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TWN
Info Service on WTO and Trade Issues (May25/27) Yerevan, 26 May (D. Ravi Kanth) — The World Trade Organization’s Director-General, Ms Ngozi Okonjo- Iweala, has apologised “for being quite direct and blunt this morning [during the morning session of the General Council meeting on 20 May],” after a reported clash with the United States, which alleged that the DG had seemingly adopted “bad faith” practices at the organization, said people familiar with the development. In a restricted report (Job/GC/440) issued on 22 May, as chair of the Doha Trade Negotiations Committee (TNC), after the General Council (GC) meeting that concluded on 21 May, seen by the SUNS, Ms Okonjo- Iweala said, “I apologise for being quite direct and blunt this morning [at the GC meeting on 20 May]”. As previously reported in the SUNS, the US is understood to have severely criticized the DG’s relaying at the GC meeting of the findings of the simulations by the WTO’s research and trade policy divisions of the impact of the US “reciprocal” tariffs on vulnerable countries, including the least-developed countries (LDCs) that were discussed at an informal session held a day before the GC meeting on 20 May. The US also took issue with the management of WTO funds and underscored the need for the financing burden of the WTO’s operating budget to be more equitably and appropriately distributed across the WTO membership. DG ON USTR REPORT In the restricted document, the DG also mentioned the US Trade Representative’s 2025 Trade Policy Agenda, which had said that the “reform by doing” approach at the WTO would be tantamount to a “vacuous” approach. In the USTR’s report issued in February, it was pointed out that “serious efforts aimed at improving the WTO’s negotiating arm have been replaced by an unambitious focus on improving a few committee procedures – a lowest-common-denominator effort that was given the fittingly vacuous slogan “reform by doing”.” The USTR’s report also said “waiving intellectual property rights under the TRIPS Agreement for COVID-19 vaccines, as well as the conclusion of a weak agreement on fisheries subsidies, show that rather than boldly tackling global challenges, the WTO is prisoner to its lowest-common-denominator.” Responding to the USTR’s assessment, the DG said: “Those who think that reform by doing here in Geneva can solve the enormous problems we face, I want them to read the USTR’s report on reform by doing, which calls this approach “vacuous”.” “So then, we have to rise above this description of the work here, take what is good that has been done here and build on it using a Member-driven process that will deliver meaningful reform,” she emphasized. Interestingly, the USTR’s report also described the Agreement on Fisheries Subsidies (AFS), concluded at the WTO’s 12th ministerial conference (MC12) in Geneva on 17 June 2022, as a “weak” agreement. The DG, however, seemingly turned a blind eye to the USTR’s characterization of the AFS as a weak agreement, said people familiar with the development. Despite the USTR’s assessment of the AFS, the DG appears to be aggressively campaigning for the ratification of the agreement, which has now been ratified by 99 countries and requires only a dozen more countries to ratify it in order for it to be brought into the WTO’s rule-book. Along with the Secretary-General of the Inter-Parliamentary Union (IPU), the DG issued a statement in Geneva on 22 May saying that “we are on the verge of a major milestone.” “This Agreement is not only about preserving deteriorating fish stocks: it is about people’s livelihoods and food security. It’s about responding to problems of the global commons – and demonstrating that the multilateral trading system is delivering global public goods. We need 12 more acceptances to bring it into force. It is now time for the remaining parliaments to take action. This is about improving economic and environmental sustainability.” “UPBEAT” ON DELIVERABLES In her TNC report, the DG said that “work is also continuing on the deliverables that we might want to produce for MC14 – work on the ratification of Fish 1, Fish 2, agriculture, IFDA, e-commerce moratorium and the e-commerce JSI.” The WTO’s 14th ministerial conference (MC14) is scheduled to be held in Yaounde, Cameroon on 26-29 March 2026. As regards the e-commerce moratorium, in the decision adopted at the WTO’s 13th ministerial conference (MC13) in Abu Dhabi on 2 March 2024, ministers agreed to maintain “the current practice of not imposing customs duties on electronic transmissions until the 14th Session of the Ministerial Conference or 31 March 2026, whichever is earlier. The moratorium and the Work Programme will expire on that date.” Therefore, the DG’s statement on the e-commerce moratorium seems to have created a flutter, said a trade envoy who asked not to be quoted. The DG’s inclusion of two non-mandated issues, namely, the Investment Facilitation for Development Agreement (IFDA) and e-commerce Joint Statement Initiative (JSI) does not appear to augur well for a rules-based organization like the WTO, said a trade envoy, who asked not to be quoted. Referring to the least-developed countries in her report, the DG said “we have tried to reflect their concerns in the matrix.” “On a development package,” she said, “we must not lose sight of these deliverables which we will have a chance to assess at the July TNC but also, as we agreed, at a date to decide which packages are ready for us to take forward to MC14.” Meanwhile, commenting on “the present trade conjecture,” she said: “I am glad that you seemed to appreciate yesterday’s [19 May] Secretariat presentations by the Chief Economist and the Director of the Trade Policies Review Division during the informal information session convened and chaired by the General Council Chair.” After thanking the GC chair for convening the informal session, the DG said that “we are ready to continue to provide support to Members on a continuing basis as Members requested yesterday.” Highlighting some recent positive developments including the “China-US de-escalation”, she said: “I know that we still have some ways to go in these various negotiations, but I hope the path forward will continue to have a positive spillover impact on the rest of the world.” Elucidating on the informal Secretariat session on 19 May, the DG said that “one of the most important sets of comments yesterday came from LDCs – on the vulnerability of their economies to uncertainty and, in some cases, to the direct impact of reciprocal tariffs.” The DG also turned to another issue that came out in the informal session, namely that of WTO reform. Following her recent visits to Japan and Korea, she said, “While Ministers made clear they value the system, they also admitted we cannot continue the way it is.” TENSIONS WITH US With the US having serious concerns about the simulations carried out informally by the WTO Secretariat, seemingly without prior notice, the DG said “members have complained, including LDCs and developing Members.” “The United States is not the only Member that has issues,” she said, arguing that: “Yesterday [at the informal session on tariffs on 19 May], the United States said its actions did not happen in a vacuum – and I agree.” “Its [the US] complaints are that many processes, agreements and procedures are broken, and Members keep sweeping things under the carpet and not solving problems.” She conveyed to the US that “there must be honesty about what these problems are and there must be no sacred cows.” On the reported clashes with the US, which alleged that the DG was resorting to “bad faith practices”, the DG said “I apologise for being quite direct and blunt this morning [during the morning session of the GC meeting on 20 May].” “What has brought us here is the inability to solve problems when they occur,” the DG said, adding that “this has led to unilateral actions instead of a cooperative approach to solve these problems.” According to Ms Okonjo-Iweala, “there may be some whose objective is simply to keep the place going in the way it is … but I sense that this approach is not what the vast majority of Members want.” Without mentioning the US, she said, “It has taken time for Members to admit that things are not working as well as they should and that they want solutions.” She went on to say that “those who think that reform by doing here in Geneva can solve the enormous problems we face, I want them to read the USTR’s report on reform by doing which calls this approach “vacuous”.” The DG said, “so then, we have to rise above this description of the work here, take what is good that has been done here and build on it using a Member-driven process that will deliver meaningful reform.” She called on members to deliver on the deliverables in Geneva before proceeding to MC14. “But from my vantage point of responsibility for a successful MC14, we must act here in Geneva to deliver a package of reform proposals for Ministers to consider and bless at MC14.” “Nothing short of this can reposition this organization in the way and form needed,” the DG said, expressing her hope that “we will work hard on WTO Reform under the GC Chair’s guidance to make this a reality – that we have the proposals to send forward.” Ending her statement “on a more cheerful note,” she urged those who have not submitted the instrument of ratification for the AFS to do so for bringing it into force. “I know that there are [a] few Members who are working hard to deliver: Argentina, Nicaragua, Malawi, Panama, Guyana, Saint Kitts and Nevis, Samoa, Tonga, Tunisia, Ghana, Liberia and Papua New Guinea,” she said, adding that “we are all waiting to see if you can deliver as soon as possible.” +
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