TWN Info Service on WTO and Trade Issues (Dec17/29)
15 December 2017
Third World Network

MC11 fails, and ends in disarray
Published in SUNS #8597 dated 15 December 2017

Geneva, 14 Dec (Chakravarthi Raghavan*) - The World Trade Organization's Eleventh Ministerial Conference (MC11) has ended in complete failure and some disarray.

In some famous last words, WTO spokesperson Keith Rockwell, who was asked at a media briefing on 12 December how he would compare the success of MC11 with other Ministerials, and hard-put to present a positive gloss to a conference heading to complete failure, highlighted the hospitality of the Argentine government as a fantastic success of the conference!

He had earlier pointed to the draft joint declaration on "gender equality" sponsored or supported by so many delegations, as also the great support of business, Ministers and leaders. That draft declaration was among many not adopted, India having blocked it as extraneous to the WTO remit and DDA negotiations.

On e-commerce (an issue deeply dividing the membership, but one where his boss, Director-General Roberto Azevedo, co-sponsored along with the World Economic Forum and promoted it at a side-event as one beneficial to micro, small, and medium enterprises or MSMEs, despite their organisations in various developed and developing countries declaring it as inimical to their interests), Rockwell said there is a digital divide: some countries are concerned that rules in the WTO would be disadvantaged by e-commerce rules.

The proponents, he added, have been saying, without equivocation that they need technical assistance to help close the digital divide at the same time.

[Among the infrastructures needed or deficient, and long identified by these governments and their public are things as simple as 24-hour uninterrupted power supply and reliable, hacker-free and secure internet connectivity, as well as internet governance issues such as net-neutrality by service providers.]

In co-sponsoring the event with the World Economic Forum, and promoting there the e-commerce initiative (that the EU, Japan and some others are pushing at the WTO through a new e-commerce work program, but failed to get MC11 to agree), DG Azevedo appeared to be acting contrary to his obligations in terms of Article VI, para 4 (VI:4) of the Marrakesh Treaty.

The failure of MC11, predictably, was inevitable perhaps from the outset, as host Argentina and the WTO leadership attempted to ignore mandates and the interests of the vast majority of members, with the Conference Chair, Ms Susana Malcorra, from the outset riding rough-shod over the rights of Members at plenary, not giving them the floor to voice any contrary views to her proposals, but gaveling consensus where none existed.

Both the WTO leadership and host Argentina were intent on burying the Doha Development Agenda (DDA) negotiations (as the US and EU wanted to enable them to resile on their treaty commitments), but launch negotiations on controversial new issues, some not even in the ambit of trade and the WTO, but all aimed at foreclosing any likely competition to their existing monopolistic dominance of markets.

With the US adamantly refusing to agree to any permanent accord (over purported domestic subsidy violations, calculated on basis of Uruguay Round era market prices) on public stockholding (PSH) programs for food security in developing countries (even as the US and the EU were determined to block any scrutiny of their own illegal subsidies in "green- and blue-boxes" of domestic support), the Conference saw open bitter clashes between the US on the one hand, and India, China, South Africa and others on the other demanding a permanent solution for their PSH programs.

As a result, the Argentine Government, that had expended huge amounts to host and run the conference (and promote its own neo-liberal, neo-mercantilist economic agenda), and had alienated and made hostile global civil society and public opinion (by banning scores of NGOs, and denying visas for many more), ended with little or nothing to show for its efforts.

Even its hopes of staging an EU-Mercosur free trade agreement with a signature ceremony as a side event did not apparently succeed. The EU-Mercosur meeting was only able to agree on a common statement and press release on continuing their efforts!

While at conclusion of the conference, a positive gloss was sought to be put by several announced initiatives for plurilateral negotiations and accords on new issues, not on the WTO's mandate, and several of them have even been posted and listed on the WTO website, it was clear that several of them were or likely to be illegal under the WTO remit.

In a Twitter comment on talk of possible future plurilateral agreements, Simon Evenett, professor of international trade and economic development at the University of St. Gallen in Switzerland, said it felt more like "back to the future." Seeking plurilateral instead of multilateral deals reminded him, he said, of the Tokyo Round in the 1970s.

In terms of the Marrakesh Treaty provisions, there can be no plurilateral agreement (with conditional rights and obligations applicable to signatories) in areas already covered by existing agreements (under GATT or GATS).

Any such agreement, involving changes to current GATT or GATS schedules of members has to be agreed to by all members by consensus, and any benefits in such schedules, have to be extended unconditionally to all WTO non-signatory members of that pluri-accord.

As for plurilateral agreement in areas of trade, not covered by any existing agreement, and that would need to be included in Annex IV of the WTO, it requires consensus of a Ministerial Conference on the basis of a request from signatories of that plurilateral accord.

In a leaked recording of her remarks at a closed plenary of the WTO membership, that the US media outlet and website POLITICO had secured and made public, the EU Trade Commissioner Cecilia Malmstrom said that the four-day summit has been a total failure.

"We failed to achieve all our objectives," Malmstrom said in a closed-door meeting of delegation heads, according to the audio recording, as reported by POLITICO.

"We did not achieve any multilateral outcomes," Malmstrom was cited as saying. "The sad reality is that we did not even agree to stop subsidizing illegal fishing. I hope all delegations here reflect carefully about the message this sends to our citizens, to our stakeholders and to our children. It says a lot about WTO."

The EU trade commissioner spoke about "the deficiencies of the negotiating functions of the WTO," and in an effort to cast the blame (without naming them) on India, South Africa and a few others, she accused some member countries of "cynical hostage-taking" in the multilateral negotiations.

The EU Trade Commissioner's remarks in blaming others for deficiencies in the WTO negotiating function was rather rich, considering that in its 22-year history, it has been the EU and the US that have been "hostage-taking" and blocking key demands of developing countries that they deliver on their Marrakesh treaty commitments, and correct the glaring asymmetries in the system. The US and EU have been blocking DDA compromise accords, in order to enable them to continue to subsidise and protect their own domestic markets, including heavy subsidies to their farming sector, and ensure oligopolistic control of their corporations in the global market.

Judging by media reports, it would appear this attempt of the EU, Azevedo, Malcorra and others to shift the blame for failure of MC11 on India and a few others appear to have failed; most reports blamed the US for its blocking of all efforts at several key decisions, such as permanent accord on PSH programs, or Ministerial Declaration or any reference to the Doha negotiations.

[* Chakravarthi Raghavan is the Editor Emeritus of the SUNS and contributed this comment.]