TWN Info Service on WTO and Trade Issues (Dec14/01)
3 December 2014
Third World Network  

Decisions adopted on TFA, food security and post-Bali work
Published in SUNS #7927 dated 1 December 2014
 
Geneva, 28 Nov (Kanaga Raja) -- A special meeting of the General Council of the World Trade Organisation (WTO) on Thursday adopted three draft decisions on the Protocol of Amendment to the Trade Facilitation Agreement (TFA), on public stockholding for food security purposes and on the post-Bali work programme.
 
The adoption of the Protocol of Amendment will result in the insertion of the TFA into Annex 1A of the WTO Agreement where it will be placed after the Agreement on Safeguards.
 
The Protocol will enter into force in accordance with paragraph 3 of Article X of the WTO Agreement. It will need to be ratified by two-thirds of the WTO's membership for it to come into force, i. e. 107 ratifications out of a membership of 160. There is however no deadline set for when this will be achieved.
 
This decision also means that the Trade Facilitation Agreement Facility that was launched back in July will now become operational.
 
With respect to the decision on public stockholding for food security purposes, the Bali decision on this issue will remain in place until a permanent solution is agreed and adopted.
 
Until such a permanent solution (whose detailed outcome or legal instrument is not prejudged) is adopted, and provided the conditions set out in Bali are met, Members shall not challenge through the WTO Dispute Settlement Mechanism, compliance of a developing Member with its obligations under Articles 6.3 and 7.2 (b) of the Agreement on Agriculture (AoA) in relation to support provided for traditional staple food crops in pursuance of public stockholding programmes for food security purposes existing as of the date of the Bali decision.
 
The decision does not cover challenges under the Subsidies and Countervailing Measures Agreement.
 
According to the decision, Members are to engage constructively to negotiate and make all concerted efforts to agree and adopt a permanent solution on the issue of public stockholding for food security purposes by 31 December 2015.
 
It also says that if a permanent solution for the issue of public stockholding for food security purposes is not agreed and adopted by the 11th Ministerial Conference (to be held in 2017), the mechanism (referred to in paragraph 1 of the Bali Decision, and as set out in paragraph 1 of this Decision) shall continue to be in place until a permanent solution is agreed and adopted.
 
The decision further states that negotiations on a permanent solution shall be held in the Committee on Agriculture in Special Session, in dedicated sessions and in an accelerated time-frame.
 
The decision on a post-Bali work programme on a priority basis for legally binding outcomes on other Bali ministerial decisions is for transforming nine Bali best endeavour decisions into legally binding instruments.
 
These are four decisions in agriculture and five in the development dossier. The agriculture decisions cover tariff-rate quota administration, export competition and phasing out of cotton subsidies. Issues in the development dossier comprise preferential access for services suppliers in least-developed countries, and duty-free and quota-free market access for least developed countries. The work on other parts of the Doha Development Agenda is included in a preamble to the actual decision.
 
According to the decision on post-Bali work, work shall resume immediately and all Members shall engage constructively on the implementation of all the Bali Ministerial Decisions in the relevant WTO bodies, including on the preparation of a clearly defined work program on the remaining DDA issues as mandated in paragraph 1.11 of the Bali Declaration.
 
As per paragraph 1.11 of the Bali Declaration, Members agree that the issues of the Bali package where legally binding outcomes could not be achieved, including LDC issues, shall be pursued on priority.
 
The deadline for agreeing on the work program mandated in the Bali Declaration shall be July 2015. (See SUNS #7923 dated 25 November 2014 and #7925 dated 27 November 2014 for the full texts of the three decisions.)
 
D-G STATEMENT AT GENERAL COUNCIL AND COMMENTS TO MEDIA
 
In his statement at the General Council meeting, Director-General Azevedo said that by agreeing these three decisions "we have put ourselves back in the game. We have put our negotiating work back on track - that means all the Bali decisions: trade facilitation, public stockholding, the LDC issues, the decisions on agriculture, development, and all of the other elements. And we have given ourselves the chance to prepare the post-Bali work program."
 
But, crucially, he added, during this process "we have seen a renewed commitment to the multilateral system."
 
Nevertheless, "we need to find an easier way of doing things. While we have seen renewed commitment to the WTO, the truth is that we must avoid repeatedly putting ourselves in this position. We have lost precious time since July, and it goes without saying that we can't wait another two decades to deliver further multilateral outcomes. We have to think about how we can operate in a more efficient way."
 
Speaking at a media briefing following the General Council meeting, Azevedo explained that since July there was an impasse in the implementation of the Bali issues, "which had a paralysing effect on the negotiations in all areas."
 
The impasse related to the political link that was established between two Bali decisions, one on the public stockholding programmes for food security purposes and the other being on the Trade Facilitation Agreement, he added.
 
He said that the General Council's first decision clarified the Bali decision on public stockholding for food security purposes, and makes clear that the ‘peace clause', agreed in Bali, will remain in force until a permanent solution to that issue is found.
 
It also states that members shall make all efforts to negotiate a permanent solution by 31 December 2015. This is an advance of the original target date - the eleventh Ministerial Conference in 2017.
 
The second decision adopts the Protocol of Amendment which formally inserts the Trade Facilitation Agreement into the WTO rule book, and this clears the path for the Trade Facilitation Agreement to be implemented and to come into force.
 
The third decision concerns the WTO's post-Bali work. With this decision, members committed to resume this work immediately and engage constructively on the implementation of all Bali Ministerial Decisions including the work programme on the remaining DDA issues. Members also agreed that the deadline for agreeing the work programme will now be July 2015, he said.
 
Asked to comment on the fact that the issue of trade facilitation was dropped from the Doha agenda back in 2003 at Cancun and it has now come back but that nothing has been done on the core issues such as agriculture, the so-called engine of the Doha agenda, the D-G said that as he remembered it when he was here in 1997 even before the Doha Round was launched and after it was launched, one of the reasons why trade facilitation was dropped from the agreement "was precisely because people thought it was too difficult. That was one of the reasons."
 
Reiterating this, Azevedo insisted that trade facilitation was dropped because it was very difficult and also "because at the time the approach that was taken did not get consensus."
 
[Trade observers noted that all the Singapore issues figured on the agenda at Cancun, for launching negotiations on all four by express consensus. However, all four issues met with resistance. At that stage, EU trade commissioner Pascal Lamy, in the Green Room, offered to take off the agenda other Singapore issues, but wanted at least the trade facilitation issue. However, a large number of countries not in the Green Room (ACP, LDCs etc) and kept out of the negotiations (with the then D-G Dr. Supachai Panitchpakdi, meeting them and conveying from time to time what was happening in the Green Room), refused to agree and the Cancun meeting collapsed.
 
[After some talks in Geneva, at the July 2004 General Council, a compromise for resuming work on the Doha Development Agenda was agreed. The WTO (http://www.wto.org/english/tratop_e/dda_e/draft_text_gc_dg_31july04_e.htm), on its web site, has posted the entire July 2004 package decision. This notes, under item 1 (g) of that decision, that "negotiations on TF was launched by express consensus", on the basis of the study and work done on it in the Council for Trade in Goods. - SUNS]
 
Azevedo said that the fact that a very large number of developing countries were now hailing this agreement, saying that this is important for them, and that they want it done and implemented, "tells you something about the developmental elements that are present in this agreement."
 
"To say today that this agreement is not part of a development agenda I think would be misleading, to say the least," he claimed.
 
"We adopted today a General Council decision on the post-Bali work. And that puts all of the Bali decisions, and that puts the work programme for the conclusion of the Doha Development Round, back on a priority basis on the table," he further said.
 
In response to a question, he cited an estimate that 5-15% of transaction costs could be reduced through the Trade Facilitation Agreement, and that some economists have estimated that the benefits to the world economy from the TFA could go up to $1 trillion, and that 21 million jobs could be created across the world.
 
STATEMENTS BY SOME DELEGATIONS AT GENERAL COUNCIL
 
In its statement at the General Council meeting, India (represented by Ambassador Ms Anjali Prasad), said that the adoption of three important decisions by the Council on Public Stockholding for Food Security Purposes; the Protocol of Amendment to insert the Trade Facilitation Agreement into Annex 1A of the Marrakesh Agreement; and on Post-Bali work, is a clear testimony to the fact that if members show understanding towards each other's concerns and demonstrate political will, "it is possible to find a solution that meets with our common needs and interests."
 
"It is indeed an important milestone in the history of the WTO as we agree to annex the Agreement on Trade Facilitation, the first multilateral agreement since the WTO was established," said India.
 
Looking ahead, India urged members to engage constructively in advancing discussion on all the Bali Ministerial Decisions.
 
"We would need to redouble our efforts to prepare a clearly defined post-Bali Work Program on the remaining DDA issues as mandated in Para 1.11 of the Bali Ministerial Declaration. The adoption of a permanent solution on the issue of public stockholding for food security purposes is an important objective for us. We urge the membership to engage on the subject in the spirit of the decision adopted by us today."
 
India said that as work is resumed towards achieving a balanced and successful conclusion of the DDA in accordance with the mandate given by Ministers, "we cannot afford to lose sight of the ‘development dimension'."
 
On its part, India will engage constructively with members in the coming days to seek balanced outcomes that yield the ‘development dividend' of the Round.
 
Lesotho, on behalf of the African Group, said: "Our Bali and post-Bali journey has not been an easy one, yet it is in such excruciating journeys that great lessons are learned. It is therefore a fervent hope of the African Group that as Members gear themselves up to engaging in other post-Bali decisions, such lessons will not be cast out into oblivion. Rather they should guide our path in the next phase of our journey."
 
Some of these lessons include the importance of ensuring that outcomes are fully negotiated by all Members with sufficient time for consultations and accompanying conducive environment, said Lesotho.
 
"Moreover, we have learned that through cooperation and spirit of partnership WTO can thrive and deliver balanced outcomes, with all Members across developed and developing countries divide making essential contributions thereby striking win-win beneficial outcomes."
 
The African Group said: "We certainly cannot discount the fact that there are also areas where the organization can do better and every effort should be made to ensure that the WTO negotiations are truly inclusive and transparent in every way possible."
 
The Group welcomed the momentous adoption of the Trade Facilitation protocol of amendment, the decision on public stockholding for food security purposes and the decision on post-Bali work.
 
The adoption of the texts is the first step that would lead to the realization of the objectives set out therein. There is no doubt that a lot of time and effort went into today's milestone, the Group observed.
 
While recognizing that nothing is absolute and that there is always room for improvement, the Group said that it suffices to mention that today`s milestone, once and for all, seals the unencumbered operation of the Trade Facilitation Agreement Facility (TFAF).
 
In this setting, the African Group took this opportunity to lodge an appeal to the donor community to furnish the TFAF with requisite funding.
 
The African Group looked forward to constructively engaging with Members in the context of further steps on the adopted decision including on the public stockholding decision for food security purposes and post-Bali work program.
 
The Group further looked forward to building on today's success in the context of the Post-Bali Work Program.
 
Uganda, on behalf of the Least Developed Countries (LDCs), said that the LDCs support the deal that has been constructed and presented today. "We join consensus in endorsing the adoption of the Protocol of Amendment of the Trade Facilitation Agreement; the General Council Decision on Public Stock Holding for Food Security Purposes; and the General Council Decision on Post-Bali work."
 
The LDC Group said that it is important to recall that during deliberations in the TF Prepcom it had highlighted the fears that its members had due to the lack of clarity on where the source of funding was to facilitate the implementation of the Trade Facilitation Agreement.
 
"We are happy to associate ourselves with the Trade Facilitation Agreement Facility that was established to provide that sense of clarity that we were looking for. It may be true that this is not the best outcome but it will be used as a stepping stone to address the requisite needs and challenges posed by the need for Assistance and Support for Capacity Building."
 
Uganda also noted that the decision of the General Council captures some of the elements that the LDCs wanted to see such as a reference to Paragraph 47 of the Doha Ministerial Declaration.
 
"We can also live with the language on assistance and support for capacity building. In our view, it gives us a degree of assurance we were looking for."
 
The LDC Group said: "This is not the best deal but it is one nonetheless that puts us back on the highway to negotiate legally binding and meaningful LDC specific outcomes. After today, we shall know whether indeed members were genuine when they said that we could get back to business as usual and conclude the Doha round."
 
"We shall know whether in fact the Trade Facilitation Agreement was not the only thing that these set of members wanted to see concluded out of the Doha Development Agenda," it said.
 
Uganda recalled that the LDCs submitted their Collective Request on the Operationalization of the LDCs Services Waiver on 21 July of this year.
 
"We are looking to hold a High Level Meeting in mid-January 2015 consistent with Paragraph 1.2 of the Waiver Decision, where non-LDCs in a position to do so would indicate areas where they would grant preferences. To that end therefore, we are looking to the participation of all non-LDC Members in the high-level meeting to be held in mid-January and also for those members to grant meaningful preferences to LDCs consistent with the waiver decision."
 
The LDCs also welcomed the decision on the Post-Bali Work. "We spent too much time, discussing this and that and got nowhere. We take note of the fact that all issues in the Bali package where legally binding outcomes could not be achieved, including LDC issues will be prioritised. It is our hope that this will now lead us to a track where we shall be able to craft a work program with the view to concluding the remaining elements of the Doha Round without introducing new issues, with development at the centre."
 
Uganda said that the current situation of LDCs should not please anyone, "in fact on the contrary all of us should be working towards the graduation of all LDCs."
 
"This is probably what informed Ministers in Doha to seek to put our issues at the heart of the work program and also to continue to make positive efforts designed to ensure that developing countries, and especially the least- developed among them, secure a share in the growth of world trade commensurate with the needs of their economic development."
 
"We should not let the July events go to waste. We have to, and we owe it to posterity to take lessons from these events. Otherwise, we shall be accused of having learnt nothing and forgotten nothing."
 
On the LDCs' part, Uganda said, "we have learnt that when a system consistently fails to deliver for many of its members; when a section of its members perpetually dwell in abject poverty and hunger with dreams far from reach; a time comes when the status quo is challenged. We have also learnt that negotiated outcomes that are heavily tilted in favour of one party are not sustainable."
 
Kenya, on behalf of the African, Caribbean and Pacific (ACP) Group, commended the US and India for their constructive role in resolving the impasse, adding that the ACP Group supports the package as put forward today.
 
On the Bali public stockholding decision, the ACP welcomed the improvement on clarification of the peace clause which shall remain in force until a permanent solution is put in place.
 
It also welcomed the target date of 31 December 2015 for adoption of an agreement on a permanent solution on the issue of public stockholding for food security.
 
On the decision on the Protocol of Amendment, the ACP said it is very pleased that some of the textual proposals from the ACP Group have been taken on board in the trade facilitation decision. The adoption of the trade facilitation package should now allow the Trade Facilitation Facility to be operationalized.
 
It urged its donor partners to generously contribute resources to the Facility which will complement the efforts of the developing and least developed countries in the implementation of their commitments under the Agreement on Trade Facilitation.
 
It also urged the Director-General to reach out to donor institutions with a view to soliciting their contribution towards realizing the objectives of the Trade Facilitation Facility.
 
On the Post-Bali work program, the ACP endorsed the proposed separate decision on extension of the post-Bali work program deadline to 31 July 2015.
 
The group placed high importance to resuming work on the mandate from Ministers to define a post-Bali work program. It looked forward to expedited work in this regard, notwithstanding the agreement today to move the deadline forward to July next year.
 
"We have done a lot of work and also useful ideas have been floated in our informal discussions since February and which we can build on to finalize post-Bali work programme," said the ACP Group.
 
The ACP Group said it is ready to engage constructively and had already tabled a document, in October, before the Trade Negotiations Committee which highlighted the principles that the Group considered as paramount in defining post-Bali work program.
 
In its statement at the General Council, the European Union said it certainly is a very important day in the history of the WTO and of the Multilateral Trading System (MTS).
 
According to the EU, the message from Geneva is two-fold: (1) The WTO has taken three decisions, each one important on its own merits; (2) Even if things cannot be easy at this place and setbacks may happen, Members are ready and able to sit down and work through their differences. Over the last weeks, the WTO was very much in the spotlight and some again believed that failure was inevitable - but we have all proved they were wrong. These are indeed very good news for all of us.
 
Today's decisions do not only implement the landmark Bali agreements, they also confirm the WTO's role as the centre of international trade policy, said the EU.
 
According to the EU, the TF Agreement is a key achievement in this respect. It will smoothen trade, bring more transparency to traders and help developing countries become more involved in global trade flows.
 
The EU said that it will support developing countries to implement and will contribute to the necessary funding to ensure that "we all move in the right direction. We all now need to expedite the ratification process in order to allow the agreement to enter into force as soon as possible."
 
The EU said that it is also pleased with the result achieved on public stockholding. The EU has always considered food security an international priority and has actively supported efforts to find suitable solutions at the WTO.
 
"We now need to turn our attention to Post Bali and the DDA negotiations," said the EU, adding that it remains a strong believer in the benefits of multilateral trade agreements and considers the conclusion of the DDA a strategic priority.
 
"It is high time that we agree on a work programme that puts us on a clear, realistic and credible path towards the conclusion of the round."
 
Meanwhile, in a statement from Washington, US Trade Representative Michael Froman said: "The WTO has taken a critical step forward by breaking the impasse that has prevailed since July. I am pleased that the United States was able to work with India and other WTO members to find an approach that preserved the letter and spirit of the package of decisions reached at last year's Bali Ministerial Conference."
 
"The Trade Facilitation Agreement has the potential to fundamentally reform global customs practices and substantially reduce the costs and time associated with goods crossing borders. It's a perfect example of how breaking down barriers to trade can unlock new opportunities for developed and developing countries alike, and it's a particularly important win for small and medium-sized businesses in all countries."
 
USTR Froman further said: "With this win under the WTO's belt, we can once again focus our efforts on revitalizing the organization's core negotiating functions." +