Info Service on WTO and Trade Issues (Oct17/23)
30 October 2017
Third World Network
MC11 becoming a North-South battle
Published in SUNS #8561 dated 26 October 2017
Geneva, 25 Oct (D. Ravi Kanth) - The eleventh ministerial conference
(MC11) of the World Trade Organization in Buenos Aires in December
is increasingly transforming itself into a North-South battle on unresolved
trade issues of the Doha Work Program (DWP).
A large majority of developing and poorest countries issued the strongest
message yet on Tuesday (24 October) that they remain firmly opposed
to new issues such as investment facilitation, disciplines for micro,
small, and medium enterprises (MSMEs), and a new mandate for electronic
commerce, several trade envoys told SUNS.
At an informal Heads of Delegations (HoD) meeting on 24 October, the
large majority of developing and poorest countries comprising the
African Group, the ACP (Africa, Caribbean, and Pacific) group, the
least-developed countries (LDCs), the G33 developing country coalition,
China, India, and South Africa demanded categorically that the Buenos
Aires meeting must deliver a credible outcome on the permanent solution
for public stockholding programs for food security without any linkage
to an outcome on the domestic support commitments as demanded by the
European Union, Brazil, and other members.
They insisted that the special safeguard mechanism (SSM) which is
mandated in the 2004 July Framework Agreement, the 2005 Hong Kong
Ministerial Declaration, the 2008 revised draft Doha agriculture modalities
and the 2015 Nairobi ministerial declaration must be delivered at
They emphasized that an outcome on cotton must also be delivered at
Buenos Aires so as to enable the C4 countries - Benin, Burkina Faso,
Mali, and Chad - to secure a credible result on this much promised
The large majority of developing and poorest countries, including
India, China, and South Africa, called for the elimination of aggregate
measurement of support (AMS) in the industrialized countries as a
prerequisite for commencing work on the domestic support reduction
The large majority of developing and poorest countries led by South
Africa demanded that the specific improvements in the special and
differential flexibilities in the Doha Work Program and subsequently,
in the other ministerial declarations, including the 2004 framework
agreement, must be resolved at Buenos Aires so as to enable countries
in Africa to industrialize and become competitive in international
On e-commerce, the large majority of developing and poorest countries,
including India and South Africa, said categorically that the 1998
work program on e-commerce must continue and further work must follow
after the Buenos Aires meeting.
The large majority of developing and poorest countries, including
India and South Africa, said NO to new issues such as investment facilitation
and disciplines for micro, small and medium enterprises, which are
outside the mandate.
The large majority of developing and poorest countries called for
credible outcomes on the duty-free and quota- free market access for
the least-developed countries.
The large majority of developing and poorest countries said that they
want a realistic and development-friendly outcome on fisheries subsidies
without undermining the lives of poor and artisanal fishermen.
China, however, pursued a two-track strategy. It sided with the developing
countries on issues concerning credible outcomes on the permanent
solution for public stockholding programs, SSM and cotton, and the
elimination of AMS.
China however chose to switch sides on e-commerce, investment facilitation,
and disciplines for MSMEs by joining with the EU and other industrialized
China said it would attend an informal high-level meeting being convened
on investment facilitation by Nigeria on 3 November. On fisheries,
China maintained that it wants an outcome only on IUU (illegal, unreported
and unregulated) fishing.
In sharp contrast, several industrialized and some developing countries
- the European Union, Japan, Australia, Switzerland, Norway, Korea,
Hong Kong (China), Chinese Taipei, Chile, and Argentina among others
- called for a work plan on new issues such as investment facilitation,
disciplines for MSMEs, and electronic commerce.
The EU supported by several others specifically linked an outcome
on the permanent solution for public stockholding programs for food
security in developing countries with domestic support reduction commitments.
The EU and more than 40 countries also called for an outcome on improved
domestic regulation in services. The EU asked members to be prepared
for strengthening the multilateral organization in the face of peculiar
challenges posed to its credibility.
The United States, however, continued to maintain its position that
there cannot be any negotiated outcomes at Buenos Aires. The US said
the eleventh ministerial meeting will be reckoned as a success if
it results in an agreed blueprint for starting a dialogue to strengthen
the WTO by rejuvenating its institutional structures in the near future,
said a participant who asked not to be quoted.
The US, however, remained silent on the Dispute Settlement Understanding
(DSU) and the systemic crisis it had triggered off in the recent weeks
following its decision to block the selection process for filling
vacancies at the Appellate Body.
On this front, without naming the US, members from across all regions
issued on 24 October resounding message for strengthening the Dispute
Settlement Understanding (DSU) in the face of grave challenges arising
from the intransigent positions adopted by one member. Many members
called for de-linking the selection process for filling the AB vacancies
from the issues raised by the US, said a trade envoy who asked not
to be quoted.
The strongest message delivered at the meeting came from Rwanda's
trade envoy Ambassador Francois Xavier Ngarambe on behalf of the African
Group. He said the African Group wants "fair and equitable rules-based
Multilateral Trading System that supports our development objectives."
"Since the launch of the Doha Round," he said, the African
Group "has made contributions consistently aiming at eliminating
systemic inequities inherited from many of the Uruguay Round Agreements."
It is little surprise, he said, "the African Group supported
the 2008 Rev.4 in Agriculture and submitted a number of Special and
Differential Treatment proposals to review GATT/WTO Agreements in
line with paragraph 44 of the Doha Declaration, among others."
Therefore, the WTO's eleventh ministerial conference in Buenos Aires
must deliver "a meaningful outcome on the Doha Development Issues,
in particular those with direct connection with our continental integration;
structural transformation and industrialization in line with agenda
2063: The Africa we want."
On behalf of the African Group he listed the markers for the Buenos
Aires meeting in all areas. In Agriculture, the African Group listed
the following issues:
i. Given the role agriculture plays in Africa, especially in its economy
for employment, GDP generation, rural development, food security and
livelihoods, the African Group wants a high-ambition and development-friendly
outcome at Buenos Aires that results in removing inequities in global
ii. It underscored the need for a fair and market-oriented agriculture
trading system in line with Article 20 of the Agreement on Agriculture
and in accordance with paragraph 13 of the Doha Ministerial Declaration.
iii. The African Group supported the elimination of all historical
imbalances, notably the elimination of AMS by MC11 as well as establishing
disciplines on product-specific support to avoid subsidy concentration
while preserving all the necessary policy space for purposes of fairness
Other approaches, such as the EU/Brazil approach based on the value
of production, according to African Group, "do not address these
systemic inequities and may in fact perpetuate them; and, therefore
these approaches are not conducive to any tangible outcome and cannot
be supported as a basis for future work."
It listed other important issues: (i) a Permanent Solution on the
Public Stockholding for food security purposes; (ii) a Special Safeguard
Mechanism as well as an ambitious outcome on Cotton by MC11.
The African Group called for "an ambitious outcome on Cotton
in line with the C-4 proposal."
On PSH (public stockholding programs for food security), the African
Group maintained that "the Nairobi Ministerial Decision mandated
a constructive engagement towards a permanent solution on this issue;
to be conducted in a dedicated process and accelerated time-frame,
distinct from the agriculture negotiations."
"We therefore cannot support any linkage to the Domestic Support
negotiations," the African Group said.
On fisheries subsides, the African Group said it supports the ACP
proposal for a substantial outcome; while preserving the policy space
for our countries to develop the fisheries sector.
On the development issue concerning Special and Differential treatment,
the African Group stressed "the urgent need to make flexible
the GATT/WTO stringent rules in order to create a conducive environment
for industrialization, diversification and structural transformation."
It expressed sharp concern that "the current stiff resistance,
and rejection as a testament to the fact that this may not be an Organization
that promotes development, contrary to the objectives of the Doha
"These rules were negotiated during the Uruguay Round without
the participation of our countries," the African Group said,
maintaining that "industrialized countries crafted these rules
in accordance with the needs of their industries."
It recounted how industrialized countries closed the policy space
after establishing GATT/WTO, particularly GATT Agreements that prohibited
"the use of local content requirements; industrial subsidies,
infant industry protection, among others."
The G-90 countries, according to the African Group, are "simply
seeking to make these rules commensurate with the economic needs of
our industries in fulfilment of the mandate found in paragraph 44
of the Doha Ministerial Declaration."
Therefore, "the argument that operationalizing the special and
differential treatment with respect to these rules might be difficult
simply does not hold," the African Group maintained.
The African Group rejected calls for an outcome on domestic regulation
for trade in services saying that their specific questions were not
even addressed. (See SUNS #8560 dated 25 October 2017.)
On new issues without a mandate, paragraph 34 of the Nairobi Ministerial
Declaration and paragraph 1(g) of the 2004 July Framework will prevail.
"It is impossible to envisage or expect any outcome whatsoever
on issues without reaching consensus on the negotiating mandate,"
the African Group maintained.
Commenting on e-commerce, the African Group said "it may be possible
to agree to the continuation of the current Work Programme, although
some Members are deeply concerned that this is intended to lay the
basis for premature and not sufficiently informed rule-making in future."
The African Group said that "the current submissions that propose
a new institutional framework appear to be designed for negotiations
on rules in future, simply heightens those concerns."
On the extension of the Moratorium on customs duties on electronic
transmissions, the African Group said "it is time to engage in
a serious discussion on the implications of the moratorium in view
of the rapidly evolving digitization trend. We are increasingly concerned
about the economic rationale for providing duty-free and quota free
treatment to the most competitive companies in the world."
"Moreover, in view of the increasing digitization of goods and
services, what is likely to be the implications on revenue losses
in a few years ahead? In view of these unanswered questions, the extension
of the Moratorium should not be seen as automatic," the African
After endorsing the statement made by Rwanda on behalf of the African
Group, South Africa said "aside from more than three or four
issues that have some prospect for an outcome at MC11, the remaining
DDA issues, which Members continue to prioritize, will need to be
taken up after Buenos Aires."
South Africa's trade envoy Ambassador Xavier Carim who is also the
chair of the General Council said "there is wide support to continue
to work for outcomes at MC11 on fishery subsidies and public stockholding."
He warned that "while the complex technical questions will not
easily be resolved on either, the most serious risk to an outcome
on public stockholding is the linkage being made to the one proposal
on domestic support."
"We need to be frank here: That proposal, based on a value of
production cap, and being presented as an incremental step, will not
achieve consensus because it does not establish a fair or equitable
basis for future work," the South African trade envoy said.
"The linkage thus risks derailing possible progress on public
stockholding, with possible knock-on consequences," he warned.
India's trade envoy Ambassador J S Deepak also warned that any linkage
between the permanent solution for public stockholding programs for
food security with the outcome on domestic support is a recipe for
disaster at Buenos Aires.
On e-commerce, South Africa said it is ready "to agree to continue
exploratory discussions under the current work program and to obtain
a two-year extension of the moratorium - in tandem with an extension
of the TRIPS moratorium - but even these cannot be taken for granted."
Ambassador Carim also expressed sharp concern over "the disengagement
on and even rejection of the G90 proposals on S&DT."
Cotton also remains an issue of top priority to African countries.
He urged members not to attempt outcomes in domestic regulation in
services, trade remedies, or others that "cherry pick" transparency
and/or regulatory related demands in agriculture, NAMA or elsewhere.
Ambassador Carim said "it is abundantly clear now that any proposal
for decision at MC11 on non-Doha, non- mandated issues, such as investment
facilitation and MSMEs, will not be agreed."
He called for "the process leading to MC11 should be fully transparent
and inclusive, and that we avoid a repeat of the process at MC10."
"We should therefore be fully focused on completing all technical
work before departing Geneva, leaving very few, manageable political
issues for Ministerial decision," he said.
It is imperative that "when our Ministers meet at MC11 they do
not confront deeply contested issues that put the Conference itself
at risk, as a breakdown at MC11 would deal the most serious blow to
the multilateral trading system."
"We must do all we can NOW to avoid that scenario," he said.
In short, the strong messages delivered at the HoD meeting on Tuesday
point towards a continuing battle that might go to the wire, particularly
on new issues, said a trade envoy who asked not to be quoted.