TWN Info Service on WTO and Trade Issues (May17/11)
12 May 2017
Third World Network

Focus on public stockholding, SSM, S&D, not new issues, HOD told
Published in SUNS #8460 11 May 2017

Geneva, 10 May (Kanaga Raja) - An informal Heads of Delegation meeting at the World Trade Organisation (WTO) on Monday heard a large majority of developing countries insisting that the focus in the run-up to MC11 in Buenos Aires later this year should be on the Doha Work Program and Nairobi Ministerial decisions, and not on new issues such as E-commerce and investment facilitation.

The views of the developing countries came in their interventions following the reports by the Director-General, Roberto Azevedo, and the Chairs of the various WTO negotiating groups on their recent consultations.

These reports reflected the sharp divergence among the membership on the key issues and possible deliverables for MC11, in particular on the issues of public stockholding for food security purposes and on the Special Safeguard Mechanism (SSM), which are of crucial importance to developing countries. (See SUNS #8459 dated 10 May 2017).

In their interventions, the developing countries including the Least Developed Countries (LDCs) and the African Group highlighted the importance of outcomes on public stockholding for food security purposes and the SSM at MC11.

The African Group stressed that special and differential treatment (S&D) is an integral part of all multilateral agreements.

The developing countries pointed out that many of the issues that are being proposed on domestic regulation in services seem to be an attempt to limit the policy space for developing countries, and impinged on their right to regulate.

Many countries expressed preference for key issues in the Doha context such as agriculture and S&D to be resolved first before the new issues such as E-commerce and investment facilitation are taken up.

The developing countries in particular called on members to stick to the 1998 non-negotiating mandate on E-commerce.

VIEWS OF MEMBERS AT HOD MEETING

According to trade officials, Cambodia, on behalf of the Least Developed Countries (LDCs), noted that there are only seven months to go before MC11.

It highlighted the issues of priority to the LDC group, namely, trade-distorting domestic support in agriculture, public stockholding for food security purposes, S&D, and the SSM.

It would like to see an agreement on fisheries subsidies by MC11, covering illegal, unreported and unregulated (IUU) fishing, reduction in subsidies and greater disciplines on fisheries practices that lead to overcapacity and overfishing.

It would also like to see full implementation of decisions on rules of origin and the services waiver for LDCs that came out of the Nairobi ministerial meeting in 2015, as well as on duty-free and quota-free market access for LDC products (DFQF).

On E-commerce, the LDCs would like members to stick to the 1998 mandate.

Rwanda, on behalf of the African Group, pointed out that agriculture is key. It would like to see trade-distorting domestic support eliminated. It would also like to see an agreement reached on cotton as well as on public stockholding and SSM.

The African Group would like to see a multilateral outcome on fisheries subsidies. It highlighted elimination of subsidies for IUU fishing, and disciplines on those subsidies that contribute to overfishing.

The African Group pointed out that S&D is an integral part of all multilateral agreements.

On the issue of domestic regulation in services, the African Group suggested that this seems to be an attempt to narrow developing countries' policy space, and impinged on the right to regulate.

The African Group also wants to see the process going forward in a transparent and inclusive manner.

Guyana, on behalf of the African, Caribbean and Pacific (ACP) group, said that the WTO is at a critical point. There is need for outcomes on the key Doha Development Agenda (DDA) objectives by MC11.

It would like to see the unfulfilled areas of the Nairobi Ministerial Declaration be a priority. It also believes that the issue of fisheries subsidies is critically important, such as banning IUU fishing.

It also wants to ensure that artisanal and small scale fishing fleets are excluded. It would like to see delivery on this issue as a contribution of the WTO to SDG target 14.6.

On agriculture, it wants to see a substantial reduction in trade-distorting domestic support. It also wants something on cotton, public stockholding, and the SSM. It further highlighted the importance of S&D.

On services, it said that the ACP group is in the process of reviewing the proposals that have been made on domestic regulation. It pointed out that E-commerce is not a DDA initiative, and should not replace DDA initiatives.

Nepal expressed support for the LDC statement. It wants to see members build on decisions taken on the LDCs in Hong Kong, Bali and Nairobi.

It was of the view that issues like E-commerce, micro, small and medium sized enterprises (MSMEs), trade facilitation in services, and domestic regulation are outside of the existing negotiating mandates.

The Philippines, on behalf of ASEAN, said it is in favour of moving ahead on E-commerce and MSMEs.

According to trade officials, India recalled that at the last HOD meeting, it had raised some important issues and challenges for the WTO in terms of process and substance.

Those concerns remain valid, it said, adding that the notion of mandates is something that members need to respect.

It pointed out that many of the proposals put forward do not have an existing mandate.

While some members are identifying these issues, these mandates do not exist and there is no consensus on going forward with a multilateral negotiation for E-commerce, MSMEs or investment facilitation. These are highly problematic in terms of any rule-making, it said.

Moreover, said India, the policy implications of these particular proposals have not been fully understood, and it seems as though the principal result of these policies would be to constrain policy space in developing countries.

India noted that there are major divergences on the mandate. A large percentage of the members look to the Doha mandate. Some of these stand-alone proposals do not provide any kind of balance as the Doha mandate does.

When we talk about trade, trade for whose benefit, is the question, India said. It is very interesting to contemplate as to what the impact of these kinds of proposals might be on developing countries.

India recognised that many developing countries are supportive of these proposals, but it does not believe that there has been an effort to try and understand what the impact of such an agreement might actually be.

India is very much supportive of both the public stockholding and SSM proposals, saying that these will level the playing field and aid millions of people in the developing world. It pointed out that there is a deadline of 2017 for public stockholding and this is a major issue.

On E-commerce, it said that there is no problem with exploring and discussing the issue, but it will not agree to any rule-making in this area.

On the issue of trade facilitation in services, India is looking at members' comments made in various fora. It will assess these and then decide what to do next.

On the issues of investment facilitation and MSMEs, India underlined that this is completely outside the responsibility of the WTO.

Costa Rica, on behalf of the Friends of E-commerce for Development (FED), was of the view that E-commerce is very important for development. It can help bring together the trade, digital and development agendas.

It noted that the FED had a ministerial meeting during the UNCTAD E-commerce week. The FED has a road map recognising seven key topics, it added.

It is convinced that MC11 will be a tipping point for this issue and is something that can lead to more in-depth discussions on E-commerce.

Japan said collectively there is need to show that the WTO system is working and addressing challenges for all including the LDCs and MSMEs. MC11 is an important moment to try and give evidence of this.

There should be different approaches to issues and also to modalities of outcomes. If a multilateral approach is not possible, then members can go through a plurilateral approach.

Japan is prepared to talk about all the issues including agriculture. It said that the issue of domestic support should be discussed as a whole, taking into account as well the proposal on trade facilitation in services put forward by India.

It took note of the proposal by New Zealand, Iceland and Pakistan on fisheries subsidies. It wants a fact-based discussion that focuses on all considerations including resource management.

It is very important to have a discussion on investment facilitation. It is not yet time to discuss the balance of any package but we should continue to have in-depth discussions which are proposal-driven till the summer break, and after that to consider specific modalities for each outcome, and at that point try and assess what the picture may be, said Japan.

Ecuador said that special and differential treatment is extremely important. It also highlighted adherence to the 1998 mandate on E-commerce and that the issue should be dealt with in the context of the existing mandate.

On the issue of domestic regulation in services, it said that while it is important to discuss it, it should not in any way impinge on members' right to regulate.

China said that with respect to its proposal on trade remedies, there is a need to clarify and improve the existing rules. Transparency and due process are key elements.

On fisheries subsidies, China took note of the proposal by New Zealand, Iceland and Pakistan. It believes that fisheries are very important to peoples' livelihood, but there is a need to make sure that there is account taken of fishery management practices.

Some may not be issues for the WTO and are outside of that, it said. Trade remedies and fisheries subsidies are both within the framework of rules. It hopes that both can receive equal treatment and move forward in tandem.

Cuba underlined that the Doha Development Agenda (DDA) is still relevant, and there is need to focus on the core issues of the DDA. None of these issues have been advanced in the way that it would like.

Agriculture is the yardstick for assessing the overall level of ambition in the negotiations, it said. It also supported the 1998 work programme on E-commerce.

In terms of the way forward, there must be a transparent and inclusive process with a bottom-up approach, it said.

The European Union said the issues of fisheries subsidies and domestic regulation is where the most advanced discussions have been taking place.

On domestic regulation in services, it said that all of the building blocks for a consolidated text are already on the table.

On trade facilitation in services, it took note of the Indian proposal and would like to see this taken up as part of the overall discussion on services.

It also supported the FED (Friends of E-Commerce for Development) and would like to see the issue of e-contracts and authorisation taken up, as well as consumer protection.

The EU was of the view that progress needs to be made on the issue of trade-distorting domestic support, and that this could probably go hand-in-hand with an agreement on public stockholding. A very broad segment of the membership is supportive of this, it maintained.

Bolivia stressed the importance of the DDA.

Uganda pointed out that Africa's share of trade has fallen to below 3% of the global total, and 80% of African exports are raw commodities. Only 20% are finished goods.

Africa needs to use trade policy instruments to give Africans the industrialization momentum that they need, because they need to add value to their exports. Manufacturing through industrialization could create as many as 5 million new jobs each year.

On the issue of domestic regulation, Uganda said that this is seen as a means of constraining developing country policy space.

On process, it said that the Nairobi ministerial meeting was imposed on the membership by a small group and this is to be avoided. There needs to be a discussion involving the entire membership which should be through a bottom-up approach.

Brazil said that there has been a lot of discussion, but there is no common set of goals or even landing zones at the moment. It is essential that development is at the centre of the work that is being done.

It is ready to discuss everything on the table including the new issues. After the summer break, members can begin to discuss the issue of balance.

Agriculture is of paramount importance, it said, adding that the overall level of ambition will be set by what happens in agriculture.

Trade-distorting domestic support is a key issue for Brazil. It is prepared to discuss domestic regulation and trade facilitation in services. E-commerce would be a positive outcome for Buenos Aires if some progress can be made here.

Korea supported the G33 proposals on agriculture. Agriculture is a gateway and public stockholding, SSM and domestic support are key.

Pakistan said that non-tariff barriers (NTBs) is a key issue. Agriculture is also extremely important - 93% of farmers in Pakistan are subsistence farmers. Domestic support continues to cause trade-distortions and must be addressed.

It is committed to public stockholding for food security. It understands that this is important and worthy of consideration but it is important that no food security program of one member affects negatively the food security programs of another. It should not lead to trade distortion.

It also favours a solid agreement on fisheries subsidies. There is need to address the issue of E-commerce at MC11 in a meaningful manner.

Indonesia, on behalf of the G33, said that time is very short and there is need to deliver on the mandates from the Nairobi ministerial on public stockholding and SSM. If negotiations commence on agricultural market access, it would like to see Special Products as part of that.

On behalf of itself, Indonesia said that fisheries subsidies and domestic regulation may be two issues which are most likely to result in deliverables in Buenos Aires. But special and differential treatment must be an integral part of any outcome.

Mali, on behalf of the Cotton-4, said that trade-distorting domestic support is still a problem affecting the region, and affecting cotton in particular. It will soon submit a proposal which would deal with the question of trade-distorting domestic support.

Bangladesh said that there is need to focus on the issues of importance to the LDCs including duty-free quota-free market access for LDC products (DFQF). It also called for an SSM and public stockholding for food security, which could be used for new programs, as the current text is limited to existing programs.

Venezuela noted that there are some proposals that are being put forward by members which are not in line with the Nairobi Ministerial Declaration. No new topic can be discussed at the expense of the Doha issues.

It also highlighted the importance of public stockholding and the SSM.

(What is being proposed on) domestic regulation would limit policy space, while on E-commerce, what is being proposed here goes beyond the existing mandate. There is no mandate on investment facilitation, it said.

Fiji stressed the importance of the issues of agriculture, fisheries subsidies and special and differential treatment.

South Africa voiced agreement with the African Group and the ACP. It is clear that the difficulties and divergences have not disappeared, it said.

Many members support the DDA mandate. Others that have opposed have not offered an approach which is unanimously acceptable to the members. So there is the issue of mandate which is a problem.

It believes that while E-commerce is of critical importance, this should be addressed within the existing non-negotiating mandate.

Morocco endorsed the African Group statement. It is important to adhere to the DDA mandate, it said.

The United States said that it adheres to the same views that it had expressed at the last meeting in February.

It cautioned against raising expectations for MC11, saying that those views have been reinforced in the past two months by what it has seen which indicates that there is no significant progress anywhere.

Norway said that there are very clear divergences and very hard work ahead of members. It said that fisheries subsidies, trade-distorting domestic support, public stockholding and domestic regulation are deliverables, with the development dimension also being of critical importance.

Nigeria said that it would like to see disciplines on fisheries subsidies, particularly with respect to IUU fishing, and overfishing.

It is very much in favour of building on the Bali and Nairobi mandates on public stockholding and SSM.

Saudi Arabia, on behalf of the Arab Group, stressed on the centrality of the development dimension.

Kenya supported the ACP and African Group statements. It stressed on the importance of the principle of Less Than Full Reciprocity, and issues of special and differential treatment, public stockholding, SSM, and trade-distorting domestic support.