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Info Service on WTO and Trade Issues (Mar26/39) Yaounde, 28 Mar (D. Ravi Kanth) — The United States, Paraguay, India, Pakistan and Bangladesh on 27 March are understood to have opposed the Minister-Facilitators’ reports on “WTO reform” at the World Trade Organization’s 14th ministerial conference (MC14) in Yaounde, Cameroon, according to sources familiar with the development. The apparent rejection of the process conducted by the Norwegian facilitator, as well as his recommendations, forced the six Minister-Facilitators to scramble to rework all the issues – changing the practice of decision- making by consensus, differentiation among developing countries for availing of special and differential treatment (S&DT), and “level-playing-field” issues, said sources familiar with the development. Earlier, the US had raised objections to the proposed facilitator-led reforms, calling for concrete proposals to be submitted after MC14. India apparently proposed during the discussions on WTO reform that: “We instruct our officials to intensify their work with a view to providing concrete and substantive recommendations for action by MC15. We will undertake a mid-term review in advance of MC15 to assess progress and provide further directions.” On the modalities, India is understood to have said: “Work will be conducted under the authority of the General Council, and the WTO Reform process shall be Member-driven, open, transparent, and inclusive, and address the interests of all Members.” India is understood to have said that WTO Reform Facilitators may be appointed by the General Council on the basis of consultations with all Members, ensuring appropriate geographical and development balance for identified areas including Decision-Making, Development and S&DT, and Level Playing Field issues. According to India, the new facilitators after MC14 will lead discussions in areas identified based on Member submissions, contributions, and past Ministerial Decisions/Declarations, said people familiar with the development. “They shall operate under terms of reference agreed by Members and shall be accountable to, and report regularly to, the General Council. Members will develop the rules of procedure to govern the conduct of all Facilitators,” India is understood to have said. Further, the General Council will continue to oversee the process in a holistic manner to ensure coherence and balance across the identified areas and avoid scheduling overlaps. Paraguay has also opposed several fundamental aspects of the reform proposal advanced by the Minister- Facilitators, according to people familiar with the development. The European Union appears to be a strong proponent of WTO reform along with other industrialized countries, said people familiar with the development. Meanwhile, China seemingly lashed out at the US and other industrialized countries on “level playing field” issues. China said that the multilateral trading system is the cornerstone of fairness in international trade, while “weakening the WTO and its core principles – like most-favored-nation treatment – won’t level the playing field.” China drew several markers on “level playing field” issues. They include: * First, a loss of competitive advantage is more and more framed as evidence of unfair competition, and then used as a pretext to abuse trade remedies or resort to protectionist measures. Where WTO rules offer no cover, there have been moves not only to walk away from these rules, but also to undermine the dispute settlement system that enforces them. * Second, with trade-related environmental measures, fairness is too often judged from a domestic perspective, not a global one. By overlooking essential principles like common but differentiated responsibilities, these measures have shifted too much of the adjustment burden onto developing members. * Third, fairness is also used to downplay development considerations. Attempts to fix so-called imbalances may end up widening development gaps or narrowing policy space for developing members. True fairness can’t be achieved without giving development concerns their due weight. To move the discussions forward, China said it would like to highlight four points: * First, uphold multilateralism and stay true to the WTO’s core principles. Different understandings of fairness should lead to more engagement like we are having today, not fragmentation. * Second, focus on trade-distorting government measures. Within the WTO’s mandate, there is a lot we can do, such as improving transparency, updating the Agreement on Subsidies and Countervailing Measures, and having serious discussions on industrial policies. * Third, fully reflect the development dimension. Developing members – especially least developed countries – must have policy space to pursue economic diversification and development goals. * Fourth, maintain inclusiveness, and avoid prejudicing outcomes. We need to respect that members are at different stages of development and have different economic systems. Our discussions should help build understanding, and foster convergence. African Group on DSS reform Meanwhile, on the reform of the dispute settlement system (DSS), the African Group said that the Multi-Party Interim Appeal Arbitration Arrangement (MPIA) cannot be a multilateral solution. The African Group listed the following markers for DSS reform: * First, dispute settlement reform should be inclusive and multilateral in nature. The legitimacy of the system derives from the fact that it applies equally to all WTO members. * Second, reform discussions must fully reflect the development dimension of the dispute settlement system. For many developing countries, including members of the African Group, the key challenge is not only the functioning of appellate review but also access to dispute settlement itself, including capacity constraints and resource limitations. * Third, it is important that interim initiatives do not inadvertently reduce incentives for members to engage constructively in the broader reform process aimed at restoring the full system. The African Group said it believes that “our collective efforts should remain focused on delivering a durable and balanced outcome in the dispute settlement reform negotiations, one that addresses the concerns of all members and restores confidence in the system.”
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