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TWN
Info Service on WTO and Trade Issues (Jun25/05) Geneva, 5 Jun (D. Ravi Kanth) — The United States has seemingly made it known in no uncertain terms that “unilateralism” is working well for Washington, while the “multilateral process” is not helping to resolve its core trade concerns at the World Trade Organization, dashing hopes for reforming the global trade body in the near future, said people familiar with the development. At an informal WTO ministerial meeting in Paris on 3 June, the US Trade Representative (USTR), Ambassador Jamieson Greer, who took part for the first time in a meeting ostensibly to address the issue of reforming the WTO, appears to have stuck to some hardline positions centering on “unilateralism”, as well as unleashing a litany of criticisms over the WTO’s alleged failures, including its inability to address the issue of non-market economies, said people, who asked not to be quoted. In a separate development, the US tariffs of 50% on imports of steel and aluminum came into effect on 4 June, a day after US President Donald Trump signed an executive order escalating the global trade war, said people, who asked not to be quoted. Aside from the US, India also highlighted a long list of problems relating to how the WTO allegedly failed to address the issue of non-tariff barriers, and has enabled non-market economies to make substantial gains, said people familiar with the development. From diametrically opposing positions, the US and India appear to have put paid to any outcome or understanding on what needs to be done in the coming months on WTO reforms before the WTO’s 14th ministerial conference (MC14), which is scheduled to be held in Yaounde, Cameroon in end-March next year, several participants noted. The informal WTO ministerial meeting was convened by Australia on the margins of the annual ministerial meeting of the Organization for Economic Cooperation and Development (OECD) held at its headquarters in Paris on 3 June. The Australian trade minister Don Farrell, who chaired the meeting, is understood to have framed the meeting by pointing out that WTO members are facing serious problems at this juncture, while asking the 20 trade ministers in attendance what they intend to do to address these problems, said people familiar with the proceedings of the meeting. In response to the Australian minister’s statement, most of the countries that spoke at the meeting acknowledged that there is a problem, while agreeing that WTO reform is one of the core priorities. The trade ministers also highlighted other issues including agriculture, the second phase of the Agreement on Fisheries Subsidies (Fish-2), special and differential treatment, and the need to address the WTO’s negotiating function. “No one disagreed on the usual list of issues,” said a participant, preferring not to be identified. Even the European Union was “probably quite careful to leave space, but basically signalling that it was able to kind of engage in the discussion,” said another person familiar with the proceedings. US ON “UNILATERALISM” According to several persons, the US “gave its familiar position, which was all about unilateralism.” The US seemingly highlighted how “unilateralism” has worked in the last couple of months, suggesting that the WTO, with its cumbersome processes and consensus-based decision-making, failed to resolve its core concerns all these years, the persons said. The US also mentioned several other issues such as overcapacity, especially in the steel sector, state-sponsored subsidy regimes, and non-market economies, which the WTO has seemingly failed to address, said people who asked not to be identified. India listed around eight issues that highlighted several alleged failures of the WTO, including addressing distortions caused by non-market economies, as well as non-tariff barriers, said people who asked not to be quoted. India also stated its opposition to incorporating the Investment Facilitation for Development Agreement (IFDA) into Annex 4 of the WTO Agreement, as well as other Joint Statement Initiatives (JSIs), despite efforts by the WTO’s Director-General, Ms Ngozi Okonjo-Iweala, to persuade New Delhi to join the consensus on the incorporation of IFDA into Annex 4 of the WTO Agreement, said people, who asked not to be quoted. Trade ministers from the African countries who took part in the meeting pressed for an outcome at MC14 along the lines of what was achieved at the WTO’s 10th ministerial conference (MC10) in Nairobi, Kenya in December 2015, said people familiar with the proceedings. SECOND SESSION Following the first round of discussions at the Paris meeting where trade ministers presented their initial views and expectations, the WTO DG opened the second session after presenting a summary of the problems plaguing the WTO and the multilateral trading system, said people who asked not to be quoted. After her initial comments at the second session, Ms Okonjo-Iweala sought to know from the ministers as to what they are prepared to give up from their much-stated positions, said participants who took part in the proceedings. Essentially, she sought to know from the ministers as to what their specific contributions are going to be in order to accomplish the WTO reforms, said participants. “That poser from the DG almost killed the second part of the conversation,” said one participant who asked not to be identified. The Barbados trade minister pointedly told the other ministers that many of the issues, such as the “level playing field issues”, are very well known, emphasizing the need to grapple with them. “But the sense from the “big guys” was really, yeah, they’re not ready,” the participant said, adding that the US just wasn’t ready. It is clear that the US is seemingly determined “to take the unilateral approach and they feel that they’re succeeding” through this approach, the participant said. The trade ministers from the so-called “Friends of the System” Group including Australia, New Zealand, Singapore, and Switzerland among others shared their willingness to make the appropriate contributions, said another participant, who asked not to be quoted. Significantly, “the US didn’t change its position and India didn’t change its position,” while countries like Japan suggested that they are ready to make modest contributions, the participant said. Meanwhile, in a separate development, it appears that the USTR has sent letters to only those countries that currently have average tariffs of more than 10%, seeking to know what is going to be their offer in addressing the US “reciprocal” tariffs, said a participant, who asked not to be quoted. “Anyone that was on 10% didn’t get a letter, while anyone that had 21% like Vanuatu or Fiji, got the letter,” the participant said. Countries like India, the EU, Lesotho, and Vietnam would have received the letters, the participant added. CAIRNS GROUP STATEMENT A day before the informal WTO ministerial meeting, trade ministers of the Cairns Group of farm-exporting countries held a meeting on the margins of the OECD ministerial meeting on 2 June. The Cairns Group comprises Argentina, Australia, Brazil, Canada, Chile, Colombia, Costa Rica, Malaysia, New Zealand, Paraguay, Peru, Philippines, South Africa, Thailand, Ukraine, Uruguay, and Vietnam. In a joint statement, the trade ministers of the Cairns Group reiterated their “support for the rules-based, non- discriminatory, open, fair, inclusive, predictable and transparent multilateral trading system with the WTO at its core which has served the global economy well for decades.” The trade ministers said that they recognize the “ongoing tensions in the multilateral trading system and the challenges and uncertainties this is creating in their economies.” The trade ministers said they “discussed the potential impact on agricultural trade caused by tariff and non-tariff measures.” The Cairns Group emphasised “the importance of the adherence to multilaterally agreed trade rules and principles and scheduled commitments, and called on all WTO Members to work together to strengthen the multilateral rules-based trading system.” The US has disregarded the sanctity of the scheduled commitments by imposing its unilateral tariffs against countries. The WTO Secretariat 2025 Global Trade Outlook and Statistics report noted the outlook for global trade “has deteriorated sharply due to a surge in tariffs and trade policy uncertainty,” the Cairns Group trade ministers said. According to the joint statement, some Members “expressed concern about the rise in tariffs and political and economic spillovers.” The trade ministers said that “agricultural trade remains particularly affected by trade and production distorting subsidies, tariffs, and other barriers.” The Cairns Group “reaffirmed its enduring commitment to achieving greater fairness and a levelling of the playing field in agriculture through ambitious and comprehensive agricultural trade reform, in line with Article 20 of the Agreement on Agriculture (AoA).” “We call on all WTO Members to intensify efforts to make meaningful progress on all three pillars of the AoA – domestic support, market access and export competition. Reversing commitments made since the Uruguay Round would be unacceptable and inconsistent with the mandate of Article 20,” said the joint statement. However, the Cairns Group’s alleged failure to acknowledge the mandated issues and the Doha agriculture agenda has seemingly eroded its credibility, said a non-Cairns Group member, who asked not to be quoted. In the lead-up to the WTO’s 14th ministerial conference (MC14), which will take place in less than 12 months in Yaounde, Cameroon, the Cairns Group said that it has been exploring “all options for an agricultural trade reform package, in particular through detailed negotiations with the African Group.” “We recognise that frank and open discussions like these provide the best possible chance of developing a reform package for MC14 and beyond,” the Cairns Group said. The Cairns Group “acknowledged the importance of robust rules for agricultural trade to address global inequality, provide sustainable economic development opportunities, and address overall global food security.” It called on WTO members to do more “in advancing agricultural trade reform to address global food insecurity and environmental challenges facing all WTO members.” The Cairns Group emphasized that “sustainable, efficient, and resilient agricultural trade and production is vital for improving food security, economic development, and environmental outcomes.” “As we approach MC14,” the trade ministers called on “WTO members to seek alignment on collective action for agricultural trade reform to support sustainable agriculture, economic development and food security.” The Cairns Group remained concerned about “the potential impact on agriculture of unilateral trade-related environmental measures undertaken by some WTO Members”, such as the EU. “These measures must be necessary and must not be designed for protectionist purposes and not amount to unjustified trade restrictions, impose excessive compliance costs, or constitute a means of arbitrary or unjustifiable discrimination,” it said. The Cairns Group recognized that given the “unique agricultural production circumstances,” there will “never be a “one-size-fits-all” approach for improving sustainability outcomes.” +
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