TWN Info Service on WTO and Trade Issues (Mar18/15)
22 March 2018
Third World Network

Ministers concerned over unilateral trade measures, AB impasse
Published in SUNS #8646 dated 21 March 2018

New Delhi, 20 Mar (D. Ravi Kanth) - Many trade ministers expressed grave concern at an informal trade ministerial summit on Tuesday (20 March) over escalating unilateral trade measures that could push the multilateral trading system into a downward spiral, several trade ministers told SUNS.

Around 50 countries called for a "collective" to face the systemic challenges in the multilateral trading system, particularly at the WTO.

Trade ministers demanded an urgent resolution of the logjam at the World Trade Organization's Appellate Body (AB) so as to restore the credibility of the dispute settlement mechanism.

While major industrialized countries along with several developing country members pushed hard for considering plurilateral initiatives in electronic commerce, investment facilitation, and disciplines for micro, small, and medium enterprises (MSMEs), a large number of developing countries pressed for resolving the Doha issues.

At the end of a one-and-half-day informal trade ministerial summit, 52 countries joined forces against unilateral trade measures imposed by the United States and Washington's repeated blocking of the filling of the three vacancies at the Appellate Body.

In his concluding statement, the Indian trade minister Suresh Prabhu said many participants underscored the need for preserving and enhancing the functioning and credibility of the multilateral trading system in which the World Trade Organization remains at the center.

Prabhu said that participants sought an expeditious resolution to the impasse for filling the three vacancies at the Appellate Body so as to ensure the credibility of the independent and impartial Dispute Settlement Body.

Without naming the United States, which is resorting to discriminatory Section 232 security-related trade restrictive measures, the Indian commerce minister said "the cycle of recent unilateral trade measures and proposed countermeasures" will severely undermine the principle of non-discrimination. He told reporters that only "dialogue" will avert further crises in the global trading system.

Commenting on the renewed push for "differentiation" and the need for classifying developing countries for the provision of special and differential flexibilities, the Indian minister said that several ministers emphasized the "need" for all developing countries, including LDCs, to avail SDT flexibilities without any interruption.

Japan, Norway, New Zealand, the European Union, and Kenya among others spoke in support of differentiation.

The EU said countries must justify why they need SDT flexibilities case by case while other developed countries called for new classification of developing countries.

But South Africa's trade minister Rob Davies said any tinkering with SDT flexibilities case by case is a redline that developing countries will never accept. (See separate story).

The WTO director-general Roberto Azevedo said the discussion on development which involves differentiation and reclassification of countries must be intensified, suggesting that it cannot be deferred to 2019, said a participant familiar with the meeting.

Many participants, particularly developing countries, according to the Indian trade minister, emphasized that paragraph 31 of the Nairobi Ministerial Declaration must remain at the center of negotiations at the WTO for resolving the unaddressed issues in the Doha Development Agenda.

Prabhu said that participants said they are ready to adopt "pragmatic and flexible options" for advancing the negotiations on the Doha issues.

Indonesia which is the coordinator for the G33 developing country coalition along with several other countries called for "locking domestic reforms in domestic farm subsidies, a permanent solution on public stockholding programs for food security purposes, cotton, and an agricultural special safeguard mechanism."

The Indian trade minister said participants highlighted the need for intensifying work in areas such as domestic regulation in services and fisheries subsidies. Prabhu said fisheries subsidies remain an integral part of the Doha mandate, suggesting that it would also help in achieving Sustainable Development Goal 14.6.

Many trade ministers, according to Prabhu, insisted that "open, transparent and inclusive discussions within the joint initiatives of the proponents of the various issues, which are presently not within the scope of the negotiating mandate of the WTO, would deepen the understanding of issues and benefit all members."

He admitted that several questioned the underlying assumptions for pursuing plurilateral initiatives saying that "all negotiations at the WTO must follow the fundamental principle of multilateralism and any other approach represents a threat to the multilateral trading system."

China took the floor first during the day-long meeting to warn about the threat posed by unilateral trade measures to the multilateral trading system. China's vice trade minister Wang Shouwen said the crisis at the AB must be resolved expeditiously and immediately without further delay.

Commenting on the steel and aluminum safeguard measures, the Chinese minister said trade remedy measures must be in conformity with the WTO rules.

More important, China opposed graduation and reclassification of developing countries for availing special and differential flexibilities. The Chinese vice minister said it will require SDT flexibilities.

The new US deputy trade representative and envoy to the WTO Ambassador Dennis Shea raised several problems with the way the AB functioned, suggesting that many procedures were not properly followed by AB members.

Ambassador Shea said the AB members failed to issue reports within the 90-day limit. The deputy USTR argued that the AB continues to issue rulings in which two members had already retired. Ambassador Shea argued that some AB reports went beyond their mandate for resolving trade disputes.

The US, he said, welcomes the plurilaterals in electronic commerce and other areas, suggesting that it is an opportune time for addressing the fundamental reforms in the negotiating and dispute settlement functions at the WTO, according to participants familiar with the meeting.

The European Union said unambiguously that countries which need special and differential flexibilities must justify why they would need them with evidence, a stand that was echoed by several other industrialized countries.

In short, the New Delhi meeting offered room for a frank political discussion on development and the work program to be adopted at the WTO but there is going to be little change either at the Appellate Body or in the multilateral trading system, several ministers said.