Developing countries propose an inclusive approach to transparency

Pointing to the difficulties they face in complying with requirements to notify their trade measures to the WTO, a group of developing countries have urged an “inclusive and cooperative approach” to the issue instead of punitive actions against non-compliance.

by D. Ravi Kanth

GENEVA: The developing and least-developed countries have coalesced around a joint proposal that calls for an inclusive approach to transparency and notification requirements at the WTO.

At the WTO General Council meeting on 24 July, the developing countries led by South Africa drove home a strong message that while they acknowledge the importance of prompt “transparency and notifications”, there is a crying need to take into consideration “capacity constraints that developing countries are facing.”

South Africa’s trade envoy Ambassador Xolelwa Mlumbi-Peter, who introduced the joint proposal by the African Group, Cuba and India, said “transparency is not only a developing country issue, developed countries must lead by example by submitting comprehensive, timely and accurate notifications.”

The developing countries demanded that “transparency should also permeate every aspect of the operation of this organization, including how meetings are convened and the conduct of Ministerial Conferences.”

Mlumbi-Peter urged her counterparts from the US and other developed countries to adopt “a developmental and inclusive approach to transparency.”

The US along with other developed countries and some developing countries have put forward a separate proposal which calls for enhanced transparency and notification requirements – including punitive and naming and shaming provisions for non-compliance – to stop what they call “wilful non-compliance” by many WTO Members.

Mlumbi-Peter highlighted the difficulties faced by developing and least-developed countries in complying with transparency and notification requirements, saying that the inability of many of them to fulfill their notification obligations does not and should not equate to wilful neglect of multilateral obligations.

For example, she said, some notifications are complex and require detailed data, which exceeds the capabilities of members due to the lack of central databases containing all the legislation, statistics and data for different government agencies. Non-compliance relates to the lack of proper infrastructure and limited institutional capacity.

While technical capacity and support provided by the WTO secretariat is very important, she said, it should be reviewed to make it more targeted to specific constraints facing members.

Mlumbi-Peter called for a cooperative approach whereby developing countries are incentivized to comply with their notification obligations. She denounced “punitive approaches” as proposed by the US and its allies for non-compliance with notification requirements.

The developing-country proposal underscored the need for “constructive and effective solutions based on the nuancing of obligations in the context of an S&DT approach,” maintaining that “punitive approaches to enforce notification and transparency obligations are not acceptable.”

Holistic approach

“Transparency is not only limited to notifications but should permeate all aspects of the function of the WTO,” South Africa said on behalf of the proponents.

The developing countries want “a holistic approach to transparency”, Mlumbi-Peter said, arguing that transparency should underpin “how an organization like the WTO is run, including the day-to-day function of the WTO, Ministerial Conferences, decision-making  processes, including the organization of various types of committee meetings to ensure effective participation and that the process is inclusive.”

She said that transparency issues arise because some discussions take place in small committees, informal open-ended meetings, Green Rooms etc. “Such practices limit the ability of developing country Members to effectively participate in important deliberations,” she argued.

Mlumbi-Peter also drew attention to the non-compliance by developed countries with notification obligations in various areas, including regarding final bound AMS commitments in agriculture and notification obligations under Article III.3 of the WTO’s General Agreement on Trade in Services (GATS), in which developing countries have a much better notification record than major developed countries. Other concerns remain around GATS Mode 4.

In addition, Article 66.2 of the TRIPS Agreement is another area where more transparency could assist the promotion of technology transfer to LDCs. Further, the TRIPS Agreement establishes an obligation for Members to require patent applications to disclose the origin of biological resources and/or associated traditional knowledge, including prior informed consent (PIC) and access to benefit sharing (ABS). However, despite a long discussion in the TRIPS Council in Special Session, no outcome has been produced on this important issue.

Mlumbi-Peter reiterated that it is not in developing countries’ interests to expand their notification obligations under the existing WTO agreements. She called for “a solutions-based, development-oriented, inclusive and cooperative approach to transparency” that takes the following into account:

*  In so far as obligations undertaken under the Marrakesh Agreement and its annexes are concerned, treaty obligations must be performed in good faith. Having said this, it is clear that the obligation to comply is not blind to the situation that a particular Member or groups of Members may find themselves in.

*  Simplification of notification formats and longer timeframes to comply with notification periods would assist developing countries, while LDCs should not be subject to any notification except in areas where they may have interest.

*  Any work in this area should be on supporting and incentivizing developing countries to address these difficulties, while punitive approaches as suggested by some will not resolve such capacity constraints and will tend to target Members who are already not able to comply and who remain under financial administrative measures currently.

While a large majority of developing countries, including China, strongly endorsed the joint proposal by the African Group, Cuba and India, the developed countries raised concerns, saying that it does not address the fundamental issues concerning non-compliance. (SUNS8955)     

Third World Economics, Issue No. 684/685, 1-31 March 2019, p7-8