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Info Service on WTO and Trade Issues (Nov25/03) Geneva, 4 Nov (D. Ravi Kanth) — The African Group on 31 October issued a clarion call to preserve consensus- based decision-making and the treaty-bound special and differential treatment (S&DT) for developing countries in the ongoing World Trade Organization (WTO) reform discussions. This move seemingly pushes back against the WTO Director-General’s suggestions for changing the consensus principle, said people familiar with the development. Ahead of a meeting on WTO reform, the African Group demanded that development remain at the core of the negotiations. Several African negotiators, who asked not to be quoted, stated that the African Group was countering attempts by the facilitator overseeing the discussions on WTO reform to re-frame the discussions on consensus-based decision-making and to introduce “differentiation” among developing countries for availing of S&DT. In an unrestricted document (WT/GC/W/971) issued on 31 October, Mozambique, on behalf of the African Group, stated: “since the conclusion of the Uruguay Round and the establishment of the WTO through the Marrakesh Agreement, the multilateral trading system has played a critical role in liberalizing trade and promoting predictable and transparent rules-based governance for the benefit of all Members.” The African Group argued that “the system now faces multiple challenges – from slow progress on the Doha Development Agenda to rising protectionism, digital transformation, climate change, and geopolitical fragmentation which threatens economic growth and sustainable development, especially for low income developing countries.” At a time when alleged attempts are being made to sideline the member-driven process, the African Group emphasized that “the reform process must be Member-driven and the outcomes should aim to make the WTO, as a multilateral institution that all Members have collectively built, better able to respond to the needs and interests of all Members.” The Group, with its diverse voices, seems to have joined forces by insisting that “WTO reform ought to reaffirm the core principles of fairness, inclusivity, and development.” More importantly, it drove home a powerful message that “reform needs to be built on existing Ministerial mandates, including the Doha Development Agenda, which represents the only multilateral development focused negotiating framework endorsed by consensus.” An African member, who asked not to be quoted, noted that although the existing Trade Negotiations Committee (TNC), chaired by the DG, Ms. Ngozi Okonjo-Iweala, operates under the Doha mandate, it now appears to be rather undignified to mention either the Doha Development Agenda (DDA) or the DDA-established TNC. The African Group cautioned members attempting to hijack the reform process, stating that “reform must not be used as a vehicle to entrench asymmetries or introduce new forms of exclusion.” Instead, the “process should restore trust in the multilateral trading system and ensure that it delivers for all Members, irrespective of size or level of development.” The Group believed that “reform should focus on resolving longstanding imbalances, revitalizing negotiations on agriculture including cotton, and development, restoring a two tier, fully functioning dispute settlement system accessible to all Members, and enhancing the participation of developing countries through capacity-building and equitable rules.” GUIDING PRINCIPLES Highlighting its “Guiding Principles on WTO Reform,” the African Group said that “the WTO reform should be anchored in the objectives of the WTO enshrined in the preamble of the Marrakesh Agreement.” According to the African Group, it should be based on the following foundational principles: 1. Development-centred reform. 2. Preservation and operationalization of special and differential treatment. 3. Equity, fairness, and balance in the trading system. 4. Inclusivity, transparency, and equal participation. 5. Preservation of consensus-based decision-making. 6. Policy space for industrial development. 7. Technology transfer and capacity-building. 8. Balanced treatment of traditional and emerging issues. 9. Preserve and implement existing ministerial decisions and declarations. On development-centred reform, the African Group asserted that “the WTO’s core mandate is the promotion of development and equitable growth through a rules-based multilateral trading system.” Therefore, it argued that “the centrality of development within the WTO’s work must be preserved as a core legal obligation.” It said the “preamble of the Marrakesh Agreement explicitly mandates positive efforts to ensure that developing countries secure improved living standards, reduce unemployment, achieve economic growth, and secure a share in trade growth commensurate with their development needs.” The Group emphasized that its “shared vision is of a WTO that functions effectively, transparently, and equitably anchored in development justice and reflective of the realities of all its Members.” It stressed that “WTO reform should give priority to development by addressing the special and differential treatment stalemate and the calls for the WTO to contribute towards industrial development.” Further, “WTO Reform outcomes should be geared towards sustainable development and result in poverty reduction, industrialization, and job creation.” It said a “WTO development index should be integrated in the reform discussions as a legal and institutional ecosystem that uses data to shape negotiations, allocate resources effectively, and assess Members’ commitments and obligations.” According to the African Group, such an index “will ensure the WTO delivers on one of its foundational objectives: trade-led development by ensuring that reform serves developing countries and LDCs.” At a time when S&DT is facing calls for “differentiation” among developing countries, the African Group stated explicitly that “Special and Differential Treatment (S&DT) remains a cornerstone of the WTO’s development mandate and should remain operational and responsive to development needs.” Also, “the provision of flexibilities and S&DT as a catalyst for sustainable development and greater integration of developing countries into global trade ought to be meaningful, preserved, and not diluted.” It called for strengthening “existing flexibilities with a view to making them more precise, more effective and more operational, based on paragraph 44 of the Doha Ministerial Declaration, which has guided the WTO’s work on special and differential treatment since 2001.” Lastly, “S&DT provisions should serve as positive enablers accorded to developing countries and LDCs according to criteria to be agreed on, in line with their levels of economic development.” On “equity, fairness, and balance in the trading system,” the African Group said the “need to correct systemic trade imbalances, especially in agriculture, by curbing harmful subsidies and enabling policies that support African value addition and competitiveness, must be addressed.” It argued that “reforms which address market access challenges, non-tariff barriers and trade-distorting subsidies should be prioritized.” Surprisingly, the African Group, which had insisted on a permanent solution for public stockholding (PSH) programs for food security, appears to have abandoned it under alleged pressure from some unknown quarters, said a person who asked not to be quoted. On “inclusivity, transparency, and equal participation,” the African Group cautioned that “the credibility and legitimacy of the WTO depends on inclusive, transparent, and participatory processes.” It added that a “shared reform objective and outcome document to be presented to Ministers at the Fourteenth Ministerial Conference (MC14) in Yaounde, Cameroon must be prepared through a bottom-up, inclusive, and transparent process.” On the preservation of consensus-based decision-making, the African Group explicitly stated that the “consensus principle is fundamental to ensuring inclusivity and protecting the interests of all Members.” More importantly, it emphasized that “the practice of consensus was embedded in the Marrakesh Agreement establishing the WTO in 1995.” In a seemingly direct challenge to the DG’s latest statements, the African Group conveyed in rather unmistakable terms that “decision-making by consensus evolved from the GATT 1947 and it was codified within the multilateral trading system to level the playing field in decision-making processes and avoid power dynamics from influencing multilateral outcomes.” Therefore, “consensus-based decision-making must be preserved as a vital cornerstone of Members’ sovereign equality,” the African Group said. It emphasized that “no efforts should be made to undermine this core principle either through descriptive language or reinterpretation.” It also argued that “improving governance through reform must include procedural reforms that institutionalize inclusivity, enhance transparency, and ensure that all Members, regardless of power or influence, participate equally.” On policy space for industrial development, the African Group said that “the re-calibration of the WTO policy toolbox to advance industrialisation and structural transformation must be part of reform discussions.” It reminded major industrialized countries that “commodity dependence leaves developing countries vulnerable to international price shocks, particularly in the context of global uncertainty, with such events, among others, triggering reversals in capital inflows and generating macroeconomic dislocation that results in dwindling revenues, debt spirals, inflation, and poverty.” According to the African Group, “the outcome of the WTO reform must ensure that WTO rules do not constrain legitimate development tools such as industrial policy, technology upgrading or local content measures, allowing countries to promote industrialization, structural transformation, and diversification of their economies to improve living standards and strengthen sustainable integration.” EXPECTED OUTCOMES The African Group highlighted the expected outcomes in key areas of WTO reform: 1. Development: “WTO reform must produce tangible and concrete results, outcomes aligned with Africa’s development aspirations under Agenda 2063, including industrialization, food security, and poverty alleviation.” 2. S&DT: “Flexibilities/S&DT must be preserved, strengthened, made precise, effective, operational and efficient across all WTO agreements. Considering the developmental needs of developing and least-developed countries, with a view to enabling them to secure food security, policy space, develop industrial capabilities, and diversify their economies.” 3. Agriculture Reform: “WTO reform must discipline trade-distorting domestic support in developed countries and remove barriers that distort trade in agricultural products.” 4. Industrial Development: “WTO reform must contribute towards economic diversification, structural transformation in developing countries, and the sustainable strengthening of their integration into world trade.” 5. Preservation of consensus-based decision-making: “Consensus must be maintained as the foundation of WTO decision-making.” 6. Dispute Settlement Reform: “The restoration of a two-tier, independent, and impartial dispute settlement system is critical for the credibility and predictability of the WTO.” 7. Balanced treatment of emerging issues: “New topics should be approached through a development lens, and they ought not to take precedence over unresolved development priorities of the majority of WTO Members, in particular those already covered by multilateral mandates.” In short, the comprehensive African Group proposal on WTO reform serves as a strong reminder to some major industrialized countries to remain focused on the outstanding mandated issues and core principles enshrined in the Marrakesh Agreement that established the WTO in 1995. +
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