TWN Info Service on WTO and Trade Issues (Jun19/12)
18 June 2019
Third World Network

China to host retreat on pursuing “development” via WTO reform

Published in SUNS #8926 dated 17 June 2019

Geneva, 14 Jun (D. Ravi Kanth) – As a “follow-up to the New Delhi ministerial meeting” of trade ministers from developing countries last month, China is to host in Geneva a retreat of trade envoys from developing countries on 19 June for pursuing “development through WTO [World Trade Organization] reform”.

However, the agenda for proposed retreat includes issues such as electronic commerce, investment facilitation and the implications for developing countries arising from the United States-European Union-Japan Trilateral joint statements, trade envoys told the SUNS.

In the invitation sent to trade envoys last week, and seen by the SUNS, China has said that it is hosting the retreat “as a follow-up to the New Delhi ministerial meeting” for enhancing the “development dimension” in the global trade.

The one-day retreat will start with opening remarks by the WTO Director-General Roberto Azevedo. The discussions on the Trilateral joint statements will involve a panel of Ambassadors of the European Union, Japan, and China.

During the G20 trade ministerial meeting at Tsukuba, near Tokyo, on 9 June, Azevedo made a strong pitch for plurilateral negotiations, arguing that they are consistent with the multilateral rules.

At the Tsukuba meeting, trade ministers from major developed countries pushed hard for including language in the final ministerial statement on “WTO-plus” rules to be negotiated at the G20 as well as in the Trilateral process involving the US, the EU, and Japan.

Further, trade ministers from developed countries also insisted at the Tsukuba meeting that outcomes from the so-called joint statement groups on electronic commerce, investment facilitation, and domestic regulation for services ought to be brought into the WTO rulebook.

However, in the face of intense opposition from trade ministers of developing countries, the proposed language on the “WTO-plus” rules were dropped from the final statement.

Trade ministers from developing countries said while they agreed that plurilateral negotiations can take place under the Marrakesh agreement, the scope for rule-making via plurilateral negotiations is not there, said a trade envoy who asked not to be quoted.

Consequently, the final compromise agreed between the two sides said in the G20 ministerial statement that “we recognize the complementary roles of bilateral and regional free trade agreements that are WTO-consistent.”

In a similar vein, the G20 trade ministerial statement merely “note[ed] the ongoing discussion under the Joint Statement Initiative on electronic commerce” and said “participants in the respective Joint Statement Initiatives under the WTO welcome the ongoing discussion and confirm their commitment to achieve progress.”

Both at the New Delhi meeting and the G20 meeting in Tsukuba, Azevedo made a strong pitch for developing countries [India, South Africa, Indonesia, and Saudi Arabia] outside the ongoing plurilateral negotiations on electronic commerce to join them, claiming these negotiations to be consistent with WTO rules, the trade envoy said.

The second issue of immense concern for developing countries to be discussed at the proposed Chinese-hosted retreat is on “transparency and procedural reform”.

Attempts are currently underway by the US and other industrialized countries to introduce burdensome reforms in both “transparency and procedures” in several WTO agreements, according to a developing country trade envoy.

“The developing countries need to think carefully about the obligations that are sought to be pushed under the rubric of transparency and procedures,” the envoy said.

In the proposed afternoon session of the retreat, China has included three issues – fisheries subsidies, investment facilitation [in which China is the main demandeur], and electronic commerce.

While the discussions on fisheries subsidies are being held under the mandate of the 11th ministerial conference (held in Buenos Aires in December 2017), there is no such multilateral mandate for electronic commerce and investment facilitation other than the questionable plurilateral joint initiatives.

By clubbing the joint statement initiative on electronic commerce and investment facilitation along with the issues of the development dimension, the proposed retreat could send conflicting signals, said trade envoys, who asked not to be quoted.

While e-commerce was discussed at the Delhi meeting last month, it had reflected the divide among the developing countries, particularly China, Brazil, Argentina, and Guatemala on the one side, and India, South Africa, and several other developing countries on the other, trade envoys said.

Last but not least, China has also included discussion on “US-EU-Japan Trilateral Joint Statements and Implications to Developing Members” in which the panelists are going to be the Ambassadors of the European Union, Japan, and China.

In short, the issues listed for discussion at the retreat bring out China’s ambiguous policy of running with hares [of developing countries on developmental issues] and hunting with the hounds [of developed countries on controversial plurilateral issues], said trade envoys, who asked not to be quoted.

Already, China’s proposal for capping fisheries subsidies based on the amber box and green box framework has caused confusion during this week’s negotiations on fisheries subsidies.

China and India have demanded the elimination of the AMS [aggregate measurement of support or Amber box commitments] in agriculture, while, in fisheries subsidies, China is promoting amber box commitments like Australia and the US, said trade envoys, who preferred not to be quoted.