TWN Info Service on WTO and Trade Issues (Mar17/01)
2 March 2017
Third World Network

WTO secretariat & DG reproached for vitiating negotiating climate
Published in SUNS #8410 dated 27 February 2017

Geneva, 24 Feb (D. Ravi Kanth) - India and several developing countries on Thursday (23 February) reproached the World Trade Organization Secretariat led by Director-General Roberto Azevedo for "vitiating" the negotiating climate by pushing controversial new issues such as e-commerce and investment facilitation, despite opposition from a large majority of members, trade envoys told SUNS.

At an informal heads of delegations (HOD) meeting, India delivered the harshest critique at the manner in which the negotiating process is vitiated by pushing "certain issues" by some members along with the WTO Secretariat.

By pushing for controversial new issues, the WTO Secretariat seems determined to torpedo "the needs and interests of developing country members and the LDCs," according to members who took part in the meeting.

"This goes against the letter and spirit of what the Ministers have said [at the Nairobi ministerial meeting in December, 2015]; it is almost as if at least some part of Ministerial Declarations remain merely on pieces of paper to be placed on the shelf after each ministerial rather than directions to be acted upon," India's trade envoy Ambassador Anjali Prasad said, according to trade envoys, who asked not to be identified.

The Indian envoy denounced what she called "selective visibility and hearing in favour of such issues [e-commerce and investment facilitation] and against those [issues] that are being taken up by many developing and least-developed countries to correct or rebalance existing asymmetrical rules."

Without mentioning the WTO director-general Robert Azevedo, who is also the chair for the Trade Negotiations Committee, and who provided his assessment on the state of play in various negotiating groups at the HOD meeting, she said the officials/trade envoys in charge of various negotiating bodies have failed to provide an "impartial - more factual and less impressionistic" assessment, according to an African trade envoy who asked not to be cited.

She suggested that biased views and assessments by officials in charge of negotiations "vitiate the discussions on all issues and raise questions on the conduct of the concerned officials."

In an organization which prides itself as a "consensus-driven body", it is imperative that the officials chairing the different bodies "assess the state of play and the extent of consensus or divergence, impartially, objectively and factually and not in a value-loaded manner," the Indian envoy emphasized.

Ambassador Prasad urged the TNC chair to direct the chairs for different negotiating bodies to "desist from value-loaded assessments" as members move towards the eleventh ministerial meeting so as to avoid "vitiating" the process.

Without mentioning the recent meetings with the proponents held by the director-general and the chairs for different negotiating bodies, she said the manner in which the TNC chair and other chairs of regular bodies held meetings in "formats" lends itself to selective hearing and visibility on the part of those assessing consensus and divergence.

"Therefore, it is imperative that the Geneva process should be as transparent, impartial and fair as possible with negotiations being structured in inclusive and representative formats; only if this is done can we as members have faith in the legitimacy of the process," India emphasized, according to trade envoys present at the meeting.

India's trenchant critique centered around the manner in which the WTO Secretariat is pushing for negotiations in areas such as e-commerce, investment facilitation, and disciplines for micro, small, and medium enterprises (MSMEs) at the ongoing G20 officials' meeting in Berlin.

In "a member-driven organization," India said the role of the "Secretariat is meant to be an impartial institution [which ought to be] exclusively international in character."

Further, "the agreement Establishing the WTO bars the Secretariat from taking any action which might adversely reflect on their position as international officials... The Secretariat, therefore, should not only be impartial but also be seen to be so," India emphasized, according to trade envoys who took part in the meeting.

However, the recent representations made by the WTO Secretariat to the Working Group on Trade and Investment under the G-20 at Berlin early this month [See SUNS #8409 dated 24 February 2017] gravely undermine the role of a member-driven WTO.

On investment facilitation, the WTO Secretariat made a presentation in which it not only attempted to "define investment facilitation but has also proposed next steps."

India sought to know how the Secretariat adopted a position on it despite the investment facilitation being a contentious issue, according to trade envoys present at the meeting.

Commenting on the Secretariat's (power point) presentation on "e-commerce," India said the last two slides of the Secretariat's presentation "actually calls for further discussion towards a multilateral outcome."

In the Secretariat's slide on "further discussions towards a multilateral outcome," the WTO official proposed the following bullet points:

(i) Transparent and inclusive discussions - Lay the ground for advancing work multilaterally.

(ii) Consider adopting general principles/best endeavour provisions on e-commerce.

(iii) Binding principles/obligations could be considered - TFA [Trade Facilitation Agreement] approach - Flexibilities; TA [technical assistance] and CB [capacity building].

(iv) Greater coherence; certainty; consumer confidence.

E-commerce, according to India, "remains a highly contentious area in the WTO which is a fact not even mentioned in the presentation."

"We wonder what gives the WTO Secretariat the authority or the mandate to propose next steps or multilateral outcomes on subjects on which discussions have not even begun in the WTO," India asked.

More important, "were the contents of these presentations [on investment facilitation, and e-commerce] discussed by members and was there a consensus on the propositions contained therein that the WTO should be encouraged to launch a dialogue on strengthening trade and investment policy coherence or that there should be further discussions towards a multilateral outcome on e-commerce," India challenged.

Such presentations, according to India, went well beyond "the remit of the functions of the WTO secretariat, and violate the letter and spirit of the Agreement Establishing the WTO."

In fact, these two presentations, said India, "seem to convey [to] my delegation that the WTO Secretariat hold a brief for certain constituency of members thereby raising a question on its impartiality and international character as required in the Agreement Establishing the WTO."

India also referred to the TNC chair's recent comments in New Delhi on public stockholding programs for food security (PSH) and special safeguard mechanism (SSM) for developing countries in which he purportedly said that "the primary responsibility for any proposal rests with the proponents and not the WTO."

"If this be the case" as stated by Azevedo in New Delhi on PSH and SSM, India said "the question that comes to mind is whether the WTO Secretariat has also become a proponent on these two issues [e-commerce and investment facilitation]?"

"If the Secretariat continues to act in this manner, it would further vitiate the negotiating process in the WTO and the members' attempts to reiterate strongly the relevance and primacy of the WTO as an institution central to the global trading system," India warned.

On substantive issues, India emphasized "the primacy of the development dimension of the DDA and that the unfinished work in the decisions taken at the Bali and Nairobi Ministerial Conferences must get precedence over any other areas [e-commerce or investment facilitation] which can only be negotiated multilaterally if there is agreement by all the members as stated in the Nairobi ministerial declaration."

Ambassador Prasad underscored the need for urgent "constructive engagement on public stockholding programs for food security and Special Safeguard Mechanism without linkages with other areas of agriculture negotiations," according to trade envoys present at the meeting.

Both public stockholding programs for food security and SSM, according to India, "are fundamental to bringing about development that is broad based and balanced in many developing and least-developed countries."

She referred to the draft negotiating text introduced by India on trade facilitation in services which seeks "to remove unnecessary regulatory and administrative obstacles to trade in services."

India's position on e-commerce, she said, is crystal clear suggesting that New Delhi wants discussions to proceed in accordance with the 1998 work program in the relevant WTO negotiating bodies.

Rules for e-commerce as proposed by some countries are "completely premature," India said.

More so, at a time when the e-commerce market is highly monopolistic in nature, such rules would only benefit a few major companies while "at the same time constraining the policy space of the developing countries to develop their e-commerce space."

India dismissed statements made by WTO officials that e-commerce rules would meet the needs of MSMEs [micro, small, and medium enterprises] or that they would automatically help economic development in developing and least-developed countries as "profoundly simplistic - almost like the one trillion dollars spin-off of the TFA."

As a body blow to the mischievous and diabolical work of the WTO Secretariat, India cautioned that "there is a risk of further deepening the divide, in case, undue importance is given to the so-called new issues where even the narratives are not still clear."

"Any attempts to cherry pick ministerial decision or a few members projecting consensus on issues where none exists, would seriously undermine the credibility of the WTO," India warned, according to trade envoys present at the meeting.

Any outcome on e-commerce is entirely premature at this juncture, South Africa cautioned.

Many African countries told the TNC chair that work on e-commerce and other new issues must not proceed without first addressing the outstanding Doha issues.

Several African countries, and India, said the Nairobi ministerial process should not be repeated as it produced outcomes that failed to reflect members' views.

"On process," Uganda's trade envoy Ambassador Christopher Onyanga Aparr said, "we would like to call upon you Mr Chairman to put in place a credible process that does not seek to replicate Nairobi... It has to be bottom up, transparent, predictable and inclusive... The small club of five should be abandoned... We are all equal representatives of sovereign states and are recognized under public international law."

Ambassador Aparr said "any text to be presented to the Ministerial Conference must have been agreed to by consensus by the membership of the whole at least six weeks before the Ministerial conference."

In conclusion, the WTO Secretariat's dubious role in advancing the interests of powerful developed and some developing countries is exposed most grotesquely as never before. But it is highly unlikely that Azevedo, who is securing a second term on Tuesday, will draw any lesson from what was said on Thursday, several trade envoys said.