Differentiation among developing countries on the cards for WTO?

The WTO Director-General has reportedly signalled future differentiation among developing countries in the application of flexibilities enshrined in the rules of the trade body.

by D. Ravi Kanth

GENEVA: WTO Director-General Roberto Azevedo has told several trade envoys that differentiation among developing countries would happen in the development dossier of the unfinished Doha negotiations, trade envoys told the South-North Development Monitor (SUNS).

During a meeting on 3 February with proponents seeking changes in the special and differential treatment (S&DT) flexibilities in the Doha Development Agenda negotiations, the DG is reported to have said that two things are going to happen in the run-up to the WTO’s eleventh Ministerial Conference in Buenos Aires later this year.

Firstly, differentiation among developing countries for availing of S&DT flexibilities would happen as demanded by major developed countries such as the United States, the European Union, Japan, Canada and Australia, Azevedo suggested, according to a trade envoy from a least-developed country, who asked not to be quoted.

Secondly, improvements in S&DT or broad exemptions covered in the S&DT flexibilities will only be available for limited periods of time and not permanently, Azevedo maintained, the envoy said.

Fiji, on behalf of the small and vulnerable economies (SVEs), demanded outcomes for improving 25 issues that fall under the monitoring mechanism. The SVEs drew attention to the Bali ministerial decision under which members had agreed to ensure that the monitoring mechanism acts as a focal point within the WTO to analyze and review the implementation of S&DT provisions.

The developing countries sought improvements in S&DT provisions aimed at increasing their trade opportunities; provisions under which WTO members should safeguard the interests of developing countries; flexibility of commitments, action and use of policy instruments; and transitional time periods.

Over the last decade and more, the developed countries have strongly opposed clarifying and improving the S&DT provisions in various WTO agreements, according to several developing-country trade envoys.

In the lead-up to the 2015 WTO Ministerial Conference in Nairobi, those same developed countries disengaged on the proposals by the developing-country G90 grouping, citing “ideological concerns” about developing and least-developed countries industrializing their economies and protecting their infant industries.

With “differentiation” brought into these negotiations, developing countries will be further divided, a developing-country trade envoy said after the DG’s meeting.

“It is shocking that the DG is negotiating on behalf of the major developed countries even before commencing the negotiating work for the Buenos Aires meeting,” the envoy said.


Meanwhile, the DG also held a meeting with the proponents of electronic commerce on 6 February to discuss how they can move the issue forward during the next six months, said a trade envoy from a proponent country who asked not to be quoted.

During the closed-door meeting, the proponents such as the US, the EU, China, Australia, Canada, Colombia, Hong Kong, Israel, Korea, Mexico, Panama, Paraguay, Qatar, Singapore, Chinese Taipei, Brazil, Argentina, El Salvador and Nigeria pressed for an outcome at the Buenos Aires meeting on two issues: a permanent moratorium on customs duties on electronically traded products and services, and a clear and well-defined future work plan.

The proponents said the Buenos Aires meeting must provide a clearly defined and coherent work programme on e-commerce, which must be “a concrete step forward” in proceeding on the e-commerce agenda.

Several participants maintained that there are many issues that need to be sorted out in the e-commerce work programme, which could prove unwieldy to manage in the next six months. Therefore, the participants said, efforts should be focused on transparency, trade facilitation in e-commerce, and consumer protection.

The South American proponents – Brazil, Argentina and Paraguay – called for addressing issues surrounding trade facilitation of e-commerce such as electronic signatures, electronic payment, electronic document, certification of services, liability, and protection of personal data.

But many proponents acknowledged that it would be difficult to make progress in e-commerce because of continued opposition from many developing and least-developed countries.

The 1998 WTO Work Programme on Electronic Commerce is comprehensive insofar as the examination of “all trade-related issues relating to global electronic commerce” is concerned.

It is unclear how proponents intend to deal with their demands when several developing countries, including India, Bolivia, Cuba, Venezuela, the African Group, the African, Caribbean and Pacific (ACP) Group and the least-developed countries, expressed their concerns over the strong push to negotiate rules on e-commerce in the absence of a negotiating mandate in the WTO.

The African Group, in particular South Africa, Rwanda, Egypt, Tanzania, Uganda and Zimbabwe, which have been championing the development issues that still need to be addressed, have sensitized members to the alarming digital divide that has plagued the African continent and placed their consumers and producers alike at a competitive disadvantage when industrialized countries have had decades to develop their e-commerce competencies.

“WTO rules in this area will lock in the existing imbalances we see in e-commerce,” said an African trade envoy who asked not to be quoted.

Nigeria, on the other hand, has eagerly joined the e-commerce bandwagon, and is now calling for deliverables at the Buenos Aires meeting.

“It is hard to reconcile how Nigeria is e-commerce-ready when the biggest economy in Africa is constantly faced with electricity shortages and blackouts and is currently experiencing an economic recession.”

The WTO and other international organizations have rolled out a coordinated plan to negotiate new issues like e-commerce in the WTO to the exclusion of all the other priority negotiating issues emanating from the Doha Development Round, according to several trade envoys.

Even as proponents seek to make a strong pitch for e-commerce negotiations, India is experiencing an existential crisis in regard to its IT exports to the US.

The US Congress and President Donald Trump did not mince words in curbing the H-1B programme by imposing the most stringent conditions for H-1B visas for skilled workers. Legislation being considered by Congress would force Indian companies to pay H-1B immigrants at least $130,000, which is almost twice their current salary. According to the Financial Times, Trump is expected to issue an executive order on H-1B visas akin to a ban on travellers from seven Muslim-majority countries.

Against this backdrop, the WTO DG, in his eagerness to secure a second term, has not only remained silent on the US actions but is actively navigating the negotiations for the Buenos Aires meeting to please the US and its new administration, several trade envoys maintained. (SUNS8398)                                             

Third World Economics, Issue No. 632, 1-15 January 2017, pp4-5