TWN Info Service on UN Sustainable Development (Feb20/01)
18 February 2020
Third World Network

Azevedo indirectly endorses coercive US trade policies
Published in SUNS #9062 dated 6 February 2020

Geneva, 5 Feb (D. Ravi Kanth) — The WTO Director-General Roberto Azevedo has indirectly endorsed the coercive trade policies adopted by the United States over the past three years, arguing that they would not have arisen if WTO members had done more to update the WTO system.

“In fact, some of the unconventional policies and bilateral arrangements we see today might never have arisen had we done more to update the system [the WTO],” Azevedo said, during his address to the Washington International Trade Association in Washington DC on 4 February.

Azevedo has also called for “political leadership” to effect “structural reforms” at the WTO.

Without naming the tariff wars launched by the United States against other countries, thereby forcing them to enter into bilateral trade agreements, the DG has justified all the unilateral and WTO-inconsistent trade measures adopted by the Trump administration during the past three years, said trade envoys, who asked not to be quoted.

Unsurprisingly, President Donald Trump touted his trade agreements with Korea, Mexico and Canada, and China during his State of the Union speech in Washington DC late Tuesday evening, insisting that the US had secured “fair and reciprocal trade agreements.”

The USTR Ambassador Robert Lighthizer said that “thanks to President Trump’s strong leadership, America is thriving under his economic and trade policies.”

“President Trump is negotiating better trade deals for the American people, and our country has secured tremendous victories in historic agreements like the US-Mexico-Canada Agreement, the China Phase One Agreement, the US-Japan Trade and Digital Trade Agreements, and the US-Korea Free Trade Agreement,” the USTR claimed.

“Each of these agreements brings new opportunities for American workers, farmers, ranchers and businesses to sell their goods and services to more customers around the world while creating new jobs and a stronger economy for our country, “Ambassador Lighthizer said.

“President Trump has kept his promise to chart a new and better course for US trade policy through fairer and more balanced agreements,” the USTR insisted, arguing that “this enormous success is only the beginning of what we will accomplish under his leadership.”

In his speech in Washington DC, Azevedo has also indirectly justified the US decision to paralyze the Appellate Body (AB) by blocking the selection process to fill the six vacancies at the AB.

Even though a large majority of WTO members were ready to accept the decision proposed by the facilitator, Ambassador David Walker of New Zealand, to improve the functioning of the AB and start the selection process without delay, the US single-handedly blocked the draft General Council (GC) decision in December last year.

But Azevedo in his remarks has now turned the AB crisis, which was solely created by the US, into a problem shared by “many members”.

“Many members, not only the United States,” said the DG, “were dissatisfied with different aspects of how the Appellate Body was operating.”

“It is my hope that members will use the current crisis to produce an improved two-step appeals process,” Azevedo said.

The DG thus shifted the burden of the “current crisis” at the AB onto WTO members instead of pointing the finger at the US, which has not offered any solution to the concerns it had raised.

The US wants members to address the original sin as to how the AB had deviated from the Dispute Settlement Understanding but not resolve the immediate crisis, said a trade envoy, who asked not to be quoted.

While paying tribute to the former WTO director-general Mike Moore from New Zealand, who passed away last week, Azevedo said “he [Moore] was deeply committed to a WTO that worked for all of its members, big and small.”

Azevedo, however, did not mention the Doha Development Agenda trade negotiations launched during Moore’s time in 2001, even though Azevedo’s current mandate for chairing the Trade Negotiations Committee (TNC) arises from the Doha Work Program.

[In all his utterances, Azevedo rarely, if ever, mentions the Doha mandate, nor does he highlight the various agenda items in the Doha Work Programme that have been stymied by the US, that would benefit developing countries, if the negotiations result in accords envisaged. SUNS]

Unless all WTO members agree to terminate the Doha work program under which Azevedo operates as the TNC chair, it is the multilateral negotiating agenda that is in place at this juncture, and according to decisions of the General Council, until these are concluded, no other trade talks or mandates can be in the field.

“The bulk of the WTO rulebook dates back to the Uruguay Round,” said Azevedo, adding that “these [Uruguay Round] negotiations were concluded in Marrakesh back in April 1994.”

“What this means for the WTO is that to endure as an effective entity in the years ahead, it will need to adapt,” Azevedo said, without mentioning the Doha Round of negotiations that were launched in 2001 to rectify the historic imbalances and asymmetries of the Uruguay Round, and relaunched in Geneva in August 2004 (WT/L/579) after the collapse of the negotiations at the Ministerial Conference in Cancun in 2003.

Even though he mentioned the Trade Facilitation Agreement (TFA) concluded at the WTO’s ninth ministerial conference in Bali in December 2013, as well as the partial agricultural export subsidies deal at the WTO’s tenth ministerial conference in December 2015, Azevedo did not even suggest that they were part of the Doha work program.

Further, the current negotiations for curbing fisheries subsidies are part of the Doha work program on subsidies.

Azevedo said that members are advancing on “multiple fronts”, arguing that “at the multilateral level they are working to reach an agreement that would curb fisheries subsidies and contribute to the health of our oceans. They are looking at how to liberalize and reduce distortions in agriculture trade.”

“At the same time, groups of WTO members are exploring potential future rules on investment facilitation, e-commerce and on domestic regulations that can unnecessarily obstruct services trade,” he argued.

Even though there is no multilateral mandate for these issues as they were rejected at the WTO’s 11th ministerial conference in Buenos Aires, Argentina, in December 2017, Azevedo claimed that “these “joint statement initiatives (JSIs)”, as they are called, tackle issues at the heart of the 21st century economy”.

He justified the JSIs, saying that “they also represent a quiet revolution in the way governments negotiate at the WTO.”

“Like-minded members are free to pursue issues without being held back by others,” the DG said, arguing that “at the same time, no one is compelled to sign up to anything they don’t want to join.”

The DG claimed that “the e-commerce talks, for example, bring together 82 members, accounting for around 90% of global trade, including the US, China, and the European Union. Establishing joint rules of the game would facilitate electronic transactions and digital trade, and could help manage wider tensions over technology.”

Against this backdrop, he said that “the WTO’s Twelfth Ministerial Conference, this June in Kazakhstan, will be a critical landmark.”

“Delivering an impressive cluster of new rules is within members’ reach – these would go a long way towards preparing the WTO for the next 25 years,” he claimed.

So, “the real question is not whether we need changes at the WTO. Just about everyone agrees on that. It is whether we can make the changes we need,” Azevedo said.

Suggesting that “change in multilateral institutions is hard [and] it is doubly hard for institutions like the WTO, where every tweak in the rules has a concrete economic impact, threatening some interests even as it creates opportunities for others,” Azevedo called for “political leadership and involvement.”

“It’s either this, or we prepare to pay for the consequences,” he said.

“For my part, I have been talking to leaders every chance I get. The G20 has endorsed WTO reform.”

Now, getting the WTO’s 164 members to agree is always complex. But global problems require global solutions.

“We need structural changes,” he said.

In short, the DG is laying the ground for a payment to be made at the 12th ministerial conference in Nur Sultan. That payment would involve bringing differentiation/graduation for availing special and differential treatment (S&DT) among developing countries and punitive notification procedures in return for restoring the two-stage appeal system that was paralysed by the US, said a trade envoy, who asked not to be quoted. +