TWN Info Service on WTO and Trade Issues (Oct17/08)
11 October 2017
Third World Network

MC11 will be scene for fierce US vs South battle
Published in SUNS #8549 dated 10 October 2017

Geneva, 9 Oct (D. Ravi Kanth) - The World Trade Organization's eleventh ministerial conference (MC11) in Buenos Aires beginning on 10 December is going to be a fierce battle between the developing and poorest countries on the one side, and the United States on the other, trade envoys told SUNS.

Washington wants to ensure that there is no ministerial declaration for continuing with the Doha Work Program for multilateral trade liberalization.

On the other side, key developing countries (China, India, G33 coalition, South Africa, African Group, ACP and least developed countries) are insistent on credible outcomes at MC11 on food security, special safeguard mechanism, cutbacks/elimination of agriculture domestic subsidy in developed countries, and completion of the development agenda of the Doha Work Programme (DWP).

As trade ministers from more than 35 countries gathered on Monday (9 October) at Marrakesh (Morocco) at an informal summit and discussed the possible deliverables at MC11, the writing on the wall is there for everybody to see, said a South American trade envoy, who asked not to be quoted.

The US remains opposed to any ministerial declaration issued at the end of the Buenos Aires meeting so as to ensure that there is no work done on the basis of the existing Doha Work Program and that the multilateral trade dispute resolution mechanism, a la the Dispute Settlement Body, remains permanently paralysed, the envoy suggested.

Besides, the Buenos Aires meeting is also likely to be used as a venue by the European Union and other industrialized and some developing countries to finalize a few cosmetic outcomes in fisheries subsidies, domestic regulation in GATS, and a limit on the overall trade-distorting domestic support in Agriculture that would include the de minimis payments currently availed of by developing countries like China and India, and close of the Doha Round once and for all, the envoy suggested.

The EU along with the Cairns Group of countries led by Australia will issue a common statement on the OTDS (overall trade-distorting domestic support) at Marrakesh.

In a joint statement issued on 9 October, the EU and members of the Cairns Group reaffirmed "a commitment to achieving progress and believe that focusing on a new discipline on the overall level of the most trade-distorting domestic support, with due consideration to the development needs of developing members, offers a meaningful and achievable next step in this process."

[This "alliance" will be an ironic development: before the Uruguay Round was launched, the Australia-led Cairns Group had been formed (in tacit alliance with the US) to mount an assault on the EU (at that time the European Economic Community in GATT 1947) and its agricultural policies encompassed in the Common Agricultural Policy (CAP). SUNS]

Further, there will be attempts by the EU and its allies with the tacit approval from the US for embarking on plurilateral trade initiatives in other areas at Buenos Aires.

Against this backdrop, several developing countries - India, Indonesia, China, South Africa, as well as Rwanda on behalf of the African Group, the ACP (Africa, Caribbean, and Pacific) coalition, and the coordinator for LDCs - have made their positions known at the Marrakesh meeting.

The trade ministers of Indonesia, which is the coordinator for the G33 coalition, and India among others have emphasized the need for credible deliverables on the permanent solution for public stockholding programs for food security, and the special safeguard mechanism (SSM).

China and India have called for the elimination of Aggregate Measurement of Support (AMS) for any dialogue on the domestic support.

The ACP Group on Friday (6 October) issued a strong statement on what needs to be done in domestic support, particularly beginning with the elimination of the scheduled AMS commitments by developed and some developing countries.

The G33 group has also made it clear that it will not make any payment for the proposed permanent solution for public stockholding programs for food security at Buenos Aires.

Trade ministers attending the Marrakesh meeting reiterated that their governments want to conclude work on the unfinished Doha negotiations so as to reinforce multilateral trade liberalization.

In the face of the corrosive "America First" bilateral trade initiatives (which often turn out to be unilateral demands), the developing countries, including Brazil and Argentina, want a clear statement at the end of the Buenos Aires meeting so as to ensure a clear work program for the WTO, according to a South American trade envoy.

The Marrakesh meeting, originally scheduled to finalize the possible deliverables for the WTO's eleventh ministerial conference in Buenos Aires, will not be attended by the United States Trade Representative Ambassador Robert Lighthizer due to a sudden cabinet meeting scheduled by his President Donald Trump on 10 October, according to a participant who asked not to be quoted.

In the absence of the US and amid continued entrenched positions on a range of issues in agriculture, fisheries subsidies, electronic commerce, and other areas, the Marrakesh meeting will thus remain "an event" for venting wish-lists of the participating countries for the big Buenos Aires conference.

Ministers from Argentina, Brazil, India, China, the European Union, Japan, Canada, Australia, Switzerland, Norway, New Zealand, South Africa, Singapore, Korea, Hong Kong (China), Mexico, South Africa, Indonesia, Nigeria, Costa Rica, Rwanda, and Jamaica among others - made initial statements for three minutes each, setting out their priorities.

Subsequently, key ministers held a series of bilateral meetings as well as participating in the meetings of their respective coalitions such as the Group of more than 33 countries led by Indonesia in which India is a main driver, the Cairns Group led by Australia, the African Group led by Rwanda, the ACP (Africa, Caribbean, and Pacific) group led by Guyana, and the least-developed countries among others.

On Tuesday (10 October), the ministers will make a final statement following which the chair, Moulay Hafid Elalamy, the trade and industry minister from Morocco, will deliver a statement directing the trade envoys to work on priority areas during the next sixty days.

In the run-up to the Marrakesh meeting last week, it has become almost clear that the WTO's eleventh ministerial conference in Buenos Aires beginning on 10 December will be a battleground for several issues, particularly for the future of multilateral trade liberalization based on the Doha work program.

On Thursday (5 October), a large majority of developing countries, including India, rejected attempts by Russia, Japan, the European Union and other major industrialized as well as some developing countries for replacing the structure of the current electronic commerce work program at the WTO so as to establish a separate working group at Buenos Aires.

Without resolving the outstanding issues in the Doha work program, major industrialized countries and their allies seem pretty determined to embark on negotiations for new rules in e-commerce and other areas while burying the Doha negotiations at Buenos Aires, said several trade envoys who asked not to be quoted.

India said categorically that New Delhi will not accept any change in the current work program on e-commerce which is comprehensive in scope and remains relevant to the "development needs" of developing countries, according to a person who attended the meeting.

India also rejected calls from major industrialized and a few developing countries like Korea, Singapore, Hong Kong (China), for a permanent moratorium for not imposing customs duties on electronic commerce transactions.

India will agree to extend the moratorium for another two years in exchange for moratorium on TRIPS non- violation and situation complaints.

On agriculture, a large coalition of developing and poorest countries has driven home the message that the fundamental reform of global trade in agricultural products must begin with the elimination of most trade- distorting domestic subsidies in the industrialized countries.

In a restricted job document Job/Ag/112 issued on 6 October, the ACP group of more than 90 countries said "agriculture is a vital sector for most ACP countries in terms of economic growth, employment, food security and livelihoods" and "for this reason, achieving tangible and binding results from negotiations aimed at establishing a fair, and market-oriented trading system in agriculture, remains central to the conclusion of the Doha Round and should be addressed effectively."

It called for eliminating "the asymmetries in domestic support entitlements resulting from the Uruguay Round."

The ACP group set the following markers in the domestic support:

1. Domestic support negotiations should achieve substantial cuts in trade-distorting domestic support. Capping Overall Trade-Distorting Domestic Support (OTDS) alone would not make any significant impact as the current applied OTDS for the top developed country subsidizers is below the de minimis. Negotiations should also achieve stricter disciplines on product-specific support and Green Box support.

2. To ensure fairness and equity, an outcome on Domestic Support should preserve the special flexibilities for least-developed countries (LDCs), small and vulnerable economies (SVEs) and net food-importing developing countries (NFIDCs) and other developing country Members, as envisaged in the Revised Draft Modalities for Agriculture (TN/AG/W/4/Rev.4).

This would entail:

a. Flexibilities in the level of commitments and the schedules of implementation;

b. Exemption for LDCs, SVEs, NFIDCs, and developing country Members with no Final Bound Total AMS commitments from undertaking any reduction commitments;

c. Technical assistance and capacity building to address institutional and financial constraints faced in the implementation of disciplines.

3. The provisions of Article 6.2 of the Agreement on Agriculture [the special and differential provisions which the US wants to remove] shall remain unchanged.

The ACP group has called for a comprehensive limit. It has emphasized that "all existing Final Bound Total AMS entitlements shall be eliminated."

For "developed country Members, the total de minimis and Blue Box supports shall not exceed the existing de minimis levels referred to under Article 6.4 (a) of the Uruguay Round Agreement on Agriculture (i.e. 5% of a Member's total value of production of a basic agricultural product in the case of product-specific de minimis and 5% of the value of a Member's total agricultural production in the case of non-product-specific de minimis)," the ACP maintained.

In conclusion, the developing and poorest countries face a defining moment at Buenos Aires which will test their collective resolve to ensure that there is no demise of the Doha work program and the end of developmental round of trade negotiations at Buenos Aires. They have to ensure that there is a clear ministerial statement at Buenos Aries for continuing work at the WTO based on the Doha work program, trade envoys said.