TWN Info Service on WTO and Trade Issues (Jul13/10)
30 July 2013
Third World Network 

Officers for MC9 elected, Lamy gives farewell speech
Published in SUNS #7635 dated 26 July 2013
 
Geneva, 25 Jul (Kanaga Raja) -- The last WTO General Council meeting (24-25 July) before the summer recess here formally elected the full slate of officers for the upcoming ninth Ministerial Conference (MC9) to be held in Bali from 3-6 December, and also heard outgoing Director-General Pascal Lamy's farewell statement to the membership.
 
According to trade officials, the Chair of MC9 will be Indonesia's Trade Minister Mr. Gita Irawan Wirjawan (this was previously agreed to at a General Council meeting on 4 June), while the Vice-Chairs are Mr Francois Kanimba, Minister of Trade and Industry of Rwanda; Mr Stephen Green, Minister of Trade and Investment of the United Kingdom; and the Minister of Foreign Trade and Tourism of Peru (according to trade officials, yet to be named by the Peruvian government).
 
According to trade officials, the Chair of the General Council, Ambassador Shahid Bashir of Pakistan, announced that a special General Council meeting will be held on the afternoon of 9 September, at which the new Director-General Mr Roberto Azevedo (who will take office on 1 September) will give a statement.
 
There will also be an announcement by the Chair (at that meeting), in cooperation with Mr Azevedo, of an intensification of the work programme leading up to Bali, starting with the focus and shape of MC9 and what members expect the outcome document to be from that ministerial conference, trade officials added.
 
On the question of the attendance of observers from international intergovernmental organisations at MC9, trade officials said that there was a continued lack of consensus on the request from the League of Arab States to participate as an observer at MC9.
 
The General Council Chair said that he will continue his consultations and expressed hope that some kind of an outcome can be found on this issue after the summer break.
 
Egypt (on behalf of the Arab Group) expressed disappointment that members could not reach a resolution on this issue.
 
As to the request for observer status by Palestine to MC9, members said that they will need more time to confer with capitals and give due consideration to this request.
 
On the agenda of work in the coming months to prepare for MC9, Ambassador Bashir reminded delegations of the roster of issues that had been put forward by Ministers at the last ministerial conference in 2011.
 
These included the issues of TRIPS non-violation complaints, E-commerce, the Work Programme on Small Economies, the extension of the LDCs' transition period under TRIPS, the accession of LDCs, the LDC services waiver, and the Trade Policy Review mechanism.
 
Trade officials noted that decisions had already been taken on the guidelines for the accession of LDCs to the WTO and on the extension of the transition period for LDCs under TRIPS, as well as on the work programme on LDCs.
 
The General Council Chair suggested that members focus on a few issues, namely E-commerce, TRIPS non-violation complaints, as well as other issues that may be put forward for consideration by members in the coming weeks.
 
Under the agenda item of the report by the Chair of the Trade Negotiations Committee (TNC), Lamy, as Chair of the TNC, thought that everyone shared the overall assessment that the road to Bali was much clearer than two months ago.
 
"In sum, I believe that the glass is two-thirds full and that Members are on track to deliver concrete outcomes in the three deliverables. Despite this positive momentum, Members realistically acknowledged that they were not there yet. More work is required to close remaining gaps in the short time left after the summer break," he said.
 
In this regard, he added, all Members agreed that there was no time for complacency. This third part of the glass needed to be urgently filled. "Therefore, Members need to sustain the renewed momentum, be more flexible and substantively focused in the final stretch to deliver the desired outcomes at MC9."
 
Lamy stressed that Bali offers a unique opportunity to reignite the Doha Development Agenda (DDA) negotiations.
 
"Bali is important because of the systemic value it promises, if Members succeed. And as we look into delivering in Bali, our eyes must also be in crafting a post Bali agenda of work for the Round. The Bali opportunity must not be missed."
 
According to trade officials, a few delegations that did not speak at the TNC meeting on Monday took the floor at the General Council meeting. These included the Dominican Republic, Cuba, Barbados, Angola, Cote D'Ivoire, Bolivia, Oman, and Ghana.
 
Delegations that had spoken at that TNC meeting asked for their statements to be put on the record (see SUNS #7634 dated 25 July 2013).
 
The Director-General also reported on the fourth global review on Aid for Trade that was held here on 8-10 July, and said the intention of the Global Review was to use the event to bring together the work streams of Aid for Trade, value chains and the ‘Made in the World' Initiative and examine the implications of a world built on trade in tasks from a trade and development perspective.
 
In his view, the fourth Global Review has substantively contributed to this debate. Firstly, through the in-depth monitoring and evaluation analysis which the WTO Secretariat, the OECD and a range of other partners conducted for the meeting.
 
Secondly, through the debate that took place across the 54 sessions. A true development dialogue in which the private sector from developed and developing countries were well-represented, together with senior policymakers with many diverse portfolios.
 
And thirdly, said Lamy, through the key issues that emerged. "This list does not contain surprises. What the 4th Global Review did was to validate this list - and its relevance for connecting the least connected in our value chain economy."
 
According to Lamy, this list includes factors such as the importance of services for connecting to value chains; the key role played by skills in adding value; the critical importance of border management and transport services; access to finance, and trade finance in particular; and capacity to ensure standards compliance.
 
According to trade officials, many developing countries called for a re-commitment at Bali to Aid for Trade, as well as the mandate of the Director-General to continue with his work in this area.
 
Several LDCs said that this issue is of great importance to them, and that while global value chains (the theme of the fourth global review) are important, there needs to be attention paid to the importance of special and differential treatment for developing countries. On trade facilitation, they said that there needs to be adequate balance between Section I (on commitments) and Section II (on S&D) of the draft negotiating text on trade facilitation.
 
On the agenda item of the management of the WTO Secretariat 2005-2013, Lamy reported that he had tabled a document entitled "Management of the WTO Secretariat 2005-2013" as a compilation of all the reforms that have been brought about in the past eight years, adding that it is a "reminder of the serious effort at modernising our financial and human resources, our technology and information systems, as well as at delivering on a one-WTO campus".
 
Lamy said: "I hope that both secretariat and Members will have a better sense of what needs to be done in future to both consolidate and build upon the progress made. We live in a changing world. And as the world changes, we will have to keep on adjusting."
 
Lamy however said that he is aware that not everyone in the Secretariat is happy with these reforms. "I think this is the inevitable cost of change. But I believe that compared to similar organisations, benefits and working conditions remain attractive at the WTO, especially in recent years during which taxpayers' money has become politically more expensive."
 
In his lengthy farewell statement, Lamy said: "I think it is fair to say that, together, we have strengthened the WTO as the global trade body, as a major pillar of global economic governance. Despite the heavy headwinds and the turmoil in the global economy as well as on the geo-political scene, together we have made this organisation larger and stronger. This, I believe, is our main achievement during these last eight years."
 
On the experience of the last eight years, Lamy said because the Doha Round has not yet been delivered, some would be tempted to say that this organization is in crisis; that trade multilateralism does not function, that the WTO has become irrelevant. "I believe these are simple shortcuts at a much more complex reality."
 
"Opening trade and crafting multilateral rules have been impacted by the profound shifts in geopolitics and economics. The former two-speed model of a world divided between developed and developing countries no longer reflects today's economic realities. A serious conceptual adjustment is needed. We must find a new balance between reciprocity and flexibility in a multidimensional membership if we are to deliver on multilateral trade opening. This is compounded by short-term politics that are becoming increasingly incompatible with the setting of the medium and longer term goals essential for designing consistent trade policies."
 
Lamy said that he often hears that the way forward is to abandon the WTO and simply move to plurilateral or regional arrangements.
 
"But we have all seen the fate of a number of these plurilateral deals such as the ACTA or the Global System of Trade Preferences among developing countries. We also know that behind the headlines of the launching of mega regionals, as some refer to them, lie tremendous difficulties and sometimes even no final deal at all, as was the case of the Free Trade Area of the Americas."
 
"I do not wish to be misunderstood. I am not against trade opening outside the WTO. I believe that plurilaterals, mega regionals, regionals, bilaterals and unilateral arrangements CAN contribute to trade opening and hence to the levelling of the global trade playing field, which must ultimately remain our collective goal. Because this is what fairness is about. But I do think we would do well to recognise that the issue is not trade opening IN the WTO as opposed to trade opening OUTSIDE the WTO. The issue today is with the difficulties involved in trade opening."
 
He said that domestic trade politics have become more difficult and trade deals have become more complex because the nature of obstacles to trade has evolved. "We are no longer negotiating just the reduction of tariffs, but also of non-tariff barriers, which have gained enormous importance."
 
Lamy also used the opportunity to again air a longstanding secretariat agenda, a role for itself in contractual negotiations with legal implications, as he put it this time, "mirroring the processes followed by other international organizations."
 
"Much time could be saved in the negotiating process," he claimed, "if, after an initial phase of definition of objectives to be reached and principles to be observed," the Secretariat was tasked to "mobilise its expertise to table proposals around which the negotiations would take place."
 
[According to Mr. Chakravarthi Raghavan, who has been closely following and monitoring since 1978 the trade negotiations at the GATT and later at the WTO, during the Uruguay Round negotiations, both in the so-called ‘FOGS' negotiating group, and in the final stages of concluding the agreements at senior officials' level in November-December 1993, the then GATT Director-General, Peter Sutherland, had twice gone before a key group of negotiators (meeting outside the GATT premises and trying to reach an accord), to incorporate such a mandate for the secretariat in the Marrakesh Treaty. After considerable discussions, all the major delegations, both developed and developing, rejected it on the ground that in a treaty, involving contractual rights and obligations, enforceable through a dispute system (with negative consensus for adoption), the secretariat could not have such a role.
 
[Since then, several trade observers have noted, if the secretariat is given a role as suggested now for tabling proposals, even if they are not accepted, or some ambiguously worded compromise is adopted by members, in future disputes, the secretariat working in the interests of the major corporations - the ‘stake-holders' in WTO language - would bring the proposals it tabled before negotiators as "negotiating history" and "context", and enable panels and the Appellate Body to interpret the language of the agreements to create "new obligations". - SUNS]
 
According to Lamy, all of these are valuable lessons for the Doha Development Agenda, an unfulfilled promise, which will need to be fulfilled in order "to redress the imbalance in some of our rules which is a legacy of history, starting with agriculture."
 
Lamy believed "there is no escape" from achieving positive results in the Doha Round, just as there "is no escape from adjusting the Doha menu to today's realities." This will require the "introduction of new elements into the menu, new elements which require multilateral handling, so as to better level the trade playing field."
 
Lamy also said that perhaps because members, since 1999, have mainly focused on the negotiating pillar of the WTO, "we all took the administering of existing rules for granted, the reality is that the surveillance function of the WTO has been underperforming" for some years.
 
The mandates for "notification and peer review" are clearly there, their implementation is "somewhat spotty," to put it mildly. While he felt the situation has improved, "more remains to be done."
 
There was a time when trade negotiations could be conducted, agreements could be reached and even implemented largely away from the public eye.
 
"But our societies no longer allow this," and there is "a growing need to engage with our stakeholders [which in WTO language appears to mean private corporations] and with the public at large."
 
"This is why ministers' and capitals' involvement is decisive. But experience shows that engaging both ministers and ambassadors is a delicate chemistry. Too much time spent with ministers and the ambassadors get restless. Too much time spent with ambassadors and the ministers become distant and mobilising their support at the right moment becomes harder. On this, my successor will have to find the right recipe. Mine did not always work!"
 
Over the last eight years (of his tenure), Lamy said there has been a building of the WTO as "a stronger institution" - providing benefits to its members, and as an institution, is an asset in itself, "a global public good that each and every one of its members must nurture."
 
Lamy said over eight years, he had also seen the political economy of trade opening better integrated into a set of domestic and international policies. However, support for more open trade will not be sustained without ensuring greater fairness between winners and losers of trade opening, and without more convergence on values-based preferences that lie behind differences in non-tariff measures. "This remains a challenge ahead."
 
Lamy ended his peroration, with the remark: "My journey at the WTO is coming to an end... It is time for me to embark towards another life cycle."