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TWN
Info Service on WTO and Trade Issues (May25/25) Yerevan, 21 May (D. Ravi Kanth) — The United States on 21 May appears to have clashed with the World Trade Organization’s Director-General, Ms Ngozi Okonjo-Iweala, over her alleged attempts to undermine “good faith” practices by playing up the informal discussions on tariffs, as well as systemic issues concerning the management of WTO funds, said people familiar with the development. The chair of the WTO’s General Council (GC) is understood to have convened an informal session on 19 May to discuss the findings of the WTO Secretariat’s Economic Research and Statistics Division on simulations on tariffs and their impact on the most vulnerable and least-developed countries (LDCs) following the recent tariffs imposed by the Trump administration, said people familiar with the discussions. At that informal meeting, a US representative apparently expressed dismay over the simulations on the recent developments concerning tariffs in response to a request by a member, said people familiar with the discussions. The US also seemingly conveyed to participants at the informal meeting that though Washington has repeatedly raised the issue of tariffs in the past, the Secretariat never undertook such work on tariff simulations, said people familiar with the development. However, matters seemingly took a turn for the worse at the General Council meeting on 21 May, after the DG, who is also the chair of the Doha Trade Negotiations Committee (TNC), appears to have relayed the findings of the WTO’s research division on the tariff simulations highlighted at the informal meeting. The DG also shared her assessment on other issues such as the Agreement on Fisheries Subsidies, which has now been ratified by 99 countries, and the Investment Facilitation for Development Agreement (IFDA), said people familiar with the development. The DG seemingly indicated that the WTO Secretariat would continue to work on tariff simulations at the request of members or on demand, said people familiar with the discussions. In a sharp response to the DG’s remarks, a US official expressed deep concern over issues that were discussed at the informal meeting being shared by the DG at the formal meeting of the General Council, said people familiar with the development. The US said that it remains concerned as to how the WTO’s research division has undertaken work in several cross-cutting areas, which, in the normal course, would fall under the domain of the respective divisions, said people familiar with the development. The US official appears to have informed the DG that if she wants to work in “bad faith”, then, so be it, adding that she should not be surprised if the US starts blocking everything, said people familiar with the sharp exchanges. According to sources, the US also conveyed that it is not their desire to block issues, but if things continue to happen in “bad faith”, then, they will be happy to do it, said people familiar with the development. IFDA DECISION REMAINS BLOCKED Meanwhile, the draft decision (WT/GC/W/927/Rev.2) on the incorporation of the Investment Facilitation for Development Agreement (IFDA) into Annex 4 of the WTO Agreement (dealing with plurilateral agreements), once again failed to garner consensus at the GC meeting. India, South Africa and Turkiye, who have been consistently opposing the IFDA on systemic and procedural grounds, seemingly made it known that their positions remain unchanged on this issue, said people familiar with the development. The US is understood to have said if there is consensus on IFDA’s incorporation into Annex 4 of the WTO Agreement, they would be prepared to allow its passage into the Annex 4 list, said people familiar with the development. Even though a large group of countries repeatedly pressed for incorporating IFDA into Annex 4 of the WTO Agreement, India, South Africa and Turkiye raised concerns over the allegedly illegal attempts to advance the IFDA in violation of the core provisions of the Marrakesh Agreement, said people familiar with the development. At the GC meeting, several developing countries like Barbados and Nigeria pressed for a decision on the IFDA, said people familiar with the development. The DG also intervened in the discussions on IFDA, suggesting that it could be a good result for developing countries seeking investments. She suggested that large economies like India, South Africa and Turkiye may be fine without IFDA but small and vulnerable economies need the agreement, said people familiar with the development. WTO BUDGET During the discussion on the agenda item on the WTO budget, the US informed members that it is undergoing a comprehensive review of all its contributions to the international organizations, and that its contributions to the WTO for 2024 and 2025 are part of that review. The US also said that the financing burden of the WTO’s operating budget should be more equitably and appropriately distributed across the WTO membership to reduce vulnerability, said people familiar with the development. The US further called for a more systemic discussion on how these contributions are determined so that there is equitable burden-sharing, said people familiar with the development. During the discussion on the WTO budget, the US again expressed concerns over the activities of the WTO Secretariat, saying that it is a legitimate issue and that it is not “micro-managing” the Secretariat’s work, said people familiar with the development. In a seemingly sharp response, the DG is understood to have said that the Secretariat is not hiding anything and everything is wide open. Ms Okonjo-Iweala apparently said that if the US wants to see more discussion on this issue, then she is ready to convene a bilateral meeting, said people familiar with the development. OTHER ISSUES During the discussion on the agenda item (WT/GC/271/Rev.2) requested by Singapore and Switzerland on the importance of the “Rules-Based Multilateral Trading System on the Occasion of the 30th Anniversary of the World Trade Organization,” the proponents reaffirmed how the WTO with its 166 members has proved to be an engine for pursuing “shared prosperity”. Singapore and Switzerland along with many other countries requested the agenda item on the importance of the rules-based multilateral trading system, at a time when it appears to be fraught with danger due to the alleged unilateral actions by the Trump administration, said people familiar with the discussions. According to Singapore and other members of the “Friends of the System” Group, the multilateral trading system “has contributed to the economic development of both developed and developing Members, including Least Developed Countries (LDCs), by promoting trade liberalisation and facilitating economic integration, fostering stability, predictability, and consumers’ trust while preserving incentives for innovation.” “We, therefore, reaffirm the central and indispensable role of the WTO at the core of the rules-based multilateral trading system, which provides a predictable, transparent, non-discriminatory and open global trading system,” despite “mounting challenges, including disruptions in global supply chains, rising protectionism and climate change,” the proponents emphasized. In response to the concerns expressed by the “Friends of the System” Group and several other countries, the US said Washington has repeatedly raised its concerns for many years over unsustainable trade balances, non-market measures, trade-distorting policies, and non-compliance with the WTO rules, according to people present at the meeting. On another agenda item (WT/GC/272), the US appears to have remained silent on China’s statement against “heightened trade turbulence” allegedly caused by the US, which has seemingly brought uncertainty and unpredictability to the global trading system through its imposition of unilateral tariffs. China had severely criticized the US for imposing its unilateral tariffs, including its announcement of “reciprocal tariffs” against countries, at the recent 30th anniversary meeting of the WTO’s Committee on Market Access. China has sought to oppose the Trump administration’s imposition of “reciprocal tariffs” at every WTO committee meeting during the past two months, said people familiar with the development. At the GC meeting, the Russian Federation, Pakistan, and Venezuela among others supported the strong statement made by China against “heightened trade turbulence”. +
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