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Info Service on WTO and Trade Issues (Oct25/11) Geneva, 17 Oct (D. Ravi Kanth) — The chair’s summary of the G20 Trade and Investment Ministers’ Meeting, which concluded in Gqeberha, South Africa on 10 October, revealed significant divergences on how to advance reforms at the World Trade Organization. The chair’s summary noted that “some” members, like the United States, “expressed preference for safeguarding their interests.” A 31-point statement was issued by South Africa’s Trade Minister, Parks Tau, under his own responsibility, reflecting the sharp divisions among participants on a variety of issues. The South African trade minister said that while “members acknowledged that agreed upon rules in the WTO are an integral part of the global trading system,” some members – without naming them – “expressed preference for safeguarding their interests.” He said that the “G20 Members recognised that the WTO has challenges and needs meaningful, necessary, and comprehensive reform to improve its functioning [in all three pillars]”, adding that “the discussions were substantive and wide-ranging, reflecting both areas of convergence and divergence in perspectives.” According to people familiar with the discussions, the WTO’s Director-General, Ms. Ngozi Okonjo-Iweala; the facilitator overseeing the WTO reform discussions, Ambassador Petter Olberg of Norway; and the WTO’s General Council chair, Ambassador Saqer Abdullah Almoqbel of Saudi Arabia, took part in the meeting. These officials witnessed their two- or three-point reform agenda being upended by trade ministers, particularly from the US and India. People familiar with the G20 discussions said that the “triumvirate” – the facilitator, the DG, and the General Council chair – of the WTO reform discussions has seemingly been zeroing in on changing the current practice of decision-making by consensus, calling for “differentiation” among developing countries for availing of the self-designated special and differential treatment (S&DT), and, more importantly, legitimizing the allegedly WTO-illegal Investment Facilitation for Development Agreement (IFDA), as well as the E-commerce Agreement, which envisages making the moratorium on customs duties on electronic transmissions permanent despite the MC13 decision. In his summary, the South African trade minister said the participants “discussed the following key topics as tabled by the Presidency: G20 Principles on Trade & Inclusive Growth and on Addressing Global Challenges; G20 Trade and Investment Guiding Framework to Enable Sustainable Industrialization and Development; G20 Declaration on Reforming the World Trade Organisation and the Development Dimension.” “However,” he said, “although there were many areas of convergence among members on most matters under discussion, consensus outcome documents on the Presidency priorities could not be reached.” He stated that while “the majority of G20 members agreed with the outcomes proposed by the South African Presidency, some members could not agree to some issues in view of the challenges confronting global trade.” The South African trade minister suggested that “importantly, discussions were substantive, reflecting the evolving dynamics in global trade, and highlighted the value of a trade and investment agenda that enables industrial development, supports integration into and the diversification of value chains, and ongoing discussions on WTO reform.” He said the text issued by him captures “the summary of the outcomes”, “without prejudice to the national positions of Members.” GLOBAL CHALLENGES Significantly, the South African trade minister said, “members recognised that trade and investment can make a positive contribution to growth, economic development, job creation and technological progress” and that “the benefits of trade should be more broadly shared to prevent the over-concentration of production, and strategic vulnerabilities arising from this”, with benefits to be shared among workers, small and medium-sized enterprises, women, youth, people with disabilities, indigenous people and other vulnerable groups. However, “some members” – who are not named but are evident from their constant positions, like the US – “drew attention to persistent imbalances in the multilateral trading system, while others emphasized the importance of market access, diversification, and integration, by developing and least-developed countries.” According to the South African trade minister, the participants also highlighted “the need for the promotion of policies that facilitate inclusive participation in international trade, including for micro, small, and medium-sized enterprises, women, youth, and under-represented groups. This includes the progressive elimination of structural barriers, support for capacity-building and institutional strengthening initiatives, and facilitating targeted interventions that promote equitable access to trade opportunities”. He said “the goal is to foster inclusive economic growth and resilience, in the multilateral trading system.” According to the chair’s summary, “members noted the importance of promoting coherence between international trade rules and global efforts to address shared challenges,” and they “supported the development of resilient and adaptable trade frameworks capable of responding effectively to global challenges such as health crises, climate emergency, food security and economic shocks.” In a rather mild tone and a clear pointer towards the continued unilateral tariffs imposed by the Trump administration, the chair’s summary noted “the need to promote reliable, responsible and mutually beneficial approaches to trade and investment, and encouraged Members to avoid the implementation of arbitrary, unilateral and restrictive trade measures that are inconsistent with international law, including WTO rules.” More importantly, it said the G20 trade ministers “resolved to work towards equitable participation in global value-chains to ensure that the benefits of trade reach all sectors of society, particularly developing and least-developed countries. This includes supporting the diversification of production and supply chains, and promoting equitable access to critical products and technologies essential to mounting an effective response to crises.” The chair’s summary drew attention to the pervasive problem of “inequitable access to key technologies” – which “hampers the speedy and effective response to global health, environmental and climate crises.” According to the chair’s summary, “most Members underscored the importance of employing necessary policy flexibilities which are provided for in multilateral and regional agreements to advance productivity objectives.” Members acknowledged the role of Governments in addressing global challenges to ensure resilience and affordable access to essential products and public goods, while also acknowledging that trade can be an essential component of effective response management in moments of crisis. Under the sub-heading of “G20 Declaration on Reforming the WTO and the Development Dimension”, the chair’s summary noted that “members discussed the future of the multilateral trading system at a time of heightened uncertainty in the global economy.” The participating ministers “recognised that the WTO was under strain, with differing views on the underlying causes,” and “some [members] were of the view that unilateral measures and protectionism pose a significant challenge.” “Others”, according to the chair’s summary, “preferred to frame concerns in terms of trade-restrictive measures and non-market policies and practices” and “still others underlined that WTO-inconsistent measures and divergent perspectives on the future of the system have contributed to the pressures now confronting the multilateral trading system.” The chair’s summary said “it was also noted that structural imbalances within the system, and the need to take account of existing asymmetries, continue to affect confidence in the organisation.” Without naming the US, the chair’s summary said that “some were of the view that the WTO has contributed to structural imbalances which have hollowed out their industries and contributed to de-industrialisation”. Perhaps this is a pointer towards China’s alleged role in becoming the hub of the world’s manufacturing activities, said a member, who asked not to be quoted. “Nevertheless,” according to the chair’s summary, “most members recognised the importance of the WTO as a forum to advance trade issues and to maintain a rules-based Multilateral Trading System” while “acknowledging that agreed upon rules in the WTO are key to facilitating global trade.” Also importantly, “most Members reaffirmed their commitment to a rules-based, non-discriminatory, open, fair, inclusive, equitable, development-oriented, predictable and transparent multilateral trading system with the World Trade Organisation (WTO) at its core and supported efforts to promote the full integration of developing Members, including least-developed countries (LDCs), into the multilateral trading system and reiterated the commitment to resist protectionism.” “However, some [namely, the US] could not reaffirm these longstanding principles,” the South African trade minister pointed out. WTO REFORM On reforming the WTO, according to the chair’s summary, “there was convergence that reform is needed to restore trust in the WTO and improve its effectiveness.” It said, “many [members] emphasised the importance of strengthening all of the WTO’s core functions, including negotiations, monitoring, and dispute settlement, to ensure the organisation remains relevant to evolving trade realities” while “some also stressed that the reform agenda should address systemic imbalances that affect competitiveness and fairness in global trade.” In the context of WTO reform, the chair’s summary suggested that “members have different needs and interests, in part, due to their different levels of economic development. In this regard, Members supported the full participation of developing Members, especially least-developed countries (LDCs), in global trade.” In a seemingly cautionary note to the “triumvirate” – the facilitator, the DG, and the GC chair – of the reform discussions, the chair’s summary said “most members reiterated the centrality of the development dimension in the work of the WTO.” The chair’s summary said unambiguously that “members reaffirmed the provisions of special and differential treatment (SDT) as an integral part of the WTO agreements and that SDT provisions should be precise, effective, [and] operational.” Further, “there was broad support for a WTO reform agenda that promotes development, taking into account respective needs and concerns of Members at different levels of their economic development.” Importantly, “most Members emphasised the importance of restoring a well-functioning dispute settlement system accessible to all and reiterated their commitment to its reform. They see a fully functioning dispute settlement system as central to the credibility of the WTO.” However, “there were different views on how to advance this work” on restoring the two-tier dispute settlement system. On the Joint Statement Initiatives, which is a common refrain of the DG, including in her signed article in the Financial Times last month, the South African trade minister said, “members noted the work undertaken by Members in Joint Statement Initiatives (JSIs), notably the negotiations of two plurilateral agreements on Investment Facilitation for Development and on electronic commerce with most Members recognising their positive role.” But “there was recognition that some Members have differing views on the JSIs and that continued dialogue in the WTO on this matter should be encouraged.” The South African trade minister said that “although Members differed on the way forward on WTO reform, they agreed on the need to advance work on this issue in an inclusive and transparent manner.” “Looking ahead,” he said, “members noted that the Fourteenth WTO Ministerial Conference in Cameroon provides a significant opportunity to advance reform and the development dimension of the WTO and deliver outcomes of interest to all Members.” In a nutshell, the way forward to reforming the WTO appears to be fraught with roadblocks, and any attempt to set aside the development-oriented issues raised by developing and least-developed countries could “boomerang” against the “triumvirate” of the WTO reform discussions, said several participants, who asked not to be identified. +
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