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Info Service on WTO and Trade Issues (Mar26/12) Geneva, 11 Mar (D. Ravi Kanth) — Many members of the World Trade Organization on 10 March expressed concerns over the elements of the draft reform package, including the draft ministerial statement and annexed work plan prepared by the facilitator for the WTO’s 14th ministerial conference (MC14), said people familiar with the development. Objections were raised apparently on grounds that the draft texts appeared to go beyond areas of convergence identified during the consultations and introduced elements on which members had not reached a common ground, said people familiar with the development. At the final General Council meeting before the start of MC14 in Yaounde, Cameroon, on 26 March, several members from South America – such as Paraguay and Argentina – as well as India, Bangladesh, Pakistan and Antigua and Barbuda (speaking on behalf of the six members of the Organisation of Eastern Caribbean States), among others, raised concerns regarding the scope of the reform agenda and the structure of the facilitator’s draft ministerial statement and work plan, said people familiar with the development. However, Brazil, South Africa and several other members indicated that while the package was not perfect, it reflected extensive consultations and could serve as a basis for further work. The biggest surprise during the meeting was the position taken by Mozambique on behalf of the African Group, said one trade envoy, who asked not to be quoted. The Group, which has circulated several detailed submissions on WTO reform in recent months, indicated that it could support the facilitator’s draft ministerial statement and accompanying work plan as a basis for ministers’ discussions, the envoy said. Several trade envoys noted that this position appeared difficult to reconcile with the African Group’s own reform proposals circulated in Geneva, including a detailed communication tabled just five days earlier, which stresses the importance of preserving consensus-based decision-making and safeguarding special and differential treatment. The position was also viewed in light of the Maputo Ministerial Declaration adopted by African Union trade ministers on 26 February, which calls for development-centred WTO reform and cautions against approaches that could weaken the core multilateral principles. According to several delegates, the WTO Secretariat is working “closely” with some developing-country coalitions, including the African Group and the Least Developed Countries (LDCs), in a technical assistance capacity. Two African ambassadors involved in both groups, speaking on condition of anonymity, said that the Secretariat often assists these groups administratively, including circulating draft statements and facilitating communications among members. “In many ways they act as a kind of Post Box for the groups,” one ambassador said, noting that this role gives Secretariat officials visibility over draft texts and evolving positions before they are delivered formally. Three trade envoys said that this interaction appears to have intensified in the run-up to MC14. “There is a lot of engagement in the name of technical support,” one trade envoy said. “But it also means the Secretariat has a fairly good sense of where the groups stand on many issues.” According to these trade envoys, this dynamic has coincided with growing “encouragement” directed at some developing-country groups not to be seen as obstructing the reform process ahead of MC14. A former General Council chair from Africa cautioned that, with the ministerial conference taking place in Cameroon and the WTO led by an African Director-General, the African Group and the host country may face heightened expectations to demonstrate flexibility and support for outcomes emerging from the reform process. For some trade envoys, the African Group’s intervention at the General Council therefore appeared difficult to reconcile with the positions articulated in its recent reform submissions and the Maputo ministerial declaration. Even though the European Union, the United Kingdom, and the “Friends of the System” group including Singapore, Australia, New Zealand, Korea and Switzerland, among others, supported transmitting the facilitator’s drafts to ministers, a number of delegations questioned the scope of the proposed work plan, explicitly stating that consensus had not emerged on key elements and that some aspects of the drafts appeared to reflect certain members’ approaches more prominently than others, said a trade envoy who asked not to be quoted. The facilitator’s report highlighted three clusters of issues discussed during the consultations – decision-making, development, and “level-playing-field” issues – and included a draft ministerial statement and work plan issued under his own responsibility for ministers’ consideration. The United States did not take the floor during the reform discussion under this agenda item, according to participants. CHINA VOICES SUPPORT China’s trade envoy, Ambassador Li Yongjie, supported the facilitator’s draft ministerial statement and work plan. For China, said Ambassador Li, “it is imperative to preserve WTO’s fundamental principles, improve its functions, and further develop the WTO rules, to better respond to the challenges of our time and deliver more for inclusive development of the broad membership.” She said, “China supports MC14 to adopt a Ministerial Statement on WTO Reform and a balanced Work Plan, which lays out the scope and modalities for Post MC14 work, based on the past 9 months’ consultations.” The Chinese trade envoy said: “The current draft contained in Annex to the facilitator’s report JOB/GC/491 is a good basis for ministers’ endorsement at MC14. It reflects the diversity of views across the Membership and avoids prejudging the direction of reform. It contains the structure necessary to guide the member-driven Post MC14 reform work. Its adoption at MC14 would also provide an important political signal that members are seriously engaged in the reform process. China does not think an MC14 reform outcome that only touches on the process would work.” However, several delegations indicated that they could not support the annex or elements of the work plan in their current form, raising questions about how the reform package would be transmitted to ministers ahead of MC14, said people familiar with the development. Members of the “Friends of the System” group, which the DG keeps referring to as the “middle-group” countries – such as Korea, Singapore, Switzerland, Australia, the United Kingdom, and New Zealand – seem to have echoed their support for transmitting the facilitator’s draft text to ministers as a basis for discussion, according to participants who attended the meeting. Brazil and China apparently suggested that the reform process should contain substantive elements alongside procedural guidance, indicating that a purely process-oriented outcome would not be sufficient, participants said. Russia indicated that it would prefer the reform work plan to proceed without the ministerial statement in its current form, and raised concerns about how certain issues had been framed. India raised strong reservations regarding the facilitator’s draft ministerial statement and work plan, indicating that discussions had not matured sufficiently to support forwarding the text to ministers in its current form. The Indian statement appears to have contained very strong criticisms against the facilitator’s construction of the three reform tracks, the participant said. India and Paraguay both raised concerns about the way that certain reform themes had been structured in the facilitator’s report, particularly in relation to decision-making and special and differential treatment. Several delegations – including Paraguay and Argentina – criticised elements of the facilitator’s draft reform package, particularly the ministerial statement. Brazil, however, indicated that it could work with the draft as a basis for further engagement. Bangladesh and members speaking through the Organisation of Eastern Caribbean States also expressed reservations regarding the scope and modalities of the proposed reform work. Several delegations also raised questions about the procedural status of the facilitator’s report and how the draft ministerial statement and work plan would ultimately be transmitted to ministers ahead of MC14. Pakistan stressed that the facilitator had been appointed to assist the General Council chair in identifying elements of a reform process and therefore any document sent to ministers should come formally from the General Council chair rather than the facilitator. According to participants, Pakistan indicated that it could not support the transmission of the draft text unless there was explicit clarification that the document was being forwarded under the authority of the General Council chair. Several diplomats said this intervention reflected broader concerns among members about the procedural basis for transmitting the draft reform package to ministers. One ambassador said the discussion ended without a clear understanding among delegations as to what had been decided. “A number of process questions were raised,” the envoy said. “But the item was closed rather quickly and it was still not entirely clear what exactly was being transmitted to ministers and in what form.” Another diplomat said the manner in which the discussion concluded left several delegations uncertain about the status of the facilitator’s report and annex. “Members were still seeking clarification on the process,” the envoy said. “Then suddenly the Chair moved to close the item.” DG’S PITCH FOR REFORM At the marathon General Council meeting, the WTO’s Director-General, Ms. Ngozi Okonjo-Iweala, made a big pitch for WTO reform and the draft agriculture text prepared by the chair of the Doha agriculture negotiations, Ambassador Ali Sarfraz Hussain of Pakistan, said participants familiar with the development. Earlier, the DG had reportedly viewed the agriculture negotiations as a proverbial “Achilles heel”, but now it appears that she has seemingly changed her stance, pleading for an outcome on agriculture at MC14, said people familiar with the development. The DG also explained how the Minister-Facilitators were decided based on the countries that put forward their names, suggesting that there were no irregularities in the selection process, said people familiar with the development. However, as Paraguay noted, it is somewhat inexplicable how the supporters of the facilitator’s reform proposals fielded their candidates while no opponents “threw their hats” into the selection process, said a participant who asked not to be quoted. At the meeting, the DG made a strong pitch for reforms, exhorting members that they have to decide whether the organization should progress or remain in its current state, said people familiar with the development. Given the realities of international trade today, she apparently said, “we need an MC14 that sets a credible path towards a reformed WTO, one that better serves the interests of all members and delivers meaningful outcomes in priority areas by MC15 and beyond.” However, the current proposals on WTO reform prepared by the facilitator, though somewhat abstract without any quantifiable outcomes or clarity on how the most fundamental concerns plaguing the WTO could be addressed, appear to be replete with far-reaching implications for developing countries. They are allegedly aimed at creating a permanent divide between the industrialized countries, including the United States, allowing them to decide their unilateral issues, and developing and poor countries, who will be pushed into “a trade ghetto”, said a former General Council chair from Africa, on background basis. The DG, however, said MC14 “is what I call in my words a turning point ministerial … One in which we can show that the organization is up to the job of taking criticisms seriously and then using this to reposition itself.” She said rhetorically, “we cannot be in a position in which we all have criticisms of this organisation and the way it functions or doesn’t function and then when it comes the time to take action to work on this, we don’t do it.” But the DG has hardly shown such urgency on reforming the WTO’s enforcement function by restoring the two- tier dispute settlement system, which could have been easily repaired if she had convinced the US to drop its opposition, said a trade envoy who asked not to be quoted. While she appears to be constantly haranguing the developing and poorest countries to embrace the “top-down” reform agenda, she did not show that kind of urgency in addressing the core unresolved/mandated issues since the WTO’s 10th ministerial conference (MC10) in Nairobi, Kenya, in December 2015, said a former General Council chair who asked not to be quoted. Ms. Okonjo-Iweala apparently said that “the outcome of this will be one that everybody, as I always say, will be watching as to whether we can move forward so the organization can do what is necessary to reposition itself and it all relies and depends on all of you here in Geneva.” Demonstrating her apparent restiveness, the DG said, “we first have to give the ministers something that they can focus on and we then have to take work back so that the work and proposals and all your suggestions can be put on the table here in order to make the organization move forward.” The DG is understood to have cautioned that if members “end up without the basis on which to engage ministers in Yaounde and we end up not being clear on what we are supposed to do when we come back, I think that will be a very huge missed opportunity and it will be very difficult to criticise after, because given the opportunity, we’ve not seized it to reform.” She thanked the members for having taken the work in several negotiating groups seriously, saying that “your collective efforts and under the responsibility of the various chairs, we now have more or less texts that we can send to ministers for their consideration to deliver the political signals needed to advance post-MC14 negotiating work.” The DG said that she had already emphasized last year that she does not expect ministers to engage in technical negotiations in Yaounde, but that they have to send focused messages on what they want ambassadors to do after, said participants who asked not to be quoted. According to the DG, “as we move into the final phase ahead of MC14, our focus now turns to preparing your ministers for what lies ahead in Yaounde.” She briefly outlined how MC14 will be organized, following the constructive feedback received throughout this nearly year-long consultation. She informed members that the final “Road to Yaounde” document containing the modalities for the conference will be circulated after this General Council meeting. That report will take into account any other feedback or adjustments that may arise from this General Council meeting, and it will be part of the package sent to ministers after the meeting. Ms. Okonjo-Iweala said that the conference will run for four days from 26-29 March, although she indicated that some side events will take place on 24-25 March at the request of members. She also ruled out any extension of MC14, suggesting that “the conference itself from 26-29 March will end as scheduled. It will not be extended.” +
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