TWN Info Service on WTO and Trade Issues (May19/08)
16 May 2019
Third World Network

Delhi meet calls for strengthening WTO-MTS, promoting development

Published in SUNS #8907 dated 15 May 2019

New Delhi, 14 May (D. Ravi Kanth) – Trade ministers from 17 developing and least-developed countries on Tuesday called for strengthening the World Trade Organization and promoting “development and inclusivity” in the multilateral trading system (MTS).

In the face of multiple challenges confronting the WTO and its multilateral trading system, the trade ministers from the 17 countries agreed “to work together” as a like-minded group at the WTO to make the global trade body more effective.

This came in an outcome document issued at an informal ministerial meeting hosted by India in New Delhi on 13-14 May.

Trade ministers and senior officials from Egypt, Barbados, Central African Republic, Nigeria, Jamaica, Saudi Arabia, Malaysia, Bangladesh, People’s Republic of China, Benin, Chad, India, Indonesia, Malawi, Uganda, South Africa, and Oman demanded “adequate policy space to the developing members to support their farmers through correcting asymmetries and imbalances” in the Agreement on Agriculture.

They reaffirmed that the “dispute settlement system of the WTO is a central element in providing security and predictability to the multilateral trading system.”

But five countries – Brazil, Argentina, Guatemala, Kazakhstan, and Turkey – chose not to join the “outcome document” issued from New Delhi because of their opposition to building a like-minded group for emphasizing the need for the “development dimension” in the global trading system.

Brazil, which had created the G20 coalition of developing countries for bringing about equitable and balanced trade rules in agriculture, has now become the chief opponent for building a developing country coalition to address the unilateral and protectionist measures, said an African trade minister, who asked not to be quoted.

The five countries also raised several concerns about forming a like-minded group for pursing multilateral negotiations based on the consensus principle.

India’s commerce and industry minister Suresh Prabhu, who chaired the meeting, emphasized that developing countries must join hands and work as a strong coalition to avert the “existential crisis” facing the trade body.

Without a strong WTO based on a development dimension, the developing and poorest countries will not be able to integrate into the global trading system, he said.

Prabhu said the Appellate Body (AB) is vital for the smooth functioning of the dispute settlement system.

Without the AB, it would be difficult for developing countries to secure independent and impartial rulings in trade disputes, the Indian minister told his counterparts at the concluding session, according to trade envoys present at the meeting.

The WTO director-general Roberto Azevedo, who attended the dinner meeting on Monday (13 May), asked the trade ministers to join the plurilateral initiatives, arguing that they provide flexibility, said a trade minister from Africa, who asked not to be quoted.

Azevedo also said that he does not know what would happen to the continuation of the Appellate Body after 11 December 2019, the minister said.

Several trade ministers and senior officials from China, Barbados, Jamaica, Indonesia, Benin on behalf of the African Group, Egypt, and Nigeria among others, endorsed Minister Prabhu’s assessment for ensuring the development dimension in the global trading system.

China’s senior trade official said that China wants a developmental outcome based on multilateral principles.

The Chinese official also said that China will host an informal ministerial meeting in November to focus on the need to preserve the multilateral trading system.

The Chinese official said it is important to stay in the joint initiatives on e-commerce and investment facilitation, as otherwise there is a danger that rules will be crafted without the participation of the developing countries.

Commenting on the “ongoing impasse” at the Appellate Body following the decision by the United States to block the selection process for filling four vacancies at the AB, which will become dysfunctional by December 2019, the trade ministers urged “all WTO members to engage constructively to address this challenge without any delay.”

Without naming the US which has resorted to unilateral protectionist measures by imposing additional duties on steel and aluminum under the US Section 232 provisions, the trade ministers said “an inclusive multilateral trading system based on equality and mutual respect should ensure that all WTO Members abide by WTO rules and abjure any form of protectionism.”

The trade ministers emphasized that “the core value and basic principles of the multilateral trading system must be preserved and strengthened, particularly with a view to building trust among members.”

The trade ministers urged other WTO members, particularly the US, “to adopt measures that are compatible with WTO rules to avoid putting the multilateral trading system at risk.”

Against the backdrop of sustained attempts by developed countries to undermine the consensus-based decision- making at the WTO, the trade ministers from developing countries emphasized that “multilateral avenues, based on consensus, remain the most effective means to achieve inclusive development-oriented outcomes.”

In this context, the trade ministers said “members may need to explore different options to address the challenges of contemporary trade realities in a balanced manner.”

As regards the joint plurilateral initiatives that were launched in electronic commerce, investment facilitation, the domestic regulation for trade in services, and disciplines for micro, small, and medium enterprises at the WTO’s eleventh ministerial conference in Buenos Aires in December 2017, the trade ministers merely said that “the outcomes of these initiatives should be conducive to strengthening the multilateral trading system and be consistent with WTO rules.”

Commenting on the sustained assault on special and differential treatment (S&DT) by bringing about “differentiation” to deny S&DT to several developing countries, the ministers said “special and differential treatment is one of the main defining features of the multilateral trading system and is essential to integrating developing members into global trade.”

More important, “special and differential treatment provisions are rights of developing members that must be preserved and strengthened in both current and future WTO agreements, with priority attention to outstanding LDC issues.”

In effect, the trade ministers rejected the concept of “differentiation” that the US has sought to introduce in the current and future WTO negotiations.

On the so-called WTO reforms being proposed by the US and other developed countries, the trade ministers emphasized that “the process of WTO reform must keep development at its core, promote inclusive growth, and fully take into account the interests and concerns of developing members, including the specific challenges of graduating LDCs.”

“The way forward” on reforms, according to the trade ministers, “must be decided through a process that is open, transparent, and inclusive.”

“We agree to work collectively with the aim to develop proposals to ensure that our common interests are reflected in the WTO reform process,” the trade ministers maintained.

“In order to instill confidence among members” in the WTO rules, the trade ministers said “it is imperative that the Ministerial conferences of the WTO are organized in a more open, transparent and inclusive manner.”

Without naming the US and other developed countries who are insisting on stringent transparency and notification requirements, including naming and shaming provisions, the trade ministers from developing countries said “WTO notification obligations must consider the capacity constraints and implementation-related challenges faced by many developing countries, particularly LDCs”.

“In the WTO, a more cooperative and gradual approach is the best way in dealing with the issue of transparency, where many developing Members struggle to comply with their notification obligations.”

The trade ministers called for removing the “imbalances and inequities” in agriculture and other agreements.

There is a crying need “to provide adequate policy space to the developing members to support their farmers through correcting the asymmetries and imbalances” in the Agreement on Agriculture.

They emphasized the need for flexibilities for LDCs and net food importing developing countries.

The trade ministers called for expeditious resolution of trade-distorting domestic subsidies in cotton.

The 17 countries also agreed “to consult on various issues of common interest to developing members, including comprehensive and effective disciplines on fisheries subsidies with appropriate and effective S&DT provisions for developing countries.”