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Info Service on WTO and Trade Issues (Mar26/01) Geneva, 27 Feb (D. Ravi Kanth) — At the end of their two-day summit in Maputo, Mozambique, on 26 February, African Union (AU) trade ministers finalized a blueprint challenging the World Trade Organization Director- General’s backing of a WTO reform agenda that they argue is being forced by the major industrialized countries, said people familiar with the development. The document directly challenges the positions taken by the DG, Ms. Ngozi Okonjo-Iweala, who, on 25 February, apparently supported the reforms proposed by the Norwegian facilitator on changing the practice of consensus-based decision-making, differentiating among developing countries on special and differential treatment (S&DT), and “level-playing field” issues, according to a senior African official who requested anonymity. In what the official characterized as an alleged violation of her status as an international civil servant under the provisions of the Marrakesh Agreement, Ms. Okonjo-Iweala reportedly urged African trade ministers in Maputo not to oppose the proposed reforms, despite concerns that they could undermine the multilateral framework. Her stance seemingly aligned with the United States, the European Union, Japan, and the so-called “Friends of the System” group, and was reinforced by 145 business lobbies from major industrialized countries calling for a “time-bound reform round” to change the consensus principle and to enable plurilateral negotiations at the WTO. Against this backdrop, African Union trade ministers issued the Maputo Ministerial Declaration on 26 February. MAPUTO DECLARATION The preamble to the declaration acknowledges that “the multilateral trading system, and the World Trade Organization (WTO) in particular, is facing a profound systemic crisis, reflected in persistent negotiating paralysis, unresolved development issues, weakened enforcement mechanisms, growing unilateralism, protectionism, fragmentation, marginalization of developing country priorities, and the erosion of trust among Members.” The systemic crisis stems largely from the United States, both in the WTO negotiations and through its unilateral reciprocal tariffs allegedly in violation of MFN treatment and the scheduled binding commitments under the Marrakesh Agreement, according to several trade envoys who asked not to be quoted. The declaration notes that “developing countries, including African countries and Least Developed Countries (LDCs), have consistently called for meaningful reform of the WTO since the conclusion of the Uruguay Round, in order to correct historical imbalances and ensure that the system delivers equitable development outcomes.” With African members “representing the largest constituency within the WTO,” the declaration states that they “cannot remain peripheral in shaping its reform and future direction, and that a multilateral trading system that fails to address the interests, priorities and development realities of its largest constituency is neither sustainable nor credible, and that meaningful reform is therefore not optional but urgent.” PRIORITY ISSUES The declaration identifies several priority issues including WTO reform; development and special and differential treatment (S&DT); agriculture; electronic commerce; WTO accession; LDC graduation; and the African Union’s observer status at the WTO. On the foundational issues, the ministers in their declaration reiterated “the WTO’s core principles – including MFN, consensus-based decision-making, transparency, non-discrimination, and inclusivity as foundational”, while stressing “Africa’s long-standing calls for reform since the Uruguay Round to address systemic biases against developing countries.” They stated that “the legitimacy and effectiveness of the WTO rest on respect for its agreed rules, principles and institutional balance, and that erosion of these foundations undermines confidence in the system, particularly among developing countries.” They recalled “the unfulfilled mandates from previous Ministerial Conferences, urging their prioritization to restore credibility and balance in agenda-setting.” On the issue of WTO reform, the ministers stated that WTO reform “must take into account the long-standing concerns of developing countries contained in the Doha Development Agenda, improve the functioning of the WTO to make it more inclusive, and should preserve and safeguard its core principles as enshrined in the Marrakesh Agreement.” They acknowledged “that the WTO is at a critical juncture, confronting a crisis of relevance, legitimacy, effectiveness, erosion of trust, and paralysis of its dispute settlement system that threatens its ability to respond to contemporary global challenges and to support the development aspirations of its Members, particularly developing countries and LDCs.” The ministers reiterated “that Africa’s engagement with the multilateral trading system has always been anchored in the pursuit of a fair, predictable and development-oriented rules-based framework, while RECOGNIZING that the existing system has fallen short in delivering balanced outcomes and correcting historical inequities.” Therefore, they said that “WTO reform must be member-driven, inclusive, transparent and development- centered, and must not entrench existing asymmetries or legitimize exclusionary approaches to agenda-setting, negotiations or decision-making.” They added: “A system that fails to address the interests of its largest constituency – developing countries – cannot endure.” Reform efforts “must restore balance across the three core functions of the WTO – negotiation, monitoring and dispute settlement – and must address long-standing development issues with the same urgency afforded to emerging and new trade topics.” The ministers called for “the urgent and unconditional restoration of a fully functional, two-tier, binding dispute settlement system, accessible to all Members, as a cornerstone of legal certainty and protection against unilateral and coercive trade measures, particularly for developing countries with limited economic leverage.” They pressed for “balance in the reform agenda, negotiations and outcomes, ensuring that institutional and procedural reforms go hand in hand with outcomes on substance – particularly in areas of development, agriculture, and industrialization,” while cautioning that “reform processes that continue to defer or dilute development priorities risk further weakening confidence in the multilateral trading system.” Reaffirming “the centrality of the Most-Favoured-Nation (MFN) principle as a foundational pillar of multilateralism,” they cautioned “against practices that fragment the system, weaken multilateral disciplines or marginalize non-participating Members.” On development and S&DT, the ministers underscored that “Special and Differential Treatment is a core principle and remains a permanent right of developing countries and least developed countries (LDCs) in the multilateral trading system.” Stating that “S&DT is a structural necessity, not a temporary concession,” they demanded “that WTO reform deliver concrete outcomes that make S&DT provisions more precise, effective and operational,” and called for “preserving policy space for industrialization, food security and economic diversification.” They further called for strengthening “the WTO’s deliberative function in order to address systemic imbalances, including technology transfer, industrial policy space, debt and trade linkages, climate-related trade measures and global value chain concentration.” “This should be done in a manner consistent with Members’ development levels, particularly in relation to the transfer of environmentally sound technologies to developing and least developed countries, while adhering to WTO principles and the principle of Common but Differentiated Responsibilities and Respective Capabilities (CBDR-RC).” On the issue of decision-making, the ministers reaffirmed that “consensus-based decision-making remains a cornerstone of the WTO and a critical safeguard for the interests of developing countries,” while calling “for reforms that strengthen inclusivity, transparency and effective participation of all Members, particularly African countries and LDCs, in agenda-setting, negotiations and outcomes.” They pressed for “member-driven, consensus-based decision-making that prevents domination by few and ensures Africa’s voice as the WTO’s largest constituency shapes outcomes.” The ministers emphatically reaffirmed that “Special and Differential Treatment (S&DT) [is] a non-negotiable foundational principle of the multilateral trading system, aimed at correcting structural inequalities and facilitating development.” They called for placing “development at the heart of WTO reform, and that S&DT is an essential tool for addressing structural inequalities within the multilateral trading system.” They stated that “reform outcomes must deliver tangible development outcomes, including enhanced policy space, industrialization prospects, and food security for developing countries.” According to the declaration, the ministers “reject reform approaches that dilute, reinterpret or condition S&DT in ways that undermine its purpose or effectiveness”, and “reject any attempt to condition access to S&DT on arbitrary differentiation, income thresholds or self-designation approaches that ignore structural vulnerabilities and development realities.” They called for adopting “without further delay, of the G90 proposals to operationalize S&DT provisions across WTO Agreements” and demanded “a reinvigoration of the Committee on Trade and Development to monitor, evaluate, and guide implementation of S&DT provisions in all negotiations and agreements.” On level-playing field issues, the ministers argued that “the concept of a “level playing field” cannot be detached from historical context, development disparities and asymmetries in economic capacity.” They emphasized that “genuine fairness in global trade requires addressing entrenched imbalances in rules and outcomes, including in agriculture, domestic support, subsidies, technology transfer, and market access, to create equitable conditions for African exporters and producers.” The ministers cautioned “against the use of “level playing field” narratives to justify constraints on legitimate development policies of developing countries.” AGRICULTURE On agriculture, the ministers stated that “agriculture and its related food systems are the backbone of African economies and remain the vital sector of African economies, essential for economic growth, food security, rural development, job creation and poverty reduction in the continent.” They reiterated their “deep concern about the historical imbalances and the persistent trade-distortive use of inequitable AMS entitlements, the Blue and Green Boxes which harm the competitiveness of African producers, fosters market concentration, and discourage production and diversification across Africa.” They called for “a clear roadmap and timelines for the delivery of a permanent solution on public stockholding on or before MC15, with appropriate safeguard mechanisms in order to enable African Countries to implement strategies aimed at bolstering domestic agricultural production and achieving food security, particularly for poor and marginalized population in Africa.” The ministers demanded that “priority be given to work aimed at reaching an effective and operational Special Safeguard Mechanism (SSM) for developing countries, enabling them to protect their local markets against import surges or price volatility which threatens the livelihoods of farmers, impacts investment decisions and ultimately affects food security.” On cotton, they called for “a ministerial mandate to advance the specific discussions agreed upon in the Hong Kong, Bali and Nairobi decisions on cotton, and to achieve concrete results before MC15.” The ministers called for “disciplining trade-distorting domestic support, in particular additional AMS entitlements and prioritizing work towards reaching an outcome on Domestic Support that integrates special and differential treatment including the preservation of Article 6.2 support for low-income and resource-poor farmers by MC15.” DEVELOPMENT On development, the ministers emphasized “the need for the reform of WTO rules that constrain policy space to promote industrialization, which is now more essential than ever due to an increase in vulnerabilities on the African continent and in other developing countries and recall the Africa Group proposals submitted in this regard (WT/CG/W/868, G/C/W/825; WT/GC/W/880; WT/GC/W/883,WGTTT/W/34/Rev1, WT/GC/W/896).” They reaffirmed “that preserving this policy space is critical to supporting African countries in their transition away from dependence on primary commodities, without violating WTO rules.” The ministers said that “trade in services is a pillar of Africa’s structural transformation driving competitiveness including through enhanced continental market access, growth of services exports, development of regional value chains, digital and knowledge-based industries, and emphasize that the GATS must be implemented in a manner that supports development and preserves policy space.” They said that “reducing the cost of remittance transfers is a critical lever to foster shared prosperity and accelerate progress towards the Sustainable Development Goals, and express our commitment to continue working to advance this issue within the WTO.” On the E-commerce moratorium, the ministers expressed “concerns regarding the development implications of the WTO moratorium on customs duties applicable to electronic transmissions, particularly the potential loss of customs revenue that is vital for financing development initiatives.” They urged “a comprehensive assessment of the impact of this moratorium on the economies of African countries.” DISPUTE SETTLEMENT The ministers reiterated “Africa’s long-standing position that a fully functional, two-tier, binding dispute settlement system is indispensable to the credibility of the WTO.” According to the ministers, any reformed dispute settlement system “must preserve the independence of adjudicators, ensure legal certainty, and remain accessible and effective for all Members, including those with limited capacity.” They called for “the expeditious conclusion of dispute settlement reform in line with written submissions and ideas by several Members.” +
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