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TWN
Info Service on WTO and Trade Issues (Feb25/09) Geneva, 19 Feb (D. Ravi Kanth) — China severely criticized the United States at the World Trade Organization’s General Council meeting on 18 February, condemning Washington’s imposition of “tariffs on its trading partners, including China, unilaterally and arbitrarily, blatantly violating [the] WTO rules”, a charge that was apparently echoed by the European Union and several other countries, said people familiar with the development. At the WTO’s General Council (GC) meeting on 18 February, the WTO’s Director-General, Ms Ngozi Okonjo- Iweala, was understood to have expressed her grave concerns about the ongoing developments triggered by one member, saying that it is not in the interest of anyone to destabilize the multilateral trading system, according to people present at the meeting. Without naming the US, she appears to have said that the need of the hour is to remain grounded, emphasizing that there is no alternative to multilateral collaboration. The DG’s comments followed remarks from China and the US, who seemingly engaged in “to-and-fro” criticism, said one person, who asked not to be quoted. According to her remarks posted on the WTO’s website, the DG said, “It is imperative that we continue to strengthen the multilateral trading system, ensuring that it remains a source of stability and opportunity for all members.” “The WTO was created precisely to manage times like these – to provide a space for dialogue, prevent conflicts from spiralling, and support an open, predictable trading environment,” she added. In her intervention, Ms Okonjo-Iweala underlined the importance of using the current situation to push ahead with reform of the WTO. “The world has changed,” she said. “We cannot come here to continue doing the same things we’ve been doing.” It appears that the US said that the status quo at the WTO has to change for making progress, said a person who asked not to be quoted. TRADE TURBULENCE Under item 8 of the GC agenda concerning “heightened trade turbulence and responses from the WTO,” the Chinese trade envoy, Ambassador Li Chenggang, said that the world faces a series of “Tariff Shocks”, pointing out that the US has “imposed or threatened tariffs on its trading partners, including China, unilaterally and arbitrarily, blatantly violating WTO rules.” Opposing the US tariffs, Ambassador Li said that these tariff shocks “heighten economic uncertainty, disrupt global trade, and risk domestic inflation, market distortion, or even global recession.” The Chinese trade envoy criticized the US, saying that “the US unilateralism threatens to upend the rule-based multilateral trading system (MTS)”. China, which joined the WTO in December 2001, emphasized that “the MTS is hard earned, and painstakingly built on the lessons of the devastation of world wars and the Great Depression.” Ambassador Li argued that “its rules and institutions are a public good for all Members,” insisting that, “No Member has the right to undermine its authority.” Moreover, “the stakes are high for all members, big or small,” the Chinese trade envoy said, adding that “at this critical juncture, as a rule-based organization regulating global trade, the WTO must have its voice.” He said that “beyond reiterating [the] commitment to multilateralism, we must translate words into action by ensuring MC14 (the WTO’s 14th ministerial conference, to be held in Cameroon in March next year) delivers tangible results, particularly on development.” Ambassador Li asked other members “to turn crises into opportunities,” saying that amidst “the storm of unilateralism, the WTO remains an island of stability and a cornerstone for rule-based trade.” He went on to highlight the need for WTO reform, suggesting that the “heightened turbulence also spurs urgency for WTO reform, so that we can cement its foundation, and restore its functions to address the challenges of our time.” Injecting a dose of confidence, the Chinese trade envoy reminded members that “together, we can weather this storm and emerge stronger.” In his second intervention, Ambassador Li said that “China appreciates the thoughtful interventions from all Members and the DG, including those made under previous agenda items.” “There is a clear shared concern over unilateralism and arbitrary tariffs, which threatens the stability of global trade,” the Chinese trade envoy said. A US official apparently rejected China’s criticisms, in what appears to be a “to-and-fro” exchange, said people, who asked not to be quoted. The US comments have not been circulated yet, said people familiar with the discussions. Responding to the US comments, the Chinese trade envoy said that “they are, at best, a red herring.” Ambassador Li said that “while the US may attempt to deflect attention by reviving old rhetoric, which China previously already refuted many times, including in this room, we cannot lose sight of the root cause of today’s trade turbulence and threats to all members: It is US arbitrary tariffs and unilateral measures.” “The real questions we must ask ourselves are: Can we practice multilateralism, not exceptionalism? Can we embrace predictability, not fuel uncertainty? Can we uphold WTO rules, not succumb to the law of the jungle? And can we take up shared responsibility, not just self-serving?,” Ambassador Li asked pointedly. China urged “the US to honestly address these questions, withdraw its wrongful unilateral tariffs and threats, and engage in multilateral dialogues based on equity, mutual benefit, and mutual respect.” Highlighting the importance of the US to the multilateral trading system, China said, “As a key Member of the WTO, the US has a responsibility to play a constructive role in strengthening the multilateral trading system, not undermining it.” Lastly, China made it clear that it is “strongly committed to safeguarding the rule-based multilateral trading system.” “We never force others to negotiate out of fear, and we never fear to negotiate,” China emphasized. Several members, particularly the EU and the “Friends of the System” group, pitched for safeguarding “multilateralism.” NO CONSENSUS ON JSIs Also at the GC meeting, two controversial agenda items, namely the incorporations of the Agreement on Electronic Commerce and the Investment Facilitation for Development Agreement (IFDA) into Annex 4 of the WTO Agreement, failed to secure consensus, after several members opposed their incorporation into Annex 4 on grounds that it would undermine “policy space.” The proponents of the Joint Statement Initiative (JSI) on e-commerce comprise Albania; Argentina; Australia; Bahrain, Kingdom of; Benin; Brunei Darussalam; Burkina Faso; Cabo Verde; Canada; Chile; China; Costa Rica; European Union; The Gambia; Georgia; Hong Kong, China; Iceland; Israel; Japan; Kazakhstan; Kenya; Korea, Republic of; Kuwait, the State of; Kyrgyz Republic; Lao People’s Democratic Republic; Liechtenstein; Malaysia; Mauritius; Mongolia; Montenegro; Myanmar; New Zealand; North Macedonia; Norway; Oman; Paraguay; Peru; Qatar; Saudi Arabia, Kingdom of; Singapore; Switzerland; Ukraine; United Arab Emirates; and the United Kingdom. They made a strong pitch for incorporating the Agreement on Electronic Commerce into Annex 4 of the WTO Agreement. The US, which has not joined the agreement though it was a key proponent in launching the JSI negotiations on electronic commerce, apparently chose to remain silent on this item at the meeting, said a participant, who asked not to be quoted. The proponents touted the benefits from the agreement, recognizing “the importance of global electronic commerce and the opportunities it creates for inclusive trade and development, and the important role of the WTO in promoting open, transparent, non-discriminatory and predictable regulatory environments in facilitating electronic commerce.” The proponents said the Agreement on Electronic Commerce is set to benefit consumers and businesses involved in digital trade, especially MSMEs (micro, small, and medium enterprises), and that it will play a pivotal role in supporting digital transformation among participating Members. In a similar vein, Cameroon, which is hosting MC14 next year, piloted the proposal from around 126 countries for incorporating the IFDA into Annex 4 of the WTO Agreement. On the proposal to incorporate the Agreement on Electronic Commerce into Annex 4 of the WTO Agreement, South Africa, Indonesia, Turkey, and India among others rejected the proposal on grounds that it would deny them policy space. As regards the incorporation of IFDA into Annex 4 of the WTO Agreement, India, South Africa, Turkey, and Namibia among others voiced opposition on “systemic grounds.” India apparently said that IFDA, which has been repeatedly rejected by members, should not be included on the GC agenda, said people familiar with the development. In an apparent criticism of the opponents, Barbados and Nigeria said that it is important for the proponents to advance the incorporation into Annex 4, regardless of the alleged systemic violations, said people familiar with the development. In an apparent rebuke of the opponents of the JSIs, the DG said that “oh, I am a bit concerned to see this dynamic here; you don’t want multilateral outcomes, you don’t want plurilateral outcomes, so what should we do?,” said people familiar with the proceedings. On a separate agenda item at the GC meeting, while the chairs of several WTO bodies were announced, there was lack of consensus on the chairs of some subordinate bodies, said people familiar with the development. Apparently, Pakistan’s trade envoy, Ambassador Ali Sarfaraz Hussain, is being considered for the chair of the Doha agriculture negotiating body, also referred to as the Committee on Agriculture in Special Session, said people familiar with the development. Earlier, Guyana’s trade envoy was considered for the chair of the Doha agriculture negotiating body, but some members seem to have opposed this choice. At the meeting, the US said that the Asian Group and the GRULAC (Group of Latin America and the Caribbean) members must resolve the issue, said people familiar with the discussions. The slate of chairs for the regular WTO bodies for 2025 announced by the outgoing GC chair, Ambassador Petter Olberg of Norway, is as follows: * General Council: H. E. Mr. Saqer Abdullah Almoqbel (Kingdom of Saudi Arabia). * Dispute Settlement Body: H. E. Ms. Clare Kelly (New Zealand). * Trade Policy Review Body: H. E. Mr. Asset Irgaliyev (Kazakhstan). * Council for Trade in Goods: H. E. Mr. Gustavo Nerio Lunazzi (Argentina). * Council for Trade in Services: H. E. Mr. Ram Prasad Subedi (Nepal). * Council for Trade-Related Aspects of Intellectual Property Rights (TRIPS): Mme. Emmanuelle Ivanov-Durand (France). * Committee on Trade and Development: H. E. Dr. Mzukisi Qobo (South Africa). * Committee on Balance-of-Payments Restrictions: H. E. Dr. Jose R. Sanchez-Fung (Dominican Republic). * Committee on Budget, Finance and Administration: H. E. Mrs. Carmen Heidecke (Germany). * Committee on Trade and Environment: H. E. Mr. Erwin Bollinger (Switzerland). * Committee on Regional Trade Agreements: H. E. Mr. Jose Valencia (Ecuador). * Working Group on Trade, Debt and Finance: H. E. Mr. Suon Prasith (Cambodia). * Working Group on Trade and Transfer of Technology: H. E. Mr. Salomon Eheth (Cameroon). As for the negotiating bodies, the Council for Trade in Services in Special Session will be chaired by H. E. Dr. Adamu Mohammed Abdulhamid (Nigeria). +
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