TWN Info Service on WTO and Trade Issues (Jun16/11)
17 June 2016
Third World Network
 
DG's sleight of hand, ignoring GC 2004 decisions, for new issues
Published in SUNS #8260 dated 13 June 2016
 
Geneva, 10 Jun (D. Ravi Kanth) - Without consulting members and in an apparent violation of rules of business, the World Trade Organization (WTO) Director-General Roberto Azevedo has expanded two existing divisions to oversee work on investment and trade and competition policy respectively, trade negotiators familiar with the development told the SUNS.
 
These controversial issues - investment, trade and competition policy, and government procurement - were shot down at the WTO's fifth ministerial meeting in Cancun, in 2003, following massive opposition from the developing countries, and that entire meeting collapsed.
 
Subsequently, in July 2004, the General Council adopted the July Framework Agreement to put the Doha talks back on the rails, but decided to keep the three "Singapore issues" outside any work at the WTO during the Doha Round.
 
Accordingly, they modified the Doha Work Programme (adopted by the Ministerial Declaration at Doha, in November 2001), of that July Framework, in these terms in Para 1 (g): "Relationship between Trade and Investment, Interaction between Trade and Competition Policy and Transparency in Government Procurement: The Council agrees that these issues, mentioned in the Doha Ministerial Declaration in paragraphs 20-22, 23-25 and 26 respectively, will not form part of the Work Programme set out in that Declaration and therefore no work towards negotiations on any of these issues will take place within the WTO during the Doha Round."
 
This decision of the General Council remains in force unless specifically decided otherwise by the General Council (acting in between Sessions of the Ministerial Conference) or by a Ministerial Conference.
 
The Nairobi Ministerial Conference (2015) could reach no decision for lack of consensus, neither to end the DWP (otherwise known as Doha Development Round), nor on taking up any new issues.
 
As a result, ever since the General Council decision in July-August 2004, these three issues have hovered around the Centre William Rappard that houses the WTO, unable to make an entry.
 
The developing countries, however, have not given any "explicit" approval, either at the subsequent Ministerial or General Council meetings.
 
As such, for all practical purposes, the three issues remain multilaterally "untouchable" due to lack of consensus among the WTO's 164 members.
 
But, in an astonishing development, Azevedo brought back these three issues through a sleight of hand, said a trade negotiator, who asked not to be quoted.
 
In a move that raises serious systemic concerns, the WTO Director-General took decisions without any specific mandate, from any of the WTO bodies to rename the division on services and intellectual property respectively.
 
Members were "informed" this week that the division on Services is being re-christened as "Trade in Services and Investment Division," while the division on intellectual property will be called "Intellectual Property, Government Procurement and Competition Division."
 
The new division on the Intellectual Property, Government Procurement and Competition "is responsible for the WTO's work in trade-related intellectual property rights (TRIPS), government procurement and competition policy (it should be noted that substantive work in the latter area in the WTO has been on hold since 2004)."
 
So far, the division on intellectual property services also included a section on government procurement for specifically servicing "the Committee established under the plurilateral Agreement on Government Procurement and dispute settlement panels that may arise" under the previous Uruguay Round agreement.
 
The section on government procurement, however, was a separate plurilateral agreement under the Marrakesh agreement and not part of the Agreement on Trade-Related Aspects of Intellectual Property Rights.
 
The decision to include trade and competition policy in the IPR division is startling as it is justified on the ground "that substantive work in the latter area [competition policy] in the WTO has been on hold since 2004."
 
The moot issue is, if trade and competition policy is on hold since 2004, did the members now decide and has the Budget Committee agreed that the Division should monitor "developments at the international level and would be responsible for any further work in the WTO Working Group on the Interaction between Trade and Competition Policy, in the event that that body should resume its work".
 
After the Doha MC, and the adoption of its declaration, any additional work, and budget for it, even expansion in activities of the WTO's information division on the DWP agenda, had to be approved by the Budget Committee, which insisted on having official minutes of that Conference before it in order to give its approval.
 
It is also legally unclear as to what is meant by saying that "trade and competition policy is on hold since 2004", because there was no decision to keep the work on hold. That trade and competition policy were buried at the WTO's fifth ministerial meeting is well known, the negotiator said.
 
In similar vein, the decision to include work on investment along with other issues of trade in services is not legally justifiable as there is no formal decision by the members to consider investment as part of services.
 
Investment, for example, can form part of trade in goods, and even intellectual property division. So, on what basis has the Director-General decided to include investment in the work of trade and services without a proper discussion involving all 164 members, a negotiator told the SUNS.
 
It is common knowledge that these three areas - government procurement, investment, and trade and competition policy - along with trade facilitation formed part of what are called the four Singapore issues which were first introduced at the WTO's first ministerial meeting in Singapore in 1996.
 
In the face of combined opposition from developing countries, the four issues were brought into the Doha work program in 2001 on the condition that negotiations on each of the four issues will only commence on the basis of "explicit" consensus at the WTO's third ministerial meeting.
 
The European Union, which was the principal demandeur for the four issues, tried hard to start negotiations at Cancun but gave up in the face of opposition from developing countries.
 
Subsequently, the four issues were dropped until the United States, the EU, and other developed and some developing countries who were part of the Colorado group brought the trade facilitation back into the July 2004 framework agreement, promising the developing and the least-developed countries that their core issues in agriculture and other areas of the Doha work program shall be addressed on the basis of special and differential treatment flexibilities and less-than-full-reciprocity framework.
 
Effectively, the three issues - investment, competition policy, and government procurement - were obliterated from the Doha work program.
 
In a matter of eleven years during 2004 and 2015, the developing countries were forced to run in circles to secure minimal results in areas - tackling trade distorting domestic agriculture subsidies, addressing tariff peaks and tariff escalation, improving rules in anti-dumping, securing credible market access in the movement of short-term services providers in Mode 4 - of the Doha Work Program.
 
After pocketing a binding and comprehensive outcome in the trade facilitation agreement at the WTO's ninth ministerial conference in Bali, Indonesia, in 2013, a handful of developed countries - the United States, the EU, and Japan - have succeeded in torpedoing the Doha Work Program at the tenth ministerial conference in Nairobi, in 2015, trade negotiators maintained.
 
They were unable though to get a consensus for ending the DWP, but with some assistance from the secretariat have been torpedoing any work on other measures, post-Nairobi.
 
Now, the Director-General who helped these handful of developed countries in their efforts to put the Doha work program to bed has initiated work quietly to bring investment, competition policy, and government procurement without a multilateral consent, said a South American trade envoy.
 
Trade observers said, following the example set by the US on the reappointment of a member to the Appellate Body, the DG whose current term will be ending next year may face a similar one.