No convergence on MC11 issues or outcome

The final meeting of the Trade Negotiations Committee (TNC) before the WTO’s eleventh Ministerial Conference (MC11) in December brought into stark relief the lack of agreed outcomes for MC11 with just over 10 days to go. The following two articles report on WTO member states’ views and assessments of the state of play delivered at the TNC meet.

by D. Ravi Kanth

GENEVA (29 NOV): An overwhelming majority of least developed and developing countries, including India and South Africa, on 28 November categorically rejected new issues to be addressed at the WTO’s eleventh Ministerial Conference (MC11), which is to take place in Buenos Aires on 10-13 December, trade envoys told the South-North Development Monitor (SUNS).

Among the new issues that are sought to be promoted for negotiations in the WTO after MC11 are: a mandate for establishing a working group on electronic commerce; disciplines for micro, small and medium-sized enterprises (MSMEs); and investment facilitation.

Rwanda on behalf of the African Group of countries, Guyana on behalf of the Africa, Caribbean and Pacific (ACP) Group, Cambodia on behalf of the least-developed countries (LDCs), India, South Africa, Uganda, Bolivia, Cuba and Venezuela joined in warning that there will be grave consequences if new issues are considered without completing the work on the unresolved issues in the Doha Development Agenda (DDA) negotiations.

Many of them remain alarmed at the manner in which WTO Director-General Roberto Azevedo, who is also the chair of the Trade Negotiations Committee (TNC), sought to open a window for new issues – disciplines for MSMEs and investment facilitation – to be discussed at Buenos Aires while knowing full well that there is no consensus on these two issues, said several trade envoys who asked not to be quoted.

At the 28 November final formal TNC meeting before MC11, the Director-General said “I know some members have also been developing work in limited group formats” on “MSMEs, investment facilitation and any other issue that is being discussed in a track different from the negotiating groups.” He said if the proponents for these issues “want to appoint their own chairs or facilitators at the Ministerial, that is for them to take forward.”

Even though there is no consensus on new issues and these were never discussed at the TNC after investment facilitation was blocked by India at the WTO General Council early this year on grounds that it is not part of the WTO’s Marrakesh mandate, Azevedo is asking some members at the WTO to start plurilateral negotiations on MSMEs and investment facilitation, said a trade envoy who asked not to be quoted.

“The Director-General who has not sincerely conducted trade negotiations as the TNC chair on the unresolved Doha Development Agenda issues is creating a dangerous minefield at Buenos Aires by shifting the entire burden to the Argentine minister Ms. Susana Malcorra who is going to chair the conference,” said an authoritative source, who asked not to be quoted.

“Azevedo’s game plan is not to take any blame for the manner in which he crowded the Buenos Aires agenda with old and new issues and leave everything to the Argentine government, as the host, to resolve,” the source said.

In short, there are 29 draft ministerial decisions to be decided in 20 areas by trade ministers during the four-day Buenos Aires meeting.

“This is clearly a mischievous game plan of the Director-General, who ought to have told members about which issues can be taken and which issues can’t be taken on the basis of the existing Doha mandate,” the source said.

(The July 2004 framework accord of the General Council, which enabled the relaunch of the Doha negotiations after the failure of the 2003 Cancun Ministerial Conference, has unequivocally stipulated that no new issues are to be taken up or considered until the negotiations on the Doha Work Programme are concluded at a Ministerial Conference. – SUNS)

China adopted a two-leg policy in which it remained with the large majority of developing and poorest countries on issues concerning the permanent solution for public stockholding (PSH) programmes for food security, reduction commitments for domestic support in agriculture, and development issues such as improvements in the special and differential flexibilities. Its second-leg positions include a proposal on investment facilitation and disciplines for MSMEs. On e-commerce, China more or less stayed with the large majority of developing and poorest countries which are opposing a new mandate instead of the existing 1998 work programme.

However, a group of major industrialized countries and some developing countries, led by the European Union, Australia, Japan, Korea, Chile and Argentina among others, pushed hard for an outcome on domestic support for agriculture, establishing a working party for e-commerce, disciplines for MSMEs, and investment facilitation among others.

The US, which stands largely isolated with its unilateral stance of no outcomes on the unresolved Doha issues as well as the new issues, said the Buenos Aires Ministerial must discuss issues concerning trade and development with a new perspective.

Four elements

Rwanda, which coordinates the African Group, said the outcome document of the Ministerial must reflect four elements: “the importance of a rules-based, fair and equitable multilateral trading system as enshrined in the Marrakesh Agreement”; “the centrality of development in the work of the WTO”; “the need to conclude the remaining elements of the Doha Development Agenda”; and “the critical importance of implementing all decisions adopted by Ministers and the General Council.”

The African Group said categorically that issues on which positions remain diametrically opposed should not be submitted to the Ministerial Conference. It emphasized “development” as the central element that needs to be resolved at Buenos Aires.

South Africa delivered a strong statement that “members’ divergent positions on issues have not been bridged and the chances for any outcome on any issues at MC11 are bleak – if at all.”

South Africa argued that “Impediments to progress are rooted in our differing views on mandates and the lack of agreement on which issues to pursue, and how, where we have engaged, divergent negotiating positions have been evident.”

Even on fisheries subsidies, members have markedly different positions, South Africa underscored.

“A combination of wide differences and linkages in agriculture tell us that outcomes here are out of reach,” it argued. It said that it “will not agree to an outcome on export restrictions that we see as an attempt to begin to close off important space for legitimate, WTO-consistent policy.”

It warned “there is no consensus on non-DDA issues such as e-commerce, MSMEs or investment facilitation”.

“By leaving the ‘moment of truth’ to the Conference itself means we have lost the chance to construct a more manageable agenda on the few issues that may have had some minimal prospect for outcomes,” South Africa said.

Ministers will have to “contend with around 29 draft ministerial decisions, contained in Job Documents that cover more than 20 topics”, South Africa pointed out. It added that “the inconclusive discussions we have had in Geneva on each of these are likely to be replicated at MC11 – also inconclusively.”

Further, there is “the open question of a possible Ministerial Declaration”, and managing it in “a process that must be fully transparent and inclusive will be an enormous challenge”, said South Africa.

It urged members “to consider carefully whether ministers will be required to pronounce on separate decisions to carry work forward in all the areas or whether that would be accomplished by a decision akin to the Nairobi Ministerial Declaration paragraph 31 – a ‘catch-all’ approach.”

“More importantly, members need to consider whether this will be done through a possible declaration or an agreed statement – alternatively, we could agree to being silent on all these matters,” South Africa said.

“The key point, however, is that we will need symmetrical treatment for all the remaining Doha issues: either silence on all issues or a catch-all phrase that is applied to all,” South Africa said, arguing that “this would be essential for a smooth conference.”

On behalf of the G33 grouping, Indonesia said that “the establishment of a permanent solution on PSH for all developing members and [an] accessible, simple and effective SSM [Special Safeguard Mechanism] remain priority.”

Indonesia said these two issues were supported by some developing countries and LDCs, and they shall be part of any Buenos Aires outcomes. “Any efforts that link PSH and SSM with other negotiation issues is not acceptable,” it said.

It rejected the “proposal for reducing developing countries’ flexibility by requesting them to constrain their de minimis and at the same time not addressing in sufficient manner AMS entitlements, Blue Box and Green Box.” Such an approach, it said, “will perpetuate or even exacerbate current structural imbalance inherited from the Uruguay Round”.

Indonesia said it sees the centrality of development in all horizontal discussions within the WTO.

“Gateway issue”

In a hard-hitting statement, India said that “the permanent solution for PSH is a gateway issue and we would like to caution that inability to deliver a permanent solution at MC11 may lead us to a spectacular failure at Buenos Aires and irreparable harm to the credibility of the WTO.”

On eliminating the Aggregate Measurement of Support, a large number of developing countries including the G33 and the ACP Group supported India’s joint proposal with China, India said.

India emphasized the importance of outcomes on SSM, cotton and development.

India also touched on special and differential treatment for developing countries, saying it is “a very important part of the WTO mandate which needs to be carefully preserved without differentiating among developing countries”.

On fisheries subsidies, India stressed the importance of an instrument that takes the concerns of artisanal fish workers into account. It asked for excluding “the Exclusive Economic Zone from the purview of the disciplines for unregulated, unreported fishing and prohibition of subsidies for overfished stocks.”

As regards an outcome on domestic regulation for trade in services, India said the issue cannot be discussed in isolation without addressing “the numerous difficulties which service suppliers, particularly those of developing countries, face in complying with complex regulatory regimes of developed countries related to recognition of qualifications.”

India said members must continue with the existing mandate of the 1998 work programme on e-commerce. “This is not the opportune time to enter into contentious and divisive debates by seeking ambitious outcomes in e-commerce,” it cautioned. It also firmly rejected issues “like investment facilitation, MSMEs and gender which do not have mandates or place in the WTO.”

Uganda urged against “impos[ing] the views of one member on the rest of the membership or [dropping] all issues of specific interest and concern of the rest to accommodate one member.”

“Any outcome document shall highlight the centrality of development and special and differential treatment in the work of this Organization,” Uganda said, arguing “the need to conclude the remaining elements of the Doha Development Agenda and the critical importance of implementing all decisions adopted by Ministers and the General Council.”

In sharp contrast, the industrialized countries, except the United States, and several developing countries, including Brazil, pressed for an outcome in domestic support on agriculture along with the permanent solution.

The EU, Japan, Australia, Norway, Switzerland, Korea, Hong Kong (China), Chinese Taipei, Chile, Peru, Argentina, Colombia, Nigeria, China and Russia, among others, called for addressing new issues such as disciplines for MSMEs.

Chile, which is the coordinator of the informal group on MSMEs, informed members that there are 39 proponents for addressing the issue after the Buenos Aires meeting.

The EU, Japan, Australia, Norway, Switzerland, Chile, Peru, Argentina, Colombia, Nigeria and Russia also pressed for a new mandate on e-commerce.

In sum, the Buenos Aires meeting is going to test the nerve of the developing and poorest countries and whether they can stand united in the face of dangerous games being played by the Director-General to impose new issues without resolving the Doha issues, several trade envoys said. (SUNS8586)                      

Third World Economics, Issue No. 651/652, 16 October – 15 November 2017, pp2-4