WTO members voice their views on key issues for MC11

The  23 February HOD meeting at the WTO also saw member states discuss what issues to prioritize in the run-up to the trade body’s eleventh Ministerial Conference this December.

by Kanaga Raja

GENEVA: The informal heads-of-delegation (HOD) meeting at the WTO on 23 February heard a range of members voicing their views on what they see as their priority issues for possible deliverables at the eleventh WTO Ministerial Conference (MC11) in Buenos Aires later this year.

Many developing countries stressed the importance of outcomes on the issues of public stockholding for food security purposes and the Special Safeguard Mechanism (SSM) at MC11.

They also highlighted the importance of the development dimension, special and differential treatment (S&D), the need to address trade-distorting domestic support in agriculture in particular on cotton, and fisheries subsidies.

Many developing countries also called for a transparent and inclusive process in the run-up to the Buenos Aires conference.

The views of the developing countries came following an assessment by WTO Director-General Roberto Azevedo on the state of play in the negotiations in the various negotiating groups in the lead-up to Buenos Aires.

At the meeting, India reportedly critiqued the manner in which the negotiating process is “vitiated” by some members together with the WTO secretariat pushing certain issues.

In his statement at the informal HOD meeting (excerpts posted on the WTO website), Azevedo said that from his discussions to date, “my honest assessment is that in all areas we still have a long way to go – and a huge amount of work ahead if we are to arrive at concrete outcomes.”

“In practical terms we have just 8 months between now and the 11th Ministerial Conference. Progress has to be driven by members, and so they will have to quickly think about how they wish to advance, and on which areas. I think the proponents in particular must further intensify their engagement with other members in order to move forward. I welcome that many members are doing this, but we need to be mindful that time is moving quickly.”

The DG further said: “The time is fast approaching when we will have to transition from the current stage of conceptual and general discussions to much greater specificity. I hope we can achieve this by the summer. Of course MC11 is not the end of the road. I think the most productive approach if we want to deliver substantive outcomes is to aim to achieve outcomes pragmatically and – if needed – incrementally. Those areas that are not ripe by then could be delivered at a later stage. Of course as part of this we need to keep focused on the implementation of existing decisions, and development needs to be a key element as we look to advance any issue.”

Views of members

According to trade officials, at the informal HOD meeting, Switzerland highlighted the ministerial meeting that it had convened in Davos earlier this year where some 29 delegations participated. The ministers had stressed the key role of the multilateral trading system as a framework for world trade, as well as the importance of trade as a tool for development and growth. Protectionism was not the answer, they said, adding that there was a need to make trade more inclusive.

According to Switzerland, the ministers had highlighted issues such as domestic support in agriculture including cotton, the permanent solution for public stockholding programmes for food security, fisheries subsidies and Target 14.6 of the Sustainable Development Goals (SDGs), domestic regulation and services trade facilitation, S&D, and least-developed-country (LDC) issues.

(SDG Target 14.6 states: “By 2020, prohibit certain forms of fisheries subsidies which contribute to overcapacity and overfishing, eliminate subsidies that contribute to illegal, unreported and unregulated fishing and refrain from introducing new such subsidies, recognizing that appropriate and effective special and differential treatment for developing and least developed countries should be an integral part of the World Trade Organization fisheries subsidies negotiation.”)

Other issues taken up that were central to the discussions included e-commerce, as well as the means of better integrating micro, small and medium-sized enterprises in the global trading system, the ministers in Davos had said.

Cambodia, on behalf of the LDCs, highlighted as key the issues of trade-distorting domestic support in agriculture, including on cotton, fisheries subsidies, especially overcapacity, overfishing and IUU (illegal, unreported and unregulated) fishing and a ban on those kinds of subsidies.

It also highlighted the importance of S&D, implementing the Nairobi decision on rules of origin, and the need for an agreement on duty-free, quota-free market access (DFQF) for LDC products. Rules of origin are as important to the LDCs as DFQF, it said.

Morocco, on behalf of the African Group, highlighted several issues of importance to the Group, including trade-distorting domestic support, the SSM, public stockholding for food security purposes, fisheries subsidies and S&D. There is a need to achieve tangible progress, and also to continue to follow the mandates, Morocco said, adding that it intends to organize a meeting in Marrakech shortly before MC11.

Japan said while it would be good to obtain deliverables at MC11, it is also a clear priority to make sure that members know beyond this meeting how they are going to work. Incremental progress is important. The Trade Facilitation Agreement (TFA) may give some valuable clues as to how to approach things, it said (see box next page).

Chile highlighted the need to adhere to the SDGs and the 2030 Agenda for Sustainable Development, and the important role of the WTO on this. Developing countries have increased their share of world trade from 27% to 42%. Trade liberalization has brought great benefits to developing countries but the threat of de-globalization can be very damaging to developing countries, it said.

Agriculture priority

Pointing to agriculture as a priority, Ecuador highlighted the issues of domestic support and market access. The Rev. 4 draft agriculture modalities text of 2008 should be the basis for negotiations, it said.

It also stressed on public stockholding for food security purposes and the SSM. It wanted S&D for developing countries on non-agricultural market access (NAMA). On services, it said the development dimension is key. It said that it is supportive of India’s proposal on trade facilitation in services. It also supported an outcome on fisheries subsidies in line with SDG Target 14.6.

Ecuador underlined that any other negotiating options would require a consensus.

Paraguay welcomed the entry into force of the Trade Facilitation Agreement. An incremental step is sensible, it said. The pace needs to be stepped up in agriculture as it is lagging behind. It said it has quite a lot of sympathy for the proposal on public stockholding. It is also ready to deepen discussions on e-commerce particularly those elements that pertain to small and medium-sized enterprises.

Uganda said that more needs to be done for the LDCs. All members should prioritize the LDCs, as should the DG as he seeks a second term.

Infrastructure projects, industrialization and regional integration are priorities for Africa, said Uganda. It was happy to see citizens in the North rising up against globalization.

Agriculture is a priority, Uganda stressed, and the Rev. 4 text should be the basis for the negotiations. S&D is also important.

Uganda underlined that there should be no repeat of the process that took place at the tenth Ministerial Conference in Nairobi, and that texts circulated for Buenos Aires should be submitted to the membership six weeks before MC11.

Mexico said that anti-trade sentiment is rising even in countries that have benefited the most, and that this sentiment is being fostered at the highest political levels. There is a threat that global value chains could be disrupted, which could have ramifications across the globe. It said that investment is already being hit, and these repercussions could also be global. The WTO membership, it said, has the responsibility to ensure that the case for trade and for stable rules is recognized. Mexico further said that it would like to see outcomes at MC11.

Turkey said that MC11 presents a great opportunity to make the case for trade. There is a need to get convergence in Geneva (in the lead-up to MC11), so that the same kind of process as in Nairobi is not repeated, it said.

On agriculture, Turkey said it is ready to build on the Nairobi decisions on public stockholding and SSM. It is difficult to work on an MC11 package without these elements, it stressed. Domestic support and cotton also need to be addressed. There also needs to be a means of addressing the imbalance between those countries that use an Aggregate Measurement of Support (AMS) system and those which use a de minimis system. There should also be disciplines on the Green Box domestic support.

On services, Turkey said domestic regulation and e-commerce are two issues that stand out. It is ready to work on these issues for an outcome at MC11, it said, adding that global rules on e-commerce are needed. There needs to be recognition of a link between e-commerce and small and medium-sized enterprises and development, but the LDC issues must also be addressed and their difficulties with respect to e-commerce must be accorded high priority.

Avoiding crisis

China said that MC11 will be very different from MC9 and MC10. It is going to be very important to avoid any crisis of the multilateral trading system. Members have to ensure that no issues are dropped off the table at MC11. A business-as-usual approach cannot be used, China said, adding that an incremental approach is a sound way forward.

China said it is very supportive of the issue of public stockholding and there needs to be an agreement here. There is also a need to find a way out on the SSM. Without a deal here, it is difficult to see movement elsewhere, it said.

On rules, it highlighted the issue of trade remedies as being important. It also underlined that all of the LDC decisions need to be implemented. On e-commerce, it said that it is important to focus on the issue of cross-border trade in goods, and that negotiations on cross-border data flows and on data localization should be avoided.

Argentina said that while the situation at present is very uncertain, it is optimistic for Buenos Aires. An outcome on agriculture domestic support and cotton is very important. It also highlighted the issues of fisheries subsidies, services, e-commerce and investment facilitation as well as a cross-cutting discussion on issues that benefit small and medium-sized enterprises. It agreed that a better process is needed for MC11 than that at MC10.

Brazil said that Buenos Aires is an opportunity to address the rising anti-trade sentiment, stressing the need to reaffirm the relevance of the WTO.

Brazil said the Doha Development Agenda and its mandate are the reference point. But in light of current circumstances, the incremental approach might be the best approach for Buenos Aires. It is ready to discuss all the issues, including the “new issues”. A developmental outcome is crucial and must also be central.

Brazil held that deliverables are most important in the areas of agriculture, small and medium-sized enterprises, fisheries subsidies, and regulatory issues including technical barriers to trade and sanitary and phytosanitary measures. It said it is supportive of a reduction in trade-distorting domestic support, pointing to the possibility of agreeing on a framework for dealing with this issue.

It also supported the issues of public stockholding and cotton reform for Buenos Aires. On fisheries subsidies, it said it prefers a multilateral approach but is participating as well in the plurilateral and this could be a stepping stone.

Brazil said that it has been very active on e-commerce and has submitted three proposals. The WTO has a key role to play here, it said. One issue that could be resolved is e-signatures, which could be addressed in Buenos Aires. In addition, there could be an outcome on how to address the digital divide, as well as perhaps something on the table that would indicate the way forward post-MC11.

On investment facilitation, Brazil said it already has a programme along these lines domestically, but it does not want this issue to delve into investment protection. It also does not want a dispute settlement system along the lines of the investor-state dispute settlement system.

Zimbabwe welcomed the entry into force of the Trade Facilitation Agreement and the TRIPS amendment on access to essential medicines.

It said it wants to see a transparent and inclusive process. It recognized the need for efficiency but said it is very important to have a transparent process of which all members feel as though they are a part.

It said it is very much in favour of significant reductions in trade-distorting domestic support under the Rev. 4 text. It also supports public stockholding for food security purposes and the SSM.

While it recognized that e-commerce is important, it preferred this to be taken up under the existing 1998 mandate mostly because many developing countries are not ready to move forward on this due to the digital divide.

Costa Rica agreed with the overall sentiment expressed by Mexico and Chile. It said it is very important to adhere to the SDGs.

South Africa mentioned the recent African Union ministers’ meeting where advanced integration and industrialization for Africa were discussed.

On WTO issues, South Africa highlighted domestic support, the development dimension, cotton, SSM, public stockholding, fisheries subsidies and S&D. It said it was clear there is a very considerable political backlash against globalization, and that this is filtering its way through to the WTO discussions where there is no agreement on mandates or issues. There are different priorities and different ways in which people see linkages. On e-commerce, it said that it is prepared to address the issue under a non-negotiating mandate.

Guyana, on behalf of the African, Caribbean and Pacific (ACP) countries, strongly affirmed the importance of the development dimension, the Doha Development Agenda, S&D and reduction in trade-distorting domestic support in agriculture. It wanted a clear framework for the gradual elimination of trade-distorting domestic support, and hoped to have this framework on the table by the summer break.

It also expressed support for the proposals on public stockholding for food security purposes and the SSM, and was in favour of the proposals on fisheries subsidies, but added that there must be S&D that takes into account the importance of fishing in developing countries and ACP members.

The ACP Group also wanted flexibility for developing countries on services. On e-commerce, it is prepared to continue to explore this issue, particularly the development dimension. It further wanted to see a transparent and inclusive process at MC11.

Nicaragua said that there is a need for an outcome on trade-distorting domestic support. There must be a balanced outcome and flexibility for small and vulnerable economies. The process must be transparent and inclusive. On e-commerce, it said it is prepared to discuss this issue within the existing mandate. The issue of fisheries subsidies is also very important, it said.

Fair and transparent approach

Bolivia said that it is supportive of the multilateral trading system. It wanted to see a balanced, fair, transparent, inclusive and bottom-up approach.

On agriculture, it would like to see the elimination of trade-distorting domestic support. On services, it wanted to see S&D for developing countries. It also wanted a multilateral outcome across all areas. On e-commerce, it noted that there is a lot that needs to be discussed, and it would not support a plurilateral approach.

Gabon welcomed the entry into force of the TFA and the TRIPS amendment on access to essential medicines. It said that the issues of greatest importance to it in the run-up to MC11 are trade-distorting domestic support, fisheries subsidies and S&D.

Fiji, on behalf of the Pacific Group, said it wants to see tangible and meaningful outcomes in Buenos Aires. The development dimension is important. For the group, the issue of fisheries subsidies is of crucial importance, because of its importance to the livelihood of people in this region. It said it would like a multilateral outcome in this area that builds on the Doha mandate and SDG Target 14.6.

On the issue of agriculture, Fiji highlighted the issue of trade-distorting domestic support as well as flexibility for developing countries. It also wanted to see a process that is transparent and inclusive.

Chinese Taipei, on behalf of the Article XII group (formerly the Recently Acceded Members), said the issues of agriculture and services are very important, as are the development issues. It said there needs to be a way in which agricultural support can be dealt with so that the contributions made by recently acceded members are matched by those of longstanding members. Market access is important to the group and should not be left behind, it added.

Israel highlighted the importance of services and said that it is ready to advance the negotiations in this area. On agriculture, it said that it has already paid a price as it has committed to eliminating export subsidies. It also wanted to see a transparent and inclusive process.

Nepal said that e-commerce and small and medium-sized enterprises are extremely important for development but there are gaps that need to be addressed with respect to the digital divide.

Saudi Arabia, on behalf of the Arab Group, said that it is important to build on the Bali and Nairobi outcomes, and to keep the development dimension at the centre.

The United States told the meeting that it is not in a position to speak in detail on account of its current political transition. What it said last year with respect to ensuring that there was no sense of over-expectation for MC11, was something that it would probably continue to say, the US said.

It also said that it is likely to remain supportive of an open and market-oriented global economy. It said it is also very likely to seek very close examination of the way in which disputes are being handled, not least in terms of issued rulings which include elements of new rules that had never been agreed by WTO members.

South Korea said that it is very important to continue to have successful outcomes at the WTO Ministerial Conferences as in Bali and Nairobi. E-commerce is vitally important, it said, adding that it is also important to try to get agreement on non-controversial issues where possible.

Cuba expressed support for the statement made by Guyana on behalf of the ACP Group. It said that there is a lot of uncertainty out there and this makes it more important than ever that the Doha Development Agenda be the basis for work. The Doha issues must be the priority. There is also a need to bridge the digital divide. It realized that e-commerce is very important but said it can only take it up in the context of the 1998 work  programme. (SUNS8411)           

Third World Economics, Issue No. 633, 16-31 January 2017, pp9-12