TWN Info Service on WTO and Trade Issues (Dec17/10)
8 December 2017
Third World Network

MC11 chair appoints "facilitators" without prior consensus of Members
Published in SUNS #8592 dated 8 December 2017

Geneva, 7 Dec (D. Ravi Kanth) - The chairperson for the Buenos Aires ministerial meeting of the World Trade Organization, Ms. Susana Malcorra, on Wednesday (6 December) appointed five facilitators, including Kenya's minister Amina Mohamed for finalizing the outcomes in agriculture.

The appointment of the facilitators appears to be a decision taken by Ms. Malcorra, without prior consensus of members, trade envoys told SUNS.

In a communication sent to members on 6 December, Ms. Malcorra announced the names of the five "facilitators".

Ms Mohamed who chaired the Nairobi ministerial meeting in 2015 will hold meetings on the permanent solution for public stockholding programs for food security, domestic support, and other issues at Buenos Aires.

Several members remained skeptical about her appointment given the role she had played at Nairobi, a trade envoy told SUNS.

The facilitator for finalizing a partial outcome on fisheries subsidies is Ms Kamina Johnson Smith, the foreign affairs and trade minister of Jamaica.

Norway's foreign minister Ms Ine Eriksen Soreide will oversee the crucial negotiations on development in which the G90 countries want credible outcomes for enhanced special and differential flexibilities so as to implement their strategic industrialization programs.

Senegal's trade minister Alioune Sarr will facilitate the most divisive discussions on electronic commerce at Buenos Aires.

Paraguay's trade minister Mr Eladio Loizaga Caballero, not known for any work on services and market access for industrial goods, will facilitate the consultations on services and market access for industrial goods. Paraguay is a farm exporting country with beef exports as its mainstay.

The five facilitators will hold open-ended meetings that will be followed by the heads of delegations (HoD) meeting every day starting from Monday (December 11).

[In thus appointing the facilitators (the "invasion of WTO by green men - replacing the green room" as described in SUNS #5008 dated 13 November 2001 by Tetteh Hormeku), without the prior consensus of Members on the appointment of the facilitators and the names of the facilitators or their mandates, and ahead of the formal convening of MC11 at Buenos Aires and approval of the agenda, the rules-based WTO, demanding transparency from its members on their policy decisions, has taken another milestone in its rule-less, manipulative processes.

[In terms of Rule 12 of the rules of business of the MC, the chair of MC11 ought to have been elected/named at MC10. The way that conference in Nairobi, chaired by Ms. Amina Mohammad, was run and manipulated (both by the chair and the WTO DG), and for other reasons related to Argentina, there was no election of MC11 Chair at Nairobi. MC10 asked the GC to hold consultations and elect the Chair of MC11. That election (with naming of Susana Malcorra, at that time the Argentine Minister for Foreign Affairs and Worship), actually took place only at the meeting of the General Council in Geneva on 18 May (WT/GC/M/167 pp 16-17). Ms. Malcorra however resigned soon after (12 June) as Foreign Minister (replaced by Jorge Faurie, viewed as a strong personality behind the Macri regime, with some local civil society groups viewing him as part of the "deep state"). Ms. Malcorra however continues as designated Chair of MC11, which formally begins on Sunday 10 December. SUNS]

The battle lines are thus drawn on domestic regulation for services as well as new issues - electronic commerce, investment facilitation, disciplines for micro, small and medium enterprises (MSMEs) - between major developed and their developing country allies on the one side, and India and the G90 members that include the African Group and the ACP (Africa, Caribbean, and Pacific) members on the other.

The United States has remained opposed to an outcome on domestic regulation for services and continued to maintain silence on the new issues, even though Washington had opposed discussing investment facilitation at the WTO.

The European Union along with other industrialized (except the US) and some developing countries have demanded a new mandate for electronic commerce by establishing a Working Party to accelerate negotiations in a horizontal format.

India has fiercely opposed any change in the existing mandate for the electronic commerce based on the 1998 work program for exploring all the issues in the relevant WTO committees on a non-binding basis.

India has also linked an outcome on continuing the moratorium for e-commerce transmissions until end-2019 to the extension of the current moratorium on TRIPS non-violation and situation complaints.

On Tuesday (December 5), Rwanda, on behalf of the African Group, emphasized that members must continue work on electronic commerce based on the existing 1998 work program.

The African Group has emphasized the following seven points in the draft ministerial decision on electronic commerce. These include:

1. To continue the work under the Work Programme on Electronic Commerce since our last session, based on the existing mandate and guidelines, in the relevant WTO bodies as set out in paragraphs 2 to 5 of the Work Programme.

2. To address all open issues in the relevant bodies, as provided for in paragraphs 2 to 5 of the Work Programme on Electronic Commerce, including but not limited to the definition, classification and technological neutrality.

3. To discuss, in the relevant bodies, the manner in which Members can preserve their right to regulate electronic commerce and consideration of all measures to promote national digital industrial development with a view to promoting inclusive, equitable and sustainable growth.

4. To undertake, in the relevant bodies, a thorough examination of the opportunities and risks associated with digital transformation and electronic commerce.

5. To discuss, in the relevant bodies, measures Members have taken and may take to develop their national institutional regulatory capacity that ensures: the protection of information of all Members and their citizens, including but not limited to mandatory disclosure of data; the disclosure of source codes; access to, and transfer of technology.

6. To continue, in the relevant bodies, the practice of sharing national experience inter alia: the historical development of the digital industry; the challenges and measures adopted to promote digital economy and electronic commerce.

7. To instruct the General Council to hold periodic reviews in its sessions of July and December 2018 and July 2019 based on the reports that may be submitted by the WTO bodies entrusted with the implementation of the Work Programme and report to the next session of the Ministerial Conference.

In a proposal on development circulated on Tuesday (December 5), the African Group also challenged the proponents of new issues as to how they can enter into rule-making negotiations on electronic commerce, investment facilitation, and disciplines for MSMEs without resolving (and concluding the negotiations on) the Doha Development Agenda issues, particularly the enhanced flexibilities for special and differential treatment for their strategic industrialization programs.

On the extension of the moratorium on tariffs on electronic transmissions for another two years, the African Group said they are discussing the issue among themselves "in view of the revenue implications of the current moratorium, particularly in the context of increasing digitization of goods and services."

Nigeria said it doesn't support the African Group proposal on electronic commerce.

On investment facilitation, pushed hard by China and Argentina along with 50 countries, the sponsors have called for "structured discussions with the aim of developing a multilateral framework on investment facilitation."

The sponsors maintained that the structured discussions shall identify and develop the elements of a framework for facilitating foreign direct investments. The elements include:

a. Improve the transparency and predictability of investment measures;

b. Streamline and speed up administrative procedures and requirements;

c. Enhance international cooperation, information sharing, the exchange of best practices, and relations with relevant stakeholders, including dispute prevention.

These discussions, the sponsors said, "shall also clarify the framework's relationship and interaction with existing WTO provisions, with current investment commitments among Members, and with the investment facilitation work of other international organizations."

The sponsors said that the discussions on investment facilitation "shall not address market access, investment protection, and Investor-State Dispute Settlement."

Also, "the right of Members to regulate in order to meet their policy objectives shall be an integral part of the [multilateral] framework," the sponsors maintained.

It shall remain "flexible, adaptable, and responsive to the evolving investment facilitation priorities of Members."

India and the African Group said categorically that investment facilitation is not part of the WTO mandate. They said they will not accept any discussions on investment facilitation as part of the WTO.

The US had fiercely opposed investment facilitation in the run-up to the G20 leaders' meeting in Hamburg several months ago. Consequently, investment facilitation did not even figure in the G20 leaders' declaration.

Chile and 38 industrialized and developing countries have called for a decision/outcome at Buenos Aires to negotiate disciplines for micro, small, and medium enterprises at Buenos Aires.

The proposal is supported strongly by major industrialized countries such as the European Union and Japan but the US has remained silent, according to people familiar with the issue.

The African Group, India, and the ACP (Africa, Caribbean, and Pacific) members have opposed the disciplines on MSMEs on grounds that the unresolved Doha issues must be addressed and resolved first.

Another bigger battle is going to be domestic regulation for services in which the proponents led by Australia, New Zealand, the European Union, Argentina, and others are seeking enhanced disciplines for a range of areas, including transparency-related improvements.

But the African Group and India said the proponents are adopting proposals which are not based on the mandate and the draft texts circulated in 2009 and 2011 by the previous chairs of the Working Party on Domestic Regulation.

In sum, the Buenos Aires meeting could become the mother of all trade ministerial conferences in which there is considerable chaos which could lead merely to a chair's concluding statement, said a trade envoy who asked not to be quoted.