US doubts WTO’s pre-eminence in multilateral trade liberalization

In ongoing talks on drafting the outcome document for MC11, the US has questioned the prime role of the WTO in furthering multilateral trade liberalization.

by D. Ravi Kanth

GENEVA: The United States has cast doubts on the pre-eminence of the WTO for accelerating multilateral trade liberalization. It did so on 14 November during a discussion at a small group meeting on the outcome document for the ministerial meeting in Buenos Aires, trade envoys familiar with the development told the South-North Development Monitor (SUNS).

At an informal information session with around 30 countries, the chair of the WTO General Council, Ambassador Xavier Carim of South Africa, explained how the drafting committee will proceed in preparing the outcome document.

The countries represented at the session included the US, the European Union, China, India, Brazil, Japan, Australia, Canada, Switzerland, New Zealand, Korea, Hong Kong (China), Singapore, Mexico, Argentina, and the coordinators of the African, Caribbean and Pacific (ACP) Group, the African Group and the group of least developed countries (LDCs).

Ahead of the meeting, the General Council chair had circulated a five-page restricted document based on his consultations with members until then.

Carim said his first general observation was that “all delegations acknowledged the rather difficult circumstances surrounding the preparations for [MC11] and the limited time we have from now until MC11.”

“The vast majority nevertheless stressed that a consensual outcome document – a Ministerial Declaration – would be their preferred option,” he said.

Without naming delegations, he said that “other delegations underlined that the significance of a Ministerial Declaration should not be overemphasized.”

“For these delegations, while a Chair’s statement was not their preferred option, such an outcome could be accepted,” he said. “In their view, the substantive results in individual areas and a clear indication on future work were more important than an agreed Ministerial Declaration.”

However, the danger with a Chair’s statement is that it lacks ministerial approval and can become a terrain for conflicting interpretations, said a trade envoy who asked not to be quoted.

Carim said he “did hear a concern about any process aimed at producing a consensual Declaration, given the precarious situation facing Members. In this view, a Chair’s statement would be a prudent course to keep in mind.”

He suggested that members could work on a two-part document for a possible Ministerial Declaration. Part I will deal with “a few introductory/opening paragraphs”, while Part II will deal with “any decision that Ministers could agree on either as outcomes for MC11 or for post-MC11 work programme”.

He said he will focus on “the first part – that is, the introductory paragraphs”. He urged members to agree “on a concise and factual opening few paragraphs”.

He said the second part on the outcomes at the Buenos Aires meeting as well as the post-Buenos Aires work programme would “remain the responsibility of the TNC [Trade Negotiations Committee] and its negotiating bodies as well as of the other WTO bodies currently working on possible Ministerial outcomes”.

Carim suggested four elements in Part I of the outcome document:

(i) Recall and reaffirm the principles and objectives of the Marrakesh Agreement Establishing the WTO.

(ii) Take note of progress since the last Ministerial Conference, MC10. This would include points such as “the entry into force of Trade Facilitation Agreement and the TRIPS (trade-related intellectual properties) amendment”, the recent General Council decision on the amendment of the Trade Policy Review Mechanism, the ongoing effort to implement the Nairobi Decision on Export Competition, and other implementation matters concerning LDC issues.

(iii) The third element would involve a statistical and factual update of recent trends in global trade.

(iv) The last element would be a reference to the importance of development and, in particular, the need to further integrate developing countries and LDCs into the trading system.

Surprisingly, the chair’s note did not refer to the ongoing Doha Development Agenda trade negotiations that are carried out in accordance with the Marrakesh Agreement. The chair could have mentioned the importance of affirming the Doha negotiations along with the Marrakesh Agreement, said a trade envoy who asked not to be quoted.

Friends of the chair

The chair appointed the trade envoys of Norway, Egypt, Moldova and Honduras as “friends of the chair” to convene meetings on each of the four elements.

Norway’s trade envoy, Ambassador Harald Neple, held the first meeting on 14 November to hear members’ views on the first element, “Recall and reaffirm the principles and objectives of the Marrakesh Agreement”.

During the meeting, the participants largely argued the importance of the Marrakesh Agreement and its general principles for furthering multilateral trade liberalization. They also emphasized the importance of the WTO as a pre-eminent body for carrying out multilateral trade liberalization.

The US, however, cast doubts about the pre-eminence of the WTO for furthering trade liberalization, said a trade envoy who asked not to be quoted.

The US position was consistent with various pronouncements that the Trump administration made as recently as a meeting of Asia-Pacific Economic Cooperation (APEC) business leaders in Da Nang, Vietnam, on 10 November. President Donald Trump said the US had “not been treated fairly” in Geneva, according to a news report in Inside US Trade on 13 November.

Even at the summit of the G20 major economies in Hamburg, Germany, in July, the US negotiators had succeeded in introducing their language on “reciprocal and mutually advantageous trade and investment frameworks” as opposed to the “developmental” priorities of the Doha Development Agenda.

The Hamburg communique did not even mention the Doha Development Agenda or the unresolved Doha issues. The communique implicitly endorsed the Trump administration’s “America First” and “Buy America and Hire America” policies when it acknowledged the “importance of reciprocal and mutually advantageous” trade frameworks.

The US also remains opposed to a Ministerial Declaration at Buenos Aires. (SUNS8576)                                            

Third World Economics, Issue No. 650, 1-15 October 2017, pp9-10, 16