TWN Info Service on WTO and Trade Issues (Feb18/04)
2 February 2018
Third World Network

E-com WTO rules via pluri will undermine MTS credibility
Published in SUNS #8610 dated 30 January 2018

Davos, 29 Jan (D. Ravi Kanth) - Attempts to bring "digital two dozen rules" into the World Trade Organization by the sponsors of the plurilateral initiative on electronic commerce will permanently undermine the credibility of the multilateral trading system based on consensus, South Africa's trade minister Rob Davies told SUNS on Friday.

The digital two dozen rules refer to the commitments negotiated in the failed Trans-Pacific Partnership (TPP) agreement by the United States and 11 other countries in 2016.

"If you cannot get something in the multilateral system it doesn't mean you form a group and then write the rules and expect those rules to be adopted at the WTO," said Davies, in an interview after attending the informal trade ministerial summit hosted by Switzerland on the margins of the World Economic Forum's annual meeting.

Several countries - the United States, the European Union, Canada, Norway, New Zealand, Mexico, Costa Rica, Colombia, Turkey, Russia, Japan, Korea, and Nigeria among others - called for commencing plurilateral negotiations on e-commerce on Friday.

The EU's trade commissioner Ms Cecilia Malmstrom said members need to try the plurilateral approach, while the US Trade Representative Ambassador Robert Lighthizer said the plurilateral route is the best option for framing rules for e-commerce which can be later included into the WTO's rule book.

Ms Malmstrom said business as usual cannot continue unless members embark on the plurilateral initiative.

Asked to comment on the large support for the plurilateral initiative on e-commerce, Davies said the sponsors who had failed to secure multilateral consensus are now resorting to what he called "reductio ad absurdum" - which is a technique of reducing an argument or hypothesis to absurdity.

"More than 100 of us of the Group of 90 countries supported changes in special and differential treatment flexibilities throughout the WTO rule book," but "it does not manage to get through the process and does not get attention in Buenos Aires," he said.

"Now if we go out and respond to this development in Buenos Aires by forming a plurilateral group, we could not expect that what we wrote in that plurilateral group would become rules in the WTO," he said.

"Will the E-commerce sponsors accept such outcomes for improvements in special and differential treatment flexibilities and reduction commitments for farm subsidies if more than 100 countries form a plurilateral group," he asked.

"It is the same for e-commerce and the e-commerce group must not imagine and write the rules which are going to be the rules for rest of us," he said.

More important, such an initiative is a gross violation of a "whole lot of procedures we agreed to work on e-commerce" as per the 1998 work program, Davies said.

"So these [developments] on a number of plurilateral initiatives," do not augur well for the organization which is now facing an existential threat, particularly the impasse at the Appellate Body (AB).

"The organization is at an impasse, if the AB issue is not resolved immediately; and a number of people, including us, spoke on the crisis in the AB at the meeting," he maintained.

He said there is a clash of paradigms on which some members are pushing ahead with their specific re-industrialization policies.

"The same clash of paradigms is behind the AB issue" as the US continues to maintain that the AB is against them and that they want "policy space for the US to pursue their America First trade policies," he said.

"We also need to industrialize and we are poorer," he said, maintaining that "we need the tool box they used when they industrialized, and we are not going to be subjected to rules like them."

Countries in Africa, including us, are "not satisfied that we have an adequate digital industrial policy we can pursue," Davies said.

Surely, nobody can agree to rules before that member understands what it needs, he said.