TWN Info Service on WTO and Trade Issues (Oct18/15)
23 October 2018
Third World Network

DG points to escalating trade tensions, no progress on AB impasse
Published in SUNS #8776 dated 18 October 2018

Geneva, 17 Oct (Kanaga Raja) - A continued escalation of trade tensions is a real possibility, with some early warning signs of its effects being already seen, the Director-General of the World Trade Organisation (WTO), Roberto Azevedo, said on Tuesday.

In some remarks at an informal Trade Negotiations Committee (TNC)/Heads of Delegation meeting, apart from highlighting the current situation in global trade, the DG also provided an update on the ongoing impasse over Appellate Body appointments, saying that he had no positive news to report on this issue, and that this comes at a time of increased dispute settlement activity.

The Director-General also spoke on the issue of WTO reform, claiming that discussion on this issue is gathering "significant momentum", and that "this is something we can't ignore."

The meeting also heard reports from the Chairs of several Doha negotiating bodies.

A number of delegations made statements following the remarks by the DG and the reports by the Chairs (see separate stories).

In opening the informal meeting, the DG said that he had met with the Chairs of the various negotiating groups on Monday.

He said that it is clear that the situation in some of the negotiating groups has not changed since the Chairs of these groups last reported on 24 July.

In fact, some negotiating groups have not met at all, and in a few cases the Chairs have not held any formal discussions despite indicating their availability to delegations, said Azevedo.

The Chairs of several Doha negotiating bodies then presented updates of the situation in their respective bodies since July.

These included the Chair of the agriculture negotiations, the Chair of the Council for Trade in Services in Special Session, the Chair of the Committee on Trade and Development in Special Session, the Chair of the Negotiating Group on Rules and the Chair of the Dispute Settlement Body in Special Session.

According to trade officials, with the possible exception of the negotiations on fisheries subsidies in the Rules Group, there was not much progress reported by the Chairs of the other bodies.

In some further remarks following the reports by the Chairs, the DG noted the intensive work being done on fisheries subsidies and thought that this was an area where progress could be made.

However, it is clear that in most areas, we are seeing very little progress, Azevedo said.

He told members that if they want to advance these issues, they will have to drive them forward. No one can do this except the members themselves, he said.

"Importantly, we must keep up the pressure in areas with specific deadlines such as public stockholding and fisheries subsidies."

The DG also highlighted the current global situation with regards to trade, noting that trade tensions continue to escalate.

Further measures have been proposed and at present continued escalation is a real possibility, he said.

Azevedo said he has warned before about the real threat to stability, jobs and growth should this trend continue.

"The effects will take time to filter through but we are seeing some early warning signs," he added.

Indicators show that businesses are holding off on making job-creating investments and export orders are on the decline.

He said that the WTO had last month revised its trade forecast downward. On the other hand, he noted that significant trade agreements have been struck in recent weeks.

"I hope we can take inspiration from this," he said. "We pursue dialogue an d negotiation to help abate tensions elsewhere but as yet, there are no clear signs that tensions are indeed abating", he added.

On the issue of WTO reform, Azevedo said that one element which is at the root of the current frictions is the argument that the trading system is allowing distortive trade practices to go unchecked, and that therefore this system needs to change.

In this context, so-called WTO reform or modernisation has increasingly been on the minds and in the speeches of many.

It's clear that this discussion is gathering significant momentum with more leaders becoming engaged and talking to each other about this.

"So it is something we can't ignore," Azevedo maintained.

A variety of initiatives and meetings are being prepared and a range of priorities have been suggested by members.

He said there are several perspectives being offered on what the priorities should be including resolving disputes and reaching agreements more rapidly and effectively, addressing a variety of trade-distorting practices that are either not covered or just partially covered by existing rules, avoiding protectionism and unilateral measures, advancing the current work, and improving notifications and transparency.

These are all important issues and others may be brought forward but precisely which issues are taken forward and how, is for members to determine, said t he DG.

Clearly, this debate is gathering momentum, he claimed. "But again, I would suggest that there are members who are not convinced that reform is needed. "

He noted that he has been invited to take part in some of these discussions , saying that he is happy to do that.

His key impression is that these discussions are at a very early stage. It is too soon to say what would be covered by these discussions. It is also too soon to establish if or how they will advance, and what fruits, if any, they might bear.

He said he doesn't think that anyone is talking about shaping a new package or a new round.

"It seems to me that this discussion is more focused on trying to fix some specific problems where necessary as people identified to help the system work better," said Azevedo.

"Whatever members' positions may be on this subject, it is useful to make your voices heard," he told members.

"I would encourage members to engage with each other and exchange views through a range of channels and formats. The state of this organization is an issue in which everyone has an interest, so it is important for all members to en gage - whatever your perspectives may be."

"As ever, I remain available for consultations with individual members and groups of members on this issue - or any other issue. I am here to facilitate whatever conversations members want to have," said Azevedo.

Addressing the crisis in the dispute settlement system, Azevedo noted that the Appellate Body is down to three members, the minimum required to hear an appeal.

"I have no positive news to share here," he said, adding that he has continued talking "but I am not hearing anything new which would allow us to identify a way forward."

He noted that this comes at a time of increased dispute settlement activity , with around 30 disputes having been initiated.

This is the highest annual total for 16 years, he said, noting that we are only in October.

While this shows faith in the WTO, at the same time it puts additional strain on the system.

"We must continue working to resolve the impasse in the Appellate Body and to maintain this essential pillar of our work."

He said any broader systemic conversation should not compromise other areas that members have been working on and are currently working on.

"We should continue our work in all areas of negotiations and exploring other issues to the extent that members wish to do so."

He noted that work is continuing on the various joint (plurilateral) initiatives (from Buenos Aires). "I leave it to members to update each other on this work as they see fit."

"I will not conclude with a reminder and an appeal. Our trading system is not perfect but it represents the best effort of governments around the world over many decades undertaking painstaking work to construct what we have today," he said.

"The system has real value in supporting stability, economic growth, development and poverty reduction. We cannot take it for granted. So we must preserve what we have. At the same time we must ensure that we are responsive to continuo us evolution of members' needs," he added.