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TWN
Info Service on WTO and Trade Issues (Sep25/01) Geneva, 2 Sep (D. Ravi Kanth) — At the conclusion of a two-day summit in Tianjin, China, on 1 September, the leaders of the Shanghai Cooperation Organization (SCO) pledged to strengthen the multilateral trading system, particularly the World Trade Organization (WTO), amid “current world economic uncertainty and the spread of restrictive trade measures.” In what appears to be a pointed rebuke of the Trump administration’s unilateral actions against the global trade order over the past five months, the Tianjin Declaration signalled that the SCO alliance has reached a defining moment in countering what insiders described as continued “bullying practices.” At the end of their two-day summit in Tianjin, the ten SCO member countries – China, the Russian Federation, Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan, India, Pakistan, Iran, and Belarus – adopted a strong narrative on strengthening the beleaguered United Nations and the so-called “toothless” WTO. On 29 August, the United States rescinded its annual payment of $29 million to the WTO, citing concerns that the organization has “aided and abetted global trade cheating by the Chinese Communist Party.” However, officials familiar with the rescission order noted that the US Congress could potentially revoke the presidential directive under the US Impoundment Control Act within 45 days. Against this backdrop, Chinese President Xi Jinping appeared to give new momentum to building a powerful regional coalition, citing an ancient Chinese philosopher’s saying: “Uphold the Great Principle, and the world will follow.” The SCO summit was also attended by leaders or representatives from Malaysia, Turkiye, Armenia, Azerbaijan, Cambodia, Nepal, Egypt, Qatar, Saudi Arabia, Kuwait, Maldives, Myanmar, the United Arab Emirates, and Bahrain. The emergence of this new alliance, representing more than 40% of global trade and around three billion people, appears to signal that the Eurasian nations are ready to stand in contrast to the transatlantic alliance of the United States and the European Union, said a trade envoy who requested anonymity. President Xi stated unequivocally that SCO leaders “should safeguard the UN-centred international system and support the multilateral trading system with the WTO at its core.” SUPPORT FOR MTS In a strong statement supporting the multilateral trading system (MTS), the SCO leaders emphasized that it “should play an important role in promoting inclusive economic growth and sustainable development, and in addressing global challenges amid current world economic uncertainty and the spread of restrictive trade measures.” The reference to “restrictive trade measures” appears to be aimed at the “reciprocal” tariffs imposed by the Trump administration since 7 August, according to a trade envoy who spoke on condition of anonymity. Delivering a clear message in favour of a rules-based multilateral trading system anchored in WTO principles, the SCO leaders affirmed that the WTO must adhere to decision-making based on consensus, openness, transparency, fairness, inclusiveness, equality, and non-discrimination. They also reaffirmed that provisions on special and differential treatment (S&DT) for developing countries, including the least developed countries (LDCs), are an integral part of the WTO and its agreements. In another implicit warning to the US, the SCO leaders declared: “We oppose trade measures that violate WTO rules and principles and emphasize the need for constructive cooperation among SCO member states within the framework of the WTO Ministerial Conference.” Expressing deep concern over “growing tensions in international economic relations, which seriously jeopardize the world economy,” the SCO leaders called for advancing international trade and achieving the Sustainable Development Goals (SDGs). The ten SCO leaders, along with observer participants, urged “all parties to engage in dialogue and cooperation, abide by international trade law – including WTO rules – and eliminate restrictions that violate WTO rules.” On the ongoing stalemate on WTO reform, the SCO leaders underscored “the importance of reforming the WTO while maintaining its fundamental principles, to enhance its effectiveness, improve global economic governance, and promote fair and inclusive economic growth.” In this regard, they reiterated “the need to restore a full, functioning, and two-tier WTO dispute settlement mechanism as soon as possible.” DEVELOPMENT ISSUES The SCO leaders reaffirmed “the importance of development issues in the work of the WTO.” To date, development concerns have been sidelined in the ongoing WTO reform discussions, with efforts being made to “differentiate” among developing countries seeking special and differential treatment – contrary to the 1979 Enabling Clause, which calls for “differential and more favourable treatment, reciprocity, and fuller participation of developing countries.” Significantly, the SCO leaders broadened the scope of the development issues, stating that they must go beyond improving S&DT provisions to include promoting trade development, supporting industrialization in developing countries, and helping LDCs better integrate into the multilateral trading system. On the issue of global food security, the SCO leaders acknowledged that “global food security faces increasing challenges, including restrictions that do not comply with WTO rules.” They stressed the need to “ensure global food security – especially the interests of developing and least developed countries – by expanding agricultural production, improving efficiency, and ensuring diversified and smooth food supply chains.” The SCO leaders also expressed support for accelerating the discussions on the WTO e-commerce work program, calling for acceptable resolutions at the 14th WTO Ministerial Conference. These should address development-related issues, overcome digital inequality, promote digital connectivity, and boost consumer and business confidence in e-commerce – while respecting national laws and policy objectives, they said. On trade in services, the SCO leaders called for continued work under the WTO framework, including the exchange of experiences and sharing of best practices. SUPPLY CHAINS The SCO leaders emphasized that “an open, inclusive, stable, resilient, and diverse supply chain is essential to achieving the Sustainable Development Goals.” With the US and the EU actively seeking to build alternative supply chains, the SCO leaders voiced concern over measures that could destabilize the global supply chain. They referenced ongoing work by relevant WTO bodies on strengthening international cooperation in global supply chains and encouraged continued efforts to produce practical outcomes that enhance supply chain resilience. The SCO leaders stressed “the importance of further increasing membership, enhancing geographical representation, expanding the inclusiveness of the multilateral trading system, and attracting more developing countries, including LDCs.” They expressed support for the swift accession of the Republic of Belarus, the Islamic Republic of Iran, and the Republic of Uzbekistan to the WTO in accordance with Article 12 of the Marrakesh Agreement Establishing the WTO. While Uzbekistan’s WTO accession bid is progressing rapidly, the long-delayed bids of Iran and Belarus are unlikely to succeed anytime soon due to continued opposition from certain Western powers, said officials familiar with the accession process. Finally, the SCO leaders called for “practical outcomes” from the 14th WTO Ministerial Conference, scheduled to be held in Cameroon in 2026. However, there appears to be some uncertainty about the convening of the conference, as sources indicated that the US Trade Representative (USTR), Ambassador Jamieson Greer, may not attend, according to people familiar with the development. +
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