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TWN
Info Service on WTO and Trade Issues (Apr26/13)
Trade: WTO faces renewed divisions over S&DT after MC14 collapse Yerevan, 20 Apr (D. Ravi Kanth) -- The World Trade Organization is set to resume work following the recent failure of the WTO’s 14th Ministerial Conference (MC14) in Yaounde, Cameroon, with a meeting of the Committee on Trade and Development (CTD) on 21 April, against the backdrop of deep divisions over the future of special and differential treatment (S&DT). These tensions stem from the unresolved disagreements over S&DT at MC14, according to people familiar with the development. A restricted document (JOB/COMTD/25) issued earlier this month and reviewed by the SUNS outlines the upcoming CTD meeting schedule and highlights several contentious issues that exposed significant fault-lines at MC14. Among the agenda items, two are expected to provoke particularly intense debate. The first concerns the “Operationalization of the CTD's mandate: A proposal to deliver outcomes based on the MC8 mandate - Proposal from China, Cuba, Ecuador, India and the African Group (WT/COMTD/W/192).” According to the restricted document, this proposal was initially tabled at the 93rd session held on 16 March 2015 (WT/COMTD/M/93). “It contains a revised proposal for the amendment of the General Council Decision on Procedures for an annual overview of WTO activities and for reporting under the WTO (WT/L/105), namely to add after the first sentence of paragraph 2: “The CTD is instructed to report, within its mandate, on development-related activities and development issues raised in other WTO bodies; and provide the necessary recommendations to the General Council on achieving better coordination within the WTO on development issues and to operationalize its mandate as the focal point for development in the WTO”.” The same document traces its origins to earlier discussions: “Importantly, the Document WT/COMTD/W/192 was first discussed at the 87th Session of the CTD held on 4 March 2013 (WT/COMTD/M/87). It contains three proposals concerning trade and development work: (i) requesting the Secretariat to continue to update the report on the application of special and differential treatment provisions; (ii) recommending the amendment of document WT/L/105 by adding after the first sentence of paragraph 2: “The CTD is instructed to report, within its mandate, on development-related activities and issues raised in other WTO bodies; and provide the necessary recommendations to the General Council on achieving better coordination within the WTO on development issues; and (iii) recommending Members parties to regional trade agreements (RTAs) to jointly notify and provide information on their RTAs in line with the obligations envisaged in the Transparency Mechanism on Regional Trade Agreements (WT/L/671)”.” With growing pressure - particularly from industrialized countries such as the United States - to re-calibrate the WTO’s development mandate, this item has taken on renewed importance as a reaffirmation of the organization’s original commitments, sources said. The second flashpoint centers on the monitoring of special and differential treatment provisions, on which the CTD chair is expected to deliver a statement. According to a restricted document (JOB/COMTD/MMSDT/6) issued on 10 April, CTD chair Ambassador Mzukisi Qobo of South Africa is expected to address the “monitoring of special and differential [treatment] provisions.” Recalling earlier decisions, the chair is expected to state: “Ministers decided to establish a Monitoring Mechanism on Special and Differential Treatment. This Decision is contained in document WT/L/920 - WT/MIN(13)/45.” The mechanism, as defined, “stipulates that the Monitoring Mechanism acts as a focal point within the WTO to analyse and review the implementation of special and differential treatment (S&DT) provisions, based on written inputs or submissions made by Members, as well as reports from other WTO bodies to which Members may make submissions.” The chair has also noted the importance of “any written inputs or submissions to facilitate the monitoring of S&DT provisions under the Monitoring Mechanism” and urged “Members to explore ways of improving the functioning of the Mechanism.” DIVISIONS OVER S&DT Reports from Minister-Facilitators following the failure of MC14 - where development issues featured prominently - underscore the depth of disagreement among members. During the breakout discussions at MC14 on “Special and Differential Treatment and Development,” the US reportedly argued that all members should adhere to the same rules. It maintained that the current treaty-based, self-designated system allowing developing countries to access S&DT lies at the root of many of the WTO’s challenges. Washington said that S&DT “should be made available according to a targeted approach - whether in terms of technical assistance, capacity-building, or policy flexibility” - based on a seemingly unilateral process without exceptions. The US also reportedly called for eliminating member categorization based on the 1979 Enabling Clause, which permits less-than-reciprocal commitments for developing countries - a framework that the US had previously supported in the July 2004 framework agreement. From Washington’s perspective, the current self-designation model for S&DT has hindered progress. Some industrialized members argued that S&DT benefits should not apply universally to all developing countries. Developing countries, however, pushed back firmly, with many insisting that the S&DT provisions are a core, non-negotiable element of the WTO rule-book and must remain distinct from broader development discussions.
They emphasized that S&DT is an inherent right and has played a critical role in integrating developing economies into the global trading system. China, while advocating WTO reform, took a broader view, arguing that trade alone “cannot solve all development problems” and stressed that WTO reform must proceed “in the right direction, which means upholding true multilateralism, placing development at the center of the reform agenda, and safeguarding and strengthening a rules-based, open and inclusive multilateral trading system that is non-discriminatory to all members and more [deferential] to the small and vulnerable.” In an implicit critique of the US stance, China emphasized that “a rules-based trading system built on principles of non-discrimination can provide stability and predictability and is conducive to universally beneficial and inclusive development.” It warned that “a power-based trading system [amplifies] the asymmetry between members, leaving the most vulnerable members marginalized.” China also called for “concrete actions to enhance the effectiveness of special and differential treatment (SDT),” describing it as “an important policy tool to help developing members better integrate into the multilateral trading system.” It posed the following question: “how to make it more precise, effective, and better respond to the needs of members at different levels of economic development?” It believes that “an integrated approach that contains elements of needs assessment, capacity building and rules implementation should be explored, as in the case of the Trade Facilitation Agreement and the Fisheries Subsidies Agreement.” It added that “the Investment Facilitation for Development Agreement also builds on such a model,” while cautioning that “imposing external criteria on SDT eligibility, on the other hand, is never going to make SDT more effective.” China further broadened the development discussion, stating that “development is much broader than SDT,” encompassing priorities such as industrial policy space, foreign investment, food security, supply chain resilience, the digital economy, green transition, and artificial intelligence. It also introduced an agenda item on “the chair’s summary of the High-Level meeting on accelerating Africa’s industrialization: China’s investment,” noting that “Ministers and high-level representatives agreed [at MC14] that, under the joint planning and guidance of China's President Xi Jinping and the Leaders of African countries, the relationship between China and Africa has achieved leapfrog development and entered their best period in history. China and African countries will work hand in hand to advance modernization and build an all-weather China-Africa community with a shared future in the new era.” The statement adds that “Ministers and high-level representatives emphasized that Africa boasts abundant natural resources and a huge demographic dividend, and has enormous potential to realize industrialization.” At the same time, “it faces severe challenges, including significant disruptions to the international economic and trade order.” China further states that it will “stand ready to work together to uphold the rules-based multilateral trading system with the WTO at its core, support each other, strengthen cooperation and address uncertainties in the international economic and trade environment with the stability of China-Africa economic and trade cooperation.” VARIED PERSPECTIVES Other participants offered varied perspectives. The European Union acknowledged the uneven gains from existing trade rules and posed key questions about how to design S&DT provisions, define transition periods, and determine eligibility thresholds. It appears to favour a flexible, capacity-based “targeted approach,” while also emphasizing the importance of investment in the development discussions. At the same time, it signalled support for industrialization, provided it is not “trade-distorting.” Gambia indicated openness to reforming S&DT but did not endorse the EU’s approach. El Salvador called for greater flexibility and fairer rules to support integration into global value chains. Nigeria stressed that reform must go beyond agreements while preserving policy space for developing countries. New Zealand pointed to multiple reform avenues, including pending agriculture negotiations, and emphasized that S&DT remains essential for integration into the multilateral trading system. It also highlighted the need for stronger technical assistance and an evidence-based approach. Saudi Arabia underscored the importance of multilateralism and insisted that S&DT remain central to the WTO framework, while the Solomon Islands called for transparency in the reform efforts. India reaffirmed that the Marrakesh Agreement establishing the WTO clearly protects the rights of developing countries. It argued that S&DT commitments are unambiguous and necessary to address structural inequalities. India also stressed that development must remain central to multilateralism and that policy space - particularly for industrialization - is indispensable. It argued that any reform of S&DT must deliver “precise and effective outcomes.”
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