Info Service on WTO and Trade Issues (Feb18/16)
19 February 2018
Third World Network
Attacks against multilateralism likely at mini-ministerial in India
Published in SUNS #8622 dated 15 February 2018
Geneva, 14 Feb (D. Ravi Kanth) - The mini-ministerial meeting on 19
March that India is sponsoring and hosting faces the prospect of an
intensified attack against the multilateral trade liberalization from
the sponsors of plurilateral initiatives on electronic commerce and
investment facilitation among others.
India has convened the meeting to address agriculture and development
issues set out in the Doha Work Program.
However, the plurilateral sponsors attending the New Delhi meeting
have their own plans to drum up support for their initiatives on e-commerce,
investment facilitation, disciplines for micro, small, and medium
enterprises (MSMEs), and trade and gender, according to people familiar
with the development.
Ahead of the two-day ministerial meeting in New Delhi on 19-20 March
of around 40 trade ministers from different groups, including all
the industrialized countries, the plurilateral sponsors have intensified
their aggressive campaign for launching discussions on their plurilateral
initiatives at the World Trade Organization despite lack of multilateral
Though failing to secure multilateral approval at the WTO's eleventh
ministerial conference in Buenos Aires on 12 December 2017, the plurilateral
sponsors went ahead and announced their specific initiatives on electronic
commerce, disciplines for MSMEs, investment facilitation, and trade
and gender on 13 December.
The US, which endorsed the plurilateral initiative on electronic commerce
at Buenos Aires, however chose to stay away from the initiatives on
investment facilitation and disciplines for MSMEs, promoted by China.
In a similar vein, China and Pakistan chose not to join the plurilateral
initiative on electronic commerce and trade and gender.
China, which has stated its commitment to the unresolved Doha issues,
indicated its willingness to pursue new issues such as investment
facilitation and disciplines for MSMEs.
Following the Buenos Aires meeting, trade ministers from select countries
made their renewed pitch for plurilateral initiatives at the closed-door
dinner meeting on 25 January (on the sidelines of the Davos World
The WTO Director-General Roberto Azevedo also joined the plurilateral
bandwagon at the dinner meeting, according to a participant who asked
not to be quoted.
Surprisingly, Azevedo kept silent on the plurilateral initiatives
when the sponsors, including the US, called for pursuing the plurilateral
discussion on electronic commerce at the closed-door informal ministerial
meeting the next day, hosted by Switzerland on the margins of the
World Economic Forum meeting in Davos.
At that informal ministerial meeting, the US Trade Representative
Ambassador Robert Lighthizer said that plurilateral initiatives are
not suitable for rule-making in all areas except electronic commerce.
Ambassador Lighthizer suggested that the plurilateral initiative in
e-commerce will be beneficial for all members, but remained stoically
silent on the sharp concern expressed by the other participants at
that meeting on the impasse created by the US at the Appellate Body
over the filling-up of vacancies created by retiring members.
The US had already presented a "non-paper" on the electronic
commerce work program almost two years ago in which it had set out
the broad goals that must be accomplished at the WTO.
In its proposal (Job/GC/94 issued on 4 July 2016), the US had unveiled
"a number of trade-related policies that can contribute meaningfully
to the flourishing of trade through electronic and digital means."
The policies set out in the US non-paper are as follows:
1.1. PROHIBITING DIGITAL CUSTOMS DUTIES: The complete prohibition
on customs duties for digital products can ensure that customs duties
do not impede the flow of music, video, software, and games so that
creators, artists and entrepreneurs get a fair shake in digital trade.
1.2. SECURING BASIC NON-DISCRIMINATION PRINCIPLES: Fundamental non-discrimination
principles are at the core of the global trading system for goods
and services. Rules that make clear that the principles of national
treatment and MFN apply to digital products can contribute directly
to stability in the digital economy.
1.3. ENABLING CROSS-BORDER DATA FLOWS: Companies and consumers must
be able to move data as they see fit. Many countries have enacted
rules that put a choke-hold on the free flow of information, which
stifles competition and disadvantages digital entrepreneurs. Appropriately
crafted trade rules can combat such discriminatory barriers by protecting
the movement of data, subject to reasonable safeguards like the protection
of consumer data when exported.
1.4. PROMOTING A FREE AND OPEN INTERNET: A free and open Internet
enables the creation and growth of new, emerging, and game-changing
Internet services that transform the social-networking, information,
entertainment, e-commerce and other services we have today. The Internet
should remain free and open for all legitimate commercial purposes.
1.5. PREVENTING LOCALIZATION BARRIERS: Companies and digital entrepreneurs
relying on cloud computing and delivering Internet-based products
and services should not need to build physical infrastructure and
expensive data centers in every country they seek to serve. Such localization
requirements can add unnecessary costs and burdens on providers and
consumers alike. Trade rules can help to promote access to networks
and efficient data processing.
1.6. BARRING FORCED TECHNOLOGY TRANSFERS: Requirements that make market
access contingent on forced transfers of technology inhibit the development
of e-commerce and a flourishing digital economy. Trade rules may be
developed to prohibit requirements on companies to transfer technology,
production processes, or other proprietary information.
1.7. PROTECTING CRITICAL SOURCE CODE: Innovators should not have to
hand over their source code or proprietary algorithms to their competitors
or a regulator that will then pass them along to a State-owned enterprise.
It is important to ensure that companies do not have to share source
code, trade secrets, or substitute local technology into their products
and services in order to access new markets, while preserving the
ability of authorities to obtain access to source code in order to
protect health, safety, or other legitimate regulatory goals.
1.8. ENSURING TECHNOLOGY CHOICE: Innovative companies should be able
to utilize the technology that works best and suits their needs. For
example, mobile phone companies should be able to choose among wireless
transmission standards like Wi-Fi and LTE. Trade rules may play a
role in ensuring technology choice by stipulating that companies are
not required to purchase and utilize local technology, instead of
technology of their own choosing.
1.9. ADVANCING INNOVATIVE AUTHENTICATION METHODS: The availability
of diverse electronic signature and authentication methods protects
users and their transactions through mechanisms such as secure online
payment systems. Trade rules may assist in ensuring that suppliers
can use the methods that they think best for this purpose.
1.10. SAFEGUARDING NETWORK COMPETITION: It is important to enable
digital suppliers to build networks in the markets they serve or access
such facilities and services from incumbents - whether landing submarine
cables or expanding data and voice networks - to better access consumers
1.11. FOSTERING INNOVATIVE ENCRYPTION PRODUCTS: Encryption is increasingly
seen as an important tool to address protections of privacy and security
in the digital ecosystem. Rules may be developed to protect innovation
in encryption products to meet consumer and business demand for product
features that protect security and privacy while allowing law enforcement
access to communications consistent with applicable law.
1.12. BUILDING AN ADAPTABLE FRAMEWORK FOR DIGITAL TRADE: New and innovative
digital products and services should be protected against future discrimination.
Trade-based protections for services and investment should continue
to apply as markets change and innovative technologies emerge, unless
a specific, negotiated exception applies.
1.13. PRESERVING MARKET-DRIVEN STANDARDIZATION AND GLOBAL INTEROPERABILITY:
Innovators should not have to design products differently for each
market they seek to serve; that is why we have the global standards
process, where industry leads and the best technologies win. Trade
rules can help to ensure that countries cannot arbitrarily demand
that less competitive national standards be forced into innovative
1.14. ENSURING FASTER, MORE TRANSPARENT CUSTOMS PROCEDURES: The sorts
of provisions contained in the WTO Trade Facilitation Agreement can
make very direct contributions to digital trade. Administrative and
at-the-border barriers can often be a bigger problem than tariffs
for exporters of digital equipment.
1.15. PROMOTING TRANSPARENCY AND STAKEHOLDER PARTICIPATION IN THE
DEVELOPMENT OF REGULATIONS AND STANDARDS: The development of new regulations
and standards can pose a significant challenge to suppliers of information
and communications technology, whose product cycles are short and
whose regulatory environment is constantly evolving. A positive environment
for e-commerce/digital trade entails strong commitments on transparency,
stakeholder participation, coordination, and impact assessment for
new regulatory measures, standards, and conformity assessment procedures.
1.16 RECOGNIZING CONFORMITY ASSESSMENT PROCEDURES: Conformity assessment
procedures verify that products, including information and communications
technology, meet required standards and technical regulations, but
overly burdensome conformity assessment procedures can hinder such
exports. "National treatment" in conformity assessment,
so that testing and certification performed by one qualified conformity
assessment body will be accepted as consistent with another Party's
requirements, can be an important means of facilitating trade in products
relevant to the digital economy.
China, however, remained silent on the plurilateral initiatives at
the Davos meeting, emphasizing that members must respect their multilateral
obligations. (See SUNS #8610 dated 30 January 2018).
Subsequently after the Davos meeting, Brazil fired the first salvo
on investment facilitation, calling for structured discussions at
the WTO based on its draft proposal. Brazil created the G20 developing
country coalition for reforming global trade in agricultural products,
particularly reducing trade-distorting domestic subsidies. The same
Brazil has now ensured the death of the G20 and has become the champion
of investment facilitation.
In its proposal (Job/GC/169) circulated on 1 February, Brazil said
that the eleven-page document, "Structured Discussions on Investment
Facilitation", is not meant to be a negotiating proposal, but
rather (i) a platform (among others) to promote more focussed and
text-based discussions, as well as (ii) a response to the call made
in the Joint Ministerial Statement issued at the Buenos Aires meeting.
(See SUNS #8615 dated 6 February 2018).
The plurilateral sponsors led by the European Union will hold a public
discussion at Geneva's Graduate Institute on 28 February for intensifying
their push. The WTO Director-General, Roberto Azevedo, and other chiefs
of the UN bodies dabbling in trade issues, will also participate at
the EU-sponsored meeting.
Against this backdrop, the informal ministerial meeting in New Delhi
could become the launching pad for the plurilateral initiatives given
the speed with which its sponsors are proceeding.
India wants to focus on issues of agriculture and development but
it remains moot whether it would be able to prevent the plurilateral
sponsors from firing salvos from India's shoulders.
At the last informal ministerial summit hosted by India on "Re-Energizing
Doha - A Commitment to Development" in 2009, India issued a set
of objectives aimed at "weaving them into a response of solidarity
to move the multilateral process forward."
"This is what the Delhi meeting attempts to achieve ... it brings
together groups from across the spectrum of interests and positions
in the Doha negotiations, in a microcosm of the WTO itself, in a bid
to give a determined push to the multilateral process," India
stated in a discussion paper issued for Senior Officials for that
meeting on 2 September.
Given the near-wreckage brought about in the Doha trade negotiations
by the US along with other industrialized and several developing countries
over the past several years, culminating in the disastrous collapse
of the Buenos Aires meeting, and in the face of aggressive push for
plurilateral discussions on e-commerce and other issues, it remains
to be seen how India will be able to bring about a consensus at the
upcoming Delhi meeting to advance discussions on agriculture and development.
Moreover, the US administration, which is going to accelerate its
safeguard actions on steel and aluminum products in addition to the
recent safeguard duties slapped on solar cells and large washing machines,
is in no mood for any multilateral work on agriculture and development.
In short, India faces a serious challenge to accomplish its multilateral
objectives on agriculture and development at the upcoming meeting
in New Delhi. Being the hosts of the two-day meeting, it faces a difficult
task to ensure that the plurilateral sponsors are kept under check.
Otherwise they will reinforce the perception that the WTO is not meant
any longer for multilateral trade liberalization.