TWN Info Service on WTO and Trade Issues (Dec18/13)
21 December 2018
Third World Network

ICs still planning to launch e-com pluri-talks at Davos
Published in SUNS #8822 dated 21 December 2018

Geneva, 20 Dec (D. Ravi Kanth) - In an attempt to paralyze the World Trade Organization's multilateral discussions on e-commerce under the 1998 work program, trade ministers of major developed countries along with their allies from developing countries are planning to issue a political statement for launching the plurilateral negotiations on e-commerce, trade envoys told SUNS.

They plan "to launch" negotiations at a "breakfast meeting" of their ministers on the margins of the annual World Economic Forum meeting in Davos next month, the envoys said.

Earlier in November, in the face of China's stance favouring only a limited , trade-related agenda, but opposing efforts for "free flow" of data across b orders, thus preventing countries putting in place regulations to store data locally, the proponents had apparently cancelled their plans on meeting on the sidelines of the annual World Economic Forum meeting at Davos.

However, at a meeting on 18 December, the co-conveners of the so-called Joint Statement Initiative (JSI) group - Japan, Australia, the European Union, the United States and Singapore among others - spoke of "the possibility of a breakfast meeting on 25 January 2019," said a participant from a major industrialized country, who asked not to be identified.

China, while not a signatory to the e-com pluri initiative at Buenos Aires in December 2017, had subsequently joined the group. It soon made clear its approach for a much narrower agenda and scope for the plurilateral negotiations. China made clear it would not agree to the so-called free flow of data across national borders or rules to prevent localisation of data.

In the face of this, the proponents of the JSI had initially cancelled their plans to launch the pluri negotiations on the sidelines of the annual Davos meet.

Later, however, the co-conveners of the so-called JSI group - Japan, Australia, the European Union, the United States and Singapore among others - on Tuesday ( 18 December) have almost decided to convene a meeting of their ministers over breakfast at Davos on 25 January 2019 for issuing a political statement about launching the plurilateral e-com negotiations at the WTO from February, said several trade envoys.

The co-convenors appear intent on doing this, despite the worst systemic crisis facing the WTO because of the US plan to terminate the Appellate Body, as also the intent of the major ICs to bury the Doha Development Agenda negotiation s forever.

The JSI was launched on the margins of the WTO's eleventh ministerial meeting (MC11) in Buenos Aires, Argentina, in December 2017, after a large majority of countries opposed tweaking the 1998 work program for launching plurilateral negotiations.

Several industrialized countries sharply opposed moves to cancel the meeting at Davos due to continued differences among members, the JSI participant told SUNS.

The Davos meeting was earlier cancelled but the European Union, Japan, Australia, and Singapore among others insisted that the Davos meeting should be held at any cost even if it is for one hour before the annual informal ministerial meeting hosted by Switzerland on the margins of the World Economic Forum (WEF) meeting.

"We are talking of a possibility of a breakfast meeting of [our] trade ministers on 25 January 2019," the participant said, clarifying that there is no "serious" divide among the JSI signatories for launching the negotiations on e-commerce.

However, the JSI participants would need further clarification of what kind of negotiating approach will be adopted, the participant said, arguing that the JSI members will need "more discussions". But there are no serious differences of opinion for pressing ahead with e-commerce negotiations, the participant added.

Asked to comment on China's insistence that the e-commerce negotiations should remain multilateral, open, and inclusive, the participant clarified that when China is insisting on multilateral, it does not mean that there has to be a consensus of all 164 members.

If members aim for a "MFN-based open-ended plurilateral" then it is not exactly plurilateral, it is a multilateral because that formula is already included in the services agreement such as the Telecom Reference Paper, the participant emphasized.

There is no great difference whether it is an open-ended plurilateral or multilateral negotiation in e-commerce, the envoy suggested, citing that in the past, members had agreed to the Telecom Reference Paper that included commitments to facilitate trade in telecom services.

As part of the Telecom Reference Paper, a total of 108 WTO members had made commitments in 1996 to facilitate trade in telecommunications services. Further, 82 WTO members have committed to the regulatory principles spelled out in t he "Reference Paper", that largely reflects "best practice" in telecoms regulation.

"So there is a question of definition but it is not a problem among participants," the participant maintained.

Another developed-country trade envoy, who spoke to SUNS early this week on the condition of anonymity, said he is more confident and almost certain about the Davos ministerial meeting for launching the e-commerce negotiations.

"It will be a significant move to start the e-commerce negotiations," the envoy said, adding that it should have "critical mass" by including major developing countries and not limited to five or six members.

The e-commerce negotiations will not aim towards a "one-size-fits-all" approach, the envoy said, emphasizing that members must be free to take commitments according to their ability and acceptability.

At the JSI meeting on Tuesday (18 December), several developing countries h ad raised sharp concerns about rushing into launching negotiations without first clarifying fundamental issues such as the negotiating approaches, and the intended goals.

The Davos meeting is still in the air, as invitations are not yet sent out, said a participant from an African country. "The meeting is likely to take place and there will be a political statement," the African participant added.

China, for example, said it wants "pro-development" outcomes from the e-commerce negotiations, according to another participant, who asked not to be quoted. "The process should be open, transparent, and inclusive," China said at the JSI meeting on Tuesday.

But China remained silent about the need for convening the Davos meeting, t he participant added. China had expressed sharp concern over several demands t hat are being made at the JSI and already drew red lines as to what it would agree to, the participant added.

During an earlier JSI meeting on 31 October, China had said that "discussion shall focus on "trade-related aspects" of e-commerce as the 1998 Work Program mandated."

Clearly, the US, Japan, Australia, New Zealand, Singapore, Canada, Mexico, and Chile among others are attempting to bring some two dozen rules that were agreed in the failed Trans-Pacific Partnership (TPP) Agreement, which are not acceptable to China, said a JSI participant who had asked not to be quoted.

"Let's stick to e-commerce without substituting its concept or generalizing its expanded scope," China said, in opposition to ongoing attempts by the US, Japan, Australia, Singapore, and Canada among others to incorporate rules from the failed Trans-Pacific Partnership (TPP) Agreement.

Many developing countries led by India and South Africa have repeatedly maintained that the sanctity and integrity of any outcome on e-commerce will hinge on how members proceed according to the 1998 work program on e-commerce.

The Davos meeting of the JSI group is aimed at permanently undermining the WTO's 1998 work program on electronic commerce, said a trade envoy from a developing country, who asked not to be quoted.

At a time when the WTO is facing the worst crisis when one of its main limb s is being amputated by the United States, the JSI participants want to launch negotiations on e-commerce, the envoy suggested.

Little wonder that the major industrialized countries opposed a "re-think" about continuing the moratorium for not levying customs duties on e-commerce transmissions at a General Council meeting on 27 November, the envoy added.

The developed countries, particularly the EU, want a multilateral outcome o n fisheries subsidies while preferring plurilateral outcomes in electronic commerce, investment facilitation, disciplines for micro, small, and medium enterprises, and domestic regulation in services.

They have turned the WTO into the Iraq-war syndrome of "either you are with us or against us" to deny policy space for development in the developing countries.

In short, the developed countries are now determined to secure their ambitious outcomes by cherry-picking while decimating the multilateral framework of the 164-member World Trade Organization which is an inter- governmental body.

Clearly, the developing and least-developed countries need to assess the dangerous implications of the concerted attempts made by the developed countries for launching the plurilateral e-commerce negotiations without addressing t he systemic existential issues facing the dispute settlement system, and the demise of the Appellate Body, trade envoys said.

[Both the launch of the plurilateral negotiations at the WTO, and any rules emerging thereof as a part of the WTO, will be clearly illegal. For, in pit h and substance, the proposed rules relate to already existing WTO agreements. In this reading, the only way for the "e-com rules" to be part of the WTO is through specific amendments, in accord with the requirements of Article X of the Marrakesh Treaty. As its sponsors envisage, the e-com rules, in pith and substance, relate to the multilateral Uruguay Round goods agreements, the G ATS and TRIPS Agreement. If it be claimed it is to be a plurilateral agreement for inclusion in Annex IV of the WTO Agreement, it would need approval by consensus at a Ministerial Conference, implying those opposed (like the African Group, or India and others) remaining silent. SUNS]