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Info Service on WTO and Trade Issues (Feb26/11) Geneva, 10 Feb (D. Ravi Kanth) — Paraguay, a middle-income and landlocked South American developing country, has severely criticized the three reform issues – changing the practice of consensus-based decision- making, weakening special and differential treatment provisions, and level-playing field issues – proposed by the Norwegian facilitator overseeing the reform of the World Trade Organization. In its communication (WT/GC/W/987) circulated on 3 February, Paraguay suggested that the reform ideas of the facilitator, Ambassador Petter Olberg of Norway, “posed a grave danger and threat to the continuation of the WTO as a multilateral organization,” said several people familiar with the six-page proposal. Paraguay also tabled a draft ministerial decision to counter the facilitator’s “heavily biased statement” in favour of the three controversial reform issues, said people familiar with the development. Pointing out that it is “a middle-income and landlocked developing country (LLDC),” with one of the most open economies in the world and the second most open in Latin America, Paraguay argued that “the multilateral trading system has been and remains essential for national development and prosperity.” Earlier, in an article in SUNS #10377 dated 9 February 2026, the dangers of pursuing the facilitator’s proposed reforms were highlighted. Against this backdrop, Asuncion said that it “seeks to contribute to the discussions on WTO reform, from the perspective of a developing country that has put its faith in multilateralism and, notably, the WTO since the Organization’s inception, and that wishes to play a constructive role in WTO negotiations.” It made several general observations on the ongoing facilitation process: 1. “The Facilitator’s reports and one-page document (JOB/GC/483), while useful for furthering discussions among Members, are not consensus documents; rather they reflect the Facilitator’s own reflections.” 2. “The lack of consensus is not limited to the details, but extends to the scope of the WTO reform process and to the identification of the issues.” 3. “Therefore, these documents cannot be “approved” by Ministers without additional substantive work by Members.” 4. Ahead of the WTO’s 14th Ministerial Conference (MC14), to be held in Yaounde, Cameroon, from 26 to 29 March, “we agree that it would be appropriate for Ministers to discuss the reform and provide a mandate to continue the work, ideally with a timetable, clearly defined checkpoints and regular progress reports.” 5. “With a view to preserving the Member-driven character of the Organization, we believe that this should not include a list of specific topics or elements, or possible solutions on which there is no consensus.” 6. Paraguay said “given the limited time remaining for discussions, we do not think it is feasible to have this list ready for MC14.” General considerations Under the sub-heading “general considerations”, Paraguay said “discussions on WTO reform and any eventual outcome should focus on institutional topics that will allow progress to be made towards achieving the objectives and purpose of the reform.” On “decision-making at the WTO”, Paraguay said, “the practice of consensus as a guiding principle at the WTO gives decision-making legitimacy and authority.” “If we (members) intend to remain an Organization at which the rules are binding, consensus is essential for those who will be subject to those rules,” Paraguay said emphatically. It pointed out: “The decision-making mechanisms of other international organizations would not necessarily lead to better results at the WTO. The drafting of non-binding instruments that are not subject to members’ approval has created negative precedents and has eroded the credibility of other institutions, by deviating from the member-driven model.” Plurilateral initiatives Paraguay argued that fracturing the practice of consensus-based decision-making is primarily aimed at legitimizing plurilateral initiatives in which developing countries would be mere “takers of commitments,” with limited or no role. According to Paraguay, “Plurilateral initiatives should be defined more precisely, and should not undermine the efforts or be undertaken to the detriment of multilateral negotiations.” It said the following issues should be explored: the minimum number of Members needed to launch a plurilateral initiative; how to tackle plurilateral initiatives that could compete with each other; and the mechanisms for incorporating their outcomes into the institutional framework of the WTO. Another key issue is the link between consensus and plurilateral initiatives. More importantly, it is pertinent to explore how members “can move forward on new topics of interest to some Members without neglecting the interests of others; particularly when the proponents of these topics are those who cite “sensitivities” when trying to make constructive progress in multilateral negotiations, for example, in the agriculture negotiations.” Paraguay argued that negotiations on plurilateral initiatives must not only “cause no injury” but also must not break good-faith negotiations on issues of interest to others, preventing trade-offs and balance. Therefore, it is “essential to build trust among Members and Members’ trust in the processes, through greater transparency and constructive dialogue, which should be open, inclusive and transparent.” S&DT The facilitator’s proposals on S&DT are allegedly aimed at breaking the self-designation framework, thereby differentiating among developing countries for availing of S&DT. Paraguay said, “Widespread exclusions make it impossible to move multilateral negotiations forward. A key issue that needs to be defined as part of the reform and that could lead to a breakthrough in negotiations at the WTO is special and differential treatment.” “The current self-classification system, without objective criteria or graduation criteria, makes it difficult to achieve consensus on formulating new rules,” Asuncion said. Also, “the lack of granularity and equal treatment for economies of different relative weights and with different needs, far from closing the gaps between developed and developing countries, creates new inequalities between them.” Paraguay said, “Special and differential treatment must be needs-based, precise, effective and operational, so that it helps to address the particular difficulties of each Member and leads to the application of the negotiated rules, ensuring that the benefits of trade extend to everyone.” Need for binding DSS Amid likely fierce opposition, discussions on the reform of the Dispute Settlement System (DSS) are being sidelined, said people familiar with the development. In its communication, Paraguay said while it is not “a frequent user of the system, it considers it important to have a binding dispute settlement system, as without a system to apply and enforce the rules, the formulation of new regulations lacks real value.” It called for “a well-functioning DSB, that is accessible to all Members and provides the necessary predictability for effective compliance with the rules, as well as for the impartial and binding settlement of disputes,” which “must ensure the necessary predictability for effective compliance with WTO rules.” Fairness Paraguay, a major farm exporter, noted that “the ongoing agriculture reform process is one of the main pending issues of the multilateral trading system.” “The playing field between WTO rules for agricultural products and non-agricultural products remains uneven, even though agriculture reform has been mandated by Article 20 of the Agreement on Agriculture, a legally binding obligation on all Members of this Organization,” it said. However, it did not mention that the derailed Doha Round of trade negotiations was launched primarily to bring fairness to global farm trade. Paraguay said: “Agricultural markets remain among the most distorted in international trade. Measures that have been found to be inconsistent with rules-based trade in other sectors and, thus, prohibited, continue to be permitted in the agricultural sector.” Without naming the United States or the G-10 group of farm-defensive countries, Paraguay argued that “state intervention in support of the agricultural sector, in the form of agricultural subsidies and high levels of protection, remains a key element in these distortions, with adverse effects for Members in terms of competition, market access and development opportunities.” “WTO rules that are considered to be outdated and not reflective of today’s realities cannot be modernized without agriculture reform, otherwise unfair trade advantages and practices will continue to be perpetuated, creating imbalanced trade patterns for agricultural goods, and we could not speak of true fairness at the WTO,” Paraguay noted. In short, it said that “as part of the work on fairness, and with a view to building trust among Members to move forward on new issues, efforts to advance agricultural trade reform should be stepped up in order to remove the most distorting forms of domestic support as a matter of urgency and substantially reduce protections that can be seen in the ongoing existence of non ad valorem tariffs, tariff escalation and peaks, agricultural safeguards, and tariff rate quotas.” Institutional matters Paraguay said that it is “essential to build Members’ trust in each other and in the Secretariat.” Joining other countries concerned about a potential loss of Secretariat impartiality, it maintained that “as a Member-driven Organization, the neutrality and impartiality of the Secretariat must be ensured.” “Therefore, institutional safeguards must be established and the Organization’s budget reformed to allow Members to properly control how their resources are used,” Paraguay said. It is an open secret that WTO budget funds are being used to promote the Joint Statement Initiatives on digital trade and investment facilitation, said several members who preferred not to be quoted. According to Paraguay, “the (WTO) Secretariat’s external relations with other agencies, the private sector and other relevant stakeholders are not and should not be independent of the will and scrutiny of WTO Members.” It pointed out that “institutional improvements in the functioning of the regular bodies and the Secretariat, through “reform by doing”, facilitate Members’ access to information, especially those with limited human resources, and allow them to participate more actively.” Paraguay saw no need for ministerial involvement to continue this process but said its importance should be recognized. Next steps Paraguay stated bluntly that “the approach taken to date, though constructive, does not allow for a detailed discussion of the substantive issues by the Members in the time remaining before MC14.” Given the paucity of time for MC14, it is important that members “define a road map for the Fourteenth Ministerial Conference and secure Members’ support for a meaningful outcome on reform.” Paraguay suggested that members focus on: “Identifying topics for discussion at the ministerial level; and mechanisms for following up on and implementing any decision to ensure that it is put into effect.” It warned: “The need for institutional reform to overcome the challenges faced by the Organization should not be exploited to include new substantive issues, on which there is no consensus and that are not ready to be presented at the Ministerial Conference.” Further, “Post-MC14 work, like all WTO discussions, should be guided by the principles of transparency and inclusion, and should remain open to all WTO Members,” Paraguay said. It cautioned against small group discussions given the “wide variety of topics and positions”, adding that “no small group could be representative of the interests of all Members.” “Small groups may prove useful as spaces for consultation, provided that adequate transparency mechanisms are in place so that all Members can follow up on the discussions that take place within those groups,” Paraguay said. It warned that “the creation of new structures with decision-making powers that limit the participation of Members would not only undermine the legitimacy of any process, but it would also only benefit large delegations with the capacity to allocate resources to access those decision-making spaces.” “This is what has been observed in other international organizations that have established similar mechanisms,” Paraguay noted. Lastly, Paraguay “reaffirms its commitment to a rules-based, non-discriminatory, open, fair, inclusive, equitable and transparent multilateral trading system, in which the WTO plays a central role.” Draft Ministerial Decision Paraguay also tabled a draft Ministerial decision for “post-MC14 reform work,” aimed at “setting out the mandate from Ministers to continue the work according to a timetable with clearly defined checkpoints and regular progress reports, which at the same time provides for sufficient flexibility with regard to the agenda and the topics to be discussed by all Members.” The draft ministerial decision states as follows: “The Ministers: Reaffirming the importance of the rules-based, non-discriminatory, open, fair, inclusive, equitable and transparent multilateral trading system with the WTO at its core; Recognizing the need to reform the WTO in order to strengthen the predictability, transparency, fairness, inclusiveness and equity of the multilateral trading system, and to ensure that the Organization continues to contribute to the fulfilment of its founding objectives enshrined in the Marrakesh Agreement; Reaffirming also our commitment made in the MC12 Outcome Document (WT/MIN(22)/24) and the Abu Dhabi Ministerial Declaration (WT/MIN(24)/DEC) adopted at MC13, to work towards necessary reform of the WTO to improve all its functions and acknowledging the progress made in this regard; Reiterating the need to take advantage of available opportunities, address the challenges that the WTO is facing, and ensure the WTO’s proper functioning; Taking note of the work conducted by the Reform Facilitator; Highlighting the importance of conducting the reform work in an open, transparent, inclusive and Member-driven manner, that addresses the interests of all Members; Decide: 1. To continue to work towards the necessary reform of the World Trade Organization in a transparent, inclusive and open manner, ensuring the participation of all Members that wish to be actively involved. 2. To instruct the General Council to identify substantive issues to be addressed as part of that process and to carry out that work, reporting at regular intervals not exceeding six months to the Senior Officials on the progress made, in accordance with the work plan attached thereto. 3. To instruct the General Council to present a report on the work undertaken and to make such recommendations as it considers relevant to the Fifteenth Ministerial Conference. WTO Reform Work Plan 1. Objective: To propose concrete recommendations for consideration by Ministers at the Fifteenth Ministerial Conference, with a view to reforming and improving the functioning of the Organization across all its functions. 2. Scope: Topics to be covered by consensus among Members, in a transparent, open, inclusive and participatory manner, shall be identified during the first six months following the conclusion of the Fourteenth Ministerial Conference. – Modality: In principle, four co-facilitators shall be appointed, representing different levels of development and perspectives, to lead reform discussions in a holistic manner, under the auspices of the General Council. – The discussions shall take place in working groups open to all interested Members, and overlapping meetings of the different groups shall be avoided to facilitate the participation of Members and ensure inclusiveness. – Once the thematic areas to be addressed for each function of the Organization have been identified, two additional facilitators may be appointed for each identified area, representing different points of view and levels of development. – At all times, the discussions shall be led by Members and decisions taken by consensus. The Secretariat may, at the request of Members, provide technical support and gather data to facilitate discussions on topics where Members consider it appropriate.” Organization of activities and checkpoints: April-September 2026: – Appointment of four co-facilitators for the reform process. – Consultations to identify reform topics and objectives. – Senior Officials Meeting in September to approve the thematic work calendar and appoint thematic co- facilitators. October 2026-April 2027: – Discussions in open-ended working groups by thematic area. – Senior Officials Meeting in April 2027 to assess progress and make adjustments. May-September 2027: – Ongoing discussions to prepare a draft decision for MC15. – Senior Officials Meeting to assess progress. October-November 2027: – Finalization of the draft decision to be presented to the Senior Officials. December 2027: – Senior Officials Meeting to approve the recommendations to be submitted to Ministers for their consideration at the Fifteenth Ministerial Conference. +
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