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TWN
Info Service on WTO and Trade Issues (Nov25/02) Geneva, 3 Nov (D. Ravi Kanth) — Ahead of a meeting on 4 November, the facilitator overseeing the discussions on the reform of the World Trade Organization has issued “additional information” under his own responsibility concerning several controversial issues. These include consensus-based decision-making and “differentiation” among developing countries for availing of special and differential treatment (S&DT), according to several people familiar with the development. Although discussions on WTO reform seem far from converging on any of the controversial issues, several countries appear to be sharply concerned by remarks made by WTO Director-General Ms. Ngozi Okonjo-Iweala last week. She had stated, “We (members) need to reform some of the ways we do business like our consensus decision- making system which is practised as unanimity – everyone has to agree – so it really slows down decision making.” The DG’s comments, which were echoed at a meeting in Saudi Arabia last week, have seemingly caused consternation among members. A trade envoy, who asked not to be identified, said there is a perception that the head of the member-driven global trade body is increasingly aligning her positions with a small group of countries seeking to change the principle of consensus-based decision-making enshrined in the Marrakesh Agreement, despite firm opposition from a majority of members. Against this backdrop, the “additional information” issued by the facilitator overseeing the discussions on WTO reform, Ambassador Petter Olberg of Norway, has been viewed with considerable caution and suspicion, the envoy suggested. In an email sent to heads of delegation on 31 October, seen by the SUNS, the facilitator sought “members’ feedback” on several topics on which he had already held consultations. “TALKING POINTS” The facilitator said that in his consultations with members, he had presented “a consolidated summary of Members’ perspectives on decision-making, development and S&DT, and fair competition/balanced trade.” He stated that the underlying purpose of his “talking points” is “to avoid restating established positions and instead focus our attention to scoping the issues to be presented to Ministers with a view to later identifying possible options to address them.” However, at a small group meeting of 19 countries almost a fortnight ago, the facilitator reportedly aborted the meeting within 30 minutes after one member fiercely questioned why he was raising decision-making issues that have been consistently rejected, said people familiar with the discussions. Nevertheless, the facilitator said his “talking points” for the 4 November meeting “include the guiding questions I formulated under each area to support discussion.” Ambassador Olberg said that the talking points and questions “set out five broad perspectives that I have heard regarding the way forward, along with the related questions I posed.” In an annex to his email, the facilitator provided his own account of what transpired at a meeting on 16 October with “approximately 20 delegations – broadly representative of the membership”. He admitted that “diverse views [were] expressed so far.” According to his notes, the facilitator said that “as we’ve all heard, many view MC14 as a key opportunity – a “reform Ministerial”, as it is increasingly being called.” Several trade envoys, who asked not to be quoted, said that while members have agreed on reforming the organization, there is no consensus on what constitutes reform at this juncture, due to a divide between developing and least-developed countries on one side and industrialized countries on the other, on several issues. The facilitator appears to be “hijacking” the discussions from the core issues such as the restoration of the two-tier dispute settlement system that provides the “guardrails” for the WTO’s enforcement function, said people familiar with the discussions. The facilitator’s notes continued: “However, in keeping with the “Geneva first” approach, we must lay the groundwork for meaningful Ministerial-level engagement on WTO reform at MC14. Many delegations have emphasized the importance of Ministerial guidance for the post-MC14 agenda, as well as clarity on the modalities for advancing that work.” Ambassador Olberg said he held the first small group discussion for “charting a concrete path forward. Our aim is to make the most of the limited time Ministers will have in Yaounde, and to ensure their political input gives fresh momentum to the reform work after MC14.” “Members hold divergent views – not only on substance, but also on the process,” the facilitator said, adding that “what is both encouraging and important to underscore is that no Member questions the need for reform. That shared recognition is our common ground.” He structured the small group meeting discussions in two parts: “a conversation on how we organize our work between now and December,” and second, “initial exchanges on the issue of decision-making – which, for many Members, lies at the heart of the reform agenda.” On consensus-based “Decision-Making and Development,” the facilitator said that “the majority of Members – including a group of Ministers at last week’s meeting in South Africa – have pointed to these two areas as logical starting points.” However, a person familiar with the G20 discussions in South Africa said there was no consensus on these two issues, noting that both officials and ministers remain sharply divided on changing the existing practice of consensus-based decision-making and the self-designated framework on special and differential treatment, which is a treaty-based right. The person said that the facilitator’s account that these are foundational issues seems somewhat inaccurate. Under the sub-heading “avoiding over-structuring or silos,” the facilitator said that “others caution against rigid sequencing.” “They argue that the issues are deeply interconnected, and an overly structured approach could limit flexibility. For example, some have suggested that discussions on the “fairness” track should begin in parallel, rather than be deferred.” SYSTEMIC CHALLENGES A third view, the facilitator said, called for “focus(ing) on the “issues of Our Time”, emphasizing “credibility”.” “From this (third) perspective, our reform efforts must begin by tackling the most pressing systemic challenges facing the WTO today,” the facilitator said. According to the facilitator, these systemic challenges include “recent developments in tariffs [reciprocal tariffs imposed by the Trump administration], trade agreements, and their implications for MFN treatment. While some support moving quickly on this, others have expressed concern about the timing.” He reported a fourth view from the small group meeting, calling for “a more open-ended, Member-driven conversation – asking fundamental questions about the kind of WTO we want, and the commitments Members are prepared to make.” “The goal here is to build a shared foundation before moving into specific reform tracks,” the facilitator said. Lastly, a “fifth perspective emphasizes the need to create space for a structured, high-level discussion among Ministers – one that focuses on: * The current value of the WTO and the multilateral trading system; * The kind of reformed WTO Members are willing to support and defend; and * The political guidance needed to shape the post-MC14 reform process, leading into MC15.” “This view,” according to the facilitator, “sees clear Ministerial direction as essential to unlocking progress and re-energizing our work in Geneva.” In addition to the five perspectives, the facilitator said “there’s one more practical issue I’d like to bring to your attention: the idea of having structured “checkpoints” on the road to MC14, which are largely process-related items.” DECISION-MAKING During the small group meeting’s discussion on consensus-based decision-making, the facilitator said throughout his “consultations – in General Council meetings, bilateral exchanges, and most recently among Ministers last week – I have heard strong and widespread support for maintaining the practice of decision-making by consensus.” The chair noted that the underlying rationale is that “consensus is viewed as foundational to the WTO’s legitimacy. It ensures inclusivity, equity, and that every Member’s voice is heard and carries weight.” According to Ambassador Olberg, “within this shared commitment to consensus,” he believes that there are two broad perspectives on how decision-making should evolve. People familiar with the discussions said that in a rather “meandering” assessment, the facilitator’s observations appear to be an attempt at confounding the discussions. Nonetheless, Ambassador Olberg suggested that perspectives focused on strengthening decision-making: This view recognizes the value of consensus but believes that, for it to remain credible and effective, the system needs to be more “responsive”, “outcome-oriented,” and “capable of functioning even amid differences”. People familiar with the discussions said the facilitator seems to be echoing the views of the so-called “Friends of the System” group (in which Norway is a key member) and the DG by suggesting that “consensus is not the same as unanimity and shouldn’t be treated as such” as well as “the current interpretation of consensus has at times contributed to paralysis.” Ambassador Olberg seemingly reflected the views of the “Friends of the System”group and the DG by suggesting that “there is growing frustration with the use of consensus as a de facto veto, even when proposals enjoy overwhelming support.” People familiar with the discussions noted that this assessment was made without acknowledging that some issues, like the Investment Facilitation for Development Agreement, which is supported by a large group of members, also reinforce procedural and systemic violations in a rules-based organization. DIFFERENTIATION On “differentiation” among developing countries for availing of special and differential treatment, the facilitator noted that “differentiation may be needed – not all decisions may require the same threshold.” The facilitator’s statement that “overall, there’s a call for a more pragmatic and results-driven approach to decision-making” is factually incorrect, said a person who asked not to be quoted. The facilitator noted that several perspectives emphasized “the Preservation of Consensus”. “This view holds that consensus is central to multilateralism, sovereignty, and equality among Members – and must not be diluted.” Members also expressed central points on the need to preserve consensus on several grounds. They include: 1. “Changing the process alone won’t resolve the problem – the real challenge lies in trust, diverging interpretations of mandates, and institutional practices. 2. There are calls for a stocktake of past mandates and their implementation, as failure to follow through has eroded confidence. 3. Early concerns are too often overlooked, only to resurface later, deepening mistrust. 4. Lack of consensus may reflect a genuine need for more time and dialogue – and attempts to bypass dissent could further damage the system. 5. Uneven or opaque procedural practices – particularly the perception that some Members or informal groups drive the process – can erode trust and true consensus-building. 6. Members reaffirm their sovereign right not to be bound against their will. 7. Some raise fundamental doubts about opt-out or selective participation models: “If I don’t know what others are signing up to, why would I commit to anything meaningful?” 8. Others point out that plurilateral agreements do happen outside the WTO, and perhaps that’s where they belong. In this view, the value lies in the agreement itself, not necessarily in its incorporation under Annex 4. 9. A broader contextual point, according to some members, is that “any conversation about decision-making reform is inseparable from a larger question: What kind of WTO do we want? 10. And lastly “how Members see the WTO’s role in the evolving global trading landscape.” PROPOSALS The facilitator pointed out that several ideas have emerged to address the above issues. He briefly summarized them under two broad headings. From those focused on preserving and strengthening consensus and multilateralism, the following points were made: i. Emphasizing that trust, transparency, and inclusivity are the essential preconditions for building real and lasting consensus. ii. Advocating a “reform-by-doing” approach – restoring trust by improving day-to-day negotiating practices, including: a. Clearer procedural guidelines; b. Regular transparency briefings both before and after meetings; c. More inclusive and interactive negotiating formats. iii. Calling for Ministerial-level engagement at MC14 to: i. Reaffirm and re-anchor a shared understanding of existing mandates, ii. And explore the idea of “institutional grandfathering” – upholding and building upon existing mandates rather than replacing them with more simplified alternatives. The facilitator stated that these ideas reflect the breadth of thinking across the Membership. From those (including the “Friends of the System” group and China, among others) calling for more effective and outcome-oriented decision-making, the facilitator suggested the following points: A. Clarifying the fallback to voting under Article IX of the Marrakesh Agreement in cases of persistent impasse (suggested by one major member). B. Exploring variable geometry and flexible multilateralism, including clear pathways for integrating plurilateral outcomes into WTO rules, with appropriate guardrails to preserve system-wide coherence. C. Applying a Pareto improvement principle – where Members agree not to block outcomes that do not harm their vital economic interests. (China) D. Considering opt-in/opt-out frameworks to accommodate diverse interests while maintaining cohesion. (Friends of the System) E. Making greater use of non-binding instruments, such as voluntary guidelines or best practices, where appropriate. F. Introducing review clauses in agreements, to allow for regular reassessment and adjustments over time. G. Promoting a cultural shift – toward a more constructive and responsible exercise of the right to block. H. Raising the political cost of blocking, by fostering greater transparency and accountability. I. Drawing lessons from other international organizations, such as the use of silence procedures to facilitate consensus where appropriate. +
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