North and its allies seek plurilateral route to push through new issues into the WTO agenda

Resistance from developing countries to the introduction of new issues into the WTO agenda has forced the countries of the North and their allies to seek a plurilateral route for electronic commerce and other new issues.

D Ravi Kanth

THE major developed countries and their allies in the developing world resorted to a plurilateral initiative on electronic commerce on 13 December at the Buenos Aires Ministerial Conference after failing to secure multilateral consensus for establishing a working party on e-commerce, several trade ministers told SUNS.

Argentine Minister Susana Malcorra, who chaired the ministerial meeting, welcomed the plurilateral initiative for what she called 21st-century issues.

Even the United States - which blocked the proposed outcomes on the permanent solution for public stockholding programmes for food security and other issues - immediately embraced the plurilateral initiative on e-commerce.

The 71 countries under the plurilateral initiative decided to 'initiate exploratory work' towards future WTO negotiations.

The decision came a day after the proponents had failed to secure consensus on their proposal for establishing a working party/working group to accelerate work on e-commerce with a view to launching negotiations at the next Ministerial Conference in 2019.

The US 'is pleased to partner with 70 members to initiate exploratory work on negotiations on electronic commerce issues in the WTO', said US Trade Representative Robert Lighthizer in a statement. 'Initiatives like this among like-minded countries offer a positive way forward for the WTO in future.'

The initiative is not, however, being called 'plurilateral' even though it is among a coalition of willing countries, because one member is sensitive to the use of terms like 'plurilateral' and 'multilateral', said one of the co-sponsors. Therefore it is being called an initiative of like-minded countries.

The US and the EU are among the sponsors of the initiative, which was announced by Japan, Australia and Singapore. Other members include Albania, Argentina, Bahrain, Brazil, Brunei, Cambodia, Canada, Chile, Colombia, Costa Rica, Guatemala, Hong Kong (China), Peru and many other countries.

In a joint statement, the 71 countries said they 'share the goal of advancing electronic commerce work in the WTO in order to better harness [the] opportunities' created by e-commerce.

They added: 'We recognise the particular opportunities and challenges faced by developing countries, especially LDCs [least developed countries], as well as by micro, small and medium-sized enterprises, in relation to electronic commerce.

'We also recognise the important role of the WTO in promoting open, transparent, non-discriminatory and predictable regulatory environments in facilitating electronic commerce.'

Many members of the group had circulated several proposals on e-commerce in the run-up to MC11 calling for a new mandate to commence work on e-commerce-related issues with the eventual aim of launching negotiations at the WTO. But those proposals failed to garner support beyond those who signed on to it during a meeting of heads of delegation at Buenos Aires on 11 December.

Therefore, the sponsors said in their joint statement: 'We, as a group, will initiate exploratory work together toward future WTO negotiations on trade-related aspects of electronic commerce.'

'Participation will be open to all WTO members' regardless of their current proposals. The proponents said their initiative will be undertaken 'without prejudice to existing WTO agreements and mandates'.

'Modern trade will increasingly be by e-commerce,' said Australia's Trade Minister Steven Ciobo. His Japanese counterpart Hiroshige Seko said 'the world is more interconnected than ever' and the WTO has an important role to play. Singaporean Minister Lim Hng Kiang said: 'E-commerce presents developing members and LDCs an opportunity to leapfrog, overcome traditional market barriers, and allow for more inclusive participation in global trade.'

WTO Director-General Roberto Azevedo said the initiative provided new 'dynamism' to the organisation even though it failed to make progress on the mandated issues.

However, major developing countries such as China, India, South Africa and Indonesia, among others, stayed away from the initiative.

There is still no clarity whether the initiative can be discussed within the WTO when the existing e-commerce work programme based on the 1998 decision is the basis for work within the organisation. 'The exploratory work cannot continue within the WTO,' said a developing-country trade envoy.

In another plurilateral initiative, trade ministers from many developed and several developing countries issued a joint statement for commencing work on disciplines for micro, small and medium-sized enterprises (MSMEs) so as to arrive at 'horizontal and non-discriminatory solutions' that will benefit MSMEs in international trade.

In their statement, the proponents led by Chile launched an informal work programme on MSMEs at the WTO. The work programme includes 'a comprehensive and strategic discussion on MSMEs in the WTO, as a contribution at the multilateral level to addressing obstacles related to foreign trade operations that represent a significant burden for MSMEs interested in participating in international trade'.

The proponents maintained that the informal group is open to 'all members' for accomplishing a multilateral outcome 'aimed at establishing a formal work programme for MSMEs at the next Ministerial Conference'.

The informal dialogue will focus on the following issues:

*          to provide enhanced access to information for MSMEs;

*          ways to promote a more predictable regulatory environment for MSMEs;

*          reduction of trade costs, including areas such as trade facilitation;

*          shipping and logistics;

*          procedures and requirements related to rules of origin;

*          better access to trade finance for MSMEs;

*          technical assistance.

The informal working group on MSMEs at the WTO, according to the joint statement, will continue to periodically share with the membership information on its work and discussions at the heads-of-delegation meetings, General Council and the Ministerial Conference.

The US, however, opted to stay out of the informal working group because of China's presence in the group, said a proponent who asked not to be identified.

While proponents of these 'new initiatives' on e-commerce and MSMEs claim that they will benefit MSMEs especially in the developing countries, organisations of MSMEs across the globe, not only in developing countries but in some European countries too, issued declarations and circulated documents at MC11 denouncing these efforts. They pointed out that the proposed WTO rules on e-commerce would advantage the handful of US Silicon Valley technology giants and secure them free access to the data of individuals across the world, while disadvantaging budding enterprises in developing countries and rendering them uncompetitive.

In conclusion, the Buenos Aires ministerial meeting has achieved its goal of undermining multilateral trade liberalisation while paving the way for plurilateral trade liberalisation among the coalition of the willing so as to deny the promised developmental benefits of the Doha work programme to developing and poorest countries.                            

This article is reproduced from the South-North Development Monitor (SUNS) (No. 8597, 15 December 2017).

*Third World Resurgence No. 324/325, August/September 2017, pp 19-20