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TWN
Info Service on WTO and Trade Issues (Aug26/11) WTO:
LPF track risks becoming "new broad-based" negotiating round Geneva, 7 Aug (D. Ravi Kanth) -- The Facilitator for "level playing field" (LPF) issues, Ambassador Elmer Jose German Gonzalo Schialer Salcedo (Peru), while defining the challenges and views on scope, observed that "fairness means different things to different Members, reflecting their diverse economic circumstances, development priorities and experiences within the multilateral trading system." While the United States, Japan, and the European Union - who were not named by the Facilitator - reportedly emphasized addressing distortions from industrial subsidies, non-market policies, state-owned enterprises, and overcapacity, many countries apparently stressed that a level playing field must encompass longstanding structural asymmetries, including in agriculture, tariff escalation, market access, and development-related flexibilities. These members stressed that "a level playing field pillar which sidelines agriculture, NAMA, services, TRIPS, TRIMS, technology transfer, and other areas with development-related asymmetries that need to be addressed would not be balanced, particularly given limited progress in the relevant WTO Bodies to date." Conversely, a few countries underscored that progress is contingent on "first restoring the WTO's capacity to take decisions, deliver negotiated outcomes and implement and enforce WTO rules." Members cautioned that absent a clearer definition of scope, "the track risks expanding into the equivalent of a new, broad-based negotiating round." Conceptual clarity Many emphasized that leveling the playing field does not imply identical rules or obligations for economies at different levels of development. For these Members, "a genuine level playing field means ensuring fair opportunities to participate in and benefit from international trade, taking into account development needs, policy space and structural constraints." However, a few powerful countries like the EU and Japan appear to have emphasized that the WTO must address harmful competitive distortions caused by current industrial policies and state interventions where existing rules fall short. Industrial subsidies & State intervention Issues regarding industrial subsidies, state intervention, state-owned enterprises, and overcapacity were regarded as central to current pressures on the multilateral trading system. Suggestions included exploring new trade remedies based on market concentration thresholds, enhancing transparency, and modernizing enforcement tools. Issues concerning transparency were reportedly raised by the US, while a few members stressed that "the objective should not be to characterize industrial subsidies as inherently beneficial or inherently harmful, but rather to distinguish between legitimate development-oriented industrial policies and measures that produce demonstrable adverse effects on international trade." Some members (like China) cautioned that "the concept of overcapacity has, at times, been invoked to justify protectionist measures." These members argued that "arbitrarily linking legitimate industrial subsidies or trade surpluses to allegations of overcapacity risks mischaracterizing underlying economic realities and could contribute to the politicization of the debate." Historical imbalances & mandates Many members emphasized that a balanced agenda must address agricultural domestic support, tariff peaks, tariff escalation, cotton, market access barriers, unilateral measures, and implementation gaps. Several Members linked confidence in this track to the implementation of existing commitments, particularly in agriculture. Attention was also drawn to the effects of unilateral trade measures, economic coercion, and broad interpretations of security exceptions. Development, S&DT & policy space Many Members emphasized that reform should support, rather than constrain, structural transformation and industrialization. Some suggested that a genuine level playing field should include reflection on whether original Members should assume responsibilities comparable to those undertaken by Members that acceded through Article XII of the Marrakesh Agreement. Conversely, a few members emphasized that as Members' capacities evolve, this should be reflected in the application of flexibilities, "so as to ensure that such provisions remain appropriately targeted and responsive to demonstrated needs." These countries expressed concern that undifferentiated approaches to S&DT could contribute to an uneven playing field "by extending flexibilities to Members whose economic circumstances have changed, while reducing the relative opportunities available to other developing Members with greater development needs." The few powerful countries apparently cautioned that "broad or open-ended policy space that weakens agreed disciplines could create competitive advantages for Members with greater fiscal, institutional or technological capacity, potentially to the detriment of other developing Members with more limited resources." Dispute settlement & mapping exercise Many members highlighted "the restoration of a fully functioning dispute settlement system as an essential element of any meaningful level playing field," noting that "any new obligations, disciplines or remedies would be difficult to sustain without an effective, independent and accessible mechanism through which all Members can enforce their rights and obligations." +
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