Info Service on WTO and Trade Issues (Dec18/02)
5 December 2018
Third World Network
North countries succeed in foisting WTO "reforms" at
Published in SUNS # 8809 dated 4 December 2018
Geneva, 3 Dec (D. Ravi Kanth) - Major developed countries on Saturday
succeeded in foisting, in the final G20 Leaders' Declaration from
Buenos Aires, "reforms" at the World Trade Organization
ostensibly to salvage the multilateral trading system from "falling
short of its objectives", trade envoys told SUNS.
Despite the writing on the wall that the multilateral trading system
is being subjected to trade wars launched by the United States for
pursuing its "America First" trade policies, the G20 Sherpas
meekly agreed to the US demand to shift the blame for the current
crisis in global trade to the multilateral trading system and the
WTO, said a trade envoy, who asked not to be quoted.
During the crucial negotiations among the Sherpas of the 19-member
G20 in Buenos Aires on 30 November, the developing countries, especially
South Africa and India among others, resisted the use of the term
"reforms" at the WTO, and its negative effects on the developing
and poorest countries, said a trade envoy, who asked not to be quoted.
But major industrialized countries, especially the European Union
and its members such as Germany and France among others, insisted
that "reforms" are needed at the WTO on a war footing for
addressing the crisis in the multilateral trading system.
The EU was supported by its allies such as Japan, Canada, Australia,
and some South American countries like Argentina, Brazil, and Chile
for launching reforms at the WTO.
The United States, which spurned multilateral trade liberalization
for pursuing its "America First" trade policies, inserted
language based on the US President Donald Trump's incessant criticism
that the WTO has failed to address the American concerns.
The US also insisted that the declaration must include language for
addressing "unfair" trade practices.
China emphasized the importance of resisting unilateral and protectionist
measures in the final declaration, but the US said that it will block
the declaration if it included language on curbing "unilateral
and protectionist" measures.
Ahead of the Sherpas meeting, China, India, and Russia had agreed
to step up their interaction and cooperation at the multilateral institutions,
including the unfinished Doha trade negotiations, said a trade envoy,
who asked not to be quoted.
The negotiations on the final declaration were also influenced by
the likely standstill agreement between the US and China for not imposing
tit-for-tat tariffs against each other for the next three months ending
on 1 March 2019, said a Sherpa, who asked not to be quoted.
Besides, the US, the EU, and Japan, which had launched the trilateral
process last year, remained united on initiating reforms at the WTO,
particularly for strengthening the transparency and notification requirements
and enhancing the oversight role of the WTO.
The three countries also demanded for reforms to include creating
new rules against industrial subsidies, stopping the mandatory transfer
of technologies, and enhanced new rules for intellectual property
Unlike the Hamburg declaration of the G20 leaders last year, the Buenos
Aires declaration largely reflected the US concerns. The Hamburg declaration,
for example, suggested that, "to further improve the functioning
of the WTO, we will cooperate to ensure the effective and timely enforcement
of trade rules and commitments as well as improve its negotiating,
monitoring and dispute settlement functions."
In sharp contrast, the G20 leaders' declaration from Buenos Aires
said in paragraph 5 that, "We renew our commitment to work together
to improve a rules-based international order that is capable of effectively
responding to a rapidly changing world."
After the US accepted language on recognizing "the contribution
that the multilateral trading system has made to that end," the
rest of the members agreed to President Trump's general assertion
in paragraph 27 that "the [multilateral trading] system is currently
falling short of its objectives and there is room for improvement."
"We therefore support the necessary reform of the WTO to improve
its functioning," the leaders' declaration said, without clarifying
what that reform would include. "We will review progress at our
next Summit" which will take place in Tokyo, in 2019, the declaration
Clearly, the battle lines are drawn on what would constitute "reforms"
and the next few months will indicate whose "reforms" will
succeed, said a trade envoy, who asked not to be quoted.
For a large number of countries, including the EU, India, China, and
South Africa among others, the first priority of reforms is filling
the vacancies at the Appellate Body (AB) as well as ensuring the independent
and impartial functioning of the AB.
But the US remains firmly opposed to filling the vacancies at the
AB. Effectively, the "reforms" have no meaning unless the
first major challenge i.e. filling the vacancies at the AB, is addressed.
The US is only interested in bringing intrusive notification requirements
and embarking on plurilateral negotiations on electronic commerce,
said a trade envoy who asked not to be quoted.
The EU and Japan as well as several other countries are also with
the US on reforms/new rules for notification requirements.
Unless the developing countries remain united on their priorities
within the reforms/new rules, they will face the prospect of onerous
and burdensome commitments being imposed by the developed countries.
The plurilateral negotiating issues of electronic commerce, new disciplines
for micro, small, and medium enterprises, and investment facilitation
were also inserted in paragraph nine of the G20 leaders' declaration
from Buenos Aires.
It says: "To maximize the benefits of digitalization of and emerging
technologies for innovative growth and productivity, we will promote
measures to boost micro, small and medium enterprises and entrepreneurs,
bridge the digital gender divide and further digital inclusion, support
consumer protection, and improve digital government, digital infrastructure
and measurement of the digital economy. We reaffirm the importance
of addressing issues of security in the use of ICTs . We support the
free flow of information, ideas and knowledge, while respecting applicable
legal frameworks, and working to build consumer trust, privacy, data
protection and intellectual property rights protection."
It further adds that "we [leaders] welcome the G20 Repository
of Digital Policies to share and promote the adoption of innovative
digital economy business models. We recognize the importance of the
interface between trade and the digital economy. We will continue
our work on artificial intelligence, emerging technologies and new
To counter the demands on electronic commerce and new disciplines,
the developing countries must demand that the reforms must address
"food security" and "hunger" in developing countries,
said a trade envoy who asked not to be quoted.
The developing countries must ensure that the permanent solution for
public stockholding programs for food security is concluded as part
of negotiating reforms, the envoy said.
In paragraph eleven of the G20 leaders' declaration from Buenos Aires,
countries have agreed to a robust framework for "tackling the
challenges of food security, which is crucial to achieving a world
free of hunger and all forms of malnutrition."
It says the G20 countries "will promote dynamism in rural areas
and sustain able agriculture, conscious of the importance of sustainable
soil, water and riverbanks management supported by individual countries
voluntarily, taking into consideration the specific needs of family
and small-holder farmers."
"We encourage the voluntary use and sharing of innovative as
well as traditional agricultural practices and technologies. We highlight
the importance of collaboration among public and private stakeholders
to strengthen risk management, facilitate adaptation to a changing
environment, protect biodiversity and provide effective responses
to reduce the impacts of extreme weather on agriculture."
In crux, battle lines at the WTO have been drawn by the G20 leaders'
declaration from Buenos Aires. Unless there is complete unity of purpose
and collective resolve to fight the US-EU mooted reforms at the WTO,
the developing countries will be forced to implement new rules that
are harmful to their interests, said trade envoys, who asked not to