US undermines consensus at WTO meet in Buenos Aires

The failure of the Buenos Aires Ministerial to secure a consensus - principally as a result of US intransigence - is a further erosion of the multilateral framework of the WTO, says D Ravi Kanth.

THE WTO's Eleventh Ministerial Conference collapsed on 13 December like a house of cards, after the United States single-handedly blocked outcomes on mandated decisions and a ministerial declaration, several trade ministers told the South-North Development Monitor (SUNS).

MC11 did, however, pave the way for accelerating work on fisheries subsidies based on the draft texts. The decision agreed at Buenos Aires on fisheries subsidies says: 'Members agree to continue to engage constructively in the fisheries subsidies negotiations, with a view to adopting, by the Ministerial Conference in 2019, an agreement on comprehensive and effective disciplines that prohibit certain forms of fisheries subsidies that contribute to overcapacity and overfishing, and eliminate subsidies that contribute to IUU [illegal, unreported and unregulated] fishing recognising that appropriate and effective special and differential treatment for developing country members and least developed country members should be an integral part of these negotiations.'

The trade ministers gathered in Buenos Aires also endorsed South Sudan's request for joining the WTO.

Extension of the moratorium not to impose customs duties on e-commerce transmissions (which was further clarified in a footnote following objections raised by Indonesia), extension of the moratorium on TRIPS non-violation and situation complaints, and a decision on the work programme for small and vulnerable economies were also approved at the meeting.

While the document posted on the WTO website [WT/MIN(17)/W/6] on e-commerce transmissions as of the moment of writing does not have any footnote, the Indonesian minister and their chief trade official, Iman Pambagyo, said the WTO Director-General had told them that he is attaching a footnote clarifying that 'electronic transmissions does not include trade in goods and trade in services'.

Besides extending the moratorium, the ministerial decision on e-commerce seeks to 'reinvigorate' work based on the existing mandate based on the 1998 work programme. It instructs the WTO General Council to hold periodic reviews in July and December 2018 and July 2019 based on the reports submitted by the relevant WTO bodies (Council for Trade in Goods, Council for Trade in Services, Committee on Trade and Development, and TRIPS Council) and report to the next session of the Ministerial Conference.

Unable to secure consensus at Buenos Aires on their proposals for establishing a working party/working group and horizontal discussions on e-commerce, the proponents opted for a plurilateral initiative (see following article).

Barring the above decisions, MC11 failed to deliver 'final substantive agreements', admitted WTO Director-General Roberto Azevedo.

Progress on longstanding issues was always going to be difficult and it would require a leap which was not possible at Buenos Aires, Azevedo maintained. 'Multilateralism doesn't mean you will get what you want but it means to get what is possible,' he said.

Azevedo, however, remained upbeat about the new 'dynamism', particularly the exploratory plurilateral initiatives launched by groups of countries at Buenos Aires on e-commerce, disciplines for micro, small and medium-sized enterprises (MSMEs), and investment facilitation.

The Director-General must take credit for working assiduously with major developed and several developing countries as part of a Plan B to ensure that Buenos Aires gave birth to plurilateral initiatives while eroding the multilateral basis of the WTO.

'There is life after Buenos Aires,' said the MC11 Chairperson Susana Malcorra, suggesting that Buenos Aires paved the way for addressing '21st century issues'. She welcomed the plurilateral initiatives on e-commerce and MSMEs.

[Though Azevedo and Malcorra hailed the plurilateral initiatives, it seemed clear that these might run afoul of the WTO agreements. Even the WTO's posting and promoting these initiatives on its website and expending its human and material resources on servicing such initiatives may prove problematic without specific General Council sanction (MC11 having provided none). Both Azevedo and secretariat officials involved might find themselves facing problems before the WTO Budget Committee and the General Council that approves budgets on the recommendation of that committee. - SUNS]

In the absence of a ministerial declaration, Malcorra issued a Chair's statement in which she maintained that the multilateral trading system is at a crossroads. She said the decisions adopted in Buenos Aires will guide members' work in Geneva in the next two years.

South Africa's Trade Minister Rob Davies said 'it is a moment of truth' for the multilateral organisation, which faces a grave crisis. He castigated the attempts at Buenos Aires to terminate special and differential treatment (S&DT) flexibilities and walk away from all mandated issues while embracing new issues.

The Buenos Aires meeting failed to provide any concrete outcomes on mandated issues such as the permanent solution for public stockholding (PSH) programmes for food security. Azevedo said the work on PSH will continue along with other unresolved issues in Geneva.

During several meetings - both open-ended and among small groups of countries - on 13 December, the US vehemently opposed many of the items including PSH, the language on agricultural domestic support, particularly cotton, and the special safeguard mechanism (SSM).

'In the run-up to MC11, decisions were expected on a permanent solution on food security and other agriculture issues,' India said. Without naming the US, India went on to add: 'Unfortunately, the strong position of one member against agricultural reform based on current WTO mandates and rules led to a deadlock without any outcome on agriculture or even a work programme for the next two years.'

The facilitator for agricultural outcomes at MC11, Kenyan Foreign Affairs Cabinet Secretary Amina Mohamed, had modified the draft decisions several times to ensure the US came on board to continue work on the unresolved issues. A trade minister from one of the countries in the Cotton-Four (C-4) grouping told SUNS that they had lowered their level of ambition on domestic support and market access to enable the US to agree to the language on cotton.

Despite the facilitator's painstaking efforts, the US finally pulled the plug on agriculture at an open-ended meeting of heads of delegation on 13 December afternoon. Once the US rejected the agriculture package, even the language agreed by the C-4 countries fell apart, the trade minister said.

The US also blocked the draft ministerial statement issued by the Chair of the conference.

The draft ministerial decision said, 'We reiterate paragraphs 30 and 31 of the Nairobi Ministerial Declaration, we commit to work towards more effective implementation and enforcement of WTO rules as negotiated and agreed by all and underscore the importance of implementing decisions by members.'

India initially blocked the moratorium on e-commerce transmissions on the ground that it could accept the moratorium only after members agreed to the moratorium on TRIPS non-violation and situation complaints and a structured work programme on the relationship between the TRIPS Agreement and the Convention on Biological Diversity (CBD). But India later agreed to take up the TRIPS-CBD demand at the TRIPS Council.

India also blocked a draft ministerial decision on 'policy dialogue' - which was initiated to bring new issues such as gender, trade and labour, and trade and environment - on grounds that it was not part of the WTO mandate.

'There was a view amongst Ministers that the WTO can play an important role in promoting the exchange of comparative experiences and a better understanding of the implications of different policy choices,' the draft decision had suggested.

In conclusion, the four-day meeting hosted by the Argentine government amidst protests on the streets of Buenos Aires was a well-crafted attempt to give birth to plurilateral initiatives while burying the bread-and-butter issues of the Doha work programme. The conference will remain as the mother of trade ministerial meetings in terms of eroding the multilateral framework of the WTO, several ministers said.   

D Ravi Kanth writes for the South-North Development Monitor (SUNS) published by the Third World Network. This article is reproduced from SUNS (No. 8597, 15 December 2017).

*Third World Resurgence No. 324/325, August/September 2017, pp 17-18