TWN Info Service on WTO and Trade Issues (Jul17/24)
31 July 2017
Third World Network

General Council elects Vice-Chairs for MC11, amends TPR mechanism
Published in SUNS #8512 dated 28 July 2017

Geneva, 27 Jul (Kanaga Raja) -- The General Council of the World Trade Organisation on 26 July elected the three Vice-Chairs for the eleventh ministerial conference (MC11) to take place in Buenos Aires, Argentina from 10-13 December 2017.

The three Vice-Chairs are: Dr Oke-chukwu Ene-lamah, the Minister of Industry, Trade and Investment of Nigeria; Mr Todd McClay, the Minister of Trade of New Zealand; and Mr Edward Yau, the Secretary for Commerce and Economic Development of Hong Kong-China.

Earlier this May, the General Council had agreed on Argentinian Minister Susana Malcorra to Chair MC11.

In a related development, the General Council approved the request by Palestine for observer status at MC11.

Under another agenda item, the General Council approved the first-ever amendment to the Trade Policy Review (TPR) Mechanism since its establishment back in 1989 under the old GATT.

This came about following intensive consultations for some six months, before the Trade Policy Review Body (TPRB), at its meeting on 27 January 2017, decided to submit, in accordance with paragraph 8 of Article X of the Marrakesh Agreement, its proposal for a decision on an amendment to the TPR Mechanism, as contained in Annex 3 to the Marrakesh Agreement.

"I would like to underline the significance for all members of this result as we were able to succeed in taking an important decision by consensus in a wide and participative manner, and this was done in a rather short period of time," said Ambassador Juan Carlos Gonzalez of Colombia, the Chair of the Trade Policy Review Body (TPRB), at the General Council meeting, according to a WTO news release.

"I believe this attests to the capacity of the WTO to deliver positive results to enhance its regular work," he said.

According to the draft decision (WT/TPR/399) approved by the General Council on 26 July, the General Council decided as follows:

"1. The Trade Policy Review Mechanism contained in Annex 3 to the WTO Agreement shall be amended as follows:

(a) the phrase "every two years" in the third sentence of paragraph C(ii) shall be replaced with "every three years";

(b) the phrase "every four years" in the fourth sentence of paragraph C(ii) shall be replaced with "every five years"; and

(c) the phrase "every six years" in the fifth sentence of paragraph C(ii) shall be replaced with "every seven years".

[Paragraph C(ii) in Annex 3 to the WTO Agreement states: "The trade policies and practices of all Members shall be subject to periodic review. The impact of individual Members on the functioning of the multilateral trading system, defined in terms of their share of world trade in a recent representative period, will be the determining factor in deciding on the frequency of reviews. The first four trading entities so identified (counting the European Communities as one) shall be subject to review every two years. The next 16 shall be reviewed every four years. Other Members shall be reviewed every six years, except that a longer period may be fixed for least-developed country Members. It is understood that the review of entities having a common external policy covering more than one Member shall cover all components of policy affecting trade including relevant policies and practices of the individual Members. Exceptionally, in the event of changes in a Member's trade policies or practices that may have a significant impact on its trading partners, the Member concerned may be requested by the TPRB, after consultation, to bring forward its next review."]

In the draft decision adopted, the General Council also decided that the amendments set out in paragraph 1 of the Decision shall take effect for all WTO Members, in accordance with the provisions of paragraph 8 of Article X of the WTO Agreement, on 1 January 2019.

According to the WTO news release, the WTO members also agreed to revise the timeline for the Q&A process during the TPR: those members who are under review and who have chosen to provide early written answers to questions from other members are now being given an extra week to prepare those answers.

Reportedly the reason for the amendment is due to the increased size of the membership, where 18 to 24 reviews were being done every year.

On other agenda items, no delegation took the floor under the agenda item of report by the Chairman of the Trade Negotiations Committee (TNC).

Some 50 delegations had taken the floor at the informal TNC meeting on 25 July (see SUNS #8511 dated 27 July 2017).

Under the agenda item of report by the Director-General Roberto Azevedo on the informal heads of delegation (HOD) meeting, Cameroon, Uganda, Norway, New Zealand, Switzerland, Mexico, Kenya, Dominican Republic, Jamaica, Nigeria, Bolivia, Montenegro, Venezuela and Rwanda took the floor.

Some 19 delegations had taken the floor at the informal HOD meeting on 25 July (see SUNS #8511 dated 27 July 2017).

According to trade officials, Cameroon (which together with several developing countries at a previous HOD meeting had raised the issue of why there have been no meetings of the TNC) said that it now knows that under WTO law the TNC is where issues are negotiated.

Uganda said that this was not in any way a question of the DG, but something to do with legal procedures.

It thanked the DG for the clarification that he had made that the HOD was not a negotiating forum.

It said that it is in favour of transparency which is especially important for the smaller delegations.

Norway maintained that the HOD was important, because otherwise we would go back to the Green Rooms, which we don't have anymore.

Cameroon said it just wanted to clarify things. It said that it has great respect for the DG and does not intend to say anything discriminatory against the WTO staff or the DG.

But it said that it relies on the Secretariat due to the fact that it has a small delegation. It wants to make sure that everything it says is always included in the record of the TNC and the General Council.

It also said that it wants the procedures to be coherent.

Venezuela said that this whole debate was born out of the frustration that we don't have TNC meetings with the frequencies that we used to have them.

The TNC should be held and the DG can use his authority to decide exactly how the TNC (scheduling) would be decided, it said.

Rwanda said that it wanted to commend the DG, adding that now it is clear for them and for Africa. We must avoid deviating from the mandates.

It said it is all about the legitimacy and capacity of some delegations to be able to participate effectively and the capacity of the organisation to meet its obligations.

It is very important that as far as developing countries are concerned that the proposals for making progress in the DDA (Doha Development Agenda), especially in agriculture, receive full attention, it said.

Under the agenda item of report by the DG on the sixth Global Review of Aid for Trade (which took place last week), Azevedo said that roughly $300 billion has been disbursed since 2006, and a record in 2015 of $39.8 billion.

He said 146 developing countries have benefited, mostly in Africa and Asia, and that 27% of the total went to least developed countries (LDCs). Much of the support has gone into supply-side capacity.

According to Azevedo, Aid for Trade has proven to be a recipe for growth, development, poverty reduction and job creation.

According to trade officials, Sierra Leone said the share of exports of LDCs is falling. It called on the developed countries to ensure that there was adequate funding for the Enhanced Integrated Framework (EIF).

Cambodia said that it was disappointed that of the $300 billion that had been allocated since 2006, only 27% had gone to the least developed countries.

It also called for contributions to be made by donors to the EIF.

The European Union said that its commitment to the Aid for Trade programme can be illustrated best by the fact that since 2007 its contribution has gone up by 85% and came to $13 billion in 2015.

Australia said that there is need to enhance the participation of developing countries in the multilateral trading system, and this can be done through the Aid for Trade programme, among other vehicles.

It said that the burden need not be onerous on procedures and methods of reducing costs. We should look to the private sector for ways in which that could be done.

The Aid for Trade session has proven that trade can indeed be inclusive. But more needs to be done in terms of investment to help women and micro, small and medium sized enterprises to participate in the global trading system, it said.

Brazil said that because it has had budgetary constraints it does not have an Aid for Trade programme but it does provide a lot of trade-related technical assistance particularly in agriculture.

In this context, it pointed to programmes of a South-South nature that had been used for programmes in cotton, including in Angola and Mozambique.

Saudi Arabia said that Aid for Trade is a global responsibility and it has made substantial contributions to this over the years.

Under the agenda item on trade restrictive measures by certain Members, Qatar said that it wanted to express its ongoing concern with serious and unwarranted trade restrictions imposed by Saudi Arabia, Bahrain and the United Arab Emirates.

It said that it had made statements on this issue in the Goods Council and the Council for Trade in Services.

Qatar said that it was important to spell out that what is being done runs counter to WTO rules. The rules call for non-discriminatory treatment and yet Qatar has been targeted.

Qatar maintained that a number of WTO rules on freedom of transit, including those included in the Trade Facilitation Agreement had been violated.

Some companies are already moving to take advantage of the lost opportunities of Qatari businesses as a result of this.

This is also fundamentally at odds with the Dispute Settlement Understanding, it said.

This was impacting not just Qatar but also other countries, including those that were purchasing oil and gas from Qatar and who had to pay additional costs because of the longer journeys that were required to make these deliveries.

Although it is a small country, it is not going to shy away from exercising its rights including rights under the dispute settlement understanding, it said.

Saudi Arabia, also speaking on behalf of Bahrain, the United Arab Emirates and Egypt, said it was disappointed that Qatar had brought this issue to the General Council.

They had already responded in the Goods Council. All the actions that they were taking were in compliance with their rights and obligations under the WTO agreements. They do not believe that this issue is one that should be resolved in the WTO. +