TWN Info Service on WTO and Trade Issues (Dec17/07)
7 December 2017
Third World Network

Final General Council meet before MC11 takes up several issues
Published in SUNS #8590 dated 6 December 2017

Geneva, 5 Dec (Kanaga Raja) - The WTO General Council, at its final meeting on 30 November (Thursday) before the eleventh ministerial conference in Buenos Aires (MC11), took up a number of issues, including further extending until 31 December 2019 the period for acceptances by Members of the Protocol Amending the TRIPS Agreement relating to the import of cheaper generic medicines under compulsory license.

At the meeting, the General Council also approved on an ad hoc basis the request for observer status at MC11 by the Republic of South Sudan.

In other actions, the General Council transmitted to MC11 the reports from the General Council; the Dispute Settlement Body; the Trade Policy Review Body; the Sectoral Councils; and the Committees on Trade and Development, Trade and Environment, Balance-of-Payments Restrictions, Budget, Finance and Administration, and Regional Trade Agreements.

Also transmitted to MC11 were the reports of the Working Groups on Trade, Debt and Finance, and Trade and Transfer of Technology, as well as the Committees under the Plurilateral Trade Agreements.

According to trade officials, the reports of the chairs of the Doha negotiating groups will also be transmitted to Buenos Aires once they have been amended to take into account what emerges on fisheries subsidies and on agriculture.

An informal meeting of the Committee on Agriculture in Special Session took place on Monday (4 December), where its Chair, Ambassador Stephen Karau of Kenya, gave his final report on the state of play in the agriculture negotiations, just before members depart for Buenos Aires (see below).

At the General Council on 30 November, in reference to the outcome document at MC11, the Chair of the WTO General Council, Ambassador Xavier Carim of South Africa, reported that there is no longer a basis to continue working (on this document) in Geneva.

According to trade officials, the Chair noted there are some members including Argentina who have expressed a desire to try and take up this work in Buenos Aires.

He said he has circulated his draft text which has gone to the ministerial conference as well. It is not an agreed text, the Chair pointed out.

The Chair also reported that there has not been agreement in the TRIPS Council on the issue of the moratorium on non-violation and situation complaints, and that this issue too will be going to Buenos Aires.

At a media briefing on 30 November on the GC meeting, Keith Rockwell, the WTO spokesman, confirmed that some 40 to 50 proposals on various issues will be going to trade ministers in Buenos Aires.

On the outcome document, Rockwell said: "We don't know the fate of the Ministerial Declaration. That is still up in the air. We don't know if that is going to emerge or not. So, we'll have to wait and see on that."

Prime Minister Abdoulaye Idrissa Maiga of Mali spoke at the General Council meeting on behalf of the Cotton-4 countries (Benin, Burkina Faso, Chad and Mali).

According to trade officials, he highlighted amongst others the importance of cotton for the countries in his region. He said that it is important that ministers in Buenos Aires make progress on this issue.

The Prime Minister noted that in the last two ministerial conferences, important progress was made on duty-free quota-free (DFQF) market access for LDC products and the elimination of export competition with respect to cotton, but the critical question of domestic support for cotton (and the subsidies to producers in the developed world, affecting fair market prices globally) remains unresolved.

Under the agenda item of report by the Chair of the Trade Negotiations Committee (TNC), the statements made by members at the formal TNC meeting on 28 November were read into the record of the General Council meeting. (See SUNS #8586 dated 30 November 2017).

A few delegations spoke under this agenda item at the General Council meeting on 30 November.

According to trade officials, Ghana endorsed the statements of the African, Caribbean and Pacific (ACP) group of countries, and the African Group that were made at the formal TNC meeting on 28 November. It said that the lack of consensus on the Ministerial Declaration is a problem. It hoped that Argentina can help bring about some kind of a result on this issue.

Ghana would like to see the elimination of trade-distorting domestic support, and it supports an agreement on a permanent solution for public stockholding programmes for food security. It also wants to see an agreement on fisheries subsidies with special and differential treatment for artisanal fisher-folk.

Ghana highlighted the importance of having the 10 Agreement-specific proposals on special and differential treatment given consideration because it is important to allow Ghana and other countries to implement their industrial policies.

It also reaffirmed its support for the multilateral trading system and the WTO, and called for a transparent, inclusive, bottom-up and member-driven approach at MC11.

Grenada, on behalf of the Organisation of Eastern Caribbean States (OECS), said that it also wants to see a transparent, inclusive, bottom-up and member-driven approach at MC11.

It said that the issues of the small and vulnerable economies (SVEs) need to be addressed. The issue of fisheries subsidies is of high importance, and it would like to see the issue of IUU (illegal, unregulated and unreported) fishing addressed in particular. It also called for special and differential treatment.

Saudi Arabia said that the issues of great importance to it are development, investment, and e-commerce.

Bolivia asked what documents are going to MC11.

Rwanda, on behalf of the African Group, welcomed the Prime Minister of Mali and echoed his call for the elimination of trade-distorting domestic support, and expressed hope for measurable progress on cotton at MC11.

The Philippines, on behalf of ASEAN, expressed concern over the lack of convergence among the membership.

Speaking on its own behalf, the Philippines said the fact that things are going to be left to Ministers at Buenos Aires because they could not be resolved here gives it some pause but the Director-General's ability to produce results in Bali and Nairobi gives them some comfort.

It highlighted the importance of the Special Safeguard Mechanism (SSM), saying that it will be put in a very difficult position to come to a consensus on other issues in the absence of a solution for SSM.

Qatar said that the issue of fisheries subsidies is important to it, and that there is a lot of work to be done. It is also looking for something on domestic regulation. The Doha Development Agenda is very important but there are many other issues that are also important for Qatar and others including investment facilitation, micro, small and medium (MSMEs) enterprises and e-commerce.

Under the agenda item of implementation of the Bali and Nairobi outcomes, the Chair of the General Council said that there has not been agreement in the TRIPS Council on the issue of moratorium on non-violation and situation complaints, and that this will be going to Buenos Aires.

According to trade officials, on agriculture, the Chair said that on export competition, the European Union has now put forward a revised schedule on export subsidies, as has Norway.

On the question of administration of tariff rate quotas (TRQs), there has been no submissions made since February.

There have been no new updates either on the issues of Rules of Origin, and the services waiver for LDCs. On DFQF for LDC products, members have been urged to find a solution next year.

On Aid for Trade, the Committee on Trade and Development has asked members to consider what they would like to see as the work programme ahead of the next Global Review on Aid for Trade in 2019.

On trade facilitation, one new member has deposited their instrument bringing the total to 123 members, which is 75% of the membership, said the Chair.

On the agenda item of development assistance aspects of cotton, Director-General Roberto Azevedo mentioned that the numbers are improving and going in the right direction. He said there were big donors that had made contributions, namely Australia, Brazil, Canada, the EU, Japan, Switzerland, and the United States.

Brazil, China and India have also been driving the platform of South-South Cooperation for Cotton-Sector Development.

[According to the DG's report (WT/GC/187), global cotton production increased by 7% across the two seasons under review (2015/16 and 2016/17), reaching 23.1 million tonnes in 2016/17. African countries accounted for 7% of global cotton output in 2016/17 (1.5 million tonnes); this represents a 19% increase against the previous season. World cotton production is projected to further increase in the season 2017/18, reaching an estimated volume of 24.6 million tonnes.]

Brazil thanked the DG for the report and said that they are continuing to work with cotton producers.

The EU said that it would like to see more transparency in how money is given to cotton producers. It said that it will now be linking its additional assistance to specific domestic policies.

Pakistan said that cotton is extremely important to its economy. It makes up 1% of GDP. It is the fourth largest producer of cotton after India, China and the US. Pakistan's share of global production is 8% and 1.5 million farming families in Pakistan depend on cotton.

According to trade officials, India said that it has been involved in a number of technical assistance programmes including a five-year technical assistance programme that involves seven African countries including the Cotton-4.

Under the agenda item of WTO accessions, Deputy Director-General Alan Wolff read out a report. According to trade officials, he said that there have been four times as many meetings on accessions this year as in 2016. There are 21 countries in the accession queue. Bosnia and Herzegovina are in the home stretch. They are waiting for a few bilateral negotiations on market access to be concluded.

[According to the report (WT/GC/189), there was a surge in Working Party activity in 2017. Such a surge is reflected not only in the number of meetings which increased four-fold over 2016, but also in the amount of documentation issued for the eight meetings which amounted to over 3,000 pages. At the level of accession Working Party, in addition to Azerbaijan which maintained the regular pace of its 20-year accession process, there were intensive efforts to reactivate several accessions whose processes had been inactive for many years.

[These reactivation efforts included the accessions of: Belarus (its Working Party met twice this year, resuming after 12 years of limited activity in informal mode), Iraq (its Working Party resumed on an informal basis after nine years of dormancy), the Lebanese Republic (a comprehensive set of multilateral documentation circulated to its Working Party after eight years of dormancy), and Sudan (its Working Party met twice this year, resuming after 13 years of dormancy).]

Saudi Arabia, on behalf of the Arab Group, said that of the 21 countries in the pipeline for accession to the WTO, six are Arab countries. It is very important that these countries be integrated into the trading system as soon as possible, it said.

The Russian Federation said that it is very important that Belarus is brought into the WTO very soon. It hoped that 2018 would be the year when this can happen.

Yemen said that WTO accession has been important to it. Post-accession trade-related technical assistance is vital but the problem is that given the condition of conflict there, it has not been able to take advantage of this assistance, it said.

Egypt and Oman echoed the views of Saudi Arabia, while Cambodia pointed out that many of these countries are LDCs and it was important to give them priority and use the streamlined system of accession.

According to trade officials, on the agenda item of MC11, in terms of the way the conference will be organised, the Chair of the General Council said that the opening session will take place at 5.00 pm on Sunday (10 December). The Argentine President Mauricio Macri and DG Azevedo will make statements.

The plenaries will start at 10.00 am on 11 December. Parallel to the plenary, there will be a series of meetings, with the Minister Facilitators holding open meetings for all. This will be followed by a HOD at the end of each afternoon.

On the issue of e-commerce, the Chair of the General Council reported on the discussions that he has had in open-ended meetings.

He said there have been a number of proposals put forward. There are now eight proposals, but the distance between the proposals have not narrowed. The positions vary from maintaining the current work programme on e-commerce to establishing a new working group to consolidate the discussions, to establishing a working group with a mandate for future negotiations.

The positions also vary on the question of moratorium on duties on e-commerce transactions. It is clear that members' positions have not changed. All eight of these proposals are being sent to Buenos Aires.

The discussions by ministers are likely to be structured around these eight proposals and that the moratorium on e-commerce duties is going to have to take into account the situation on (continued moratorium on) the non-violation complaints under TRIPS.

On the outcome document, the Chair said that there is no longer a basis to continue working (on this document) in Geneva. There are some including Argentina who have expressed a desire to try and take up this work in Buenos Aires.

He said he has circulated his draft text which has gone to the ministerial conference as well. It is not an agreed text, he said.

According to trade officials, Afghanistan said that there are now a group of countries, the "g7", which are post-conflict countries, and that they are going to announce an initiative in Buenos Aires highlighting the challenges they have encountered in trying to get their economies back on track, and how they can use the multilateral trading system to revive their destroyed economies.

Grenada spoke of the importance of hurricane relief for Barbuda and Dominica, and said that the damage to Dominica is equal to 200 percent of that country's GDP.

Barbados, Guyana and the Dominican Republic endorsed what Grenada had said about the difficulties vis-a-vis the hurricane situation.

The EU said that for it e-commerce must be part of any MC11 outcome. It is pleased to have discussions on this issue at MC11. It is prepared to base the discussions around the eight proposals. It had originally called for a work programme with a negotiating mandate but now it can be flexible and take up issues with the possibility of negotiations going forward, but it wants a single locus.

Under the agenda item of TRIPS Council matters, the General Council decided to further extend until 31 December 2019 the period for acceptances by Members of the Protocol Amending the TRIPS Agreement that enables developing countries with insufficient or no manufacturing capacities in the pharmaceutical sector to import cheaper generic medicines produced under compulsory licencing.

This is the sixth extension of the period for the acceptance by Members who are yet to accept the Protocol Amending the TRIPS Agreement.

In its decision of 30 November 2015, the General Council had extended the period for acceptances by Members of the Protocol for the fifth time until 31 December 2017 or such later date as may be decided by the Ministerial Conference.

The Protocol Amending the TRIPS Agreement came into force on 23 January 2017 following its acceptance by two thirds of the Members.

Under paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health of 2001, Ministers recognised that "WTO Members with insufficient or no manufacturing capacities in the pharmaceutical sector could face difficulties in making effective use of compulsory licensing under the TRIPS Agreement."

They instructed the TRIPS Council to "find an expeditious solution to this problem and to report to the General Council before the end of 2002."

Under Article 31 of the TRIPS Agreement on other use without authorisation of the right holder, paragraph (f) states that any such use "shall be authorised predominantly for the supply of the domestic market of the Member authorising such use."

On 30 August 2003, WTO Members agreed to waive this limitation under Article 31(f), and further agreed that the waiver will last until the article is amended.

Paragraph 2 of the 30 August 2003 General Council decision states: "The obligations of an exporting Member under Article 31(f) of the TRIPS Agreement shall be waived with respect to the grant by it of a compulsory licence to the extent necessary for the purposes of production of a pharmaceutical product(s) and its export to an eligible importing Member(s)" in accordance with the terms set out in the paragraph.

On 6 December 2005, WTO Members agreed to make permanent the August 2003 waiver by incorporating it into the TRIPS Agreement when two-thirds of the Members have ratified the protocol of amendment. (See SUNS #8387 dated 25 January 2017).

Under the agenda item of the review of the exemption provided under paragraph 3 of the GATT 1994 (pertaining to the Jones Act of 1920, namely where US cargo must travel in US ships in US waters), Norway, Japan, Canada, Hong Kong (China), China, Panama, Korea, Australia, the EU, and Brazil voiced their concerns, asking whether the conditions (imposed by the US) still need to apply.

According to trade officials, the US said the conditions still exist for the exemption to be in place. The provision is an integral part of GATT 1994. It said that the US Navy needs the shipbuilding capacity to maintain its requirements.

The next General Council meeting is scheduled to take place on 7 and 8 March 2018.

REPORT BY CHAIR OF AGRICULTURE NEGOTIATIONS

An informal meeting of the Committee on Agriculture in Special Session was held on Monday (4 December), with the Chair, Ambassador Stephen Karau of Kenya, providing a final report on the state of play in the agriculture negotiations before members depart for Buenos Aires.

According to trade officials, this meeting has brought to an end the Geneva process, with the talks expected to continue in Buenos Aires.

The Chair reported that he saw grounds for agreement to be reached at MC11 on the issue of public stockholding for food security purposes, and on export prohibitions and restrictions.

Furthermore, a decision could also be envisaged on cotton at MC11.

According to trade officials, as regards the other topics, the Chair suggested that members pursue a limited outcome in the form of a post-MC11 work programme.

The topics falling into this category include domestic support, market access, and the remaining issues of export competition.

On the next steps, the Chair said that he would join the minister-facilitator to be designated for agriculture and ensure the best possible transition from the Geneva process to the Buenos Aires one.

According to trade officials, four submissions were tabled since the last meeting on 27 November: a proposal by the Russian Federation in JOB/AG/129; a revision of the proposal by Singapore in JOB/AG/101/Rev.2; an information note by Singapore in JOB/AG/131; and a proposal circulated by Rwanda on behalf of the African Group in JOB/GC/165, JOB/TNC/67 and JOB/AG/132.

Egypt, on behalf of the African Group, introduced the Group's proposal on domestic support that was submitted on 1 December.

The proposal, in the form of a post-MC11 work programme, seeks to remove Aggregate Measurement of Support (AMS) and sets disciplines on Blue Box and Green Box.

On the issue of public stockholding, the Chair said that a permanent solution based on the Bali Interim Decision is most likely to attract convergence. He said that he intends to carry on the discussions in Buenos Aires under Ministerial guidance.

"It is one of the issues where an outcome at MC11 is possible," he said. "That being said, some serious work will need to be done in Buenos Aires. I will be working together with a facilitator and all of you to find the way which has thus far eluded us; the will to embark on this journey would, however, have to come from you."

On Special Safeguard Mechanism (SSM), the Chair said that he is still reflecting on the way forward, owing to the wide divergence in members' negotiating positions.