Info Service on WTO and Trade Issues (Oct18/17)
24 October 2018
Third World Network
Ottawa meet to initiate first steps to launch new talks at MC12
Published in SUNS #8779 dated 23 October 2018
Geneva, 22 Oct (D. Ravi Kanth) - Thirteen trade ministers are expected
to initiate the first steps in Ottawa, Canada on Wednesday for launching
a new round of trade negotiations in Astana, Kazakhstan in June 2020,
that could fundamentally transform the World Trade Organization from
a multilateral to a plurilateral trade body almost on a permanent
footing, trade envoys told SUNS.
The thirteen trade ministers who will congregate in Ottawa on Wednesday
(24 October) are from Canada, the European Union, Japan, Switzerland,
Norway, Australia, New Zealand, Kenya, Singapore, South Korea, Mexico,
Chile, and Brazil.
The United States, China, India, and South Africa among others are
not invited to the meeting.
But Canada, which is hosting the two-day meeting, has already sounded
the US which apparently has given the green signal but with a caveat
that Washington will not support the proposed reforms for the Dispute
Settlement Body, particularly filling the four vacancies at the Appellate
Body, said a person familiar with the preparations for the Ottawa
meeting, preferring anonymity.
On Friday (19 October), trade envoys from the 13 participating countries
for the Ottawa meeting finalized a joint communique that will call
for adopting "flexible" approaches for pursuing new issues
for making rules at the World Trade Organization, immediate resolution
of the crisis at the Dispute Settlement Body by filling the vacancies
at the Appellate Body, and revitalization of the transparency and
notification mechanism of the trade body.
The communique will emphasize that issues in the three pillars - the
negotiating function, the dispute settlement system, and transparency
and notification mechanism - must be pursued simultaneously.
As regards reforms in the negotiating function, the Ottawa communique
will insist on pursuing "flexible" approaches for new issues
at the WTO.
The EU, which is advancing "flexible multilateralism" and
"pragmatic multilateralism", wants both multilateral and
The EU wants that issues such as fisheries subsidies and trade-distorting
industrial subsidies among others must be approached on a multilateral
track, according to people familiar with the development.
Brussels wants to continue with the plurilateral negotiations for
making rules in electronic commerce, government procurement in services,
investment facilitation, disciplines for micro, small, and medium
enterprises (MSMEs), and trade and gender among others on a plurilateral
The EU's "flexible multilateralism" or "pragmatic multilateralism"
seems akin to what Brussels had proposed - i.e., "multi-functionality"
in the Doha agriculture negotiations to stall comprehensive commitments
for reducing domestic support and market barriers in agricultural
Many developing countries had likened the EU's argument of "multi-functionality"
as a ruse for continuing with its heavily-protected farm programs
as embodied in the Common Agricultural Policy, said a trade envoy
from a developing country, who asked not to be quoted.
Brazil, which had opposed the EU's negotiating positions in agriculture
and created the G-20 group of developing countries to oppose the protectionist
positions of the EU and the US in 2003 before the Cancun ministerial
meeting, has now switched ranks and joined the EU by adopting common
positions in agriculture since the past four years, said a South American
trade envoy, preferring anonymity.
Coming back to the Ottawa meeting, the participants are expected to
adopt a Christmas tree approach for starting work on several proposals
at warp speed.
Brazil and Kenya, for example, insisted that issues concerning "development",
particularly special and differential flexibilities and differentiation,
must be pursued as a top priority.
Kenya has already supported "differentiation" that seeks
to remove some countries such as China, India, and South Africa among
others from availing special and differential flexibilities.
In the Canadian discussion paper on issues pertaining to "the
development dimension," it is argued that differing levels of
development among developing countries need to "be accommodated
in a way that strikes a balance between reciprocity and flexibility."
Canada proposed that "a new approach is required, one that recognizes
the need for flexibility for development purposes while acknowledging
that not all countries need or should benefit from the same level
Therefore, Canada has proposed a new approach that includes the following
* recognizing that while the development needs of certain countries
justifies transitional implementation, the long-term objective is
the convergence and full implementation of all obligations by all
* developing categories of need, differentiated by obligation, by
country and by the length of the transition required, to be applied
based on evidence of need and subject to negotiation; and
* linking implementation of the most onerous obligations, at least
for countries with the least capacity, to the acquisition of capacity
to do so, for which other Members might have an interest in providing
support and assistance.
The EU demanded that issues that would address the "level playing
field" such as trade-distorting industrial subsidies, state-trading
enterprises, and disciplines to stop forced transfer of technologies,
and theft of intellectual property among others must remain high on
In the discussion paper for the Ottawa meeting, Canada has argued
that "modernizing the trade rules for the 21st century"
cannot happen as "a single undertaking, at least not for the
Therefore, Canada wants "alternative approaches to cooperation
and rule-making" that would reflect the "realities of a
WTO Membership with increasingly diverse needs, levels of development
And those alternative approaches, according to Canada, must "allow
for differentiated participation in negotiations and for accommodating
differentiated levels of development."
In short, Canada wants "differentiation" in negotiations
so as to exclude some members. Effectively, this would bring a "them
vs us", said a trade envoy who asked not to be quoted.
Canada also proposed a combination of issues that includes:
* outstanding from previous negotiations, including issues from the
Doha Round such as agricultural support and development issues, and
especially those facing Least-Developed Countries;
* required to modernize the rules for the modern economy and address
the social dimensions of globalization, such as digital trade, inclusive
trade, sustainable development, MSMEs, investment and domestic regulation;
* required to address more recent concerns about distortion of competitive
conditions, for example, through the market-distorting effects of
SOEs [State-owned Enterprises], industrial subsidies, transfer of
technology and trade secrets, and transparency.
Canada maintained that "while no WTO Member should be expected
to take on obligations to which it did not consent, likewise no Member
should expect to be able to prevent others from moving forward in
various configurations in are as where they are willing to make greater
commitments which could vary from political statements to more ambitious
binding agreements, e.g. plurilateral initiatives."
"Binding initiatives should be inclusive, open and provide clear
rules for accession by other Members or eventual multilateralization,"
Such initiatives could take on several forms, both inside and outside
the WTO legal framework:
* "open" agreements where the benefits are extended on a
Most-Favoured Nation (MFN) basis (e.g., Information Technology Agreement),
if critical mass of coverage is achieved or the risk of free-riding
is low, [and] do not require agreement of all Members;
* "closed" agreements that apply only to the participants
(e.g., Government Procurement Agreement), [and] are subject to agreement
by all Members, but might be feasible in certain areas;
* closed agreements can also be pursued outside the WTO framework
(e.g., TiSA), but these may be less transparent and may not be subject
to WTO dispute settlement.
For addressing the current crisis in the dispute settlement system,
particularly the Appellate Body, Canada has proposed a two-phase approach.
As part of the first phase, members must address issues concerning
"whether the Appellate Body has, through its clarifications of
WTO provisions, added to the rights and obligations of WTO Members."
The second set of concerns, according to Canada, must involve "systemic
and procedural practices of the Appellate Body."
Actions to address these concerns could include:
* narrowing the scope for "advisory opinions" by clarifying
that the primary objective of the dispute settlement system is the
settlement of specific disputes and that only findings that are necessary
to achieve this objective are required;
* focusing appellate review on legal issues by clarifying the standard
of review to be applied by the Appellate Body to panels, especially
with regard to factual findings and those related to the operation
of domestic law;
* promoting a more robust adjudicative dialogue by allowing for the
expression of minority views in panel and Appellate Body reports and
reiterating that interpretations adopted by the panel and Appellate
Body apply only to the disputes in which they are adopted; and
* developing guidance related to consultations with parties when the
Appellate Body is unable to meet its deadline.
Lastly, Canada has put forward several proposals for strengthening
transparency and notification procedures at the WTO.
During the meeting of the 13 trade envoys last Friday, Brazil, Australia,
New Zealand, and Chile pressed for addressing the central issues of
trade-distorting farm subsidies in agriculture.
But Switzerland, Japan, and Korea among others opposed the inclusion
of agriculture in the Christmas tree approach.
In crux, a large majority of developing and poorest countries face
a moment of "float or drown" in the tsunami caused by a
group of industrialized and developing countries at the World Trade
Organization. If they fail to join hands, they could find themselves
drowned by the concerted assault launched by major developed countries
with the support of some developing countries, said
trade envoys, who asked not to be quoted.