral/impartial facilitator” serving Members’ needs and interests.

* Engage stakeholders: Develop mechanisms to ensure that stakeholder involvement in Geneva is substantive and contributes positively to decision-making processes.

* The power of “no” comes with accountability/responsibility: “I detected clear calls for accountability when a Member exercises its right to object. When a Member is unable to join consensus, that Member should accompany its objection with relevant information – so as to provide proponents with an opportunity to engage with the objecting Member(s) and arrive at mutually acceptable and workable solutions. The idea is not to allow matters to drag on indefinitely but rather to arrive at mutually acceptable and workable solutions”.

In conclusion, the chair said that he “detected a collective desire to enhance decision-making processes in Geneva, build and restore trust, uphold consensus decision making in a manner that delivers results and ensure the WTO remains fit for purpose.”

Several trade envoys said that the report by the GC chair appears to confound the issues as there was significant opposition to any change in the consensus-based decision-making process, barring some select countries, including Norway, who seem determined to introduce new parameters for the decision-making process, including the controversial notion of “responsible consensus”.

UNOFFICIAL ROOM DOCUMENT

Meanwhile, in a restricted “unofficial room document” (RD/GC/33) issued on 17 July, seen by the SUNS, it appears somewhat clear that there is considerable opposition to changing the consensus-based decision-making process to new ways of forcing decisions on members, said people familiar with the development.

If anything, there is little appetite for the notion of “responsible consensus” as can be gleaned from the feedback from the facilitators. It figured only once in the unofficial room document.

The six facilitators who covered the retreat in the small groups include: H. E. Dr. Athaliah Lesiba Molokomme (Botswana); H. E. Mr. Matthew Wilson (Barbados); H. E. Ms. Mazlizah PG Mahalee (Brunei Darussalam); H. E. Dr. Muhammadou Kah (The Gambia); H. E. Mr. Simon Manley (United Kingdom) and H. E. Dr. Sofia Boza Martinez (Chile).

In the sixth breakout group in which 18 members participated during the retreat, the unnamed facilitator said the following:

“On improving decision-making process:

“6.3. Members should exercise responsible consensus. In this context, the principle of consensus is not being questioned, rather the focus should be on how to improve the practice of reaching consensus.

6.4. Members should focus on the questions at hand and avoid the politicization of issues. Those opposing consensus should provide official reasons for their stance.

6.5. Alternative options for achieving outcomes could be explored in the absence of consensus, such as incremental approaches, opt-outs or reservations, and plurilateral initiatives. It was also pointed out that the Marrakesh Agreement provides for qualified voting.

6.6. For a more informed decision-making process, the WTO Secretariat and external experts, where appropriate, could provide briefings and technical information as useful inputs into the discussions.

6.7. To ensure efficiency and continuity of work, Members could consider extending the term of the Chairpersons of regular bodies beyond one year.”

One could almost sense who these 18 members are and whether some of them were the proponents of changing the practice of consensus-based decision-making to “responsible consensus”, said a trade envoy, who asked not to be quoted. +